Century transfers funds to cover gas
Gas system couldn’t meet payroll; pay taxes
August 1, 2019
At an emergency meeting of the Century council Monday night, the council approved to transfer $65,000 from the water department with the authority to transfer up to $15,000 each month for August and September as needed to cover the natural gas department's payroll and payroll taxes.
Councilwoman Ann Brooks read a letter that all council members received from Town Clerk Kim Godwin that the gas department did not have the funds to pay its payroll or payroll taxes.
“General and water were able to meet their obligations to payroll. I (Godwin) was unable to transfer the gas portion of $5,872.70 to payroll as the gas fund has a balance of $325.09. Payroll taxes are due in the amount of $3,796.23, against a balance of $3,273.37 (referring to the payroll taxes for all town employees, not just the gas department),” Brooks read from Godwin's letter.
Godwin transferred $5,000 from garbage to gas last week to cover the gas portion of payroll, as voted by the council, and she is asking direction from the council.
CPA Robert Hudson went over the town's budget and accounts as they stand.
He told the council that the prison has not paid for May and June and that what is expected is $85,325 for water and sewer and $14,952 for the gas fund.
He noted that the July 26 pay period for the gas portion of payroll taxes owed last Friday which is $5,872.80 and what the gas fund owes, which is $63,057.73, accounts payable.
“Some of these bills have come across the bill list and have been approved, but there's just not been the funds in the gas fund to pay them,” said Hudson. “Of that $63,000, $40,944 is owed to BP Energy. One of those bills go all the way back to January.”
Hudson said those are the bills that need to be paid out of the gas fund to catch up. Godwin pointed out that even though they do not charge a late fee, several of the vendors owed will cut off insurance if the bill is not paid.
“Those numbers total $76,024,” said Hudson. “To get us through July and then August and September, it is going to take another $15,000 going into the gas fund to pay its bills. That's if we don't have any unexpected expense. The total of all those is $106,024. It looks large, but looking at the budget for this current year, we anticipated having to put in the gas fund $121,547, that's what we budgeted to operate and transfer into the gas fund and that was based on a $450,000 revenue.”
He said the town will fall short about $50,000 of the projected $450,000 revenue, so it will be about $400,000.
“Right now if we fund this whole $106,000, we've already got $31,000 that's been transferred into the gas fund this year,” said Hudson.
Brooks pointed out that there were several transfers and Hudson said he was going to classify them as an operating transfer instead of a loan, if that's what the council wanted.
In the Special Revenue Fund currently, there is $42,011, and Brooks asked where the difference would come from is they took that money out to pay these gas fund expenses.
Hudson noted the $160,000 for the impact fees of the new apartments could be used and Councilman Ben Boutwell asked about the Capital Trust Agency (CTA) funds, over $200,000 this year so far.
Brooks asked about taking the balance of the United Bank Special Revenue, $42,011 and asked Hudson where he thought the town should pull the remaining $64,014 from to pay the gas expenses.
“It's really a matter of personal preference,” said Hudson. “I like to keep all the enterprise stuff in the enterprise, the as, water, sewer and the garbage, because those are supposed to be self-supporting businesses. I would suggest taking that money out of the water fund.”
Hudson said the water department has had a good bit of expense for maintenance and repairs so taking the money out would be cutting into the $160,000 impact fees. He suggested if an emergency came up in the water department in the future, the town could transfer from the General Fund over to the enterprise fund.
Hudson suggested making a motion to transfer $76,000 out of the water fund to the gas fund immediately to get it up to date, July 29, and with the authorization, for approve for August and September, up to $15,000 for each of those months.
Brooks noted that the water department equipment being as old as it is could create an emergency in the future, causing concern in taking money from the water department.
“If we rework a water well pump that's going to increase the use of life by 15 or 20 years, that should be a capital expenditure and not necessarily a current repair and maintenance expense,” said Hudson.
In a motion made by Councilwoman Sandra McMurray Jackson and seconded by Councilman James Smith, the motion carried unanimously.