City of Georgetown frets over finances

The words that opened the first budget workshop for the city of Georgetown set the mood for that meeting and the many that will follow.

"All of you know the financial situation hasn't gotten any better. It's worsening every day," City Administrator Chris Eldridge said.

At the hours-long meeting on Friday that was the first of many budget meetings, department heads presented few, if any, requests for the upcoming budget year and city officials were quick to question any areas for cost savings.

For example, the council spoke at length about measures that could be taken to make The Kaminski House and the Parker Stewart House more profitable.

The cost of maintaining both houses costs about $208,000 a year, but the houses only bring in about $30,000 a year in revenue, according to budget documents. The remaining costs come out of the city's hospitality and accommodations tax fund, which receives about $600,000 annually.

"Why would you keep a bucket with a hole in it?" asked Councilman Brendon Barber. "If we can't find a solution to turn that around, we need to look at another alternative. We're in that kind of time."

Councilwoman Jeanette Ard said she would like to see something done to connect the two properties to make them more usable as a place for special events like weddings.

She said if the city "concentrated some money there that would really be able to make us raise the price," for renting out the facility.

Council agreed to have staff look into the issue and research what the city would be able to do to those properties.

Eldridge also warned the council that the general fund, where many city employees' salaries and benefits are paid from, is facing losses of revenue as well as some increasing costs.

He said the approximately $8 million general fund is expected to have at least $1 million less in revenue due to reassessment and anticipated cuts to the state's local government fund. And there is expected to be at least $350,000 more in expenses due to increasing health care costs and the shifting of workers in departments.

But council members said some in the community still believe that the city has more than $19 million in a fund that it could use to help cover those costs and more.

The issue, first raised by former candidate for mayor of Georgetown Marty Tennant, has continued to come up during city council meetings and from constituents speaking to council members.

"Some of these people that are asking these questions, they are sincere. They're concerned. They're worried," said Mayor Pro Tempore Rudolph Bradley. "We need to do something to counteract and inform."

Finance Director Jessica Miller told council members that the $19 million is listed in the budget, but as "unrestricted net assets" - a term she said must be used according to accounting guidelines

Most of those assets, around $11.6 million, Miller said cannot be spent. For example, at least $2.7 million of those assets are due to the city from taxpayers and customers.

"Those are payments that are due to us but we don't have in hand at the time," she said. "They don't come in all at once. They come in at various times."

And some of that money, though it is listed as "unrestricted," is earmarked internally for a specific use. The city has to have $3.5 million as a general fund reserve, for example, for the months from July to January when little money is coming in to the city.

"None of general fund revenue comes in until midyear," Miller said. "We have to make sure we have enough cash on hand to pay our weekly and daily bills."

The remaining $7.8 million that is "spendable" still has restrictions, she said. Included in that number is the $1.6 million in hospitality tax money that must be used for very specific tourism-related items.

"You can't use that to pay payroll," Miller said. She also pointed out that $3.5 million of that money comes from the electric utility department and therefore has to go back into that fund.

"The bottom line is you do not have $19 million of cash to spend however you want to," she said.

Eldridge and council members suggested putting a breakdown of that accounting somewhere that the public could read it, either online or sent out with bills to city residents.

Council made no decisions at the meeting and will continue to discuss the budget over the coming months. The first council budget workshop will be held on March 29 at 5:30 p.m.