Decreasing Net Assets Of The City Of Memphis

January 13, 2014

 

In recent days, the City of Memphis finally published their Comprehensive Annual Financial Report (CAFR) on line. In between watching the NFL playoff games and Tiger basketball, I have been reading this important document. It will never outsell “Gone With The Wind” or the Bible in popularity but to me it makes fascinating reading. It is like reading a diary as the Administration tries to put the best face on things but the public auditors (Banks, Finley White and Co) have to publish the facts as presented to them by the administration while at the same time going over the books for verification of what they are told.

 

One of the most interesting and important statements is the following one found in the section entitled “Management’s Discussion and Analysis”. It reads as follows.

 

“Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City is improving or deteriorating.”

 

Well here is a look from the last five CAFRs for the City of Memphis.

 

Net Assets of the City of Memphis.

 

2009                     $2.02 Billion

2010                     $1.90 Billion

2011                     $1.84 Billion

2012                     $1.76 Billion

2013                     $1.69 Billion

 

This is a decrease over four years of $332 million dollars or $83 million per year.

 

There is another interesting figure on page 94 which shows changes in long term liabilities. This shows that the total liability for vacation, sick and other leave benefits is $90 million dollars. This is money owed to people for unused but owed vacation, sick leave and other benefits.

 

This is one area that needs to be reformed as the current system allows some city workers to be off work as much as 25% of the year depending on length of service. I will write more about this in following posts.

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