Quincy faces dire financial woes

Last week, Quincy City Manager Jack McLean called a special meeting of the commissioners to discuss the city’s tightening finances.

Only two commissioners showed up to the meeting.

Sapp explained to the public that at least three members of the commission must be in attendance - either in person, by phone, or via Zoom - for the commission to take any action during a meeting.

Although they did not have a quorum (meaning they could not vote on anything), McLean and the two attending commissioners, Angela Grant Sapp and Freida Bass-Prieto, decided they would use that time to have a workshop instead.

During the workshop, McLean stressed to commissioners that the first quarter of the city’s fiscal year ends in December, and the commissioners still haven’t completed the budget, even after having more than a dozen budget workshops.

McLean recommended looking at the $900,000 of expenses that are not unfunded in the budget and then going back and looking at the Hurricane Michael surcharge.

“The surcharge itself has been put in a kind of lock box,” McLean said.

In September, the commission voted 3-2 to put $981,660 Hurricane Michael surcharge revenues into a contingency reserve that cannot be spent unless approved by the commission.

All other monies that were not allocated by October 1, were also placed into the contingency reserves.

McLean said that decision has caused the city to become “fiscally restrained.”

He said the surcharge was originally pledged to take care of Hurricane Michael expenses.

“It was pledged both from the bond refinancing, as well as initially with the $3 million that we got from Capital City,” McLean said.

The city took out a loan with Capital City Bank in anticipation of receiving funding from the Federal Emergency Management Agency to repair damage caused by Hurricane Michael.

“Once that money was placed in what I’m calling a lockbox - or called reserves - no money was to be spent out of that, and what that required the city to do on its last budgeting act on September 28 is that you didn’t need to pull money out of your fund balance, and money outside of your retained earnings, so essentially you took $1 million out of the proposed budget,” McLean stated.

McLean said the Hurricane Michael Surcharge also had recurring expenses that were related to clearing vegetation from utility lines.

He said that totaled about $250,000.

McLean said the money is still considered as revenue, but it cannot be spent. He said in order to pay the city’s legal obligation, they had to dip into the city’s savings, also known as the retained earnings, and the fund balance.

McLean said that has created a challenge because the rest of the Capital City Bank loan must be paid off by the end of January, which is about $883,000.

McLean said because the funds from the surcharge are not available to spend, making that final payment will be difficult.

McLean said the city doesn’t have to take out another loan to pay off that loan, because the city has enough cash.

McLean also presented a list of items that could not be funded, totaling more than $900,700.

“Some people don’t like the term ‘dire needs’, but those are things that would have otherwise been funded,” McLean said.

Back in September, McLean presented the commission with a list of the city’s “dire needs,” which lists items that have not been included in the city’s budget.

During that time, Harris argued that the numbers on the list were inflated.

Included in the list is $80,000 for nonprofit organizations like the Gadsden Senior Services and Gadsden Arts Center and Museum, a truck for a sewer flush machine, and funding for fire and police union negotiations.

Bass-Prieto pointed out that the city also needs to add $4,000 to the clerk’s budget to complete codifications and bring the city’s Municode - the website where many of the city’s legal documents can be found - up to date.

Finance Director Marcia Carty said in October the city brought in $670,000 but spent $839,000, resulting in a negative $169,000 in the general fund.

However, she said the enterprise fund brought in $1,960,000. She said she did take out $80,000 to add to the final payment of the Capital City Bank loan.

“So, the revenues available for operations is $1,880,000,” Carty said. “Expenses were $1,525,000, so the enterprise fund had a profit of $354,000.”

Carty said the city had a total profit of $185,000 in October.

Carty said there was also a projection prepared for the first quarter that will end in December 2021.

She said the first quarter revenues are expected to $8,350,000, with expenses expected to be $7,900,000.

“We expect to have $400,000 more in revenue than expenses,” Carty said.

Carty also said the city has also received almost $100,000 in utility revenue since last year.

In October 2020, the city earned $1,991,000. This year, during that same period, the city earned $1,894,000.

Overall, Carty said the city has $12,889,296 in proprietary funds, but more than $9 million of that can’t be touched because it’s tied to capital purchases and debt services.

In other words, most of the proprietary funds are collateral for loans.

Carty said the city had about $1,096,829 in unrestricted dollars in its general fund at the end of September.

However, McLean said $833,000 must be used to pay back the Hurricane Michael loan next month.

An additional $147,446 from the contingency-reserves was used to fund an extra $2,600 annual raise for hourly employees.

The city now has $182,080 contingency-reserves to fund the rest of this year’s budget.

Erin Hill - erin@gadsdencountytimes.com

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Quincy faces dire financial woes

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County awards fire service contract to Greensboro – The town has no active firefighters

Candyland in Quincy – Annual Christmas parade spotlights Gadsden’s community appeal

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