Funding the Greensboro budget

I attended the public hearing on financing for the High Point Road property purchases earlier in January. I suggested more cash could be drawn from the Coliseum fund to finance these property purchases. Two separate facts make me believe additional cash for the city's general fund can be found at the Coliseum.

First, the Coliseum receives annual transfer from the general fund ranging from roughly $ 1.5 million to $ 2.0 million dollars to offset losses. Seemingly, in years when it operated in the black (2005) it would not need a cash infusion from the general fund, but it received and retained $ 1.6 million for that year. One year earlier, 2004, was a loss year and the general fund transfer occurred. Again in 2006 a loss was sustained and a general fund transfer occurred. The question is why was the Coliseum permitted to keep $ 1.6 million in 2005 when it was not needed to offset a loss?

Second, over the past eight years the Coliseum has earned $ 1.3 million dollars on invested cash. Why should this cash be kept by the Coliseum?

The Finance Department staff maintains very detailed and accurate records for the Coliseum, and correctly points out that the Coliseum is required by statute to retain a cash balance that is calculated each year. The information I reviewed showed that the Coliseum had exceeded its statutory requirement by $ 441,000 in 2008. Staff says the Coliseum must retain sufficient cash to meet day-to-day obligations, and I agree with this point. The statutory calculation, however, fails to add accounts receivable as a cash source into the calculation even though a deduction for accounts payable is included.

City Council is faced with difficult choices as it begins work on the 2009-10 budget. I challenge the Council to take a hard look at the Coliseum cash position as a potential source of sorely needed cash in the general fund. City Council should require the Coliseum to refund interest earned on idle deposits and also consider its policy on subsidies in years when operations are in the black.

In 2001 the Coliseum received $12.2 million dollars from its customers for events and parking, and that year had a year end cash balance of $ 1.4 million dollars. In 2008, customer receipts had fallen to $ 10.8 million dollars and the year end cash balance (after removing $ 2.9 million dollars held for capital expenditure purposes) was $ 2.9 million dollars. If the Coliseum made it through a number of years on a smaller cash balance when revenue was greater, it should have more than enough cash now.

Council needs to decide if the Coliseum cash should remain intact, or if a more prudent course would be to require the return of some cash. This will not solve the overall city budget riddle, but a few hundred thousand dollars could certainly fill some gaps in expenditures.