EDITORIAL: Financial transparency

For the past several years, the finances of the city of Tower have been virtually unknown to the public and were of little apparent interest to members of the city council. Last year, when the city’s auditor laid out the worsening financial picture, the entire council failed to ask a single question, apparently not recognizing that the auditor was trying to raise the alarm.

Those days appear to be over, and none too soon. Tower’s new city council, led by Mayor Orlyn Kringstad, is slowly peeling back the onion on the city’s finances, and the results could well shock plenty of the city’s residents. Those in attendance at this week’s council meeting were certainly surprised when the clerk-treasurer told the mayor she “didn’t have a clue,” how much cash the city actually had on hand.

We suspect that the city is in difficult financial straits, but the city clerk-treasurer has managed to keep the city’s financial woes hidden, in part, by diverting hundreds of thousands of dollars from the city’s ambulance fund to pay the bills. On paper, the ambulance fund has about $885,000 in surplus funds built up over the past decade or so. But city officials have hinted that much of that has been diverted to cover deficits in other city funds.

It’s not clear how much cash is actually remaining in the ambulance fund, or if there is enough cash remaining to pay for the new ambulance the previous council ordered in December.

And the days of surplus in the ambulance department appear to be over as a result of the shift to paid on-call, which is the argument this newspaper has been making for more than a year. Under previous ambulance directors, the service routinely socked away $100,000 annual surpluses, which is the main reason the department has such a large fund balance on paper. In 2018, however, expect the surplus will be much-diminished, even though the paid on-call service was only in place for nine months.

A full-year under the new system could well put the service into the red, particularly since the number of transfers appear to be running well below the ambulance director’s assumptions, at least so far.

It’s no wonder that the director has been rattling the tin cup at every neighboring township in recent months, hoping to convince town boards to back a doubling of the ambulance subsidy over the next three years. The department’s own financial projection showed that the revenues the increased subsidy would generate far exceeded the cost of ambulance replacement over the next several years, yielding a growing surplus. If that fund was truly in a lock-box, that could be justified, but the city clerk-treasurer has yet to show anyone that the township funds aren’t simply being used to cash flow city operations. Until the city provides some financial transparency, township officials would be wise to remain skeptical of any increase in the subsidy.

Transparency is also in order when it comes to the city’s ongoing efforts to sell land. Over the past three years, the city has sold a total of 244 acres of land and it has much more than that currently listed with local realtors. Where is the money from such land sales going? If land is being sold to make new investments in the city, that’s one thing. But if city assets are being sold off simply to fund basic operations, that’s hardly sustainable financial management. The council should certainly seek an accounting of the $213,500 generated from land sales over the past four years and have a discussion about whether future land sales make sense.

But first the city council and the residents of Tower need to understand the extent of the problem. And that can only come from continuing to peel back the onion. Fortunately, new members of the city council are asking the right questions. Now, we just need some answers.