Campbell upgrades its financial forecast

By jeanne starmack

starmack@vindy.com

campbell

The city finally is able to project a positive cash balance for the next five years, a critical step in getting out of fiscal emergency.

The state auditor’s office could be considering a request to release the city from its emergency status by the end of the year.

Paul Marshall, who chairs a commission that oversees the city while it remains under the emergency status, said Thursday that as long as the city keeps its spending under control and resolves some accounting issues, the commission would ask for a release.

The city learned it is able to project a positive forecast for five years at a commission meeting Thursday, Marshall said. At last month’s commission meeting, the five-year forecast projected positive balances only four years out.

Marshall said an income-tax levy due for renewal in 2013 is also an important factor in whether the city can stay on track financially.

Even without that renewal, the city could still project five years of positive cash balances, said city finance director Sherman Miles.

“In the years after 2015, we would be in trouble again,” he said. The levy generated $461,000 last year for city’s general fund, he said.

Now, the city must fix accounting deficiencies that were noted in a June 2007 state auditor’s report on accounting methods.

The city also must begin to follow generally accepted accounting practices, or GAAP accounting. It is expecting software in April that will allow it to do that.

The city also is hiring a firm to take an inventory of assets. That has to be done because under GAAP accounting, city assets are recorded, Miles said.

The commission is expecting a progress report on how the city is addressing accounting issues by its next meeting April 28.