Excess Money? Clearing up Confusion
By J. Anthony Beard, Treasurer, Clerk & Comptroller
There has been a lot of talk recently about Palm Beach County’s perceived “surplus” of $2+ billion. In fact, Governor Charlie Crist recently told a group of taxpayers that Palm Beach County Commissioners should “give it back.” In reality, they can’t. The $2+ billion refers to the County’s cash and investment portfolio. While some of the money is, in fact, reserves, most of the money is restricted and earmarked for payments approved in the County’s budget, leaving not a lot of excess. This article explains where the money in the cash and investment portfolio comes from, where it goes and how it’s invested to benefit Palm Beach County citizens.
The Money Trail
Money in the County’s cash and investment portfolio comes from a variety of sources including property taxes, user fees, and gas, sales and tourist taxes. The Clerk & Comptroller’s Treasury Department invests County funds that are not needed for immediate use to maximize their earnings potential until they are needed.
Interest income on the cash & investment portfolio helps reduce the tax burden on Palm Beach County citizens. In fiscal year 2006, interest income on investments totaled over $88 million, the equivalent tax savings of approximately $68 per citizen countywide.
Behind the Numbers
There are other sources of funds for the cash and investment portfolio. Funds from County enterprises, such as the Palm Beach International Airport, Solid Waste Authority, and Water Utilities, accounted for $554 million of the countywide cash and investment portfolio at the end of fiscal year 2006. Agency funds from constitutional officers, including the Clerk & Comptroller, Tax Collector and Property Appraiser, totaled roughly $60 million and represent fees, fines and funds held in escrow by these agencies. Internal service funds, which include risk management insurance funds, account for about $90 million of the portfolio. Palm Beach County is self-insured against many risks and maintains its own risk management insurance funds in an effort to save taxpayers money.
|
Governmental Funds
Totaling $1.56 billion as of FY2006, governmental funds are the largest portion of the County’s cash and investment portfolio. As seen in the graph below, a majority of those funds are pledged to specific projects and purposes and cannot be spent freely.
|
Of the $1.56 billion in governmental funds in FY2006, the amount available for general government operations was $393 million, the bulk of which was incorporated into the County budget for operating purposes. The sources of some of the funds in general government operations place certain restrictions on use of the funds. For example, gas tax money is used primarily for County road programs. The following graph shows the sources of funds in the general government operations category.
|
The Conclusion
Out of all the funds that make up the County’s $2+ billion cash and investment portfolio, property taxes are the only funds that could technically be “given back” to citizens. They represent $223 million, or 9.84% of the portfolio, which equates to about $173.17 per citizen in Palm Beach County. Currently the County’s Office of Financial Management and Budget holds $125 million in unbudgeted reserves. That money along with the other funds in the portfolio are invested until required for use to maximize earning potential.
The Clerk’s Treasury Department takes great pride in watching over the assets of the citizens of Palm Beach County and will continue to efficiently manage the County’s investment portfolio. More detailed financial information about the portfolio can be found in the FY2006 Comprehensive Annual Financial Report (CAFR) available at www.mypalmbeachclerk.com.
Treasurer J. Anthony Beard brings more than 15 years of experience in the field of finance to the Clerk & Comptroller's office. He holds degrees in Finance and International Business and has been accepted into the MBA program at Northwestern University’s Kellogg School of Management.