Taylor’s finances return to black
Taylor – — City officials have announced Taylor’s budget has moved into the black, moving it out of a state-mandated deficit elimination plan a year ahead of schedule.
According to the Chief Financial Officer Jason Couture, Taylor now shows an unassigned budget fund balance of $389,200 as it nears the end of 2014.
The city of 62,000 was forced to file a deficit elimination plan with the state of Michigan at the end of fiscal year 2010-11 when its general fund showed a deficit of about $1.9 million, which eventually dropped to a low of about $5 million in 2011-12.
“We’re very, very happy to be able to make this announcement,” Mayor Rick Sollars said. “It means that the city has remained very conscious of the difficult financial situation that it found itself in, and made sound financial decisions that resulted in positive gains.”
Despite the improving financial situation, the city has a ways to go, according to Sollars. “A city this size, with a substantial budget, needs to have a very responsible unassigned fund balance, or rainy day fund,” he said.
“The city is not considered financially stable,” Couture explained. “The administration must continue to be prudent with spending and seek additional revenue sources.”
Couture said to achieve financial stability, the city would have to maintain an unassigned fund balance equal to 20 percent of operating expenditures, which would be about $6 million.
Of the approximate 1,800 municipalities in the state, 65-75 are involved in deficit elimination plans at any one time, said Terry Stanton, Michigan Department of Treasury spokesman.
Sollars said he plans to meet with Couture to develop a multi-year-budget-like forecast of anticipated fund balances, with the caveat being some funds would be assigned to specific capital projects or programs.
On Tuesday, Standard & Poor’s Ratings Services raised Taylor’s outstanding limited-tax general obligation (GO) and Michigan Transportation Fund (MFT) bonds from a previous “AA+” to “AAA,” while defining the outlook as “stable.”