CAFR CHAT: Will student apt. developer's lawsuit really "cripple" CoMo City Hall?

Peddling the Big Lie

COLUMBIA, Mo 4/24/14 (Beat Byte) -- Columbia Mayor Bob McDavid's worries that a developer lawsuit could "cripple" city government over what McDavid calls "the Jeremy Root petition" are nothing more than City Hall's typical "sky is falling" rhetoric over finances.

Served at the end of the City Council's Monday meeting, the Mayor's big slice of budgetary baloney is the subject of this second edition of CAFR Chat: Learn about YOUR money at City Hall.

As of the latest Comprehensive Annual Financial Report (CAFR), Columbia city government had some $144 million in slush funds -- so called "unrestricted or undesignated fund balances" not subject to appropriations, legislation, or restrictions of any kind.    

That's up over $1 million from last year's $143 million slush fund balance.   Each division of city government has a slush fund, including over $85 million for water, sewer, electrical, and other infrastructure departments.  

Local developers and deposit-hungry bankers love the lavish slush funds, used to pay for crony goodies like sewer lines out to remote subdivisions, and "shovel ready" land for construction projects.   

 

Three "potentially crippling" concerns prompted McDavid into an unprecedented move Monday.  He asked city staff to invalidate "The Jeremy Root Petition," over 3,600 signatures to repeal City Council approval of Opus Group's six-story downtown student apartment project.   Opus' attorneys threaten to sue City Hall earlier that evening, and McDavid's concerns included:         

1) Expense of litigation

2) Risk of $5 million in damages

3) Effect of breaking a contract on the city's credit rating

"It's not for Josh Oxenhandler to say, 'Don't worry about it, we're covered,'" McDavid said, in a jab at a Columbia attorney who helped organize the petition effort.   "A $5 million loss to our General Fund would cripple some of our infrastructure needs," the Mayor added. 

But the CAFR calls the Mayor's bluff.   Of City Hall's $144 million in slush funds, the General Fund boasts $26,350,897.   "This is 34% of expenditures," the CAFR's auditors explain on page 14.   "It is well above the 20% target set by Council policy in August 2012." 

Meanwhile, Mayor McDavid suggested firefighters and police officers might take a hit over litigation with Opus.  "It’s going to really, really irritate me if we’re hiring attorneys to manage this lawsuit at the expense of firefighters and police officers," McDavid warned, toward the end of the Council's six-hour meeting.  

If they take a hit, firefighters and police officers will have good reason to initiate a petition of their own:  to recall Mayor McDavid and other Henny Penny types on the Council who insist on peddling the Big Lie:  that City Hall is nearly broke. 

-- Mike Martin