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Washington finance director outlines fund structure; council warned against routine transfers to utility funds
Summary
Finance Director Joni Baxter reviewed the city’s fund structure and cash position, saying the general fund held about $16.4 million in July. Councilmembers asked whether the general fund could subsidize water/sewer projects; Baxter said auditors and bond counsel generally advise against such transfers and that rating agencies view them negatively except in rare one-time cases.
Finance Director Joni Baxter gave the Washington City Council a step-by-step overview of the city’s fund and account structure at the Sept. 15 meeting and shared a cash snapshot of city resources.
Baxter explained the difference between governmental funds, proprietary (enterprise) funds and trust funds and walked council through the account-numbering system used in the city’s reports. "At the July, we had, you know, 16,400,000 in the general fund," Baxter said when describing the state-of-the-treasury cash snapshot.
During questions, Alder Preston Moss asked whether surplus general-fund dollars could be transferred to enterprise funds such as water or sewer to help pay for infrastructure projects. Baxter said she had consulted auditors and bond counsel and that they generally "would not recommend it." She added that while a one-time transfer might be possible, repeated use of general-fund dollars to cover enterprise needs could be seen as a negative by rating agencies and lenders.
"They basically said they would not recommend it," Baxter said. "It's not a good sign. It's probably a red flag. It would not look good to rating agencies, honestly, if we were to want to go after a bond."
Councilmembers pressed for clarity on equity and policy: one member noted residents who do not receive city water or sewer services would still pay property taxes, asking if those taxpayers would be subsidizing utility projects under a transfer policy. Baxter and other council members characterized transfers as possible only in exceptional circumstances and cautioned that doing so regularly would undermine long-term financial signals and could affect borrowing costs.
Baxter said the city uses a revenue-tracking report to monitor major revenue streams and makes projections using state-supplied data. She encouraged council to use those reports and the month-to-month snapshots to spot trends early rather than waiting until the end of the fiscal year.
The presentation was informational; no ordinance or policy change was proposed at the meeting.
