LAFAYETTE — City-parish government has little financial cushion left after heavily tapping its savings account to balance the budget in recent years, auditors told Lafayette City-Parish Council members on Tuesday.
The city’s general fund — the bulk of the budget — should have enough savings banked away to support government operations for about 60 days, said Burton Kolder, whose firm presented the results of the annual audit at Tuesday’s council meeting.
“You only have a 16-day cushion,” Kolder told council members.
Kolder said the financial cushion should be from $14 million to $15 million, money that could carry local government through a major emergency or an economic downturn.
He said the city’s general fund now has about $3.8 million available for use if expenses for this year are in line with the budget.
“It’s something that this council needs to address going forward,” Kolder said.
City-parish government has dipped deeply into prior-year savings to balance the budget this year and last year, using about $5 million of savings in 2010 and $9.7 million of savings in 2011, according to the audit.
The city’s general fund ended the 2011 budget year with about $9.1 million in the savings account, but more than half of that is budgeted in the current year, leaving only about $3.8 million in savings, according to the audit.
The budget problems are due in large part to rising costs for health-care and retirement expenses.
The council had few comments on the auditor’s report.
Many of the financial issues have been discussed in recent weeks, and cuts are expected in the 2013 budget that is being prepared.
City-Parish Chief Financial Officer Lorrie Toups warned council members in March that $5 million in reductions might be needed to maintain a status quo budget.
The administration has asked department heads to look for areas that can be cut, but no specifics have been identified at this time.
Some council members have pushed to eliminate spending for social service agencies, arts organizations, festivals and supplemental funding for the Cajundome.
The administration has trimmed some expenses in the current budget, nixing employee raises this year and implementing a policy that requires the administration to approve the filling of any vacancies.
Auditors also noted that the city-owned telecommunications service, LUS Fiber, continues to operate at a loss.
Toups has said LUS Fiber is still in the start-up phase, so the losses are expected.
The service launched in 2009.
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