18 Apr Boca’s Excessive Reserves Shown in the CAFR 2018
This article, originally published by Al Zucaro on BocaWatch.org, is preserved for historical purposes by Massive Impressions Online Marketing in Boca Raton.
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Boca Raton’s current elected and appointed officials are a cautious bunch. Perhaps they are still reeling from the political changes that have swept our city over the past four years: a Mayor removed from office and awaiting trial for corruption; a park referendum which upset the City’s plans for a restaurant on the Intracoastal; the election of two City Council Members who are not beholden to developers (and the near election of a third); the growing outrage over traffic, parking and too much development—the list goes on and on.
Who wouldn’t be cautious in such a political environment?
But when it comes to spending our money, many would argue that our City Council and Administration are overly cautious. Squirrels save nuts for the winter. Government officials piling up tax dollars because they can’t figure out what to do with the money is just nuts.
Boca’s finances are detailed in something called the Comprehensive Annual Financial Report. It should be called the Incomprehensible Annual Financial Report. The CAFR is so convoluted and jargon-filled that only a CPA can easily understand the numbers and their implications. Oh, that’s right…the City Manager is a CPA…go figure!!!
So for those who are fiscally challenged, here is the bottom line: Boca Raton currently has excess reserves of over $254 Million dollars. That is the number I consider ‘excess’ from the 2018 CAFR; that number grew from $224 Million in 2017. I am not talking about reserves that are needed for Capital Projects or Debt Service and so on. Boca continues to collect more in revenue than it spends and puts more money in reserves than it needs.
Our excess cash reserves will approach $320 Million if one factors in the future sale of the Boca Raton municipal golf course. This $254 Million is basically just sitting there, earning very little interest. Our city’s blended average portfolio yield increased from 0.61% in 2017 to whopping 1.08% in 2018. Just to remind you that our prior City council voted to sell the golf course because it was losing $200,000 a year. I bet GL homes will be laughing all the way to the bank. We could buy 4 golf courses with this ‘excess’ amount. It’s a problem that cities like Chicago or Newark would love to have, but for Boca it’s like saving for a rainy day in the desert.
So here are some suggestions :
- When the 2018 Financing Report is published on the city website, publish a simple summary that the public can comprehend. How much did Boca collect in taxes and fees? How much did the city spend, and what were the major expenses? What amounts were left over and are being held as excess reserves? What are the contingencies and liabilities that these reserves are supposed to cover?
- Hold a public workshop to discuss the 2018 CAFR and what the residents want to see done with these excess reserves. This would provide an opportunity for the Council and city staff to evaluate the need for such large excess reserve funds. Remember, these monies can be spent at the Council’s discretion—they are by definition excess reserves. What immediate needs could be met by spending some of these funds? The public would get their usual five minutes. Maybe we could expand the discourse on excess reserves by providing the public with excess comment periods.Such a workshop would also offer the opportunity for the presentation of creative ideas on the best use of our money. Some possibilities include:
- Directly contributing to the Beach and Park Tax District to help pay for the new Boca National Golf Course.
- Acquiring the 2500 and 2600 N. Ocean Boulevard beach properties for a fair price.
- Expanding the Wildflower Park by acquiring the southeast corner of NE 5th Avenue and Palmetto Park Road. This may require use of eminent domain, but it would also provide extra space for much needed turning lanes on NE 5th Avenue, one of Boca’s worst traffic bottlenecks.
- Initiating and subsidizing effective mass transit in the downtown. There has been much talk about how this might be accomplished (trolley, free taxis, pedicabs, golf carts). What is missing is a plan of action, not the money to make it happen.
- Building a new parking facility in the downtown.
- Making needed E-W road improvements to alleviate traffic congestion.
- Funding needed park repairs and improvements, e.g. at Gumbo Limbo.These and other ideas should be the subject of that 2018 CAFR workshop. The money is there. The Council has the authority to spend it wisely. Opportunity knocks.