Houston pinched by late payments

HOUSTON — The city almost ran out of money this month, but with Thursday’s transfer of $50,000 from a city savings account, it will be able to pay its bills.

Houston Mayor Sandy McDonald called an emergency meeting Thursday afternoon with a goal of straightening out the books.

Carolyn Grabowski, the recently installed treasurer for Houston, explained the city has been waiting for property taxes due to come in from the Mat-Su Borough. Typically, those payments arrived in August, she said. This year, the payments are a little late and a call to the Borough led Grabowski to believe the city shouldn’t expect to see the $163,000 it’s due until the first of October.

Reached late Thursday afternoon, Borough Finance Director Tammy Clayton did not immediately know if or why the payment was later than normal.

Still, without the revenue, the city was left about $28,000 short of the month’s tax bills, Grabowski said. Payroll is covered, but a number of other bills couldn’t be paid unless the city could free up some cash, she said.

“We have enough money to pay all but five bills?” Councilman Roger Purcell asked, receiving an affirmative answer from the clerk.

Those bills included city insurance payments, one to a local road contractor, fuel costs and payments to the Alaska Municipal League.

McDonald said the city hadn’t done anything extraordinary with its finances, it had just been waiting on money that hasn’t arrived.

“[It’s] not that we have been mismanaging our funds,” McDonald said. “It was as safe gamble, I would say, that we were going to be getting this money.”

Funds to cover the deficit eventually came from a city savings account, where Houston has been depositing proceeds from land sales. The actual tab decreased by more than $3,000 on a motion Purcell made to transfer interest from that account into the city’s coffers. The remaining money will come from the account’s principal.

Purcell floated the idea, to which the council eventually agreed, of transferring $50,000 from the account, paying the deficit and keeping the rest in reserve so the council wouldn’t have to reconvene if coffers came up short again. According to his motion, that money will be paid back into the land sales account when the Borough’s $170,000 in revenue sharing funds came through from the state.

Contact Andrew Wellner at andrew.wellner@frontiersman.com or 352-2270.