Finances dominate Redkey discussion (02/17/06)

REDKEY — More gloomy financial news, primarily revolving around the town’s water department, came bubbling to the surface during a three-hour council meeting Thursday night.

Topics ranged from the need for immediate repairs and maintenance work for the town’s water tower and tank to water billing discrepancies and concerns dating back more than five years.

Town attorney John Brooke and clerk-treasurer Sandy Kirby also said the town needs to make a payment of $86,500 on its sewage bonds in May, but the fund from which that payment must be made is more than $25,000 in the red.

Kirby said the “sewage sinking reserve” fund has a balance of only $3,650, and as of the end of last year, the total amount in the sewage operating fund was $980.

Kirby’s latest figures for the water operating fund showed a total of less than $150.

Brooke said the current financial news was certainly gloomy, but added that he is already working to try to improve the situation.

Kirby said the the big question is how the town can afford to make the bond payment.

“I think we’ll need a loan,” former town council president Violet Erlenbush interjected. Erlenbush is still a member of the council, having been replaced as president by Dottie Quakenbush.

Speaking out at the meeting in response to Erlenbush’s statement was audience member and Redkey resident Roberta Garringer who formerly served on the council. “If I was a lending company, I wouldn’t give you any money,” Garringer said, referring to the town’s numerous financial problems.

Brooke interrupted by explaining that the town does have options and borrowing is one of them. He said many taxing bodies have had to borrow funds for current needs against tax money which will be coming in later. When the future tax money arrives, the loans are paid back with interest, and sometimes this process has to be done on a continuing basis. Another term for this practice is the need to issue tax anticipation warrants.

“We’re not going to shut the town down. We have to borrow,” Erlenbush said.

Audience member Clayton Phillips, who previously served on the council and who is running once again for a council seat, asked, “Can we put a freeze on spending?”

Brooke responded that the town has ongoing expenses which have to be paid. Also Erlenbush said there are improvements which the town should make, including a need to supply better water pressure to houses in some areas.

Kirby also said that the town’s insurance policy premium payment is due in April.

Brooke said that he is basically considering two options concerning the current financial crunch. One is to have the sewer bond payments restructured so the loan could be longer and the payments lower; the second is to secure some sort of short-term loan to handle pressing problems.

Brooke suggested that the bond restructuring might involve an analysis of other community needs such as a new water tower and improvements in water lines and fire hydrants. Funding for those improvements could be included in the new bond arrangement, he explained.

“I’ve already been talking to some bond attorneys,” Brooke told the council members Thursday night. “We might as well make it one project,” he said.

Brooke said it was possible the town may not receive its next tax draw until July or August rather than June. This also implies that short-term borrowing may be necessary, Brooke said.

“The only positive thing I can say about this discussion is we’re hearing about the problems before we go into the red,” Erlenbush said.

In other business at Thursday night’s meeting, Redkey council members:

•Heard a report from Erlenbush that the council is in process of seeking bids on water main improvements designed to increase water pressure from about three pounds per square inch to 20 pounds psi for several homes on the west end of Main Street. There is barely enough water pressure in these homes to take a shower, if a toilet is flushed, Erlenbush said. Bids on this project are scheduled to be opened at a special town council meeting at 11 a.m. Wednesday, Feb. 22, in town hall.

•Heard Quakenbush criticize town marshal Donnie James about the police department’s lack of action on having junk and abandoned cars towed away and dilapidated houses and property cleaned up. “I would like to see something done in the next few weeks,” she said. James was not in attendance at the Thursday night meeting, but Deputy Marshal Mike Daniels said that he would pass along Quakenbush’s comments to James.

•Learned that Insight Cable Television had paid its annual franchise fee of $8,784 to the town.

•Worked to resolve a water billing problem dating back to 2001. Redkey resident Bobbie Miller said he had a major water leak at his house several years ago, and after talking with former town clerk-treasurer Brenda Adkins on several occasions, he decided not to make any more water bill payments until the matter was straightened out.

Miller said he could never get an accurate total on what he owed and that he no longer received bills.

Kirby suggested that Miller be at least charged the minimum rate for the months when the leak existed. She also questioned if his home’s water meter was working properly. Miller agreed to show Kirby the receipts which he had received for the payments which he had made over the last five years.

After much discussion between Miller, Kirby, Brooke and other council members, town officials decided to have the clerk-treasurer review Miller’s receipts and set an amount for his back payments while requiring that he start making current payments.[[In-content Ad]]