Susan Jones, who is running against Ward 5 incumbent Councilman Bud Leonard in the upcoming city election, questioned Chief Financial Officer Robert Porche after the meeting about when the 2013 financial audit report would be completed.
“The audit has not been done for this year … for 2013, the official (audit) won’t come out until the middle of next year,” Jones said Tuesday. “The city is in a financial mess, which could have been avoided if only they had chosen to stick to their very own budget. The papers that I had copies made of, and paid for at City Hall, shows the city of Woodstock is almost $48 million dollars in debt.”
Leonard, who has held the Ward 5 city council seat since Jones left office in 2005, said Tuesday he didn’t see a problem with the numbers presented at the meeting.
“I don’t think the audit is going to change the outcome at all. I think the figures are going to speak for themselves and the audit is going to verify them,” Leonard said.
On Tuesday, Porche said the information presented at the meeting the previous night was “the debt load as of June 30, 2013.” According to the presentation, the total outstanding debt as of June 30, the end of the fiscal 2013, was $44.9 million.
“I understand some candidates are questioning the numbers presented (at the meeting). They have been provided June 30, 2012, numbers … which is the latest audited numbers. There has been movement from 2012 to 2013,” Porche said Tuesday. “Our audit is scheduled for Oct. 14. We should have our fiscal year 2013 audit results by mid- to late December.”
According to the debt presentation at the meeting, presented by City Manager Jeff Moon, seven loan debts were paid off between 2012 and 2013.
“Three things were paid off early as funds became available,” Moon said at the meeting. “People hear in the news about Detroit and other cities that have filed for bankruptcy and they get concerned, and rightfully so. … If you take Detroit’s estimated $20 billion debt, billion not million, some 25 percent of it was to cover health care, dental and other promises to retirees. We don’t have any of that, zero. And we aren’t a dying community. We’re a growing, thriving, prosperous community.”
Moon said money the city owes is for capital projects such as streets, building, equipment, and water and sewer equipment. He said the city owes nothing for operations, pensions, retiree health insurance and payroll, Moon said.
Based on the presentation, $19 million of the debt was incurred in 2010, to make “improvements on the wastewater treatment plan,” along with other items including the reimbursement of reserve funds that were used to pay off the original short-term note in 2004.
“The payoff is in 2030,” Moon said at the meeting. “And included in that number of $19.6 million in the original bond issue, 65 percent of that, or $12.6 million, was existing debt that was refinanced to a lower interest rate.”
Jones said she thought the debt presentation was only done because “it’s an election year.”
“(At the meeting) they made the fact that we’re not in as much debt, and we haven’t borrowed as much money as we could have. But we’re so in debt that it’s going to take years and years to get out of this debt,” Jones said. “(At the meeting, Moon) talked about $12 million of that debt being from the water treatment plant from 1998 to 2003, they had to refinance that bond. They didn’t have to refinance that bond, they could’ve paid that off, so don’t put it on the previous elected officials’ backs.”
Leonard said the refinancing came after the economy took a downturn in 2008, and said that “long-term money is what it took to keep that afloat.”
“The reason it was refinanced was to get a lower interest rate and to put it on long-term bond. It was on a short-term bond and it was eating up the reserve fund and it was coming out of the general fund, we went ahead and refinanced it because in 2008, when we had a major downturn, we had to extend the payments out,” Leonard said. “The sewer treatment plant, so much had to be done to it. It had to be upgraded and ...we had to spend an awful lot of money on it. We elected instead of using short-term money, which wasn’t coming in, in the 2008 time-frame, because of the depression, instead of using short-term money we started using long-term money to finance that thing and stretch it out.”
Moon said the next meeting agenda will include recommendations about how to pay off two more loans.
“It’s more than a number, it’s the economic future for the city of Woodstock,” Moon said.