Birmingham News (Alabama)
BYLINE: Anita Debro
Graysville officials in the next two months will have to make some tough decisions about the city’s finances, the city’s auditor warned last week.
The city’s general fund will soon run into a deficit of more than $1 million, and officials may have to consider ”significant cuts” and selling assets, accountant Jeff Chandler said.
Typically, Graysville has relied on revenues from the city’s gas system to supplement the city’s general fund and cover any shortages, but that is not possible since the gas system itself is facing a $515,000 deficit, Chandler said.
Gas revenues are down by about $1.1 million, according to gas system officials. Low sales of gas to customers because of the mild winter are to blame.
Graysville has enough money in the general fund to cover expenses for the next two months, City Clerk Kathy Dumas said last week.
Chandler said the city needs a plan of action by July 4. ”You need to tear through your budget,” Chandler told the City Council. ”Outflows (of money) have to be adjusted accordingly.”
Chandler said the city could look at selling assets, particularly the water system, to bring in money.
”Water is something you have to look at,” he said. ”It has to be explored.”
Councilwoman Mary Sue Morgan, who is also a member of the water board, has said in the past she did not support selling the city’s water system. But she said the city does have to address the financial problems aggressively.
Graysville Mayor Doug Brewer said last week he believes the city could cover the $1 million deficit by reconsidering a plan to refinance a bond issue and open a $600,000 line of credit with Regions Bank.
Brewer has been championing the refinancing of a $3.2 million bond issue and opening a line of credit for the last several months. The council, however, has not acted on Brewer’s recommendation.
Chandler told the council last week that borrowing more money may not be the best way of solving the city’s financial problems. He warned the city should work to get its financial house in order by 2015 when a balloon payment of $1.9 million is due for the $3.2 million bond issue that was used to help draw the Lowe’s store that opened in November 2010.
”The city needs to be in a position to refinance the bonds then,” Chandler said.
The Graysville City Council in September, when it approved its fiscal 2012 budget, made cuts to the city’s Fire Department. Brewer said last week the city had to make more adjustments because of the finances by closing Fire Station No. 1 and consolidating staff at the city’s other fire station.
Copyright 2012 The Birmingham News
All Rights Reserved