The Cactus Speaks: Municipal Capital Improvement/Slush Fund? Budgets are boring…

[EDITOR’S NOTE: This column by Earl Gipson is a view of SeaTac city government. It does not necessarily reflect the views of The SeaTac Blog nor its staff. We are always seeking additional regular columnists to reflect different opinions and views of SeaTac residents. Those interested can e-mail us at [email protected].]

Municipal Capital Improvement/Slush Fund? Budgets are boring…

By Earl Gipson

The Municipal Capital Improvements Fund is fund #301 in the City budget document. This was the fund that the State Auditor had a finding on just recently (previous coverage here).

The Anomaly
I first noticed this fund as an anomaly ~2012 budget (or sooner) when $920 K was transferred to the General Fund to fund decision cards and to balance the budget. It was the first occurrence and directed by then City Manager Cutts and approved by the then Council. My concerns were ignored. This continued for some years after but has since ceased.

The problem I had is that a capital fund was being used for recurring costs with no itemization for the purposes of transfers in and transfers out. It was my understanding this fund was originally a set aside for Construction Sales Tax (there may have been an ordinance) so that monies collected on this tax would be used for infrastructure, support, etc for the new construction. Pretty good idea (I thought). There were some large projects (176th Station, Rental Car Facility, and Concourse A expansion) that placed many dollars into this fund. Its depletion into the general fund with no itemization should have caught the eye of an auditor before (my opinion).

Now here we are. First of all a Capital Fund is a procedure/fund typically used in government accounting whereby a procedure/fund that consists of various types of financial resources is utilized in the acquiring or constructing of capital facilities. This eliminates the use for recurring costs, salaries, etc.

The 301 Fund needs to be controlled, rules on what it can be used for defined, and the Council needs oversight of authorized/itemized transfers in/out. You may consider renaming the fund that better defines its purpose. I wouldn’t use “City Slush Fund” though that seems to have been its past use from my vantage point.

The accountability/blame goes directly on previous administrations under then City Managers Craig Ward/Todd Cutts and the previous Majority Council led by former Mayors Mia Gregerson and Tony Anderson. Our current Finance Director (Gwen Pilo), current City Manager (Joe Scorcio), and Council inherited this and have had their hands full finding other discrepancies in budgeting/expenditures, lawsuits, ILA…… The auditor simply caught this one before they got to it.

I had forgotten about this fund until I asked about the sale of the Hugh’s property (partial) and its distribution. $2 million of it went into this fund. With the auditor findings it now comes to front and center. Municipal finances are complicated especially when taking over from others who “always did it this way.” It may look bad but our City Manager and Finance Director are doing any excellent job of cleaning things up. Keep up the great work Mr. Scorcio and Ms. Pilo.

Cactus Song Selection: Money: Pink Floyd : 1973
This song came to mind and I have a history with it. When I was in high school we were required to take some artsy class. Drama it was and I promptly slept through most of it. The final exam was a pantomime of a profession. I chose a pool player (quite a lil hustler at the time) and set it to this song. Got an A. Still goof’in off (except without the damn pot). Bring back memories anyone?



One Response to “The Cactus Speaks: Municipal Capital Improvement/Slush Fund? Budgets are boring…”
  1. Joel Wachtel says:

    Welcome back Earl!

    It’s nice to see things explained by a person who was here when it happened!