On Tuesday night, the city council was reminded again about the impending budget crunch due to new accounting regulations known as GASB45:

GASB refers to the General Accounting Standards Board, an operating arm of the private Financial Accounting Foundation. GASB establishes standards of state and local government accounting. And Section 45 is a policy adopted by the board in 2004. It requires that governments must account today for future costs of guaranteed medical benefits for retirees…. [Those] higher costs, when the bills eventually come due, must be paid for by higher taxes or reduced services.

Standard and Poor’s, which takes this seriously because it rates government credit, said in a December 2004 report that GASB could uncover much higher costs that could “seriously strain operations” or uncover conditions in which governments “are unable or unwilling to fulfill these obligations,” which could hurt governments’ credit ratings.

So, Peoria is going to be facing some potentially drastic measures, such as making cuts in health care coverage for employees. Since that’s unpopular, every item of business, no matter how small, came under scrutiny. They even spent time haggling over hiring a part-time training coordinator for a mere $5,000.

I would be more sympathetic to these conscientious cost-cutting measures if it weren’t for the fact that the city council is poised to throw away a $565,000 asset without giving it a second thought. While they’re haggling over $5,000, the park district can hardly wait to get the word that it’s okay to tear out a half-million dollar rail line known as the Kellar Branch — a rail line for which there is a willing buyer or lessee — so they can turn it into a hiking trail. The irony is that the city could get the money and the trail, too, if they’d accept Pioneer Railcorp’s offer to buy or lease the line.

If the city council is really interested in plugging the GASB45 gap, then they should stop walking over dollars to pick up a dime.