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.

 

Contact reporter John Wayne Ferguson at 409-683-5226 or john.ferguson@galvnews.com. Follow him on Twitter, @johnwferguson.

(16) comments

Jarvis Buckley

This is a very interesting , article.

Dwight Strain

For years, headline like this made me think, "another desperate ploy and/or wild goose chase that will cost galveston more in the end" - but, after reading, actually sounds like a great plan. - Go Galveston - Go Big Jim

rah

Maybe you all need a rainy day fund that never gets touched unless under EXTREME emergency. I know that you guys think you have an emergency everyday but, I am talking something like IKE for city services not to rebuild all your islander's good 'ol boys houses. Look at Perry. He may be dumb as dirt but, at least he has a rainy day fund

Norman Pappous

We have a 90 day reserve as mandated by state law as well as a reserve for emergencies like Ike.... We are well "reserved"....

Ron Shelby

Norman, you are Absolutely correct, but there also needs to be a separate Fund Balance policy, above and beyond reserves, meant for rainy day. Check out GFOA's recommendations. The County always had a target for it. It will lower your borrowing costs as well as be a good fallback during recessions (rather than just hurricanes). Unlike other jurisdictions, as a coastal entity you'll need to be doing "more" than what the rest does to protect the city financially. Not criticizing, just making an observation having recently looked at fund balances (after reserves) in various states during the recession.

Norman Pappous

The city has an emergency line of credit that is reauthorized annually.....

Ron Shelby

Where is the City of Galveston 2013 CAFR online? I cant seem to find it. The latest one that kicks up by googling is 2012. Maybe you can post the link. Thanks.

John Ferguson Staff
John Wayne Ferguson

Ron, the CAFRs are posted here.
http://www.cityofgalveston.org/Archive.aspx?AMID=41

Robert Young

Big Jim knows what he is doing..City Gov't is improving around here.

Steve Fouga

This is a very encouraging development!

The mayor is right: lazy, sloppy work. Hopefully that's all in the past.

Kathy Maddox

It's NOT in the past. The current Finance Director needs to be fired. I'll bet she know nothing about all of this until it was looked into. They also hit the nail on the head about the high turnover, which has been going on for a LONG time. The cure for that is to hire good management, which has not happened for a LONG, Long time. Finance hasn't had good management for at LEAST a decade. That includes ALL managers in Finance.

CLEAN HOUSE!

George Croix

'Four or five years. Probably longer'.
That spreads it out far enough to make finger pointing bipartisan, so not worth doing at all.
Move forward....

Doyle Beard

dream on you dreamers

Mark Johnson

It seems to me if there is "extra" money that has been unallocated and unused and for years it was not needed to begin with. The term is OVERTAXED. My suggestion is to return it to the taxpayers by means of a tax reduction. I know, I'm dreaming.

George Croix

Superman - Kryptonite
'Progressive' - tax cut

rah

Yea, Big Jim knows what he is doing. That is why he was successful in his last two endeavors. Oh, wait! Was he given his last post because the previous one boiled over. Oh. we cannot be talking about the same Jimbo could we?[scared]

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