The bottom line about Alachua’s financial condition

Guest Column by Ben Boukri, Jr, Alachua City Commissioner

 In recent weeks the City of Alachua’s financial situation has been covered widely in the media.  I think it is important for our residents to know, from one of their own, exactly where we stand.

On June 14, 2010, the audit for fiscal year 2008-2009 was presented at a regularly scheduled commission meeting.  The audit revealed that the City of Alachua’s financial situation had declined and the City met one condition out of a possible five of Florida State Statute 218.503(1).

Immediately, a workshop followed by a special commission meeting was called by the City Commission to address the city’s financial issues.  On June 23 those meetings were held and the Alachua City Commission implemented a 12 month hiring freeze effective immediately as well as directing staff to bring a detailed financial report to the City Commission on a monthly basis. 

On June 30, I sat down with City Manager Traci Cain to find out how the City of Alachua reached its current financial situation.

The City of Alachua has been a proactive community for many years and over the past several years has made a number of investments to improve the quality of life of its residents.  In 2006, the City donated $1 million to help bring a Santa Fe College campus specializing in emerging technologies to Alachua, increasing educational and employment opportunities locally. 

The City also expended $195,000 on renovations to the Cleather Hathcock, Sr. Community Center, bringing a much needed facility for our seniors. 

Another $935,000 was spent to complete the build-out of the City’s municipal complex.  This expense was not covered in the loan for the complex, but implementing the build-out concurrent with construction of the complex was estimated to bring substantial savings over the long term. 

The City has also experienced a number of lawsuits which increased legal expenses beyond budgeted levels.

These are some of the major costs that impacted the city’s operating account, leaving a shortfall to cover a $1.2 million utility bill as well as other expenses which were paid by transferring funds out of Alachua’s SBA (State Board of Administration) account.  Further, the City could not have foreseen the downgrading of its bond insurance policy company, which occurred late 2008, requiring the City to maintain additional money in unrestricted funds in the SBA.  This fund is essentially the City’s savings account.  By using these funds from this account to assist in covering operating and other expenses, the City is now in a position where we must replenish this account.  

So where is the City of Alachua today? 

Through a combination of decreased spending and revenue generation, the City is well on its way to an improved financial future. The City is paying its bills on time and is in better financial condition now than represented by the 2008-2009 audit.  Staff is developing an aggressive but achievable plan to replenish the SBA account.  City Manager Cain has reduced $1.2 million in budgeted expenses for fiscal year 2009-2010.  The City of Alachua currently has two properties for sale that are anticipated to net the City $1 million.  This revenue will aid in replenishing the City’s accounts as well.  The City may be able to transfer funds at the end of this current fiscal year to the SBA account.  Additionally for the record, the City of Alachua is current on all debt payments and obligations.   

I ran a campaign on fiscal responsibility and I am confident in saying Alachua is headed in the right direction.  It is now time, and has been for quite a while, for government at all levels to look for ways to reduce spending.  I will be doing my part in Alachua.