Dire Straits: Town suspends rec department after budget revelations

State Auditor Beth Wood presented her analysis of Robersonville’s financial state during a special called meeting Tuesday night.

Robersonville – “As council members you have got to take hold of your town.”

This was the plea made by State Auditor Beth Wood to the Robersonville Town Council during Tuesday night’s special called meeting.

During the meeting, Wood presented her analysis of the town’s financial affairs now that the town’s books have been caught up in preparation for audits.

The picture painted by the more accurate state of financial affairs led the town council to suspend operation of its recreation department and its director, Marcus Crandell, until a future time where the town can better afford the expense.

The figures presented are not a part of any audit process, but were put together by Wood’s office.

Wood presented a breakdown of each of the town’s funds: general, electric, water and sewer, as of June 30, 2020.

“The general fund lost money in 2020,” she explained, pointing out the ending fund balance was a negative $146,908.

For the period ending June 30, 2020, revenues for the town were $1,384,752.79. Expenses were $1,428,753.21.

Wood pointed out the cash position of the general fund. “The general fund is in a negative $328,629 cash position. It is spending money that doesn’t belong to it (the fund),” she explained.

After a detailed breakdown of the general fund, Wood told the council and virtual attendees, “I think you can see your general fund is in dire straits.”

Disparities in budgeted amounts versus actual revenues and expenditures were a reoccurring theme in Wood’s analysis.

One example of this was the town’s revenue of Fire District funds. For the period ending June 30, 2020, revenue was budgeted as $75,000.

“But you only brought in $28,000 ($28,626.26),” the auditor stated. “It is my understanding that a check came from the county and it sat around here for so long that a new check had to be issued.”

She mentioned another check that reportedly arrived at the town office in July and did not get deposited until September.

Wood stopped on several occasions, offering to entertain questions from town council members.

An analysis of the water fund, according to Wood, showed in the past 20 years, the fund has lost money in all but three years.

Total revenues for the period ending June 30, 2020 were $650,168.46. Expenditures for the period were $646,302.05.

Water cost was another area where budgeting problems became evident.

For the period ending June 30, 2020, $120,500 was budgeted for water cost; however, the actual expense was $245,863.67.

When a council member questioned how this could happen, Wood replied, “Somebody presented you with a budget that didn’t work. You adopted a budget that had only $120,000 in the budget for cost.”

Of the funds analyzed, Wood called the sewer fund “the absolute worst.”

“The sewer fund is in a net deficit of $483,000,” she said. “So you’ve been using cash that did not come in from sewer revenues.”

Included in this fund was a money market account with a negative balance of $39,680.

Water costs also under budgeted, this time by nearly $15,000 ($88,500 budgeted versus $103,393.98 spent), under the sewer budget.

The fund suffered a loss of $446,908.91 for the year ending June 30, 2020.

One thing Wood noted while discussing the sewer fund, “These negative cash balances have been going on for years.”

“Like the general fund, the sewer fund is in dire straits,” she explained.

“To make matters worse, you have a total of approximately $800,000 in accounts receivable for all utilities.”

Of that, about $428,000 is owed by people who do not have a current electric bill, according to Wood.

“These people have either moved, died or have an account under another name,” she advised.

The last utility bill write-off Wood was able to find was done in 2011. She gave examples of bills included in the $428,000 in the amounts of $27,000 from 2014, $21,000 from 2000, $15,000 from 2001 and $6,000 from 2014.

Wood explained such information should be brought to the attention of the council each fiscal year.

“This town will not survive if the council members don’t put somebody in a position here to help you understand this month to month and year to year,” the state auditor explained.

Wood later said she did not believe the Local Government Commission should continue trying to run the financial matters of towns, such as Robersonville, and would seek legislation that would revoke the charter of towns who can not or will not properly manage their business affairs.

State Treasurer Dale Folwell, Chairman of the LGC, agrees.

“Over 1,300 entities report to the LGC and we have 38 employees,” Folwell told The Enterprise. “We can’t manage them all.”

Folwell applauded the work of Robersonville Mayor Tina Brown and her continued efforts to help get the town on the right track.

He said although the books have been reconciled in Robersonville, that’s “not the end of it,” citing the pending audits.

“We want to account for every penny and paperclip because that’s what the people should expect,” said Folwell.

After Wood exited the meeting, Town Manager Libby Jenkins recommended suspending operations of the town’s recreation department and director until a time the town could better afford to run the department.

Commissioner Eugene Roberson made the motion to accept Jenkins’ recommendation. A second to the motion was offered by Commissioner Claudie Wilkins.

All commissioners ­– Roberson, Wilkins, Glen Cowan, Debra Hines Armstrong and Chiquita Ward – were in attendance and voted in favor of the motion.

Sarah Hodges Stalls can be reached via email at shstalls@ncweeklies.com