County budget issues loom

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By Arin McKenna

During Tuesday’s first Los Alamos County Council meeting of the year, council reviewed the Comprehensive Annual Financial Report for FY2011, presented by the Office of Management and Budget and independent auditing firm Clifton Larson Allen LLP. 

The report also addressed upcoming budget issues.

Staff anticipates revenues of $6.8 million less for FY2013 than the FY2012 adopted budget.

The report reads, “It is expected that future LANL spending and related county GRT revenue levels will stabilize, but at a level lower than had been previously expected.”

The impact could be significant. 

“It was estimated in an August 2004 report “Creating a Sustainable Los Alamos” that LANL’s expenditures provide, either directly or indirectly, approximately 97 percent of the county’s economy. It is also estimated that LANL generates directly approximately 75-80 percent of the county’s GRT revenue.”

Revenues have been further reduced by the impact of the national economic recession on the county’s long-term investments. 

The audit report states that the county’s investment portfolio “performed slightly worse due to using a limited number of investment vehicles that focus on principal preservation, with shorter duration and lower market risk.

“Projected investment revenue in fiscal year 2013 is estimated to be just slightly higher than what was projected for fiscal 2012 and still below historically normal average returns as the overall economy is still recovering quite slowly.”

In the FY2013 budget tentatively adopted last year, the combined ending fund balance/working capital is expected to be $114.1 million, $10 million less than the FY2012 projected ending balance. Most of the reduced balance is due to an anticipated $17.4 million in spending on capital projects from the Capital Improvement Projects Fund. 

These projections could change after the Jan. 29 council meeting, when staff presents options for FY2012 mid-year budget adjustments and addressing future revenue reductions. 

Included in the report was the announcement that the Government Finance Officers Association of the United States and Canada has again awarded the county a Certificate of Achievement for Excellence in Financial Reporting and the Award for Distinguished Budget Presentation for the FY2012 budget. 

The awards represent the 21st consecutive year the county has received recognition for financial reporting and its 20th year for the budget award. 

“That does show a long-standing commitment by this county to go over and above the minimum requirements,” Deputy Chief Financial Officer Joe D’Anna said. “There are, with the addition of Santa Fe County last year, four counties that do an annual comprehensive report, that take that extra step and receive a certificate of achievement. So I think it really shows the dedication throughout the county and within the Office of Management and Budget.”

D’Anna stressed that the achievement is a joint effort. 

“Our financial transactions happen every day, with lots of people throughout the county. There’s our recreation division collecting cash and billing their customers, it’s the golf course running their operations; it’s the customer care center coordinating all of our cash collections, billing and collecting 7,000 utility bills, including solid waste. 

“We have work crews every day come back from their job, enter their time, enter their equipment, and enter the things they use. That’s our financial data. It flows through payroll, it flows through time keepers. We have admin staff entering purchase requisitions, entering purchase orders, doing invoicing at departments throughout the county. 

“So I really want to emphasize that while our division puts together that final product that you see, it doesn’t happen without those hundreds of people on a daily basis.”

Joel Blackman, audit manager for Clifton Larson Allen LLP, also acknowledged the county’s achievement. 

“It really is a massive undertaking,” Blackman said. “Not all states and local governments do a CAFR, and for the ones that do, it’s pretty difficult. And the county pulls it off nicely, and they have for as long as I’ve worked with them, which has been three years.”

The auditor’s report was unqualified for both the county’s financial practices and its compliance with standards for administering federal awards.

Auditors noted only two small findings.

Three out of 22 cash receipts tested were not deposited within 24 hours, as required by state law. Staff determined that the delay is caused by money from the county’s many decentralized locations being reviewed and deposited centrally. The county is currently exploring potential solutions. 

Auditors also found one variance of $1.40 between a disbursement and the supporting document. 

 Copies of the Comprehensive Annual Financial Report are available at Mesa Public Library, the White Rock Branch Library and the Office of Management and Budget. The report may also be viewed online by following the link on the county’s Sunshine page.