City of Goodyear Employees, This Might Interest You

The City of Goodyear just posted it’s Q2 Financial Summary on line. Here it is 2011 Q2 Fin Summary . This report is supposed to tell us how things are going financially in Goodyear half way through the fiscal year.

However, this report only looks at General Fund and Enterprise spending (the “Operating Funds”) and gives a one page recap of Capital Spending. It completely ignores over half of city budget revenues and expenses.  Referring to my table below, the Quarterly Financial Summary only looks at the top 6 rows, above the one labeled Q2 Subtotal.  It says virtually nothing about progress vs budget on any of the revenues and expenses below that line.

But I’m going to tell you about them because that is where our ‘structural’ deficits come from and city employees should want to understand this because they are the ones who are actually doing the ‘funding’ by giving up salary and benefits.

As you can see in the table below, the revenues above the Q2 Subtotal line FUND the stuff below the line. One would have no way of knowing how things are going by just looking at stuff above the line since the above the line budget revenues are over $15 mil greater than the above the line budget expenses. You’d have to be short by over $15 mil through Q2 before the city’s Q2 Financial Summary sounded any alarm bells.  From the current Q2 report, one would think that everything is going exactly according to plan.  But this report says nothing about how much of an actual structural deficit we might have by the end of this year and there are no projections about how much we will have to rob from reserve funds above budget estimates to cover the city’s TOTAL spending.

How much of the $15 mil above the line funding does the Q2 Financial Summary show has been collected so far?  By my calculation, only about $1.5 mil and we are already halfway through the year.  And why is that?  It appears mostly because Water and Wastewater Enterprise revenues are not contributing as much as they were projected, about flat right now vs a nearly $11 mil expected annual budget contribution.

What that means is that the city is planning to over charge for water and wastewater service in order to make a profit on these areas and use the profits to fund stuff below the line.  Why do you think the newspapers reported John Fischbach bragging about how Goodyear’s water bonds (not all city bonds) were UPGRADED?  Because those bonds are supported by water revenues which the city is charging well in excess of the cost to provide the service.  Bond holders don’t care what goes on below the line, they just like it that lots of money is coming in above the line over and above their costs to those enterprise areas.

I’ve tried to understand the rest of it, but you have to go to the “Transparency in Government” tab on the city website to get any other current information.  And what is provided there is 300 pages of pdf with department by department spending and revenues all jumbled together.  On purpose?  You decide.  Unfortunately in Goodyear, these don’t match up very well since they are presented so differently than the budget book so it is very time consuming to come to any conclusions.

Here is what I have come up with building my own summary spreadsheet.

Revenues Expenses
January 1, 2011 2010-11 Budget 2010-11 Budget Budget Contribution YTD Budget Contribution
GF $56.70 GF $51.50 $5.20 $1.20
HURF $2.70 HURF $3.50 ($0.80) $0.26
Water $10.30 Water $4.60 $5.70 $0.86
Wastewater $8.90 Wastewater $2.97 $5.93 ($0.90)
Sanitation $5.50 Sanitation $4.56 $0.94 $0.39
Staduim $1.76 Staduim $3.40 ($1.64) ($0.28)
Q2 Subtotal $85.86 Q2 Subtotal $70.53 $15.33 $1.53
Int Svc Fund $1.08 ($1.08) $0.00
Other Fees $0.29 $0.29 $0.00
Devel Fees $6.03 $6.03 ($1.15)
Grants $17.21 Grants $17.21 $0.00 $0.00
2nd Prop Taxes $7.13 Debt Svc P&I $24.00 ($16.87) ($1.17)
CIP Carryover $25.72 CIP $50.97 ($25.25) $3.85
Water Devel Fees $2.60 $2.60 ($0.98)
Water Bonds $2.00 $2.00 $0.00
Subttll Add’l Bud Rev $60.98 Subttl Other Bud Exp $93.26 ($32.29) $0.55
Grand Total $146.84 Grand Total $163.79 ($16.96) $2.08

In summary;

1. Operating and enterprise funds (rows above Q2 Subtotal) were budgeted for revenues in 2010-11 of nearly $86 mil.

2. Those same funds are expected to have expenses of only about $70 mil.

3. This gives the city $15 mil in operating department ‘slush’ to work with throughout the year as they report quarterly, and what you pay for water, waste and sewer is funding city council’s appetite for other spending.

4. Where is most of that $15 mil going? Most of it is supposed to go to service principle and interest of $24 mil per year on Goodyear’s $300 mil of debt.  That debt is supposed to be served by your secondary property tax but that debt is currently $16.87 mil MORE than the $7.13 Goodyear expects to collect in secondary property tax.

5. What if property values go down as city council was told they would in a Feb 15 report by over 20%? (here is the presentation, look at slide #19 of 47 pages 2011 2 15 Work Session Presentation ).  Well that $7.13 mil will become $5.7 mil and you will still be on the hook for the debt service.

What should or could have Goodyear done differently to avoid this?

You can see under, “Grand Total” that in 2010-11 the city planned on and is carrying on with spending a total of about $164 mil while only taking in about $147 mil.  (I’m not saying these numbers are exact, but I think they are directionally correct. The way Goodyear reports financial information, it does not make it easy).

Number one, the city should have placed a moratorium on ANY new capital projects. (Like the radios, the 3/4 mile of paving in the little town down south, new police cars, the park and ride, etc etc.)

And if you are a city employee reading this?

I hope this helps you understand better what I have been trying to tell you since the CBC.  NONE of what is going on here is in your best interest. You can clearly see from this data that the cuts you are taking and the overcharges for enterprise service that users are paying is what is funding the council’s capital spending agenda. That is because your salaries are in the General Fund and money is being taken from GF and enterprise funds to pay for a bunch of other stuff.

But don’t take my word for it, why don’t you ask council and the new mayor about it?  You just helped re-elect them.


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