Cash on Hand
Cash on Hand
As I started 2020, I had a goal of reaching 180 days of Cash on Hand (COH) in all the city’s funds combined. The second part of the goal was to reach 180 days in the general fund, and the third is to reach 180 days in the city’s Park and Recreation fund. I will try to explain why this is important and where we are today in this process.
Why 180?
The city receives tax payments twice a year which means we go roughly six months, or around 180 days, between receiving those installments each year in June and December. Getting us to 180 days of COH will allow us to not borrow from the sewer fund, which has a regular monthly income, and have to repay it prior to the end of the year.
Late in 2021 or early 2022, we reached 180 days in all funds combined. While this is great it is just the first of my three-step approach to getting us in a better financial position for the future of our community. The General Fund is where most of our revenue and expenditures are processed through and that is why it was the second step of my goals.
When I joined the Common Council in 2016, we had 41 days of COH in the general fund. Each year that number grew and was at 103 when I began serving as mayor in 2020. At the end of 2020, we had reached 121 days of COH and were getting closer to the 180 days that I was working and planning towards. As we work on the budget each year, it is a balancing act to put enough into reserves to grow our cash on hand and keep services at a level we have come to love and expect in our community. I believe raising taxes, while sometimes unavoidable, is not the way to reach this goal and keep our community moving in the right direction for our children and their children’s future. As I mentioned, by the end of 2020 we had gained 14 days of COH over the previous year. Fast forward through the next two years, 2021 and 2022, we had achieved another 65 days of COH to reach my goal of 180 days and exceeded it by six going into 2023. We had also done this while lowering taxes by six cents to a rate of $1.3639 compared to the 2022 rate of $1.4245.
Since the start of 2020, we have reached two of my three goals related to 180 days of cash on hand. Now we are working on as we have been all along getting Parks and Recreation to the goal. We are already working on the capital planning for the next five years and I am sure as we have already had to do before we will have to make some tough decisions, but we will continue to grow on so many fronts. As our plan currently shows, if we stick with it and projections are as accurate as they have been for the last couple of years we will reach that goal by the end of 2024.
Quick recap:
Goals
(DONE) 180 COH all funds combined
(DONE) 180 COH General Fund
(EST end 2024) 180 COH Parks and Recreation Fund
