March 21, 2019 10:59:46 AM
Imagine if you awoke one night to discover your house was on fire.
What would you do?
Certainly, you would make an effort to determine what caused the fire and what could have been done to prevent it.
But those aren't the first things you would do.
The first thing you would do is put out the fire.
The city of Columbus was alerted Tuesday night to the fact its financial house is on fire, metaphorically speaking.
Based on a report from Mike Crowder, a CPA hired to analyze the city's finances, the city's cash reserves will sit at a negative $338,881 by the end of the fiscal year in September, based on conservative projections. And that's before storm expenses are accounted.
To be clear: Projections show the city will be out of cash within six months.
That sound you hear are the fire alarms going off.
City officials must examine the budget and scrutinize every expenditure to find ways to cut costs, and they must approach this with the sense of urgency it demands.
Unfortunately, since being alerted by former city CFO Milton Rawle of a $800,000 deficit last year and implementing a spending freeze, the council has continued to take on major expenditures including $100,000 for an LED light study and $35,000 for a contract with The Retail Coach.
While the city council generally seems to understand the need for immediate action, Mayor Robert Smith suggested the city wait until the summer when a clearer picture of the city's finances emerges.
In that respect, he is mistaken. The fiscal year is already half over. Any delay in doing what can be done to mitigate the shortfall should be taken now. This should be Priority No. 1 for the mayor and council and department heads. Everything goes on the table. And by everything, we mean everything.
It seems inevitable that even with cuts in spending, the city faces the unenviable choice of borrowing money to cover the shortfall or furloughing workers. That's a grim choice.
The city's debt has swollen from $2.6 million in 2010 to about $28 million. With that debt comes interest expenses.
While the city can borrow money to get out of this hole, it has a tendency to roll debt payments over to new obligations instead of retiring it. That practice has only compounded this problem.
Furloughing city workers is equally unfortunate. These are folks with families and homes and bills to pay.
Every worker who can escape being furloughed and every dollar the city does not have to borrow matters, which is why acting now rather than waiting a few months is critical.
There will be time to ask some serious questions about how the city wound up in this position, who is responsible and what can be done to prevent future deficits.
Those will be lively discussions that are essential to the future of the city.
As important as that is, there is a more pressing priority.
First, put out the fire.
And, with all due respect to the mayor, there is no time to waste.
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