August 20, 2012
CAFR is shorthand for Comprehensive Annual Financial Report. Sounds dull and uninteresting until it is time to pay your local tax or utility bills.
Memphis and Shelby County publish these reports annually and they contain most of the vital information about where the money comes from and where and how it is spent. Over the next few weeks I will be reviewing these two reports and similar reports from the MLGW and the two school systems.
The most important statement in all the CAFRs is the following one.
“Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position is improving or deteriorating.”
Well, let us take a look at the City of Memphis net assets, 2010 versus 2011 only for Governmental activities. (Business type activities such as MLGW, sewer collection and treatment and storm water are a separate issue). The net assets of the City of Memphis for Governmental activities decreased by $170 million dollars from 2010 to 2011. Even adding in Business type activities, the decrease was $60 million.
The unrestricted net assets for Governmental activities for Memphis decreased by $168 million dollars 2011 compared to 2010. Comparing this reporting to the Metro Nashville CAFR for 2011, I note that they counted their unfunded OPEB liability in their unrestricted net assets which amounted to $649 million dollars. The Memphis CAFR in reporting net assets says nothing about the $1.33 billion dollars of OPEB unfunded liability. Interesting how they keep quiet about this elephant size unfunded liability which they keep ignoring year after year. Add the Memphis City School unfunded liability of $1.1 billion and you have a real ignored problem, especially with the pending school consolidation.
I will continue to reveal ignored and publicly unknown facts in the various CAFR’s in the coming weeks. Sleep well you Memphis taxpayers as your property tax due date of August 31st comes up.