It’s amazing what a simple little change can make. As reported last week, at this time last year the city had $9.6 million in its checking account. By most standards, that’s a lot of money. Not so when it comes to Warwick payroll. With teacher and city worker pay, not to mention health care, pension and utility costs, $9.6 million can evaporate in a matter of days. In fact, it was feared that might happen and some members of the administration were prepared to borrow from the banks [tax anticipation notes or TANS] to make certain city checks wouldn’t bounce.
Take a look at city accounts a year later and the picture is remarkably different. As of last week, the city checking account and reserves in money market accounts totaled $27 million. That’s almost a 300 percent increase in reserves.
No, the city didn’t stop paying bills nor was there a sudden windfall from Uncle Sam.
What happened, quite simply, is that the city cashed the checks people sent in to pay for property and motor vehicle taxes much sooner this year than it did last year.
The change was implementation of a lock box.
The system that is contracted with Citizens Bank provides for the same-day deposit of payments. Naturally, there is the occasional problem payment – payments that fail to match invoices or lack the proper account information – but, for the most part, checks are deposited the day they are received.
That wasn’t the case last year, when checks were held for two months and longer before deposit. The result was numerous calls to City Hall and aggravated taxpayers who were left to wonder if their payment had been lost and were anxious to balance their checkbooks.
Prompt and reliable handling of money is something we expect from government. When it doesn’t happen, it undermines confidence and trust.
City Treasurer David Olsen understood this. He pushed for the lock box when he realized city accounts were running low and the city was lagging in the processing of payments. Now that Olsen is acting tax collector, in addition to treasurer, he is looking for other ways to automate and expedite procedures in the tax collector’s office.
There’s work to be done, starting with tax bills that failed in a number of instances – more than 1,200 – to take into consideration senior exemptions. That is one of several issues the administration is working to correct with its software provider.
With one successful revision under his belt, we hope Olsen will come up with more.
Although money market interest rates are low, what he has been able to invest can help pay for the changes.