New auditors for the financially troubled town of Signal Mountain have advised the town that its State Street Aid fund currently owes $839,000 and can only pay $420,100 of it now.
Finance Director Jennifer Broomfield said the town is facing dealing with that shortfall on top of an already projected budget deficit of $600,000.
Council members, at a special called meeting on Tuesday, were told that the development could bring a halt to street paving within the town for up to four years. The deficit will have to be paid down, then the fund will have to build back up before new paving contracts can be issued. The fund takes in from $23,000 o $25,000 per month from the state gas tax based on the town's population ($35.10 per resident).
Ms. Broomfield said she had been operating under the impression that the fund had the money for large paving projects over the past two years. One was for $465,000 and another for $645,000.
She said, "There had been no discussion of this. It was not brought to our attention. There wasn't even a finding on it in our last audit. There was just radio silence about it."
Ms. Broomfield said the town's new auditors alerted the town about the major problem prior to the issue of their audit, which is due by the end of the month.
She said, "I found out about it after 5 p.m. on a Friday. The auditors gave us a heads up."
One option given was forgiveness of the debt and another was the town providing a loan from its general fund to the State Street Aid Fund. On a loan, the town would have to charge interest. The amount of that interest was not initially known.
Councilman Andrew Gardner said one factor leading to the issue was when the town earlier annexed sections where there were long sections of roads to be kept up, but few residents there to pay taxes.
Vice Mayor Elizabeth Baker said the rash of road paving began several years ago when the town passed a tax increase and pledged it would result in better roads.
Ms. Broomfield said of the situation, "There were a lot of things done that shouldn't have been done. Things went wrong."
Another special called meeting on the issue will be Friday at noon.