We are less than three months away from the November elections. One of the biggest races this year will be the mayoral election for the city of Evansville.
Brad Byrd sits down with Democratic mayoral candidate Gail Riecken, who is also an Indiana State Representative. She discusses several issues including the downtown hotel project and transparency on the city’s financial situation.
Evansville City Controller Russell Lloyd, Jr. released the following response:
“Generally Accepted Accounting Principles (GAAP) accounting is used in business, and required for large businesses. In the business world, it shows a more accurate picture a firm’s economic activity.”
“This is not necessarily so for government. Many government units use the cash basis of accounting, where you record cash as it comes in and expenses as checks are paid. Government can use GAAP but in my opinion it will only marginally improve accounting for the city.”
“It will require additional training for accounting personnel, more recordkeeping by recording accounts receivable, prepaid assets and expenses, accounts payable and other liabilities. For government the most important measure is the budget combined with cash inflows and outflows. GAAP does not improve this.”
Sen. Holdman and Rep. Riecken’s bill hurts small government units by adding complexity and recordkeeping costs beyond what is done now.
Paragraph 4 – “… there is a liability to the General Fund of more than $ 3.7 million in unpaid bills to surgeon and physicians.”
“That is completely false and inaccurate. This shows lack of understanding of how the City Health Insurance fund operates. The City pays health insurance claims when received and will even temporarily pay more than received and go negative in the fund. The General Fund was billed in July for health.”
To specifically answer the Rep. questions:
1.) The City General Fund cash balance was in fact $ 891,009 on 6/30/15. The City reports on the cash accounting basis.
2.) The City paid the quarterly Hospitalization Fund 0704 in April. The Fund was cash positive in April and May so all claims were paid. The City paid the 2nd quarterly bill for Hospitalization in July. There is no $ 3.7 mil. “owed” for Health Insurance that is an internal billing to the Hospitalization Fund.
3.) The Utility Dept. pays the quarterly bills on a separate schedule. They have their own accounting staff. The $ 891,009 is the balance, nothing misleading about it.”
Evansville Mayor Lloyd Winnecke released the following response:
“As the convention hotel project moves forward, it is important that the public has correct and accurate financial information. The City has maintained all bond ratings since 2012. There has not been any downgrade. Moody’s Investors Service and Standard & Poor’s Rating Service use a completely different scale. They are independent entities, however their ratings track each other fairly closely.
Last evening, State Representative Gail Riecken stated several times in the media that the hotel bond was of lesser quality than the bond for the Ford Center project and will cost taxpayers more money. For the record, the arena bond was originally rated A1 by Moody’s and rated an A by Standard & Poor’s. In 2013, Moody’s actually upgraded the arena bond to an Aa3 rating.
The hotel bond was rated an A by Standard & Poor’s, which is the same rating given by Standard & Poor’s for the arena bond. Moody’s was not asked to rate the hotel bond. To be clear, there have been no downgrades in bond ratings for these projects and Standard & Poor’s rated both the arena and hotel bond an A rating.”