The city of Atlanta’s cash reserves have grown to nearly $127 million, a sum that could help the city pay for a variety of projects, including sidewalk reconstruction and bridge repair.
Mayor Kasim Reed touted the increase in the city’s general fund reserves — a $119 million spike from the city’s $7.4 million reserves when he took office in January 2010 — as proof that the city is adeptly juggling its financial demands.
“It’s going to be used to stabilize the finances of the city,” Reed said of the cash. “It’s really about a demonstration that we’ve been disciplined.”
Reed said the reserves could help the city achieve better terms — including lower interest rates — when it issues bonds to pay for a variety of much-needed repairs on roads, bridges and sidewalks. Under that scenario, larger reserves could be seen as a sign of fiscal stability.
Reed previously said the city may float bonds worth $250 million to $300 million for those purposes. But key details — including when the city will take on the debt — have not been hammered out.
Atlanta has about a $922 million infrastructure backlog — including streets, signs, bridges and vehicles in addition to sidewalks —- according to one widely cited study.
On Monday, Reed said the city had navigated challenging economic trends, cut unnecessary expenses and hired more than 700 police officers while expanding services for residents, including programs for young people at recreation centers.
Reed has promised not to raise property taxes this year, but the city’s property tax receipts remain a large question mark after the real estate downturn cut deep into home values. Last month, concerns over how dramatically the city’s tax collections would drop delayed plans for across-the-board raises for city employees.
The decision to push those plans into this year instead of using reserves or other sources of cash to pay for them was controversial and sparked scattered protests by city employees.
In an interview with The Atlanta Journal-Constitution, Reed said he hoped the city’s tax collections dropped by less than $10 million in 2012, compared to drops of as much as $15 million in previous years.
Final tax-collection figures are expected from Fulton County this week. Combined with improvements in the city’s sales tax receipts, a smaller drop in property tax revenues would help shore up the city’s finances, Reed said.
Decisions by Moody’s and Standard & Poor’s, two big credit-rating agencies, to raise the city’s fiscal outlook from negative to stable should also help the city when it issues the infrastructure bonds, he said. The city also plans to pay off bonds related to parking lots at Underground Atlanta by 2016, potentially freeing up $8.1 million per year.
The city’s audited financial data was released as part of the city’s comprehensive annual financial report for the fiscal year that ended June 30, 2012. Accounting and consulting firm KPMG, which audited the financial statements, gave them a clean review and reported that it found no material misstatements.
Jim Beard, the city’s chief financial officer, noted that the city’s $107 million unrestricted fund balance is equivalent to 20 percent of Atlanta’s annual budget, a longstanding goal that Atlanta has not been achieved in years.
The unrestricted funds are not designated for a particular use. With City Council approval, the money could be used for a wide variety of purposes.
Beard said the city is committed to conservative budgeting and spending practices.
“We’ve got a lot to celebrate,” said Yolanda Adrean, who represents part of north Atlanta on the City Council.
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