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Officials say city finances show some improvement

Cairo city officials are continuing to monitor the city’s finances and records for the first two months of the fiscal year, which began July 1, and are reporting positive results.
In both July and August, the city took in more revenue than was budgeted while coming in slightly below the budgeted expenses in July. Actual August expenditures exceeded the budget by $13,974.
The city pulled in $121,728 more in revenue in July than anticipated and another $128,534 in August than budgeted.
Revenues were upped due to large sales of electricity in July and August. The July electric revenues were $1,616,082 compared to $1,447,369 in July 2013. August electric sales jumped to $1,707,825 compared to $1,532,301 the year prior.
Water, sewer, gas and cable revenues were also up over the same period last year.
Cairo City Council Finance Committee Chairman James H. (Jimmy) Douglas said Monday, “We still have a cash problem. We’re not collecting enough revenue if we are having to hold checks.”
City Finance Director Miriam Faircloth told the finance committee this week that the outflow of cash at the end of each month is “very heavy” and that drives cash balances low.
Faircloth said her office is processing invoices from vendors as they are received and the checks are written, but admitted she only releases the checks when there is money in the city’s bank accounts to cover the checks.
“At no time has the bank account been overdrawn,” she said.
The negative balances that appear in the city’s monthly financial statement is “only a snapshot on the last day of the month,” Faircloth said.
Cairo City Manager Chris Addleton said the cash flow issue for the city is not new, and that it has been an issue since he was hired as city manager.
Addleton said bond payments for the CNS cable and the combined utility bonds are the primary factors in the city’s cash flow issue.
The city is paying just over $900,000 annually in principal and interest on the CNS bonds and approximately $1 million annually for the combined utility bonds.
The CNS bonds will be paid off in 2017 and the combined utility bonds will be paid off in 2024.
Douglas expressed his concern that the city is not accumulating enough cash to make the bond payments at the end of the year without borrowing from the city’s reserves.
The city withdrew $1.2 million from its reserves in July to relieve the cash crunch. Councilmen also approved a withdrawal of approximately $1 million last December, which was paid back earlier this year.
Addleton told the finance committee that there are three months to go before the bond payment comes due and, based on his projections, the city’s finances are improving.
“I don’t intend to recommend this council borrow from the municipal competitive trust account again to pay for operating expenses,” Douglas said Monday.
The finance committee chairman urged Addleton and Faircloth to monitor revenues and expenses closely “until we get out of this cash crunch.”

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