In his Express Times Op-Ed, Lamont McClure betrays a basic lack of knowledge about Northampton County's $60 million fund balance. During Council meetings, he's called it a "slush fund." He misrepresents it as a "gentlemen's agreement" between Executive John Stoffa and Council member Ron Angle, or as two months of the County's entire $300 million budget. Both claims are incorrect.According to McClure, instead of $60 million, "The more fiscally appropriate amount of money to have set aside in a fund balance or surplus is about $19 million. For five years, Northampton County has been keeping a surplus three times larger than was necessary."
Let me give you the facts.
Northampton County's fund balance is $60,093,120. It's going in the wrong direction. It's $1.5 million less than it was in 2009, and $4.5 million less than it was in 2008.
It's no "gentlemen's agreement," but the product of an accounting standard called GASB 54. Last year, Northampton County Council formally adopted it by a 7 to 0 vote. McClure may be confused about all this because he was absent that night, and also missed all the Committee meetings during which the importance of this accounting standard was discussed.
A product of the Governmental Accounting Standards Board, its purpose is to prevent exactly what is happening in Bethlehem, where money set aside for one purpose is spent on something else. Fiscal Affairs Director Vic Mazziotti tells me that failure to adopt GASB 54 would result in a "qualified financial statement" from outside auditors, and that would affect Northampton County's favorable A/A2 bond rating.
Contrary to what McClure seems to think in his Op-Ed, most of that $60 million is already committed. Here's how it breaks down.
* $13.8 million is set aside to pay the cost of a swaption agreement coming due next year. Gracedale proponents will tell you that the nursing home is being sold to pay this bill, but the funding has already been set aside. Their claims are disinformation.
* $25 million is set aside as a stabilization fund against emergencies like a collapsed roof or a bridge that needs immediate repair or cost over runs on a parking deck. Would McClure really advocate eliminating the rainy day fund?
* $463,000 is set aside to pay for purchase orders. Should we follow McClure, adopt Bethlehem's accounting style and delay paying our bills?
* $5.9 million is set aside to plug the hole in the 2011 budget so it is a balanced budget. Should we spend this money anyway and end 2011 in the red?
* $15 million is unassigned. This pays the bills when people are slow paying their property taxes. If I read McClure's op-ed correctly, this sum should actually be $19 million, which would make the fund balance $64 million.
A product of the Governmental Accounting Standards Board, its purpose is to prevent exactly what is happening in Bethlehem, where money set aside for one purpose is spent on something else. Fiscal Affairs Director Vic Mazziotti tells me that failure to adopt GASB 54 would result in a "qualified financial statement" from outside auditors, and that would affect Northampton County's favorable A/A2 bond rating.
Contrary to what McClure seems to think in his Op-Ed, most of that $60 million is already committed. Here's how it breaks down.
* $13.8 million is set aside to pay the cost of a swaption agreement coming due next year. Gracedale proponents will tell you that the nursing home is being sold to pay this bill, but the funding has already been set aside. Their claims are disinformation.
* $25 million is set aside as a stabilization fund against emergencies like a collapsed roof or a bridge that needs immediate repair or cost over runs on a parking deck. Would McClure really advocate eliminating the rainy day fund?
* $463,000 is set aside to pay for purchase orders. Should we follow McClure, adopt Bethlehem's accounting style and delay paying our bills?
* $5.9 million is set aside to plug the hole in the 2011 budget so it is a balanced budget. Should we spend this money anyway and end 2011 in the red?
* $15 million is unassigned. This pays the bills when people are slow paying their property taxes. If I read McClure's op-ed correctly, this sum should actually be $19 million, which would make the fund balance $64 million.
McClure seems to think that the County can find $7 million to fund Gracedale next year, as well as another $10 million for capital projects. He claims there's no "fiscal necessity" to raise taxes. But as you can see, he is misinforming you. I don't believe it's intentional, but it's what happens when a Council member has a 60% attendance record. IHe should attend a few more meetings and listen to Controller Steve Barron a little less.
