More financial trouble for Redkey (07/21/06)

REDKEY - The light at the end of the tunnel is still pretty dim.

"You're not going to like what I have to say, but you need to hear it," Redkey clerk-treasurer Sandy Kirby announced as she gave her financial report, mid-way through Thursday night's town council meeting.

After listening patiently to earlier requests Thursday evening from department heads who were seeking to buy more equipment and supplies as well as make necessary repairs to town facilities, Kirby said that during the last two weeks she has been busy trying to balance financial records from 2005.

Unfortunately, she said that she discovered things were worse than originally suspected. In places where there first appeared to be balances, there were actually deficits, she said. Both the water and sewer funds now appear to have been in the red at the end of 2005, she said. The most recent figures show the water fund was $8,500 in the red at the end of last year, and the sewer fund was about $900 in the red.

Former clerk-treasurer Brenda Adkins submitted her resignation from that position in October while Indiana State Board of Accounts auditors were in the midst of reviewing Redkey financial records.

Adkins subsequently reimbursed the town nearly $40,000 to cover misappropriated funds, along with $3,189 in unnecessary finance charges incurred by the town and $4,284 to cover the cost of state audits. The state audit alleged Adkins diverted $32,061.99 from utility payments for her personal use while she was in office.

A special prosecutor has been appointed and an investigation by Indiana State Police is ongoing.

After further review of the town's financial records and water billing accounts, Kirby reported in the spring that about 80 Redkey residents owed $90,000 in delinquent water bills, some of them dating back several years.

"The choice today is we're either going to have to control spending or increase revenues," Kirby told town council members Thursday night.

"What I'm going to do next is review the rest of the records for 2005," Kirby said, adding that it appears a $20,000 inter-fund transfer loan from the water fund to the general fund was never re-paid.

Kirby also said Thursday that the United States Internal Revenue Service is sending notices several times a week about problems with payroll reporting and the filing of IRS forms dating back to 2002 and 2003 when Adkins was clerk.

Kirby said that some of these notices involve penalties and interest charges. The clerk-treasurer added that she and Brooke feel the town should start making payments on these to prevent more penalties from accumulating, and keep records to try to eventually be reimbursed from whoever might have been responsible for this situation.

Meanwhile, town council member Violet Erlenbush said Redkey is not the only town to have ever gone in the red, as she pointed out that the sewage treatment plant was in desperate need of a new air conditioner as well as a dehumidifier. Erlenbush is a full-time employee with the town, serving as wastewater treatment plant supervisor in addition being an elected council member.

Erlenbush said that the sewer plant equipment needs to be in a controlled environment and currently conditions were so humid that condensation was dripping off the walls at the plant, and numerous pieces of scientific equipment were in jeopardy of being ruined.

"You people do what you want to do, but I'm reporting it (the financial situation) the way it is," Kirby said.

Town employee Greg McIlwain added that the water plant office is also in need of a dehumidifier, but he could make do with fans and opening up the windows. However, he emphasized the sewer plant office really needed a new air conditioner as well as a dehumidifier as soon as possible.

Council member Darrell Smith offered to lend the sewage plant an air-conditioner from his garage at no charge to get the town through the crisis. Erlenbush said Sears seemed to be the only place where she could purchase the required replacement air-conditioner, but the town didn't have a Sears credit card, or the necessary $579 on hand to pay by cash or check.

Erlenbush said she was told that it would take five days for Sears to review the town's application for a credit card to determine if the company would grant Redkey one.

At Thursday night's meeting, council members directed Kirby to apply for a Sears credit card and then purchase the air-conditioner and humidifier for the sewer plant. Council president Dottie Quakenbush suggested that perhaps money from the town's railroad right-of-way fund could be used for this purchase, but first town officials would need to check how much money is still remaining in that fund.

Fire Chief Randy Young said it was his understanding that the railroad fund was pretty low, as expenses relating to the January 2005 ice storm were paid from that fund.

Also Quakenbush suggested that an air-conditioner in the park cabin could be temporarily used at the sewage treatment plant.

"Anything that'll work" would be appreciated, Erlenbush said.

Other departmental needs voiced at Thursday night's meeting focused on a variety of concerns including the fact that budgeted gasoline funds were running low for the police department, uniform clothing allowance payments for newly-hired reserve police officers need to be paid, equipment repairs were needed for the fire department tanker truck, and the town's water reservoir tank needs to be painted on the inside and outside.

The elevated water tank is also leaking and needs other major repair work. Quotes are being sought on that project.

As the meeting continued, council members and town officials at times huddled in small groups to review financial figures and cost estimates. At one point Erlenbush looked around the council table, and asked: "Are we all on the same page here?"

As the meeting dragged on, Quakenbush commented, "Not only am I tired, but we're broke."

Also addressed once again by town council members at Thursday's meeting was the need to collect past-due water bills. Council members unanimously approved a resolution calling for the town attorney to mail out notices, starting Friday morning, for delinquent accounts to be paid or face having water service disconnected on Aug. 15.

As a further step, the town attorney will start taking persons with past-due accounts, dating from October, 2005, through March, 2006, to small claims court if payment arrangements have not been made, council members agreed.

Passage of the water bill resolution, approved Thursday, was needed to strengthen the town's position in small claims court, Leslie Horn, an attorney with the law firm of town attorney John Brooke, explained. "When the cases come up in small claims court, we don't want to lose on a technicality," Horn said.

She added that there are roughly 35 accounts where there has been no effort shown to pay the past-due bills.

In other action at Thursday night's meeting, council members:

•Approved second and final reading of an unsafe buildings ordinance. "I'd say it's time - it's past time for this," Quakenbush said.

•Passed second and final reading of an ordinance prohibiting firearms from being carried in the town's Morgan Park. This ordinance was recommended by town Marshal Donnie James.

•Noted that volunteers were still being sought to serve on a proposed Redkey zoning board. Town officials said that seven people are needed.[[In-content Ad]]