Century addresses grand jury report
Solutions to problems being worked on; transparency is sought
May 9, 2019
At a special meeting to address the grand jury and Florida League of Cities reports that resulted from a recent investigation into the town of Century was held Tuesday night to address the town's issues.
Councilman Ben Boutwell gave out a document draft about the rules and procedures of the meetings, stating there are no policies and procedures in place.
Among nine people present, suggestions were made that the council could address public comment at the meeting's beginning instead of the end so that citizens would not have to sit through other unrelated business and they could address an item, especially if it is going to be discussed or voted on at that meeting.
Suggestions were made to include the agenda be put on the town's website prior to the meetings to give citizens a chance to see what will be addressed at the council or other meetings. Social media and churches were suggested as places to provide public notices for meetings also and that proof of publication for proper notice for meetings is vital to stay within the laws involving the Sunshine Law.
Discussion moved to the town's finances and the status of the gas and water departments.
Town Planner Debbie Nickles asked how close the town is to declaring a financial emergency under state law, according to what the report said.
CPA Robert Hudson read several criteria that would make that happen and assured that the town's status did not meet those criteria to his knowledge. He cited a recent overdraft of payroll checks, but said that the “lack of funds” was not the case.
Mary Hudson asked if the town had the money to pay the bills and where the money is coming from. Hudson said the loss on the bottom line reflects expenses, non-cash expenses, such as annual water system depreciation, makes it look in the negative.
“It's all about cash flow,” said Hudson. “The water fund is probably break even or a little of positive cash flow. We know the gas fund is in a negative cash flow, to the tune of $150,000 to $175,000, per year, and that's what we budgeted for this coming year, hoping to find what that problem was in the billing quantity versus the purchase quantity. If that is resolved, in my opinion, I think the gas fund will just about break even and it would be that big deficit of $150,000 to $175,000 per year.”
Nickles asked if the town can pay its bills when it goes over budget on items.
Hudson said that the budgetary control for each department should be at the superintendent level. He said you have to amend the budget or find that money somewhere else to put in that budget line item.
“In a perfect world, the budgetary control is the way you run your business,” he said. “But day in and day out, things happen you cannot control.”
He cited examples of problems, such as infrastructure or town maintenance problems, that make it difficult to follow the budget.
Nickles then asked if a reserve fund or budget for emergencies would be more prudent.
“What's the point of having a budget if you're not going to abide by it?,” said Nickles. “If you're always over budget, what is the purpose? It sounds like there is no accountability for the budget.”
Hudson said in Florida, when the council votes to pay a particular that puts that particular line item over the budget, they are amending the budget at that point. He said it makes it difficult to run a town, but said that this past year's budget has run closer to reality than what it has been historically, with the exception of a couple of large unexpected expenditures.
He said that with plans, the superintendents should be able to hone their expected budgets to maintain their departments better as time goes by.
Nickels suggested more transparency with the town workers to know what is going on all the time,, not just when there is an emergency. Councilwoman Ann Brooks said she would like to see more communication between the department heads, town workers and the public.
Mary Hudson asked if the town does not have the money and therefore cannot afford an item, why the town is purchasing it.
Robert Hudson pointed out that the garbage fund has had $35,000 to $40,000 cash each year, which helps defray the expense in the gas funds.
“Historically, we've had excess money accumulate in the water fund that helped defray the gas fund,” said Hudson. “We have accumulated in the past in the special revenue fund, monies from rents from buildings that the town has that was designated for economic development, the council has agreed to utilize some of that money to help defray the expense of the gas fund. Currently, in the General Fund, through March, we have about $75,000 more in revenue coming in than what we budgeted, and that's due to Capital Trust, almost 98 percent of it is from that. Therein, is where the money comes fro to pay the bills. If we did away with Capital Trust, we would really be in a world of hurt.”
Nickles asked what the town would do if another tornado came through, referring to putting the money in a place to prepare for that.
Mary Hudson asked how many more months the town could pay its bills with out making a change.
Hudson said that installing new gas meters and the recent training on the billing program to make it more efficient will start to recover the $25,000 or so per month that has been lost from the poor gas system in Century.
Mary Hudson asked about a timeline to start to see a turn around and the mayor said that Gas Superintendent Wally Kellett is monitoring the new gate gas meter daily and the commercial gas meters are being installed, although commercial meters and residential meters are the same rate. Mary suggested a timeline and Brooks agreed that a date to determine if the gas department is going to be profitable or should be done away with.
Century Mayor Henry Hawkins assured them that Kellett is replacing the commercial meters because there are fewer and that the town is installing them as quickly as they can.
“We've identified where we need to start and they are working those things,” said Hawkins. “We're having to work with others coordinating, there is a lot of coordinating going on. They're doing well to get two meters in a day.”
“As a citizen, with all this going on, we have to ask,” said Mary Hudson.
Nickles asked for more communication between the council, mayor and citizens to know what is going on all the time and that the gas rates for commercial should be different that residential, much like other cities nearby. Hawkins said he has reached out to Okaloosa County to get a copy of their gas rates and that Kellett is working on a rate comparison.
Discussion then moved to a review of the town's charter and policies and procedures, such as per diem for meals.
Nickels asked the mayor about an issue from Monday night's meeting and said that it can seem a lack of transparency and that a specific answer can clarify better than what is perceived as a vague answer.
Councilman James Smith noted that it is a citizen's job to ask questions to maintain transparencies and that information is available to anyone who will ask.
“You're asking questions, that's all you have to do,” said Smith. “If anyone is not sure, just ask, I'm sure he will answer. He has a lot on his plate and may not feel the need to explain in detail at that moment.”
Several people, including the media, asked about having more information for items on the agenda when a party approaches the council, such as a proposal. Nickles asked why the mayor's report is not detailed on the agenda also, in case something the mayor approaches the council with needs more research before making a decision.
“It all comes down to transparency,” said Nickles.
The council then discussed why they did not have a financial report or statement at the first council meeting and Robert Hudson said it was because he did not have some of the bills, so any statement would not be accurate. He said that he could have the statement by the second council meeting each month, with the possible exception of months when the first meeting falls on the 1st or 2nd of the month, putting the second meeting prior to the arrival of a few monthly bills.
Lastly, Nickles asked what is taking the audit so long to be completed and why it has taken from Oct. 1, 2018 to May 7, 2019 and nothing has been done when the audit is due June 30, 2019.
Brooks said she has not heard about the town providing documents, which has been requested in the past. Brooks said she heard from Bob Eisner that in his talks with Warren Averett, the accounting firm the town has a contract with, was not happy with the town.
Hudson said if they tell him when they are coming up the Century to work on the audit May 25, 98 percent of what Averett needs will be available.
Nickles suggested that maybe the town should find another auditing firm to do the audit.
“If an auditing firm doesn't get the town's audit done by June 30, then I think you need to find another auditing firm that can,” said Nickles. “It seems like the town is willing to sit back and let Averett drive this bus when its the town's ultimate responsibility to get that audit by June 30. If the auditing firm is not coordinating and working with the town as to when they expect to start, then you need a new auditing firm.”
Robert said Warren Averette knows what to expect because they have done it for the past several years. He said that 85 percent of it is done, and that Warren Averette is not working because it would be after April 15, that they are in no hurry. Brooks asked if Hudson could tell them that the town is under a deadline. Boutwell suggested getting documentation in place to show the town is reaching out and provide proof they will finish the audit by June 30, 2019.