LAFAYETTE — Lafayette city-parish government ended 2012 with savings of nearly $18 million in its general fund, thanks in part to gains in tax revenue and a major hiring freeze, according to an audit released Monday.
The audit also shows that the city’s four-year-old television, telephone and Internet fiber optic service is not yet self-sustaining, but LUS Fiber is bringing in increasing revenues and, city officials said, it is meeting growth expectations.
The city’s savings, call the fund balance, serves as a financial cushion during a disaster or an economic downtown, but city-parish officials in recent years had drawn down the account to cover normal operating expenses that had outpaced revenues.
The savings for the city’s general fund at the end of 2011 had dipped below $4 million.
“If we were hit by a hurricane and Lafayette were shut down, we would have been only able to operate for two weeks,” City-Parish Chief Financial Officer Lorrie Toups said.
The general rule of thumb is that a government should have enough savings to cover expenses for at least 60 days, said accountant Burton Kolder, whose firm did the annual audit for city-parish government.
The city’s savings when the 2012 fiscal year ended was enough to cover operations for 81 days, Kolder said.
“Overall, we are very pleased with the direction we see things going with the city,” Kolder said.
The nearly $18 million in savings at the end of 2012 came from a combination of factors.
Toups said sales tax and property tax collections climbed higher than expected, the city saved money through refinancing the millions of dollars of bonded debt it carries for capital projects and a hiring freeze left some 80 positions unfilled.
Those vacant positions include jobs in the Police Department, the Fire Department, and on drainage and road crews.
Lafayette City-Parish President Joey Durel said that although he is pleased the city has restored its financial cushion, leaving positions vacant can affect services.
“There is something lacking in government when you don’t fill those positions,” he said.
Even with the flush savings account, city-parish officials still face financial issues.
Restoring funding for unfilled positions would cut into the surplus, as well as any move to give raises to city-parish employees, who, with exception of firefighters, have not seen even a small cost-of-living adjustment for two consecutive years.
And city-parish officials have grappled in the past year with funding needs for the parks and recreation department and the police and fire departments that rise into the millions of dollars.
The audit released on Monday also offers a close look at the finances of LUS Fiber, the city-owned fiber optic telecommunication service that launched in 2009.
LUS Fiber operating revenues rose from $17,010,937 in 2011 to $24,041,236 in 2012, according to the audit.
That’s enough to cover debt payments on the more than $100 million the city borrowed to build the fiber optic system and to cover nearly all operating expenses with the exception of depreciation.
Depreciation is not the loss of actual cash but rather writing off the value of aging equipment as an expense.
With depreciation, the system ended 2012 with a loss of $11,869,564, compared with a loss of $16,519,323 in 2011, according to the audit.
Factoring out depreciation, LUS Fiber made enough money to roughly break even by the end 2012, according to the audit figures.
LUS Director Terry Huval said it will likely be a “couple of years” before the telecommunications system is full self-sustaining, but the fiber optic system is meeting financial goals and continues to grow every year.
“Each day our customer numbers are increasing,” he said.
The city has never made public the number of customers served by the fiber optic system, citing laws that allow it to keep competitive information secret, but Huval said he plans to release the numbers later this month.