Frontloads and Fog
Earlier this month the Williams Pioneer posted an article about the City of Williams’ audit. This article presented comments made at the recent City Council meeting that the revenues were down and expenses up from the previous year and that this report ”essentially disputed a recent op-ed written by former Mayor Chuck Bergson that the City has received such a large influx of cash from recent developments.”
The article quoted City officials attempting to explain away its surplus revenue; that the City is not “flush with cash,” that they “went into debt with themselves,” that they “just frontloaded the costs,” and that the City is in no position to fix roads.
The City is, in City’s terms, “flush.” The City had over $700,000 net revenue over expenses in the fiscal year ending June 2017 (page 14, City of Williams FY 2017 Audit) and had over $400,000 net revenue over expenses in the fiscal year ending June 2018 (page 14, City of Williams FY 2018 Audit). The City’s objections just underscore the facts.
The City eliminated surpluses by doing what they said they did – loaning money to themselves (how well-off is a city that can loan money to itself?), frontloading (making multiple loan payments in a year), and declaring more expenses.
These City actions are similar to what businesses do to reduce income and taxes by writing down loans and raising expenses. In the City’s case, it is making multiple loan payments in a short period of time and raising expenses to reduce income and lower the surplus.
Public agencies are supposed to disclose terms of loans and produce loan payment schedules. This City’s “loan to themselves” has produced none of these – no interest rate, no face value, no length of loan, no payment schedule. They sort of make the payments as they go, literally more or less, depending on available balances. The City Councilmember themselves, who authorized this ‘loan,’ do not know the terms. There is no loan document. This loose loan arrangement allows the City to massage the bottom line and fog financial reality.
Making extra loan payments are not by themselves wrong, if that is what they are. These payments are not. These are unplanned, with no schedule and at the expense of funds that could be used to repair the Museum, the parks, the Old Gym, as well as finance street projects.
Additional evidence of the surplus can be seen by a tour about the City. The City has mushroomed over the past several years. There are many brand new stores and more under construction. There are new gas stations, business expansions, coffee shops, over a hundred new homes, and now a new truck stop. All of which are paying thousands of new dollars in sales taxes and property taxes and bringing more people, and none of which were here five years ago.
Further evidence of the City’s fiscal status? The City’s budgeted annual revenue, between 2011 and 2018, increased 29 percent, an increase approaching a million more dollars a year. And last year the City made two large purchases, cash, without blinking – nearly $300,000 for public works equipment and $30,000 for storage facilities.
Then consider the statement that the City is “not in the financial position” to undertake fixing the streets. In 2015, the City built Marguerite Street to the price of $4 million, the site of the new truck stop, and did so with millions less in its reserves and less annual revenue. The City’s financial position is significantly better now than 2015, yet the City is doing nothing about repairing its streets.
These gymnastics – the denials, the government-speak, the building boom, the profligate spending – cannot suppress reality. The City has an annual surplus and the City does not want anyone to know.
— Chuck Bergson, Former Williams City Council-member