Last year’s books are finally closed. And the city did indeed end its last fiscal year with an $11 million deficit.
That’s according to the city’s final pre-audit report for Fiscal Year 2017 – 2018 (FY18).
This article has been updated with comments from the city.
FY18 officially ended on June 30. The city published the pre-audit end-of-year financial report on Oct. 26. City Acting Budget Director Michael Gormany said that the city officially closed its books on the fiscal year on Sep. 14.
“The pre-audit report is always printed approximately three weeks or more later,” Gormany said.
The new end-of-year report shows that the city finished the fiscal year with an $11.09 million hole in its overall fund balance, including a roughly $8.5 million deficit in its general fund balance.
The city’s finance department plans next to conduct an audit of the end-of-year numbers, then publish that audit next spring.
The finance department has pledged to close FY18’s budget deficit with proceeds from August’s restructuring of $160 million worth of existing debt, the largest such bond sale and debt refunding in the city’s history.
The pre-audit numbers confirm sizable end-of-year deficits at the Board of Education (BOE), and employee health insurance and workers compensation budgets, and the police overtime budget.
The report shows that the BOE ended FY18 $6,185,403 in the red. That’s over $1 million better than the $7,218,320 deficit the city last projected for the BOE in July.
The city ended the year with a $1,868,282 deficit in employee benefits, including a $647,110 hole in workers compensation payments and a $761,220 deficit in the city’s health insurance fund.
And the police department’s net overtime expenditures wound up coming in at $7,054,489, which is $2,911,805 more than the $4,142,684 that made up the department’s revised overtime budget.
The Fire Department’s net overtime expenditures, on the other hand, only came in $4,368 over budget, according to the latest report. The department spent $4,673,368 on overtime, in comparison to its revised overtime budget of $4,669,000.
As late as July 2018, the city had identified the fire department’s FY18 overtime budget as only $1,869,000.
“The change in the Fire department budget was due to the $10M transfer that the Board of Alders approved for FY 2017 – 18,” Gormany said. “The approval was made on August 06, 2018.”
In other numbers, the final pre-audit report shows that the city’s medical expenses increased by 7 percent from FY17 to FY18. By the end of FY18, the city spent $116,730,265 on employee medical benefits. That’s $7,812,479 more than the $108,917,786 that the city spent on medical the previous year.
The report notes that the city began FY18 with a $5,552,583 hole in its medical self-insurance fund. By the end of FY18, the report notes, that self-insurance fund hole has shrunk slightly to $4,896,671.
The primary reason for the decrease in the medical deficit after a year when medical expenses increased by 7 percent is that the city diverted $9 million from last August’s bond refunding towards its medical account.
The city also recently published its latest monthly financial report for the current fiscal year.
On Oct. 26, the city’s finance department published the September monthly financial report for Fiscal Year 2018 – 2019 (FY19), covering city finances through the end of September.
In that monthly report, the city reaffirmed its projections that the city will end the current fiscal year with an $11.2 million surplus, thank to this August’s bond refunding.
“As the fiscal year progresses,” the report’s summary notes, “revenue and expenditure projections will be revised to mirror any budgetary changes within the City.”
Ouch. Thank goodness we haven't quite fully maxed out the proverbial credit cards, and we can still afford to pay firefighters $100,000/year, in retirement, and while they work the same job somewhere else.