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City ends fiscal year with $4.6 million surplus

November 09, 1999|By DAN KULIN /Staff Writer

The City of Hagerstown ended the 1998-1999 fiscal year in the black, according to the city's annual end of the year audit released Tuesday.

The city had a $4.6 million surplus in the fiscal year from July 1, 1998, to June 30, 1999, according to the audit. Most of the surplus came from the city utilities, which depend upon annual profits to pay for construction projects.

The city's $20 million general fund, which pays for many city services including the police and fire departments, had a $200,000 surplus for the fiscal year.

All property taxes go into the general fund.

During the 1998-1999 fiscal year it appeared as if the general fund might have been heading toward a deficit.

City Finance Director Al Martin said that around August 1998, they saw that property tax revenues were going to be lower than projected by about $150,000.

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A major reason for the shortfall was the negligible increase in assessed values of properties in the city, Martin said.

To save money several vehicle purchases were postponed, vacant positions such as assistant public works manager and human resources department manager were not filled, and some borrowing for major projects was postponed, Martin said.

Also, the city received more money than expected from gas tax and income tax reimbursements from the state, he said.

Those factors led to the city's general fund coming out $200,000 ahead that year.

Martin said it was basically a "break-even position" for the city.

"We don't consider $200,000 a sizable surplus," he said.

The $200,000 will go into the city's general fund reserve account, which now stands at about $3.8 million, he said.

Revised financial projections for the current fiscal year have not been done yet, but Martin said he expects property values probably will be flat again and they will have to look at ways to save money such as postponing some purchases again.

He said recent development, such as the construction of the Centre at Hagerstown shopping center near the U.S. 40 and Interstate 81 interchange, should bring in additional money and have a positive impact on this year's budget.

The Hagerstown accounting firm Albright Crumbacker Moul & Itell audited the city's financial statements, and found that the city had sound accounting practices, representatives from the firm told the City Council on Tuesday.

The firm recommended the city complete and approve minutes from previous council meetings.

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