Calais mayor rejects council critics During campaign, Alexander accused city board of spending surplus

CALAIS – The mayor last week defended statements she made during her campaign that some city councilors say cast a shadow over how they handled the city’s financial business.

At the regular council meeting on Thursday, Mayor Judy Alexander, who owns her own accounting and bookkeeping service, read from a prepared statement and admitted she did not understand what a municipal surplus was.

“Yes, I thought ‘surplus’ meant ‘cash,’ and I’m not the only one who ever served on council or as mayor who thought that same thing,” Alexander said, “that the term ‘surplus’ which [the auditors] prefer to call ‘fund balance’ is not cash, but a combination of assets … minus liabilities.”

Councilors didn’t respond to her statement, except for Councilor Ferguson Calder who questioned Alexander about where she obtained her misinformation.

Alexander was defeated during her re-election bid in November 2000, but she won the office again last month.

In her recent campaign brochure, Alexander stated, “Since I left office … the $450,000 surplus that existed has now all been spent, and money had to be borrowed to meet payroll until tax revenues are received.”

When the councilors and Alexander met for the first time at the November council meeting, the councilors denied they had squandered the surplus.

Rather than apologize, the mayor said she planned to investigate the issue.

At a Wednesday night meeting with the council, auditors said the city had ended the year with a $469,581 surplus. During the meeting, Alexander did not question the auditors about the surplus, nor did she ask the auditors whether the gap financing that the city had pursued to cover capital-improvement projects had left the surplus at a precariously low level.

Finance Director Tammy Ginn said Friday that gap financing had been sought to cover the cost of some capital-improvement projects. “We have been extremely busy this year,” she said.

Former Finance Director Pam Bridges said the city never pursued gap financing when Alexander was mayor.

“But we didn’t have as many capital-improvement projects going either,” she said.

Bridges explained why municipalities use gap financing, saying, “If you are taking on capital projects, lots of projects are not paid until the work is completed. So the money has to be upfronted from somewhere.” She said gap financing is used until the grant money or loan is received.

During her investigation, Alexander read from her statement, she learned of the $500,000 gap loan the city had pursued to finance part of the cost of the water project. After years of stops and starts, the city finally has its own water system. In the past, it purchased its water from St. Stephen, New Brunswick.

“Since so much had been self-financed through the general fund, the cash balance had diminished to $106,727.21 on April 11,” she said. The mayor went on to say that if other money had been deducted during that period, it would have created a serious problem, but she admitted that did not happen because the city received sufficient income to cover its obligations.

The mayor went on to say in her statement that on July 11, these city loans were executed: $1 million for improvements to sidewalks and library and $1 million of the grant anticipation note for the water project.

Although the mayor alluded to those projects, she failed to mention that they were projects that began or were already in progress around the time she left office in 2000. In fact, it was the mayor who spearheaded a move to convince taxpayers to approve a referendum allowing the council to borrow up to $1 million for improvements to the library and sidewalks.

“I feel it is a tribute to our city’s financial ability to have self-financed so many projects for so long. However, I do not feel it is in our best interest to do so when it creates a cash-flow problem,” she said. Alexander did not offer any other options on how capital-improvement projects should be temporarily financed.

The mayor did suggest she and the councilors should reach an accord.

“It’s time to put this to rest, roll up our sleeves and do the work that each and every one of us were elected to do,” she said.