Macon City Council’s Appropriations Committee agreed Monday to let Mayor Robert Reichert’s administration tap city reserves in the coming months as the city’s cash flow wanes.
Appropriations members added a few caveats though: The amount of cash that can be accessed was capped at $4 million; finance officials will have to report to the committee every two weeks what money was used; and they must repay what they take out by Oct. 31.
Macon has about $6.1 million parked in a money market fund that it can dip into as it requires liquid assets. Only about $1 million of that is true, unappropriated savings though, officials said, while the rest of the cash technically is spoken for by liabilities accounted for elsewhere in the city budget. But the bills the cash will help pay also are accounted for in the budget.
It is normal for Macon to have less hard money coming in at this time of year even though payroll and other expenses do not stop. The lack of a substantial rainy day fund, however, makes these months more tenuous than they might be in other local governments.
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Cash-flow projections from the finance department show that Macon will be short $1.69 million by the end of August, and through mid-October it will be as much as $3 million in the hole as payroll costs and bills surpass the amount of money coming in during those weeks.
The saving grace will be a check for about $5.5 million in insurance premium tax revenue that is expected to be paid to the city in October. After that, property tax payments will begin to come in.
From 2004 to 2007, Macon took out short term loans, called tax anticipation notes, so it could pay its expenses while waiting for various income sources to kick in again. Since then, the city has either squeaked by without having to supplement its revenue stream or has been able to temporarily borrow from its own nascent rainy day fund.
Last year, the city paid some of its bills late rather than take money from its cash account.
To contact writer Matt Barnwell, call 744-4251.