Letter to the Editor: FOIA Request Upends Mayor Maguire’s Statements in May 7th Letter to the Editor
FOIA Request Disproves Mayor Maguire’s Statements in May 7th Letter to the Editor
Funny thing about the Freedom of Information Act…it allows an individual to disprove the misinformation spread by an elected official.
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The mayor declared that she does, in fact, know and understand the budget process. I accept her assertion and believe that she does, in fact, know and understand the budget process. State law requires that the city have a balanced budget in place prior to the first day of its fiscal year. A balanced budget does not mean there is no deficit spending. A deficit is covered by using a cash reserve. So why does the mayor make such false and misleading statements about the city budget?
The mayor claimed in her recent Letter to the Editor, “there is no deficit spending in neither the approved Wood River City budget nor the 1% Sales Tax Fund.” The finance director states in his Internal Memorandum dated April 29, 2020, that the city council policy is to keep 3 months of cash in reserve. As of 4/30/20, the General Fund had cash reserves of $1,691,857. His memo stated, “This will leave 2.8 months in the operating reserve in the General Fund at 4/30/20.” He continues, “However, the estimated fund balance at 4/30/21 is down to $776,315 after factoring in the projected FY 20/21 revenue decreases. This would leave only 1.2 months operating reserve in the General Fund.” Contrary to the mayor’s claim, that is a budget deficit of $915,542. The overall city budget for all accounts will result in a reduction of cash reserves and a deficit of “$464,188, from $6,387,320 to $5,923,132.”
The mayor is correct, there is no deficit in the 1% Non-Home Rule Sales Tax Fund. The city council chose to ignore her demands to fund the Rec Center. As of 4/30/20, cash reserves in this account were $330,302. If she had succeeded and obtained funding for the Rec Center in the amount of $783,482 as originally planned, instead of projected cash reserves on 4/30/21 of $838,104, the cash reserves would have been only $54,622. That would have created a deficit of $275,680.
To finalize the budget, the finance director informed the council he could not realistically project any revenues for the 2020-2021 fiscal year budget and recommended the removal of all 1% Non-Home Rule Sales Tax Fund projects, except for the Sewer Separation Project which was legally obligated. The mayor objected. During the week of April 20-24, with all budget items agreed upon except the Rec Center, the city manager offered a compromise which removed all capital spending projects from the budget except for the Sewer Separation Project and included the Rec Center, but at zero dollars. On the morning of April 24th, the mayor reluctantly agreed, but before 5 PM that same day she backed out of the deal. This is what forced the Budget Work Session on April 27th with the Rec Center as the only item of discussion.
During the Budget Work Session on April 27th, the mayor repeated, for 1½ hours, that “a zero balance in a fund collecting money is not transparent accounting.” The mayor knows that a budget with zero dollars is an expense item and does not affect the revenues that are collected. A council member told her that she was not making sense because the funds continue to grow and are added to the cash reserve. The finance director agreed that a budget of zero dollars does not mean there is no money in the cash reserve. The mayor’s statement was nonsensical. She used this appeal in an attempt to convince the council to include funding for the Rec Center. This way she could claim to the unsuspecting public that she was fighting for them without directly opposing the finance director, and then blame the council for approving the funding if anyone complained about the deficit.
The mayor discussed the Sixth Street Retention Pond in her recent op-ed. She used this project to promote the 1% Non-Home Rule Sales Tax to gain voter approval on April 2, 2019. However, when $350,000 was proposed to buy the property to start this project on April 6, 2020 the mayor argued against using the 1% Non-Home Sales Tax Fund. Instead, she wanted to use the Sewer Fund for the purchase. That would have kept funds in the 1% Non-Home Rule Sales Tax Fund for the Rec Center.
The mayor’s pet project has clouded her judgement and led her to make irresponsible decisions that can harm the city. The city needs to exercise caution with its finances, as its finance director has recommended, and not follow the demands of the mayor to spend money on her pet project in this time of economic uncertainty. Now is the time that the city must be careful with its limited cash reserve.
- Bill Dettmers
Opinions expressed in this section are solely those of the individual authors and do not represent the views of RiverBender.com or its affiliates. We provide a platform for community voices, but the responsibility for opinions rests with their authors.
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