City responds to accountability group’s critique of finances

If you’ve been paying attention to Columbus Council in recent weeks, you’re probably aware of talk about the city’s finances.

Last month, Tollie Strode of the CCG Accountability Forum showed up at a council meeting stating that the city’s financial position had declined in recent years. He said spending had increased by 89 percent since 2001, while revenue had only increased by 39 percent.

Strode said the group had launched an initiative called Columbus Refocus, and he recommended a hiring freeze for some positions, along with a five-year moratorium on capital projects.

Strode appeared before council again on Feb. 14, that time with his wife, Gloria, who accused council of disrespecting her husband.

The city has a different perspective on the finances, and responded to Strode’s critique at the Feb. 14 meeting.

“First of all, looking at 16 years and making a summary statement can be a little misleading and subject to misinterpretation,” said Deputy City Manager Pam Hodge. “... It’s hard to compare year-to-year and it also doesn’t reflect the true revenue-to expenditures — money-in-money out — which is how we budget for the government.”

She went on to explain how city finances work and referred to accolades the finance department has received over the years. She said the city submits budgets and financial statements to the Government Finance Officers Association annually, and it has been recognized over the years for meeting budgeting and reporting requirements.

Hodge said the city also is regulated by the Government Accounting Standards Board, an independent organization that establishes accounting and reporting standards for local governments. She said that organization makes annual pronouncements, which have changed how financial information is reported in the city’s Comprehensive Annual Financial Report over the years. That, she said, makes it difficult to compare 2001 to 2015.

Hodge said Strode looked at one chart in the CAFR called the Government Wide Statement, which she said doesn’t paint a true picture of the city’s overall financial position.

“That one chart assumes that you roll all the city funds together and it’s based on full accrual, which means that you’re capitalizing all your assets, you’re depreciating all your assets like roads and bridges,” she said in a recent interview. “And because all the funds — except the general fund — are restricted for specific purposes, it’s difficult to look at the city as a whole when you can’t spend funds that are for a specific purpose for anything other than that purpose.”

Hodge said it would be better to look at the city’s operating budget. From 2001 to 2015, that budget jumped from $158 million to $263 million, increasing by 44 percent or an average annual increase of 2.75 percent, she said. That’s excluding OLOST and economic development, which didn’t exist in 2001. With OLOST and economic development, the budget increased 66 percent with an average annual increase of 4.4 percent.

Also at Tuesday’s meeting, Internal Auditor John Redmond presented results from a transition audit conducted after Hodge’s promotion from finance director to deputy city manager; and the appointment of Angelica Alexander to the finance director position.

“We did test transactions from each of the segments and we found that from our sample they’ve all been found to be correct, which is unusual, but not unexpected with financial matters,” he said. “We certainly hope that we have a high degree of accuracy, and their work in transitioning the department certainly has demonstrated that they do.

“We looked at budgetary performance and found that actually the department for this fiscal year is under budget, and it’s attributed to fact that they’ve had vacant positions at the beginning of the fiscal year,” he said. “... “It’s a very well run department.”

On Friday, Mayor Teresa Tomlinson addressed the criticism of the city’s finances in her State of the City address. She said the Columbus Consolidated Government was named one of the 2016 Top 50 Best-run Cities in America. She said the city also received the Government Finance Officers Association Distinguished Budget Presentation Award for the 25th year in a row. And the FY2015 Comprehensive Financial Report received a clean independent audit.

“Our current budget is the first in 16 years where the General Fund was balanced with no reserve funds,” she said. “Columbus has the lowest per capita expenditure of any comparable Georgia community. We provide good government to citizens at roughly $1,300 per person while our peer cities, such as Augusta, provide services at $1,600 per person. And Savannah provides services at $2,400 per person.

“Our city’s annual operating budget has shown a total negative 3.6 percent growth rate in the last six years,” she said. “So we’re not wildly increasing expenditures as some have erroneously suggested. And yet, we allot 40 percent of our budget to public safety and have the highest per capita expenditures for public safety of any comparable community in Georgia. ”

She said the city has provided an 8.5 percent pay increase to all employees and an 11.3 percent pay increase to police officers in the last six years.

This story was originally published February 21, 2017 at 4:11 PM with the headline "City responds to accountability group’s critique of finances."