City of Farmington approaches financial stability
It seems hard work pays off, and the city of Farmington has received that benefit this year.
For the past several years, the general fund’s fund balance has typically slipped into the negative during May and November. In some years, the fund balance was already below zero in April and October. But this year, the fund balance stayed in the positive through all May. And that’s good news.
The general fund is the fund most often used by the city of Farmington to cover the day-to-day operations of the city. It covers costs associated with police, fire, parks, streets and utilities, and so on. The general fund is funded, in part, through the tax levy collected from property taxes. But those dollars are only allocated to the city in June and December.
Those same dollars are used to pay the city’s bills throughout the year. That’s why the fund balance has dipped below zero in the past. And that, city administrator David McKnight told the Farmington City Council July 21, “isn’t good news.”
“We’ve had to borrow funds from other budgets to pay for those bills,” he said.
This year, that did not happen.
“I was ecstatic,” McKnight said. “We stayed above zero, which means that all of the work that you’ve been doing in planning and setting good policies is finally starting to pay off.”
By the end of June, after the city received its first allocation of property tax income, the city had just above $3.8 million on hand.
McKnight credits the reduced number of delinquent tax properties — meaning the city is collecting more of its property taxes on time than in the past — as well as an increase in permit dollars and solid budget planning.
Farmington mayor Todd Larson credits the hard work of McKnight, city staff and council members.
“We made a conscientious effort to get that fund balance above the negative. It’s not our job to have a lot of extra money sitting around, but it is our job to stay above zero and pay our bills,” Larson said. “I was almost giddy when I found this out.
“It may seem like we’re patting ourselves on the back, and we are. We worked damn hard. We still have a lot more work to do but we’re taking a big step in the right direction.”