The economy's toll on Gainesville's financial situation is clear from a recent financial report conducted by Rushton & Company.
"Most of the time we say ‘things are up' and this year we're saying some things are down," Rushton & Company's Chris Hollifield recently told the City Council.
In fiscal year 2008, the city's total revenues declined by about $5.5 million, according to the report. The decline can mainly be attributed to a lack of construction and a decrease in water sales.
From July 2007 through last June 30, the city's revenues from city services such as building permits were nearly $1 million lower than in Fiscal Year 2007. Revenue from the water sales from the city's Public Utilities Department, which were limited much of the year by state mandates to decrease water use, were down by nearly $2 million, according to the report.
Other reported changes in revenues came from decreases in court fees and reductions in grants.
Although the decline in development and restrictions on water use have certainly taken their toll on the city's revenues, Rushton & Company's independent audit of the city's revenues and expenditures in Fiscal Year 2008, show the city still is in sound financial shape, Hollifield said.
"I think you are still healthy as a city," Hollifield told the council.
The report shows that the city ended the fiscal year on June 30 with a balance of $2.5 million in unreserved funds. The balance is the equivalent of about two months of the city's operating expenses, and is a smaller reserve than the city had at the end of prior fiscal years, Hollifield said.
With the future of the building industry uncertain, Hollifield urged the council at a recent work session to keep a close watch on revenues and expenditures throughout the fiscal year.
"I think your fund balance is still healthy although you certainly need to keep a closer eye on it than you may have needed to in the past," Hollifield told council members.
"I know ... it's gotten even worse since then in the economy we're in right now," Hollifield said.
However, Hollifield told council members that there is no apparent weakness in the city's financial structure. He praised city officials for garnering revenue from numerous sources and not relying on one or two revenue sources to carry the city financially.
"You're very fortunate that you're diversified," Hollifield said.
"I don't see any weaknesses per se that I would consider are material or that would ... have potential opportunity for problems," Hollifield said.
Interim City Manager Kip Padgett told the council that although the audit shows declining revenues, it shows the city has a comparably sturdy financial standing.
"We're in a fairly good financial situation compared to the economy we've got," Padgett said. "We're faring a lot better than other local governments, but we're going to keep a sharp eye on that and we're going to address any situations because what we don't want to do is surprise y'all at the end of the year."