Red Bank's spending plan did not receive the state Comptroller's Certificate of Excellence as it did last year due to concerns over departmental overspending and use of ARP (American Rescue Plan) funds.
The Comptroller said, "We have reviewed the budget and have determined that projected revenues and other available funds are sufficient to meet anticipated expenditures."
However, the report also said, "During our review of the budget we noted that your municipality's most recent audit reflected actual expenditures exceeding budget appropriations for several departments within the general fund.
Expenditures at the department level should be authorized in the original budget for an amendment to that budget or in a supplemental appropriation.
"The governing body needs to closely monitor the budget to ensure all expenditures are legally authorized. Future audits should reflect this has been resolved for your local government to be eligible to receive the annual budget certificate."
The Comptroller also said, "The governing body budgeted the use of ARP funds. This budget approval is not an approval for the planned use of the ARP funds and the governing body, with the assistance of its attorney, should determine that the planned use complies with federal regulations concerning the use of ARP funds. ARP funds spent contrary to federal regulations must be returned.
"ARP funds are non-recurring and should only be used for one-time expenses. When purchasing capital items, ongoing maintenance and operating expenses should be analyzed to show future demand on recurring revenues."
Martin Granum, Red Bank city manager, said, "The city of Red Bank has and will always operate with a sound financial plan. We are committed to a thorough and public budget process at every step.
"Here’s a few examples: beginning this year, fiscal year 2025 (or “FY25”), we conducted a four-session “Budget Workshop” to help citizens understand the budget process. Those four budget workshops encouraged greater attendance at all our budget meetings, and at the conclusion of our budget process we presented four ‘Budget Workshop Certificates’ to citizens who attended them all. That may seem like a small number, but it encouraged much greater attendance in the budget process overall and was a significant improvement from the mostly empty rooms of previous years.
"A second example of our sound financial plan, and a more consequential example, is our audit results. The city of Red Bank budgets, and is audited, at the ‘fund’ level (general fund, solid waste fund, state street aid fund, etc.) and for the past several years, including the most recently audited year, the city has received what I’ll call ‘clean’ audit reports. A more complete but wonky description would be to say we received an unmodified opinion that identified no internal control deficiencies, no instances of material noncompliance, and no findings disclosed… that’s auditor-speak for operating with a sound financial plan.
"In the memo referred to, the Comptroller and his staff are encouraging all 345 cities to budget and operate at the department level and at the highest levels of financial excellence… a worthy goal! But on any given year only around a quarter of Tennessee cities actually earn the certificate (89 of 345 this year.) Red Bank earned it in 2023 and 2024 and we were proud of that accomplishment. We did not get it in 2025 and that’s a big disappointment, but it is not an indicator of a larger problem; rather, it’s a challenge to be more excellent again next year. Where you would find indicators of larger problems is in an Audit report, and our Audit reports for the past several years have had no findings.
"Lastly, at this early stage, we are on track to earn the budget certificate again next year, for FY26, but that will be the Comptroller’s decision around this time next year. Regarding the comments about ARP, there are no issues identified in the memo… best I can tell the language in the memo is simply a standard advisory to all cities that received ARP money that you need to follow the APR rules… and as a city we are."
Former Red Bank Commissioner Ruth Jeno said, "Last Wednesday, I went to the Tennessee Comptroller's website to see if Red Bank had received the Certificate of Excellence. I discovered the city was not on the list of recipients this year.
"I called Red Bank City Hall and talked with the city recorder. I was not given specific information on the denial. I then called William Wood in the Comptroller's office and he confirmed the denial of the certificate and stated it was the result of overspending in departmental appropriations in the budget.
"They were cautioned, emphasizing the need to closely monitor the budget to ensure all expenditures are legally authorized. The big issues are the ARP funding being questioned and the fact the city may have to return some of the funds."
Ms. Jeno said, "I have an issue with the fact the mayor, vice mayor and city manager chose to withhold the letter from the commission. They received it from the comptroller on June 25 and did not share with the commission until after the last commission meeting before the election last Wednesday, therefore keeping it from the public.
"They apparently felt the need to share the letter after I called and questioned the city recorder about why we didn’t get the certificate this year."