Baltimore spent more in 2009 than it took in
For the year ending on December 31, 2009, Village of Baltimore cash receipts totaled $959,059, but they spent $1,012,594. The income statement shows receipts of $263,317 from the Municipal Income Tax, $92,877 from Property and Local Tax and $101,245 from Fines, Licenses and Permits, and Other.
Disbursements include $298,188 for Security of Persons and Property. I am not versed in reading this information, but it sounds like there is a possibility that we are spending 30 percent of the village income on Security of Persons and Property. Can I assume that his is the reason that they want to transfer the cost of operation of the Security of Persons and Property, which could mean Baltimore Police Department, from the General Fund to a property tax levy?
When you read more, you find that Baltimore has considerable debt. The principle amount of the debt is $8,281,140. That amount apparently involves the water and sewer plants and the respective distribution and collection systems. That debt was not an “elective” for Village Council or the village administrator. It is the result of the Ohio Environmental Protection Agency telling us, “ This is what you will do, or we will take it over and do it for you.”
What seems to be more troubling is the final paragraph on page 3 of the Auditor of State’s report on village finances. “In our opinion, because of the effects of the matter discussed in the preceding two paragraphs, the financial statements referred to above for the years ending December
31, 2009, and 2008, do not present fairly, inconformity with accounting principles generally accepted in United States of American, the financial position of the village as of December 31, 2009 or 2008, or its changes in financial position for the years then ended. Also, in our opinion, the financial statements referred to above present fairly, in all material respects, the combined cash balances and reserves for encumbrances of the Village of Baltimore…”
The comments are based upon, “The Village has elected not to follow GAAP (Generally Accepted Accounting Procedures ) statement formatting requirements.”
The investopedia.com website states, “If a financial statement is not prepared using GAAP principles, be very wary.” Maybe there is a reasonable explanation for not using GAAP procedures, but why would the Auditor even mention it if it were unimportant.
As I stated earlier, the debt involved in the water, sewer and collection/distribution systems is not the fault of our Village Council or administrator. Both the state and federal environmental protection agencies placed these mandates on Baltimore and citizens of Baltimore would be paying for it one way or another. We have no control over those mandates.
What we can control is when “receipts” are less than the “disbursements.” When that happens changes must be made and that change is “stop the spending.”
Charles R. Lamb