by Bradley Parsons
Staff Writer
The City Council’s Finance Committee chair is taking an interest in how the City spends its interest revenue.
Warren Alvarez estimated the City has more than 100 accounts — most of them holding bond money — earning unknown amounts of interest. He said “there’s no telling” how much money the accounts earn, and that’s the problem. Although the City is limited in how it can spend the bond money, the interest from those accounts is fair game to be spent elsewhere.
Alvarez wants all the money pooled in one account. Putting the money on the ledger sheet would allow the City to keep better track of the money and better plan how to spend it, he said. Currently, the interest accumulates until someone hunts it down and puts it to use. Since 2000, the mayor’s office has been doing most of the hunting and gathering, according to City Council legislative records.
The City Council has let the mayor’s office dip into interest accounts 21 times since 2000. Those forays into the accounting netherworld have netted more than $8.9 million, which the City has put to use in a variety of ways from improving park land to studying surfing conditions.
Most of the requests came from Mayor John Peyton’s predecessor. Only two of the transfers, totaling $206,000, took place after Peyton took office last July.
However, it was Peyton’s request, made at Monday’s Finance Committee meeting, for $155,100 in interest earnings to pay for three projects that spurred Alvarez to voice his concerns.
“You can’t find that money anywhere else?” Alvarez asked Peyton’s Council Liaison Paul Crawford. The three bills passed unanimously.
Alvarez said he doesn’t question how the money is spent. But he said the money should be accounted for.
“I keep seeing bills go through and the money keeps going out,” said Alvarez. “I’ve just been watching them, and I just wonder how much money is out there and how much is being spent.”
Alvarez asked the Council Auditor’s Office to dig through all the City’s interest-bearing accounts. He wants to know: How many accounts? How much interest do they generate and how fast?
Council Auditor Richard Wallace said lining the funds up in one account would give everyone in the City an equal shot at the money. Now, the money is most available to whoever is best at finding it.
“It could have the effect of leveling the playing field so everybody has an equal opportunity to know how much money there is and to line up potential funds with potential projects,” said Wallace.
Wallace said many of the bond agreements require that the money, and its interest, be accounted for separately. That could make Alvarez’s consolidation plan difficult to implement.
If the money can’t be pooled, then Alvarez said the interest should be put back into the account that earned it.