Weatherford Democrat

March 31, 2013

Annetta addresses financial discrepancies


Weatherford Democrat

— By CHRISTIN COYNE

ANNETTA – The Annetta Town Council took steps Thursday night to rectify two separate financial issues discovered during an audit of the city’s funds.

The recent audit was clean but did reveal a couple of outstanding issues, according to council member Chuck Sheridan, who handles the city’s finances.

In an email sent to council members, Sheridan addressed a recently uncovered problem concerning approximately $170,000.

A prior council used city funds to put in the water system in the Lakes of Aledo subdivision several years ago on the understanding the money was to move to a 10-year note, paid back to the City of Annetta by the water system once the system was purchased and operational, Sheridan said.

City leaders were not clear about why there was no follow-through by prior council members on the arrangement.

The city was not made aware of the issue during a previous audit, according to Sheridan. The water system is paying for itself and is fully functional, he said.

However, because the city – which is currently searching locations to drill two additional wells – might have additional unforeseen expenses and maintenance costs, Sheridan recommended the council wait to transfer the money rather than risk the city having to borrow more to complete the projects.

After drilling the additional wells, the water system should have more water to sell and be able to bring in more revenue, Sheridan said. Because the system cannot currently meet the demand for water at times, the system was on Stage 4 emergency water restrictions between August and December.

Other members of the council disagreed with Sheridan’s recommendation and voted to move ahead with transferring the money back to the city’s general fund from the city’s enterprise fund.

“Over the past couple of months this council has been petitioned by the citizens of the Deer Creek water system to give them what they believe is rightfully theirs,” Mayor Pro Tem Larry Wood said. “I don’t see how … they would deny what is rightfully the city’s.”

“I want to make a motion that, whether we do it on payment plan as previously set up as previously set up as a 10-year payout, of which we are three years behind in, we as a city get our money back, get caught up on the 10-year payout and continue with that payment on a yearly basis,” Wood said. “Not to overburden the water system by paying it all at once but to get caught up and continue to make payments. I think it’s a reasonable request on behalf of the city.”

About $17,000 a year should have been transferred to the general fund the past three years, council member Bruce Moore noted.

“To answer the question, I would have to go back in and look at our finances on the enterprise system,” Moore said, noting that Sheridan said last week that the city couldn’t afford a city public works manager.

“So based on his comment, why we can’t afford it, that’s what I want to find out,” Moore said. “If we can’t afford it, then obviously the water system can’t pay us back. If we can afford it, then maybe the water system can pay us back. That’s what I’m trying to figure out now.”

Moore asked if the water system was standing on its own or in debt.

It is at least somewhat operational, other council members said, noting that the city borrowed money to make improvements to the system, including the three additional wells.

“The water advisory committee gave a very thorough report and they were unanimous in their responses,” Mayor Bruce Pinckard said. “What they stated ... get the improvements in so we’ll sell more water and then we’ll know. And until those improvements are in, we don’t know exactly what those they will cost. I mean we’ve already had one dry hole – unanticipated but it can happen. You can have acquisition costs and things like that.”

Before the improvements are in place allowing them to sell more water and possibly pay back the city early, Pinckard said he’d hate to strap the water system to pay the city money.

Pinckard noted the city had discussed the enterprise fund and water system finances in multiple meetings.

However, Moore said he still had unanswered questions.

Council members, with the exception of Sheridan, who was absent Thursday, unanimously approved a motion made by Wood to move forward on 10-year payout of debt owed to the city by the water system with the first payment due Sept. 1.

The council also unanimously approved a recommendation to transfer about $8,500 from the city’s enterprise fund to the city’s general fund.

There was a bookkeeping error and the amount was mistakenly put in the wrong account, Sheridan said.