For most people, this is the time of year when last-minute Christmas shopping reigns supreme, and the wallets and pocketbooks open up.
For Columbus city officials, it’s the time of year when finances are a little tighter and the city’s pocketbook stays closed.
Columbus Chief Financial Officer Mike Bernsen reported at Monday’s department heads meeting that the city’s cash balance dropped around $850,000 from Dec. 1, 2010, to Nov. 30, and departments must be a little tighter with spending until the difference is made up.
“Everyone is like this at Christmas,” he said, noting the city had a cash balance of $3.2 million on Dec. 1, 2010, and now has a balance of $2.4 million.
“A lot of municipalities at this time of the year are borrowing on the short term to cover for operating expenses, and that’s what we want to try and avoid.”
While the dip in the city’s cash balance is accounted for and should be offset at the beginning of 2012, the city spent “a lot more than we usually do,” he said.
Bernsen called the events leading to the dip in funds a “perfect storm” of paying grants and bond issues. According to Bernsen’s best guess, the difference between the city’s revenue and spending at this time last year was about $300,000, but there was not a bond issue to pay for. In 2010, the city of Columbus issued $8.9 million in bonds for infrastructure and to refinance debt.
Around $500,000 of the difference from this year is from paying “our first principal payment on the 2010 bond issue,” he said, noting this payment will be offset when residents pay property taxes at the beginning of the calendar year.
“That’s the nature of the animal: waiting on property taxes to come in,” he said. “And, of course, the sales tax from Christmas sales helps. It’s always the biggest month of the year.”
The other $350,000 comes from making upfront payments to receive government grants. Some of those payments will be reimbursed; the others are budgeted for, Bernsen said.
“We had a lot of grants that we had to pay out the money first,” Ward 6 Councilman Bill Gavin said. “All that money will come back to us at the first of the year. This year it was a little bit more than normal because of all the grant projects we have going.”
There is a belief that the city is broke, but that is not true, Bernsen added.
“That’s the same way we are every year. I make the same comments every year,” he said. “It’s just unusually sensitive this year.
“We always ask — and I can play a recording — we always ask department heads to be frugal and very cautious until the tax money starts coming in.”
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