Aragon still facing cash shortfalls
♦ Emergency funds remains unopened as of February session, money used to keep General Fund on a positive balance
The hope for the City of Aragon is to hold on for a few more months and only spend when absolutely necessary as they wait for infusion of revenue to help bulk up their bank accounts and keep operations on track.
Aragon’s financial consultant Rick Hartley said the city needs to stay away from any capital expenditures and stay small until checks come in covering local property taxes, utility franchise payments and stay conservative in the months to come to avoid running out of funds.
For the past several months, the Aragon City Council has questioned why expenditures keep overrunning the amount of revenue available, forcing officials to dip into funds set aside in the Special Assets Account, and have not yet opened an account the council voted to open and put strict stipulations on the use of that money.
“I’ve already looked at – and this is just preliminary – I’ve already looked at what we brought in for this month and what we’ve spent,” Hartley said. “We’re in the red by $10,900. But the good news is that next week we’re getting the $12,000 LOST check, which will help us get through that.”
He said unless an emergency comes up, the city has already covered expenses for the month of February, and payroll won’t push through again until March 1.
“On March 1, we hope to get our power check from Georgia Power. Last year it was $34,300,” Hartley said. “So I’m hopeful that it’s at least that, if not even more.”
Additional funds have come and gone from the city’s coffers, and Hartley is hopeful that by the end of the month this week and heading into the rest of the fiscal year that closes in June, the city can continue operating without issues.
“I’m hoping that we’ll have a positive month for a change, and then we’re rolling into tax season and collections and so we’ll have a few good months, and then hopefully we can funnel some of that money into
the savings fund,” Hartley said.
Council member Debbie Pittman asked if the account – which was approved to be open in late 2018 – had been opened, Hartley said it hadn’t. When pressed by Council member Judd Fee about the legalities of whether consequences were involved for having not yet followed the council’s order they sealed in a vote.
“We’re all trying to do what is best for the city,” he said. “But my question is what happens when something like the Emergency Fund isn’t opened but was established by the council. What happens when things don’t get done?”
City Attorney Zach Burkhalter said that if the council voted for it to be established and it wasn’t opened, then that could be a potential problem. However, he did point out that if no funds were available at the time to open the account immediately, it couldn’t be established.
Funds were supposed to be used to open that account from the sale of equipment Public Works previously owned to collect trash, and the cans the city gave out to account holders to roll out on the roadway. Those all were rounded back up and sold and the city instead used the money to put back into the Special Assets Account.
A transfer back out of $13,173
during January was used to pad the general fund balance, leaving the Special Assets Account with only $1,145 at the end of Jan. 31.
The city used an additional $5,854 from the Special Assets Account to pay Waste Industries their monthly costs.
Other funds on the city’s books include $10,232 from the 2014 Special Purpose, Local Option Sales Tax fund and an additional $88,039 in SPLOST Recreation fund.
Another $539 was available in the Police Department’s seizure fund.
No immediate balance was available as of press time.
“January and February were tough, we got pretty low into the bank account,” Hartley said.
He did add that plans are to establish the Emergency Fund account to grow a surplus again once tax collections are in, and insurance premium checks later in the coming fall months to pad the account.
Part of the problem is general spending and larger bills than expected. Revenue and expenditures don’t always match up to the time of the year when the city needs money, and in some cases bills come in greater than expected. Mayor Garry Baldwin pointed to a $24,000 Workers Compensation Insurance bill the city wasn’t
expecting to have to pay out as one reason why it has been hard for the city to catch up. Hartley added turnover and capital expenditures also haven’t helped.
“It’s got to get to the point where we’ve got to push stuff aside, and I think part of the problem was with the Special Assets was there wasn’t a policy for what it was to be used for,” Hartley said. “… It’s gone now. I’m not going to play the blame game. We’re all in this together.”
However, financial controls put in place by the council to curtail spending issues by placing limits of $50 on personnel and Mayor Garry Baldwin as the upper limit for being able to use funds without putting in a request to Hartley haven’t been followed.
When asked pointedly, Hartley said those controls haven’t been followed fully, even though the Council approved a spending limit in past months.
“I don’t see everything, no,” Hartley said.
Pittman added that “That’s what we said. That everything was supposed to be going through you.”
Obviously, some bills like power, water and internet have to be paid. But other spending is happening without his authorization.
“We’ve got that issue, we’ve got the issue with the debit card, and we’ve got the issue with the Emergency Fund,” Fee said. “All of these things that have passed, and none of it has been done.”
Debit cards were supposed to be locked up, but Baldwin said they weren’t because “we have to use them.” He further explained they were being used to pay bills.
“We’re just making sure this is being followed the way we set it up,” Pittman said.
Baldwin added that he’s not tracking “every single dime, but I know pretty well what’s… everything major that we need to do Rick is in on. We talk frequently, every nickel and dime.”
The discussion over finances continues in Aragon, but for the second month in a row the council decided not to put forth a motion to approve the monthly financial statements and the measure died without a vote.
See this story online for additional documentation and audio from both the council’s work session and regular sessions last week.