Projected $1 million balance called first step for Kankakee County
Kankakee County is on pace to post a $1 million balance at the end of the fiscal year, County Auditor Jacob Lee recently reported, but the county is not out of the woods yet, he warned.
“Obviously areas of concern remain: our cash-flow, the backlog in accounts payable, inter-fund borrowing, among several others,” he wrote. “There is ‘light at the end of the tunnel’ and if we are able to maintain current or similar levels of increase in expenditures, we will see the financial progress as depicted in the analysis come to fruition.”
According to Lee, the county budgeted for revenue and expenditures of $24,378,749. While the projected expenditures are now at more than $26.6 million, the projected revenues are now at $27.6 million.
“All things being equal, current projections still indicate that there will be more revenue than expenditures this year,” Lee reported. “I must strongly advise that if there is more revenue than expenditures that we do not increase expenditures. The inter-fund borrowing, the debt to the Highway Department and the $1 million loss in the TAW cash-advance, and the backlog in accounts payable all are claims against any positive revenue balance that may manifest.”
Fiscal year 2016 marked the first in time since 2012 that the county achieved a positive balance between its revenues and expenditures, at just under $20,000. The previous four fiscal years saw deficits of a combined $6.4 million. While the fiscal year 2017 gains of more than $1 million will help to begin to offset that figure, Lee said the county must maintain lower expenditures than its revenues for the immediate future.
“With the information available to me at the time of compiling this report, I predict that the general fund will not be above zero until 2022 or beyond,” Lee wrote. “There are a few things that could changes this, namely DHS, an exceptional increase of economic activity in the business community, a significant increase in home ownership (i.e. population growth) within the county; absent these economic changes I have little confidence in faster progress.”
According to Lee, the county is expected to bring in $457,000 more in fiscal year 2018 than it spends but won’t reach the $1 million mark again until 2020. He noted that the county plans to pay the Highway Department $1.1 million this year – a strong start to paying off the $4.5 million debt it owes, which must be paid off within the next three years.
Further, the county needs to clear its $5.15 million deficit in its general fund and achieve a combined balance of $1 million between the general, tort and pension funds to receive a better bond rating, which would enable cheaper borrowing. Lee cautioned that the county needs a balance of $5 million at the end of this year to avoid accessing outside money.
“The county is still in dire financial straits,” Lee reported. “The projected revenue exceeding expenditures this year is not ‘free money’ or ‘extra money.’"
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