Cash Money Homey
By Andrew Richter
Again, what a difference a new council makes. It looks like Crystal is going to pay cash for their public works building!
Months after both construction and discussions began, the Crystal City Council passed a resolution that formalizes how the city will pay for its new public works facility on West Broadway Avenue. The council, the previous iteration of which had been leaning towards bonding for at least a portion of the $13.5 million project, voted 6-1 to pay for the city’s new public works building with cash the city has on hand.
Cash money homey!
According to documents supplied at the meeting, the approved plan would use $10.3 million from the city’s Major Building Replacement Fund, $1 million from three utility funds, $650,000 from its Economic Development Authority fund, and $600,000 transferred from the city’s general fund to the replacement fund.
The remaining $950,000 will be paid for from an “Internal Fund Transfer/Loan,” from another fund which has yet to be determined, explained Finance Director Charles Hansen, describing the transfer as a “stopgap” until money was raised or found in other city funds. Mayor Jim Adams said the council will “more than likely” take guidance on the issue from the city’s staff. “When and if other funds become available we will apply those funds first to the $950,000,” he said. “My concern for ‘borrowing’ from other funds is low because our council is interested in paying for the entire project as soon as possible and we believe it will be within a year of the project’s completion. My goal is to use as much of the citizens’ tax money for bricks, mortar, trucks, equipment, services as possible and as little as possible for financing and bonding.”
There was one dissent; that being Laura Libby and listen to her logic;
“I still think we should still be bonding,” said Councilmember Laura Libby, who was the sole ‘nay’ vote on the measure. “We’re really putting ourselves in the situation where there either have to be tax increases, or big cuts, or we just won’t have the money, or we’ll have to bond for something and the interest rates will go up.”
We’ve been hearing these interest rate scare tactics for years now.
Libby said believes the cash-only decision could leave the city in a vulnerable financial position when it plans its next major purchase or is beset by an unforeseen emergency, such as the recent failure of a water main underneath County Road 9.
So let me get this straight; we have a ton of cash so we should borrow anyway because of the next imaginary disaster or major building. Under that scenario we’ll never pay cash for anything. There’s always a “next project” or a “possible disaster.”
“The notion that the city is at risk by paying cash for this building is false, and not backed up by the data,” said Councilmember Jeff Kolb, who voted in favor of the all-cash option. “We were able to meet our obligation to pay for the new facility without raising taxes while still preserving an adequate amount of liquidity to respond to any unforeseen emergencies.”
I love it! Oh and what about that $4 million bond last December;
The previous council approved up to $4 million in bonds to pay for the project at a December meeting. Most of the council members in support of that measure lost their re-election bids to those who voted in favor of the cash option in March.
Ain’t it great to have this council? A big thanks should go out to Mayor Jim Adams for this. He wanted cash, stuck to his guns, and in the end got what he wanted saving Crystal taxpayers millions of dollars in interest payments. Thank you Mr. Mayor!