City of Minot does not have a surplus
Cindy K. Hemphill, Minot
In the Sunday Minot Daily News a letter to the editor asked the following question: “Why does city have a surplus?” There is only one answer – the city does not have a surplus.
As the finance director for the City, I have firsthand knowledge on the finances of the city. The city does not have a surplus. However, in an effort to be responsive to Joan Hawbaker’s letter to the editor I will provide the detail to show the misunderstanding of the numbers Hawbaker has quoted.
Hawbaker has calculated a surplus, from the 2013 budget, by subtracting total revenues, $177,953,265, from operating expenses, $77,278,486. Operating expenses are defined as a category of expenditures that a business incurs as a result of performing its normal business operations.
The difference, $100,674,779, is for those non-operating expenses. The following are a couple of funds that make up part of the $100,674,779 that are non-operating expenses:
Category Sales Tax One Cent Sales Tax One Cent Total
Property Tax Relief 10% – $1,118,434 30% – $3,355,301 $4,473,735
Community Facilities 30% – $3,355,301 $3,355,301
Capital Infrastructure 50% – $5,592,168 40% – $4,473,734 $10,065,902
Economic Development 40% – $4,473,734 $4,473,734
Grand Total $22,368,670
Community Development Block Grant Disaster Recovery funding accounts for $57,562,642 of the $100,674,779. The expenditures for this revenue source are outlined in the Action Plan approved by the U.S. Department of Housing and Urban Development. These funds must be spent as allocated in the Action Plan, which may be found on the City’s web page.
Other items of expenses that do not fall into the category of operating expenses include Northwest Area Water Supply, Sidewalk Improvements, Street Improvements, Debt Retirement, Pension and Social Security, Hotel/Motel/Car Rentals pass through funds.
The city must also maintain reserves in each fund as dictated by city ordinance. In addition, the city must maintain reserves to be compliant with bond covenants. All of the NAWS funds are held in reserve until needed for expenditures. Funds are also encumbered from year-to-year when projects are multiple year projects.
The Finance Department has an open door policy and is willing to discuss the finances with the citizens of Minot.