WHITE SPRINGS — The Town of White Springs received a clean audit at its May 14 meeting, although it still has work to do.
Ken Daniels, CPA, presented the audit to the Town Council and said the clean audit was not a surprise.
“I don’t want to imagine what it would take not to get a clean audit opinion,” Daniels said.
But Daniels did caution the council about the financial situation the town is in, mainly stemming from a lack of operating funds. Daniels said the town has $214,000 in operating cash, which isn’t enough to cover two months worth of expenses, as is recommended for municipal governments in case of natural disasters.
“That’s something you need to work on,” Daniels said, adding he has one client that has nearly two years worth of operating expenses in their general fund. “Ideally, you want six months. That’s incredibly low and you need to work on that.”
Daniels advised the council that it may have to “take some significant action” in order to help improve its financial standing. He told the board it may want to consider raising its rates in order to compensate for the lack of resources available.
He also said the town needed to start tracking the loss of water from what the town is pumping to what is being paid for. He said meters indicated the town was short more than 3 million gallons last year, or a variance of 17 percent.
“It’s expensive to treat that water and then lose it and not sell it,” Daniels said.
One area of the town’s budget that Daniels thoroughly addressed was the town’s use of Local Option Fuel Tax funds. Daniels said his opinion was the town, which used all of its LOFT money the past year, was OK in how it used those funds. He said Town Attorney Karen Hatton also was of that opinion as well as Henderson & Godbee, LLP and Purvis Gray and Company.
He said if the town council, though, wanted to restrict those funds for repairs to roads and streets, it has that right during the budget process.
“It’s your budget, you fix it like you want it,” he said before cautioning the council on what that action could mean.
“But be forewarned that you may have something the size of your police department to disappear with that street definition and this revenue deficit.”
Daniels, though, did commend the town’s staff for the strides they’ve made in recent years.
Seeking attorney general’s opinion
Despite Daniels’ assurances that the town was using the LOFT funds appropriately, Miller requested — as she has repeatedly in previous months — to seek an opinion from the attorney general’s office about the proper use of those funds.
The council approved that request by a 3-2 vote with Spencer Lofton and Tonja Brown dissenting.
Councilman Tom Moore did express concern about seeking the opinion with worries that it could lead to the town having to repay those funds if it was determined to be an inappropriate use.
Miller and Town Attorney Karen Hatton said that wouldn’t be an issue. Hatton said requesting an opinion would not lead to an investigation.
Miller said the town’s request would be hypothetical based on if a use would be appropriate in the future.
Prior to the vote, Lofton asked why was the attorney general’s opinion needed since both Daniels and Hatton advised that the funds were used properly.
“If you think we are using it right, what is the concern with seeking the opinion?,” Miller asked, adding she didn’t think it was an appropriate use.
New fire engine
Following a lengthy discussion, the council approved obtaining a new fire engine for its volunteer fire department using a USDA Rural Development grant to cover a portion of the cost and obtaining a low-interest loan for the rest.
The town was approved for a $150,000 grant on its application for a $330,000 purchase of a new truck.
Town Manager Stacy Tebo said the town was advised to aim high on its application and there is a good chance the fire truck won’t cost $330,000, so the loan wouldn’t necessarily be for $180,000.
Still, after hearing from Daniels’ audit presentation earlier in the meeting, there was concern with the town’s financial status and having to pay another loan, which could be anywhere from approximately $9,000 to $16,476 annually.
Tebo and Fire Chief Steve Stith said that cost would be offset by the reduction in maintenance on the town’s current older vehicles, as well as selling off one or two trucks, including an engine that is too costly to repair.
Tebo and Stith also said the payments would be funded by the town’s fire protection agreement with the county, which guarantees the town $10,000 annually. The town can earn up to $20,000 more based on the number of calls it responds to.
“To me it’s a no-brainer,” Lofton said of the decision to provide the new fire engine to the department.
The council approved obtaining the truck by a 4-1 vote with Miller dissenting, due to concerns over it being fiscally responsible.