GALVESTON — Officials are hoping a thorough review of city accounts will lead to a cash windfall that can be used for infrastructure projects.
Mayor Jim Yarborough said he thinks there are numerous city accounts that can be reclaimed and returned to the general fund.
“There are funds within the city system that are dormant,” Yarbrough said. “When I say dormant, I mean probably no activity in four or five years, probably longer.”
Yarbrough has during recent council and committee meetings pushed the idea that the city has money available for capital projects.
On Friday, Yarbrough said one of his first acts as mayor was to ask interim City Manager Brian Maxwell for a list of all the accounts managed by the city. Maxwell gave Yarbrough a 73-page document.
Many of the accounts are empty, but were never removed from the books, Yarbrough said. But there’s money left in some the city could spend, he said.
“That’s an indication to me of lazy, sloppy work,” Yarbrough said.
“This is an issue that comes when you don’t have good systems in place, coupled with turnover,” he said. “You lose your institutional memory.”
The amount of money left in these accounts varies.
There is just $2.12 in one.
In others, there is much more.
Early last week, at a meeting of the Industrial Development Corp., members were told that as much as $2.7 million might be available. The money is leftover from the “old IDC” committee that oversaw spending of 4B sales tax revenue before voters renewed the tax in 2008, officials said.
City officials said they were investigating whether that money has strict limitations on its use, and whether it can be reclaimed by the council and put into the general fund.
Yarbrough estimated that as much as $5 million might be available in these “cubby holes.” The money could potentially be put into the accounts for neighborhood improvements and small infrastructure projects, although nothing has been decided yet, he said.
Maxwell said Friday the money Yarbrough is focused on was not lost or being removed from already started projects.
“I wouldn’t interpret this as the city finding money in a box,” Maxwell said, while acknowledging that the dormant funds could amount to millions of dollars. “Most of this is money that’s been left over from other projects.”
Maxwell compared the money to that in forgotten bank accounts and uncashed checks reported annually by the state comptroller’s office.
“Galveston is an old city,” Maxwell said. “Over the years there have been funds set up every time somebody wanted a special project or something else. The projects were done and there was money left over.
“They’re not really forgotten, it just hasn’t been put together and used in a meaningful way,” he said.
The cubby-holed money could have implications on future financial decisions as well.
The City Council is in the early stages of its budget planning for the next year, but has already directed Maxwell to design a budget that includes a 2.5-cent property tax rate reduction. It is still unclear what effects such a reduction would have on city operations. Maxwell is expected to make a budget presentation to the council Wednesday.
But a potential boost of $5 million in available money for capital projects might make the decision process easier for the council as it looks ahead, Yarbrough said. He added, however, that the review of the city’s accounts would likely not be completed before the beginning of the next fiscal year.
“This will not have much implication on this particular budget cycle, but it will down the road,” Yarbrough said. “It will certainly help us find money for neighborhood and capital projects.”
The city spending what money it does have right now, he added, is essential if the council plans to seek a bond issue in the next few years.