Tooele County’s bank balance has trended upward, a successful turnaround from earlier this year when cash flow projections predicted that the county would temporarily run out of money by last June.
“Based on where we were projecting without the spending cuts back in March, we are in a much better situation,” said Tooele County Treasurer Jeremy Walker, as he presented an update on the county’s financial plan at an Oct. 1 county commission meeting.
The commissioners also formally approved the organization of two new oversight committees that are part of the county’s financial recovery plan, and announced new financial procedures that will change how the county reports funds in restricted accounts.
Walker’s presentation, based on current and historical data for revenue and expenses, showed a Sept. 30, 2013 cash balance of close to $6 million. Last March, less than $1 million was projected by the end of September.
Budget cuts, along with $3.2 million in annual Payment in Lieu of Taxes (PILT), boosted the county’s cash supply in the second quarter of the year. PILT is a federal program that compensates counties for non-taxable federal lands in their jurisdiction,
During the last two months of the third quarter the county’s cash balance has remained flat, meaning revenue has been equal with expenses, according to Walker.
A normal drop in cash balance occurs during the start of the fourth quarter as expenses outstrip revenue until property taxes, including the tax increase approved last August, begin to come in around Dec. 10, Walker said.
The county treasurer forecasts a balance of between $5 million and $6 million at the end of the year.
While the cash balance may seem healthy, the county still has a $6.5 million internal loan to pay back accumulated by past operating expenses for Deseret Peak Complex. The county also needs a balance going into 2014 to pay bills while waiting for revenue streams to kick in.
When county commissioners raised the property tax rate last August, they also pledged to rebuild the rainy day fund and start a new capital projects fund without the need for borrowing money.
In another pledge, the commissioners promised last month to organize two committees to help keep the county’s financial recovery plan moving forward and publicly transparent. During the Oct. 1 meeting, commissioners approved the creation of a seven- to nine-member budget advisory board, and a three-to five-member audit committee.
The board’s duties will include reviewing fiscal policies and procedures, reviewing proposed departmental budgets, and acting as a point of contact for citizen budget and financial concerns.
Audit committee members will have a basic understanding of financial reports and independent auditing standards. They will assist in preparing for the audit and will review the audit results with the external auditors and the county commissioners.
The audit committee will also act as an external independent contact for whistle-blowing and initiate investigations as needed.
Applications for these two committees are available on the county clerk’s website. They will be accepted until Oct. 11.
Also during the Oct. 1 commission meeting, Walker announced a new financial procedure for restricted funds, such as hotel and restaurant taxes, development bonds, road funds, and evidence funds.
Currently, all county funds are placed into one bank account and the balance of each account is tracked by the county.
The new procedures will create accounts that are separate from the county’s general bank account, called public treasurer’s investment funds. These funds are an investment vehicle available to counties through the Utah State Treasurer’s office. The restricted funds will no longer be mingled with other county funds in the same bank account.
While the new procedures will require more accounting work, it will make transfers or loans from the funds to be more deliberate and transparent, said Walker.