Audit shows Cary finances bounce back

Spending, revenue at pre-recession levels

akenney@newsobserver.comDecember 27, 2012 

— The town beat its budget in fiscal year 2012, according to an audit released this month.

A report by independent accounting firm Cherry, Bekaert & Holland found no notable accounting errors for the town – and it showed the town’s spending and revenues returning to pre-recession levels.

The local government took in a record-high $138.6 million between July 2011 and June 2012, finally growing revenues past the pre-recession high of fiscal 2009.

Expenditures also passed pre-recession levels as the town spent more on public safety, public works, capital projects and debt payments.

However, accounting for population growth, the town spent less per resident than it had in the years before the recession.

“We continue to manage our finances conservatively,” said Finance Director Karen Mills. “Our staff’s been prudent, and our council’s been prudent.”

The town saw a 30 percent uptick in its permits and fees in fiscal 2012, and its property-tax revenue increased by $3 million, or about 4.4 percent.

Continuing construction of new homes, apartments and commercial space drove both increases. Apartment and nonresidential construction accelerated, while single-family homes rose in western Cary at the same rate as the year before, town staff reported.

However, town revenue also took a few hits. Sales-tax revenue was down 10 percent, or about $2.4 million, a drop that Cary attributed to slow economic recovery and the U.S. Census. (The recent government population count shaved Cary’s share of the state tax dollars.)

The town’s return on its financial investments also continued to plummet, continuing a downward slide that has knocked investment revenues to the general fund from almost $11 million to less than $1 million over four years.

“It’s such a shame,” Mills said, explaining that the town isn’t pursuing more aggressive investments because it prefers to keep its money in safe, easily accessible funds.

“It’s going to be a long time before those yields come back up,” she said.

The town’s general spending, meanwhile, expanded by $16 million, or about 12 percent over fiscal 2011. The increased spending included about $2.8 million more to police, about $1.3 million more to public works, and about $8 million more to capital projects, a large chunk of which went to buy downtown land.

Overall, the town took in $4 million more than it budgeted and spent about $11 million less, though almost half that will be spent next year instead. As planned, the town spent some of its cash reserves, depleting its general fund by about $6.5 million.

There’s no rest for the number crunchers: Planning for next year’s budget is already under way.

Kenney: 919-460-2608 or twitter.com/KenneyOnCary

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