By John Schaffner
Financial quandaries continue to plague departments within the city of Atlanta, seemingly on a weekly basis.
With the city already reeling from unrealized anticipated revenues for the past couple of years, the city’s Department of Watershed Management had an ordinance introduced in City Council on the last day of September to write off $811,011 of water and wastewater bills it claims it has been unable to collect.
Then on Oct. 9, the Department of Aviation announced that a financial review of the construction in progress account at Hartsfield Jackson Atlanta International Airport had revealed errors regarding items which should have been classified as expenses over the years dating back to 2003 and certain items which should have been placed in service during 2007 and 2008 but were not. Instead, the funds ended up on the book as surplus.
The impact of these changes for 2003-2008 would have reduced the airport’s surplus by an amount ranging from $10.4 million in 2003 to $19.7 million in 2008.
The review of this account, which is a holding account of capital projects under construction and not yet placed in service, was part of the due diligence for pending sales of bonds for the airport.
The impact of these errors changes airport bonds debt service ratios for 2003 and 2008, but the city claims all of the revised debt ratios remain well above the 1.2 required minimum.
The Department of Aviation reportedly has implemented the necessary controls to insure the errors do not recur.
All in all, the past few weeks have not been good for city finances.
The revelation of the unpaid water bills and request to write off the uncollected bills came just two days after city officials disclosed they paid the Internal Revenue Service $2.5 million in penalties and interest on late payments to the city’s General Employee pension fund.
The city was notified Sept. 14 of the due amount and, based on legal advice, paid the full IRS levy bill on Sept. 23 even though the city has filed an appeal.
The penalties and interest were imposed because the city was a few days to a week late on some of its monthly pension payments.
City Finance Department workers also incorrectly put $894,000 in the police pension fund instead of the General Fund pension account, according to Chief Financial Officer Jim Glass. The city intends to seek a full refund. The city sent a letter Sept. 21 requesting a refund of the $894,000.
Glass also dismissed workers in the Finance Department who were responsible for making the payments.