Maybe it’s because it happened right before the holidays, when most Farragut residents were busy with parties and shopping. Or maybe it’s because accounting and finance talk tends to make people fall asleep. Whatever the reason, there was little applause when the town of Farragut received excellent marks on its Comprehensive Annual Financial Report (CAFR) at the December Board of Mayor and Aldermen meeting.
Now that the new year is upon us, let’s acknowledge Farragut’s strong report. State law requires an annual audit, and the CAFR is a comprehensive review of the town’s financial statements that have been audited by the accounting firm Overholt & Bean, P.C. The recent report is for fiscal year 2018, which ended June 30.
The most striking fact in the report is that the town has no debt. Take a moment to process this. While many government entities struggle to keep debt in check, Farragut has none. That’s because the town budgets conservatively and saves money to pay for projects with cash, says Town Administrator David Smoak.
That’s not the approach used by most municipalities (or Americans, for that matter). Most issue bonds to pay for large projects then spend big bucks each year to service those bonds. Smoak uses McFee Park as an example of a conservative approach to spending. Instead of borrowing money to build out the park 15 years ago, the town is finishing the park in stages and paying as it goes. The board is currently deciding what will be included in Phase 3 improvements, and those funds are already in the town’s savings account. The same is true of the Farragut Community Center (which should open for business in late 2019), ongoing improvements to the Campbell Station Inn, and two major road improvements.
(Side note: assets like increased park amenities and a community center require additional maintenance and staffing. Guess what? These items are also budgeted.)
Another indication of Farragut’s solid financial position is its general fund account balance, as of June 2018, of over $17.5 million. These are funds that aren’t currently assigned to a specific project. The fund has doubled in five years, says Smoak.
“It’s a testament to our ability to budget conservatively and still be able to provide quality and efficient services to our community.”
Another reason why this good news may have slipped under the radar is that it’s old news. The town of Farragut has received a Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association of the United States and Canada (GFOA) for its comprehensive annual financial report for 26 consecutive years, and excellence in reporting goes hand-in-hand with a healthy financial position. For the past 14 years, Town Recorder Allison Myers has been responsible for this award-winning document. Farragut was one of 54 (out of 356) Tennessee municipalities to receive this recognition last spring.
During this time of partisan bickering, let’s take a moment to appreciate a government with a transparent budget that doesn’t leave the next generation holding the bag. Thank you, town of Farragut.
Wendy Smith coordinates marketing and public relations for the town of Farragut.