Which City of Providence Accounts are the Reserve Accounts?

Philip Marcelo's story on Providence City Auditor James Lombardi's memo expressing "grave concern regarding the financial stability" of Providence is running in today's Projo. The memo addresses several issues, one of which concerns the reserve fund that the City is supposed to maintain. According to the memo, the balance in the “reserve contingency funds cash account” has gone from $14.4 million to minus-$187 thousand, and the balance in the “capital assets account” has gone from $22.2 million to a $4.6 million. The implication of Mr. Lombardi's memo is that these two accounts make up reserves which have gone from $36.6 million dollars at the end of fiscal 2009 to “approximately $4.6 million” at present, because the city has used them to pay operating expenses.

According to both Philip Marcelo's story, as well as Stephen Beale's story on the same subject in GoLocalProvidence, the Cicilline administration denies that the reserve fund is below the level it is supposed to be at. Here is the Projo version...

The city is also required to maintain a reserve equal to about 5 percent of the city budget, or about $30 million, he said. (Karen Watts, the mayor’s spokeswoman, said the city’s reserves are currently at about $30 million.)

Auditor Lombardi has provided detailed information in his memo, in the form of a set of general ledger reports, supporting his statements that the reserves are nearly tapped out. One report shows an end-balance of negative $187,736 in account, on October 6 of this year, in account 10101-0000 from accounting unit 657-900 (the “reserve contingency funds cash account”). The other report shows an end-balance of $4,661,904.14, on October 14 of this year, in account 10101-0000 from accounting unit 856-900 (the “capital assets account”).

If the Cicilline administration disputes that the sum of these two figures fully accounts for the city's required reserves, they should be able to make a straightforward refutation, by providing either 1) the account numbers and balances of other accounts that should be counted as part of the "reserves" and/or 2) details of other transactions (including source and amounts) that have replenished the balances in these two accounts since the reports were generated.