Tuesday, March 04, 2008

Problem with Appropriations

Buried in an article about old cemeteries, and as a Genealogical hobbyist I am a sucker for cemeteries, is a lesson in public funding. Case in point:
a perpetual-care fund valued at $99,000 and a set of historical records, some written in Czech, documenting some of the city's founding families.

With maintenance costs at about $5,000 a year, Johnson (director of recreation services for Minnetonka) expects the care fund to last about 20 years.
Now, it has been awhile since I received my Finance degree, but if you could find an annuity at 5% interest, and I believe you can, that $99,000 could last into perpetuity as the principle would never be touched. Isn't that how it works. The only way it lasts 20 years is if you put it in a shoe box, and I would think that isn't very good fiscal management.

Eden Prairie gets it:
perpetual care fund that allows it to operate without tax dollars,
Isn't that what 'perpetual' means.

Maybe King can confirm this for me, but I have a suspicion that ole Crump Farrell would just be shaking his head after reading this.


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