Gilbert Residents Don’t Need to Sacrifice Anymore: The Money is Available in the General Fund

by Eddie Cook
I am a successful business professional who has been associated with several organizations for over 20 years dealing with Fortune 500 companies. I have developed a strong understanding and knowledge of business finances. Recently, I took on the task of trying to understand the health of the Town of Gilbert’s General Fund Budget for the current fiscal year FY09-10. The General Fund Budget of $112,171,750 was adopted by the Town Council for FY09-10. This fund pays for the expenditures incurred by departments such as Public Safety, Public Works, Development Services, Support Services, and Community Services. In rare cases, if the General Fund Budget has a deficit, the General Fund Balance will make up the difference to balance the budget. The General Fund Balance started FY09-10 with a positive balance of $53,874,615 (Gilbert Comprehensive Annual Financial Report June 30, 2009, page 26).
The General Fund Balance contains surpluses from prior fiscal years and is cumulative from year to year. In the General Fund Balance, the cash is distributed into two categories, “Reserved” and “Unreserved.”
“Gilbert maintains a General Fund Rainy Day reserve with a goal of 10% of the total General Fund expenditures” (Gilbert Annual 2009-2010 Budget Report Adopted August 25, 2009, page 23). This “Unreserved, Designated” fund is set to be $12,500,000.
After the “Reserved” and “Unreserved, Designated” funds have been subtracted from the General Fund Balance, then what is left over is called the “Unreserved, Undesignated” fund. Today the balance is $20,268,802 (Gilbert Comprehensive Annual Financial Report June 30, 2009, page 18). This balance might be considered a “Slush Fund.” This positive balance can be used at the discretion of the Town Council to supplement the General Fund Budget as revenue in case of a projected budget deficit.
Here is the summary of the “Unreserved” General Fund Balance for the start of the FY09-10 Budget:
Unreserved and Designated (Rainy Day): $12,500,000
Unreserved and Undesignated (Slush Fund): $20,268,802
Projected Surplus for FY09-10:

(Considered Unreserved, Undesignated $2,000,000
Total General Fund Balance: $34,768,802
In conclusion, the Town Council has access to a healthy amount of cash on hand to provide relief to the General Fund Budget in case of a deficit. We anticipate that the economy will be improving over the next 12 to 24 months. Revenues will be increasing for the Town of Gilbert during that period. But until then, the Town Council can use the “Unreserved and Undesignated” General Fund Balance to help supplement the predicted deficit for the FY10-11 budget which shows that the 3% voluntary employee salary reduction is not necessary and we have no need for a sales tax increase. The “Money is There” in the General Fund. Vote “NO” on Proposition 406.