Helena-West Helena Mayor Kevin Smith told lawmakers this Friday that he was working to resolve many of the financial and accountability issues described in what a lawmaker had called an abominable audit of the city of Phillips County last year.
"We have done a lot since January," said Smith, a former Democratic senator who succeeded Jay Hollowell as mayor of Helena-West Helena in January.
"I do not know if we have already arrived there, but we are on the right track to get there," he said at a meeting of the Joint Legislative Audit Committee.
Helena-West Helena – the county seat of Phillips County – has a track record of thorough auditing by the Arkansas Legislative Audit since 2006. These findings include material misstatements in financial records, expenses to non-commercial purposes, violations of the laws of ethics. , payroll delays and budget problems, said Tim Jones, a senior official of the Arkansas legislative audit audit.
The city has improved its financial records and has had fewer audit results in recent years. These improvements have helped reduce the number of errors in financial records and better comply with the Municipal Accounting Act, he said.
"When I took office in January, one of my first meetings was to tell our staff that we had a bad reputation in Little Rock with regard to audits and that under my administration, at least there would be a zero tolerance of any kind of attitude that this is not important or significant or any serious conclusion on the part of the city, "Smith said.
"Before the end of my term, my goal would be to have no conclusion," he said.
Before the adoption of a budget amendment for 2018 on June 4, 2019, the general fund and Helena-West Helena Street Fund expenditures had exceeded the credits of more than one million more than $ 92,000, respectively, said Jones.
"Due to excessive spending – which includes end-of-year bonuses of nearly $ 105,000 – the general fund has a deficit balance of $ 480,000 by the end of 2018," he said.
Jones said various accounts payable totaling more than $ 1 million had contributed to the deficit, including about $ 276,000 at the Phillips County Port Authority; approximately $ 210,000 in 2019 for workplace accident insurance premiums paid to the Arkansas Municipal League; approximately $ 127,000 for payroll taxes and a tax lien; approximately $ 125,000 for pension contributions to two public pension systems and approximately $ 271,000 for other suppliers.
Helena-West Helena remains unpaid on its share of project costs under an agreement reached in 1997 with the US Army Corps of Engineers. The city balance stands at $ 1.4 million in June 2019, Jones said.
Smith said the city had repaid what she owed for items such as workers' compensation premiums, pension contributions and tax liens. He stated that the debt to the US Corps of Engineers had been in existence for more than 10 years, but this was not mentioned in previous audits, as he does not think the previous mayors reported it to his legislative auditors.
"We think we can demonstrate that we have done some work in kind [for the part of the costs of the project assumed by the city.] We have simply never submitted documentation," said the mayor.
The city's general fund deficit of about $ 480,000 is mainly explained by the city's trend over the last 12 years to exceed its revenues, said Jones, the manager of the city's capital. audit. The city has received contributions totaling about $ 987,000 from the water and sewer departments from 2006 to 1880, and contributions to this level may not be sustainable indefinitely, he said.
"These factors create uncertainty about the city's ability to remain a growing concern," he said.
In response to this situation, the Mayor and Helena-West Helena City Council have implemented several corrective measures this year, Jones said.
They limited total expenses and overtime, reduced some administrative costs, increased spill fees and landfill remediation rates and merged the streets and sanitation departments. , did he declare. Other actions include waiving employee bonuses this year, negotiating a payment plan with Port Authority officials and discussing debt settlement with the Corps of Engineers. US military with officials in Washington, DC, he said.
Jones said the city had paid Hollowell, the former mayor, $ 7,000 more than the amount approved by the city council because of the double payment of vehicle allowances, which was paid back to the city on June 4th.
The city also paid a firefighter $ 3,000 more than the amount approved by the city council BECAUSE a bank error was made and that money was refunded on August 7, he said .
Administrative staff and District Court Clerk receive full-time salary and benefits, but their timesheets do not reflect 80 hours of work for each pay period, he said. District court clerks earned extra hours to work during lunch breaks without the proper approval of their immediate supervisor, he said.
No competitive offer was sought for three police cars costing around $ 84,000, which was not in accordance with state law, Jones said.
Smith told lawmakers that the city had adopted a tariff increase for water, sewer and sanitation services. Rates are indexed to the consumer price index and the sanitation portion of the bill is paid into the general fund of the city.
"Provided we use fiscal discipline, and we do not spend it unnecessarily in our bills, my goal is that we can get out of the deficit situation by July 1, 2020," he said. declared.
The city has not had a prison for seven years, but the prison was built and it will cost the city about $ 500,000 a year starting July 1, Smith said.
"The increase we have just experienced will give us a window between September and June 30, where we still have income before having to pay the prison," he said. "This will allow us to make up about $ 300,000 [debt], provided we do not create new debt on top of that."
Metro on 11/09/2019