Summer tax collection changed Cass County cash flow

Published 3:40 pm Friday, December 7, 2007

By By JOHN EBY / Niles Daily Star
CASSOPOLIS – Accountant Becky Moore made a presentation to the Cass County Board of Commissioners Thursday which attempted to show how various pots of money are "spoken for, so people understand we don't have a lot of cash sitting around."
Moore Thursday afternoon reviewed with commissioners a summary of the balance sheet and a synopsis of revenues, expenditures, transfers and fund balances for the general fund, the Family Court child care fund, the revenue sharing reserve, the budget stabilization fund and the delinquent tax revolving fund.
She defined various kinds of equity: unreserved – the portion of fund balance that reflects expendable available financial resources; designated – expendable resources for which the legislative body or management has tentative plans; reserved – financial assets that are not available for general spending; and restricted – laws limit use.
While Cass County's cash position improved $900,000 from last year ($936,431 to $1,757,936), "That is needed and still doesn't cover our cash-flow needs during the year," when borrowing $1.2 million from the revenue sharing reserve will be necessary, starting in April.
"Taxes receivable has also improved by about $1 million," from $1,876,823 to $2,680,768, Moore said, "but it's all in timing. It doesn't mean we're billing more taxes. All it means is that we are finished with the transfer that the state mandated where we had to change our tax collection from winter to summer. Now that we're collecting 100-percent of our taxes in the summer, obviously, by Sept. 30, a lot of that money hasn't come in. Before, collecting it in the winter, by the time Sept. 30 (the end of the fiscal year) rolled around, it was all here."
Deferred revenue of $817,924, up from $193,771, fits the "same factor," she said. "Deferred revenue is what is not collected within a 60-day time period after our year-end. That revenue, by law, gets pushed into the following year. So, if we issue tax bills for $8 million, what we collect from July 1 through Sept. 30 all goes into our current year. Then we have 60 more days to collect as much money as we can, which goes back into that year as a receivable. Anything after Nov. 30 – Dec. 1 – is pushed into the following year. Deferred has grown because we still have $800,000 on the books that have not been collected. According to our bookkeeping rules, that revenue now has to get pushed into 2008."
"I urge my fellow commissioners to reverse some of these silly policies," said Commissioner David Taylor, D-Edwardsburg. "We just drilled a big hole in our equity to keep money for imaginary purposes. I object to this, quite frankly. It's just a difference of opinion, but I believe these funds are available for other purposes."
Of the $1.2 million that will need to be borrowed, the projection divides it to $200,000 in April, $700,000 in June and $300,000 in July.