Washington running low on cash

The City of Washington is going through a cash-crunch at the moment but City Accountant Joe Myers said he thinks the municipal government can weather the storm. Myers advised the city councilors at the last meeting, Sept. 7, to refrain from spending money if possible.

Myers said the city will have to pay a bill for nearly $1.4 million to Gridor Construction for work it has done on the new waste water treatment plant. The city has approximately $830,000 in its checking account at Washington State Bank. It has $1.4 million more in a savings account known as the Iowa Public Agency Investment Trust. Myers said he can transfer money electronically from one account to another.

The city has taken out a loan to pay for the waste water treatment plant. The council learned earlier this year that the water and sewer rate increases it adopted will allow the city to pay back its loan. Myers said the paper work for the loan is being worked on right now in Des Moines, but until it?s done the city will have to pay Gridor Construction from another fund. He said that bill, combined with the regular payroll and claims, will leave the city with a light wallet. That is why he asked the council to be especially frugal until Gridor?s bill is paid.   

?Gridor is pouring a lot of concrete, and a lot of concrete means big bills,? Myers said. ?I told the council that we need to proceed in a conservative fashion. We need to hold on to the cash so we can get through this 30-45 day window. I think the loans will be available the first part of October. I?m thinking we?re going to be OK but I don?t like cutting it this close.?

Myers said he doesn?t think the city will run out of money to pay its bills. The council voted 3-2 against spending $100,000 on a sewer camera at its meeting Sept. 7. Councilor Karen Wilson-Johnson motioned to purchase a $6,000 hydraulic hose crimping machine but that motion died for lack of a second.  

?I?m saying we need to push trucks and sewer cameras out so we can cover the other bills,? he said.

Myers said one saving grace is that September?s property taxes will begin rolling into the city coffers over the next few weeks. He said the city expects to receive $1 million in tax receipts.  

Myers said the city is running low on funds partly because of the general obligation bonds it has to pay off on the downtown enhancement project and the new library. He said the city pays $650,000 to $800,000 annually to pay off those debts.

He said another reason the city is slightly cash-strapped is that it purchased so many acres of land in 2010. The city purchased 279 acres for three separate projects that year ? the new waste water treatment plant, the proposed runway extension at the airport and the future site of a water tower and wellness park. The city spent more than $3 million to acquire that land.

?Those big hitters have put a crunch in our finances,? Myers said.

Myers said he is looking forward to the arrival of city administrator-select Brent Hinson Oct. 17. He said Hinson has a background in finance and will be able to handle problems like these. Myers said Hinson will visit Washington tomorrow to talk about the city?s finances.