Newton County ended fiscal year 2007 with a budget fund balance of 25 percent or $14.5 million and was issued an unqualified "clean" opinion for its financial statements by certified public accountants.
"Newton County enjoys one of the rare instances I've seen in the state, that they don't have to borrow money ever to operate. They've been able to keep money invested," said CPA Wayne Tamplin, whose firm Treadwell, Tamplin & Co. audited the county's FY 2007 financial statements (the county ends its fiscal year at the end of June).
Tamplin shared his findings with the Newton County Board of Commissioners at their board meeting Tuesday.
"Everything at this point looks good," Tamplin said. "I don't really see that we're going to have to do any of the belt-tightening that the city of Atlanta is going to have to do in the near future."
District 2 Commissioner Earnest Simmons questioned whether having a 25 percent fund balance might be a bit cautious on the county's part. The county aims for a fund balance of between 15 percent and 25 percent each year.
Of the county's fund balance, $2 million has been designated for future road projects leaving $11.9 million unencumbered.
Tamplin said while the county does have some room where unencumbered funds could be used, he would not recommend the county taking its fund balance down to 15 percent.
"I think it's important to keep these ratios," Tamplin said. "You've got to realize that you've got to use that very judiciously because you only get to use that one time."
On Thursday, John Middleton, county administrative officer, said it was important to note that the 25 percent fund balance the county ended FY 2007 with was relative to the county's budget that year, which was $48 million. The county's budget for FY 2008 is $53 million.
Middleton said the fund balance was the result of the county having fewer expenditures than were anticipated and several budgeted positions that went unfilled in FY 2007. In FY 2006 the county ended the year with a fund balance of 20 percent. Middleton noted that because of its fund balance the county did not have to worry about short-term borrowing to pay day-to-day expenses, which incur interest.
"The only borrowing we do is capital projects and that's long term," Middleton said.
In FY 2007, tax collections, which include property, sales, franchise, business and other, amounted to 64 percent of the county's revenue or $51.7 million. Those taxes do not include revenue collected from the county's local option sales tax or special purpose local option sales tax.
Revenue from the county's SPLOST and LOST has fallen off recently as a result of the recent economic downturn, which has heavily impacted consumption levels. In February of this year, SPLOST collections fell to $700,000 compared to last October when the county collected $1 million.
Even with the recent downturn in collections, the county is still well on track to meet its projected FY 2011 collections goal of $58.8 million. In FY 2007 the county collected $10.1 million from its SPLOST.
LOST collections in February, the most recent date available, were down from the projected $710,000 and stood at $530,297.
Middleton noted that as a result of the county's diversified tax base, it was not in the danger that other counties, who rely heavily on sales tax to finance operations, were in as a result of the downturn.
"You may live by the sales tax, you may die by the sales tax," said County Chairman Aaron Varner.
The three largest taxpayers in FY 2007 were SKC Inc., General Mills Inc. and Pactiv/Tenneco respectively.
Charges for services fell slightly in FY 2007 compared to FY 2006, falling from $13.2 million to $11.7 million. Charges for services contributed $11.7 million or 14 percent of the county's revenue. Capital grants and contributions amounted to $11.7 million as well.
Revenue brought in by water resources, solid waste and special facilities is not included in governmental activities, which include general government, judicial, public safety, public works, health and welfare, culture and recreation and housing and development.
Public safety costs accounted for the largest chunk of the county's governmental activities in FY 2007 at 45 percent, followed by health and welfare at 23 percent and general government at 17 percent. The total cost of governmental activities in FY 2007 was $66.7 million compared to $49.7 million in FY 2006.
The county saw a change in net assets of 56 percent in FY 2007 ($272.3 million compared to $118.8 million). Marcia Allen, finance director for the county, said this was the result of the new state requirement that Newton County factor in all county roads and bridges as net assets.