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Much Ado About Something

A part of each year’s Arlington County financial statement (the Comprehensive Annual Financial Statement) is a page containing “fund balances, governmental funds and other component units” for the “last ten fiscal years.” In addition to providing various reserved and unreserved amounts as well as a “total general fund balance,” page 168 of the Fiscal Year 2007 CAFR shows the unreserved amount is significantly larger than the reserved amount.

The Revenues & Expenditures committee of the Arlington County Civic Federation reported on these fund balances earlier this year in their report on the FY 2009 budget. In fact they said they were pleased that:

“the County has finally recognized the true nature of the unreserved fund balances, i.e., that they are discretionary funds that can be allocated for virtually any purpose.” Further,  the committee noted “the General Fund Balance has grown from” $62 million in FY 2003 to $115.5 million at the end of FY2007.”

The CAFR table includes one other piece of valuable information, i.e., the “general fund balance as (a) percentage of general fund expenditures and other financial uses. Because each CAFR lists the balance for only the past ten years, we looked at the FY 2001 CAFR to pick-up three additional years (unfortunately, the "look-back" in the 2001 CAFR only went back to 1995). For the fiscal years 1995 through 2007, the average general fund balance was 9.18%, and ranged from a low of 5.80% in 1999 to a high of 13.49% at the end of FY 2007.

The source of the growth in the general fund balance percentages becomes clear, however, when you compute the average balance percentage for two sets of years:

  • 1995-2000 = 7.17%
  • 2001-2007 = 10.91% 

So thanks to the skyrocketing residential assessments from the first part of the current decade, the county has been able to build up a slushfund. The county may have designs for that money, but remember whose money it really is. Much ado about nothing? We think not!

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