The good news is that Golden did not incur additional debt in 2012. The long term debt at the year ended December 31, declined from $3.924 million in 2011 to $3.606 million in 2012.
Reserves in 2012 were reported to be up by $404,613 to $2.697 million at year end 2012. As a result, the town's net debt position was halved from $1.448 million in 2011 to $721,372 for the year ending 2012.
Of more concern in 2012 was the annual deficit of $500,517; Expenses were greater than revenues.
Revenues for 2012 were reported at $8.645 million compared with $10.563 million for 2011. Revenue in these financial statements includes grants, both conditional and unconditional.
Conditional grants, usually provided for one-off capital projects like the civic center, vary from year to year, making the comparison of revenue from year to year not very meaningful. In 2012, Golden received conditional grants of $598,185 compared to $2.783 million in 2011.
The conditional grants cannot be used to pay for operating expenses. Including them in revenue overstates the revenue available to pay operating expenses, distorting the true financial picture. Excluding conditional grants, revenue from all other sources including property taxes, water and sewer fees in 2012 was $8.047 million up slightly from $7.780 million in 2011.
If conditional grants were excluded from revenue, the annual deficit would be $1.1 million.
Total operating expenses for 2012, reported at $9.146 million, were slightly more than those reported for 2011 at $9.080 million. Operating expenses remain too high in relation to the revenue and will limit the amount of money available for future capital projects, maintenance and upgrades to the town's infrastructure (water,sewer, roads and buildings).
In 2012, only $1.181 million was expended on capital infrastructure, well below the amount required to maintain tangible capital assets (town's infrastructure).
To attain a sustainable balance, the annual deficit must be eliminated. To achieve this, expenses should be reduced by approximately $1.1 million, twelve percent (12%), and that money added to the capital budget to maintain the town's infrastructure.
Keith W Hern, Councillor
The opinions expressed in this blog are my personal
opinions and may not represent the opinions of other Councillors nor the
opinions of council.
