TOWER— The city of Tower’s general fund cash balance has deteriorated dramatically over the past two months, although the reasons behind the situation remain unclear. City Clerk-Treasurer Linda …
TOWER— The city of Tower’s general fund cash balance has deteriorated dramatically over the past two months, although the reasons behind the situation remain unclear. City Clerk-Treasurer Linda Keith did not respond to questions posed by the Timberjay, nor had she complied as of late Wednesday with a public records request, submitted May 14, for city financial documents that would shed more light on the city’s worsening cash crunch.
As of April 30, the city of Tower had just $9,126 remaining in available general fund cash according to a written financial report that Keith provided to the city council on May 13. And the city still owes $219,000 on a new city ambulance in addition to ongoing costs such as payroll and other operational expenses. It’s unclear if the city has the available funds to pay those obligations.
As of April 30, the city did have $117,828 in a special ambulance purchase account funded primarily by subsidy payments from area townships, but that fund will fall well short of financing the entire remaining cost of the new ambulance.
In brief comments at the May 13 city council meeting, Keith said that the city showed an April 30 bank statement balance of $48,861, but that figure did not take tens of thousands of dollars in outstanding checks into account.
And it appears Keith misled council members and the public under questioning from Mayor Orlyn Kringstad when she said that the general fund cash balance did not include a $140,000 insurance settlement that the city needs to rebuild the ambulance garage, which burned in 2014. The city’s fire and ambulance service has been storing some of its equipment outside in the weather ever since that event.
Keith said the insurance money is in a separate, segregated account, although that has not appeared in financial reports that Keith has given to the council previously, nor was it indicated in the city’s 2018 audit.
When questioned by the Timberjay back in April, the city’s auditor, Devin Ceglar of Walker Giroux and Hahne, indicated that, in fact, the insurance settlement funds are not segregated but are part of the general fund cash balance. Assuming Ceglar is correct, the city has, in effect, spent virtually the entire insurance settlement on general operations, without ever replacing the garage. Without the insurance funds, it appears the city would currently be facing an available general cash balance of approximately minus-$131,000. The Timberjay made its public records request last week, seeking documentation of the true whereabouts of the $140,000, but Keith has yet to provide any financial documents to the Timberjay to support the claim she made to the city council.
Keith’s latest report shows the degree to which the city’s financial situation has deteriorated over the past two months. On April 8, Keith presented a financial report through Feb. 28, which showed $134,987 in available general fund cash remaining after accounting for undeposited receipts and outstanding checks. Two months later, that was down to $9,126, or far less than the city would need just to cover monthly payroll, much less other expenses. The city does receive revenue at various times throughout the year, but most major sources, such as property tax receipts and state Local Government Aid, don’t arrive until mid-to-late July. The Timberjay asked Keith whether she anticipates any significant revenue to arrive prior to July but Keith did not respond.
Mayor Orlyn Kringstad said he expects to have the city’s financial circumstances back on the council agenda at their Tuesday, May 28 meeting. “High on the city council’s priorities is to make sure that the city is financially sound, and that full transparency is provided to our taxpaying citizens,” said Kringstad. “I am not satisfied that the council or citizens have been adequately informed.”
Kringstad said he has not received any documentation that the $140,000 insurance settlement is actually segregated as Keith purported to the council on May 13. “I expect that question to be answered on May 28,” he said.