Audit shows higher '13 shortfall
Wednesday, January 15, 2014 12:00 AM
The city of Philadelphia in fiscal 2013 saw a sixth consecutive year of expenditures outpacing revenues, this time much higher than expected, an annual audit shows.
Expenditures outpaced revenues by $613,896 in 2013. The city's general fund showed $7,120,077 in revenue and $7,733,973 in expenditures.
Over about the last 12 years, expenditures have outpaced revenues by $7.8 million as officials have drawn on a huge reserve fund. During that time, primary revenue sources have increased or at least remained fairly steady.
The general fund provides monies for such departments as general government, public safety and cemetery, among others.
The general fund revenue included $821,487 from the sale of a city-owned warehouse in the industrial park to The Taylor Group and some equipment sales.
"If the sale of that building hadn't have happened," Ward 1 Alderman Josh Gamblin said, "we would have missed revenue budgets by a million dollars."
Other financing sources moved into the general fund, including $159,834 in loan proceeds for a bulldozer and the transfer in of $70,045 from a portion of what Philadelphia Utilities pays the city in lieu of taxes, reduced the overall shortfall to $384,017.
The general fund had a beginning balance of $4,200,316 in fiscal 2013. The fund balance at the end of the fiscal year was $3,816,299.
CPA A. T. Williams presented the Mayor and Board of Aldermen with an audited financial report last week.
He noted in the report that even though the city amended its budget, there were several instances of expenditures exceeding their budgeted amounts.
He recommended that the board take "greater care" in reviewing city operations and in amending the budget.
Overall, the city's total assets decreased by $333,577 or .7 percent from fiscal 2012. Total liabilities decreased by $360,805 or 5 percent. The total net position increased approximately $27,228 or .6 percent as a result of this year's operations.
The governmental expenses exceeded revenue by $547,476 before transfers while the city's business-type revenues exceeded related expenses by $574,704 before transfers, the report said.
During fiscal 2012, expenditures outpaced revenues by $1.3 million.
The general fund budget for fiscal 2014, which began Oct. 1, 2013, reflects anticipated revenues of $7,435,767, which includes an increase in mills from 10 to 20, basically doubling the amount of ad valorem taxes collected.
The 2014 general fund budget shows anticipated expenditures of $7,405,575.
If these budgeted estimates are realized, Williams said the city should see a surplus of $30,192 by the end of the fiscal year on Sept. 30.
Mayor James A. Young said he was pleased that the fiscal 2013 shortfall wasn't more, noting that the board had anticipated a shortfall when it set the budget initially.
The initial 2013 budget projected a shortfall of $97,403, though the mayor predicted during the budgeting process that it would climb higher.
"The way the budget was structured, I'm very pleased that it [the shortfall] wasn't more," Young said.
"The department heads did a good job of staying within the budget that was set.
"We stayed in line as much as possible. Everybody did a good job of holding the line."
He expects the city's fiscal 2014 budget to be in balance at year's end.
"Then we will have something to smile about," he said.
Gamblin said he was glad fiscal 2013 was behind the current Board of Aldermen.
"We have got to start tightening up as we move forward," he said, noting that the fiscal 2013 budget was set by a previous board.
The current board took office on July 1, nine months into the fiscal year.