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City must be careful not to spend the wrong money

 


A few years ago, Electric City inadvertently ran afoul of the rules for properly appropriating funds brought in by taxes collected from motel and campground patrons, leading to a small fiscal problem when the city had to repay the money to its own reserves. The city should be careful that it’s not about to make that mistake multiplied many times over.

When city council members and the mayor back then decided that those hotel/motel taxes could be used to buy Christmas lighting to decorate power poles along the main thoroughfare, they reasoned that it could be claimed that folks would drive from far away to see them.

The state auditor disagreed, but only after the city had spent the money on the lights, meaning some other part of the city’s operation had to be shorted the money.

That was a relatively small amount of money, $10,000, but for a city careful with stretched resources even that amount coming out of a carefully planned budget creates problems.

The mistake was understandable and likely far from unique to Electric City. Anyone who has been to Leavenworth for the lighting of the Christmas lights has seen that exact use of those funds, except done at a place that is already a holiday destination.

The Washington State Auditor wouldn’t allow those funds, collected for the lawful and exclusive use of boosting tourism, to be used for a purpose unlikely to do so. Auditors didn’t seem to think people would drive to Electric City, stay in motels and dine out, in order to see its relatively meager lighting display.

So it’s not clear that spending some $400,000 of that fund on two parks ostensibly built with an Ice Age theme — with pictures of a mammoth on a basketball court and under water in a children’s splash pool — is going to pass muster.

The city council wants to use those funds to match others it will seek from grants to build two parks at a total cost of about $890,000.

What happens if it builds the parks, then finds out the state auditor thinks it did so illegally? That using funds collected to boost tourism to decorate a kiddie pool was not likely to pull in tourists to Electric City. That other funds gotten with that hotel/motel fund leverage also must be paid back to the granting agencies?

How easy would it be to repay those funds, and what new taxes on the citizens of Electric City might be necessary to do so?

Electric City’s leadership wants to do something good for the city by building parks that people want. They should be careful not to do so by recklessly misappropriating funds from the wrong source.

Scott Hunter

editor and publisher

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