North Myrtle Beach doing just fine financially, but thanks for the concern

Re “North Myrtle Beach living above its means” letter by John Bourassa.

First, we’re glad that John liked the city’s FY 2016 Annual Report and that its content makes him proud to be a city resident.

Second, in contrast to John’s claim, the city’s FY 2016 Comprehensive Annual Financial Report (CAFR) is available online at www.nmb.us via the finance department portal on the homepage. However, as a result of his letter, we have installed a new access “button” for the CAFR, as well as the city’s proposed FY 2018 budget at the bottom left hand corner of the homepage.

Third, John appears to have misread or not read completely the financial statement offered on page 18 of the report. The statement clearly shows that the city’s operating expenses are not $4 million above its revenues. Instead, the statement shows a surplus for FY 2016 and the line item for “Installment Loans” clearly shows $0 or no loans.

Without traveling too far into the world of government accounting, the following may provide clarity:

In the financial statement, a $3.7 million deficit appears before the line item “Other Financing Sources (Uses)”, which includes “Operating Transfers In” of over $6 million. The “Operating Transfers In” are not loans, but instead represent the General Fund portion of State Accommodations Taxes, Local Accommodations Taxes and Hospitality Fees, which represent a major funding source for the city’s General Fund.

State law requires that these tax revenues first be recorded in separate revenue funds and then be transferred to the General Fund, where the appropriated expenditure is then recorded. As shown at the bottom of the financial statement, the actual surplus for the General Fund for FY 2016 was $11,765, and the Year End Fund Balance was $11.6 million. The city is in sound financial shape.

The city also has significant cash reserves built into its 16 active funds, and serves citizens and visitors with tax rates and fees below that of all other governmental entities in Horry County and most municipalities statewide.

This story was originally published April 8, 2017 at 8:02 AM with the headline "North Myrtle Beach doing just fine financially, but thanks for the concern."