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CITY HALL SWISS BANK ACCOUNT: Grows $184 million in 19 years


"WTH is going on?" 

COLUMBIA, Mo  9/11/17 (Beat Byte) --  Columbia city government's Swiss bank account balance has nearly tripled in 19 years, a study of the city's Comprehensive Annual Financial Reports (CAFR) from 1998-2016 has revealed.

On deposit since 1994 at UBS -- the Union Bank of Switzerland/Swiss Bank Corporation -- City Hall's "pooled cash" account has grown from $110.4 million in 1998 to $294.5 million in 2016 -- an astonishing $184 million increase, about $10 million per year (see chart).

The giant bank account has elicited growns -- "WTH [what the hell] is going on?" -- across social media.
 
Like a company banking its profits or a family saving cash left over after all bills are paid (if they can), City Hall's various departments -- Water and Light, Sewer, Stormwater, Public Works, Parking, and so forth -- "pool" the cash they have left over after each year.  

Drawn from taxes, fees, rates, fines, grants, and the other ways city government makes money, the pooled cash is deposited in short-term interest-earning investments at UBS, a Swiss bank headquartered in Zurich and Basel, Switzerland.   In one year, for instance, "thirty-one percent of the pooled cash portfolio was in a money market fund," the city's accountants explain in the CAFR. 
 
"There are no fees charged to the city for this account," City of Columbia public information officer Steve Sapp told the Heart Beat.   "UBS also provides reports to the city at no charge."  
 
City officials can use the funds, no strings attached.   In 2010, for instance, they spent $500,000 to buy an old office building for IBM from the estate of prominent businessman Bob Lemone.   In 2013, city officials spent $3 million for development land north of town.   This year, they sold the land at a $1.5 million loss to Aurora Organic Dairy. 

"The City manages a pooled funds investment program for all cash not restricted," City Hall's accountants explain.   The pooled cash is "available for use by all departments."

Restricted funds, on the other hand, are either spent as mandated or kept in accounts with names that designate their purpose.    City Hall uses US Bank for day-to-day accounts of this sort, Sapp said.
 
Pooled cash does NOT include employee retirement or health insurance monies, which as of the last audited CAFR amounted to around $118 million

The city's pooled cash Swiss bank account usually fluctuates modestly, rising or falling from $5-$15 million each year. 
 
But in some years,  the balance takes big jumps:  up $53 million between 2014 and 2015; up $63 million between 2005-2006; down $43 million between 2009-2010, around the time city government paid cash for the new City Hall addition.     A single year's worth of gains could pay for all the city's police, fire, and sewer needs, with plenty of money left over. 

The pooled cash Swiss bank account remains a mystery to Columbia City Council members and the public.   Salaried senior staffers like city manager Mike Matthes are mum as to whom the money benefits and why it has skyrocketed so much over the years.  

Questions about the money are discouraged and even belittled.  Matthes and city finance director Michele Nix spent nearly 30 minutes at the city budget retreat trying to convince Council members not to investigate the account, calling it "just a rumor" and "misinformation."
  
Though the CAFR annually details each cash investment in Table 13 or 25, Matthes embarassingly told Council members the money wasn't *really* cash, but "inventory, like spools of copper and utility poles."   Nix corrected him several times.  


COLUMBIA CITY GOVERNMENT'S SWISS BANK ACCOUNT -- YEAR BY YEAR

Year          Balance
 
1998.....$110,397,466       
1999.....$105,066,441
2000.....$110,987,441
2001.....$125,839,688
2002.....$140,075,135
2003.....$138,010,591
2004.....$161,149,160
2005.....$165,926,351
2006.....$228,027,571
2007.....$210,830,550
2008.....$257,218,936
2009.....$272,342,674
2010.....$229,094,128
2011.....$242,563,812
2012.....$266,675,771
2013.....$249,670,673
2014.....$246,778,093
2015.....$299.859,366
2016.....$294,460,358
 
 
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