Bryan City Council members learned Tuesday that the city's general fund balance totals about $20 million but that almost half the money has already been designated for necessary projects and payments.
The discussion was included in a financial status briefing prior to the city's budget workshops. The City Council will adopt its budget in September, and the 2008 fiscal year begins Oct. 1.
As of May 31, Bryan's general fund assets - including property taxes, sales tax, cash and investments - total about $23.3 million. Liabilities, which cover accounts payable and other committed funds, total about $2.9 million. Based on those figures, it appears that the city has a $20 million rainy day fund, but that's not the case, City Manager David Watkins said.
"Don't get real excited, because some of that you have earmarked," he said, explaining that the actual fund balance is more in the neighborhood of $12 million.
The city has been spending about $3 million for vehicle replacement and $2 million for information technology upgrades out of the fund balance, Watkins said. The fund also has been used for a loan payment.
Although the balance is smaller than it appears on paper, the fund is still in good shape, the city manager said. Bryan's minimum targeted balance is about $7.7 million, according to documents provided by the finance department.
Watkins said sales tax is expected to boost revenue this year, as Bryan has gone from collecting $8 million in 1999, to a projected $14 million this year.
"That's pretty healthy," he said. "But it doesn't take much - one shopping center going dark, one car dealership leaving town - for those numbers to turn upside down. That's why you need a fund balance."
During upcoming budget workshops, the City Council will decide whether the fund balance ought to be lowered to spend some of the revenues on necessities, Watkins said.
"We do have a lot of capital needs," he said. "We've talked about infrastructure improvements. It may be that we want to take a little cash and use it to make some big improvements in various parts of Bryan."
Bryan operates on a $260 million budget and has a property tax rate of 63.64 cents per $100 assessed valuation.
Mayor Mark Conlee said after Tuesday's meeting that he thought the city was in a good financial position but that officials might need to look at lowering the fund balance in order to address infrastructure.
"That's something we're going to have to take a hard look at," Conlee said. "We're really too early in the process to make decisions like that, but maybe we need to take some of that fund balance and put it into streets or sewers."
The city offers a $15,000 tax exemption for senior citizens and could soon be faced with another potential budget impact. The City Council will decide at its July 10 meeting whether to implement a senior citizens tax freeze or place the issue on a November ballot.
Chief Financial Officer Kathy Davidson has said the tax freeze could cost the city about $993,000 over a three-year period. Costs will continue to escalate each year, Davidson has said.
In other matters Tuesday:
• The City Council approved on final reading an ordinance approving the Burton Creek tax increment financing zone along William Joel Bryan Parkway and Villa Maria Road.
A financial plan, also approved Tuesday, shows that the city will issue bonds for about $2.3 million to pay for landscaping, walking trails, a regional detention pond and construction of Nash Street, which will connect William Joel Bryan and Villa Maria.
Development within the TIF zone will add about $80 million to Bryan's property value over the next seven years, according to the financial plan. A portion of the property taxes on new development in the area can be used to repay the city's debt.
• New council members Ann Horton and Paul Madison were sworn into office. Both won runoff elections Saturday. Outgoing Councilwoman Annette Stephney was honored for her service to the city.