The Signal Mountain Council was told Monday night by CPA Jennifer Waycaster that the government-wide financials, the balance sheet and liquidity are in a very good place and all the various funds made a profit. However, the general and water funds were given an adverse opinion.
Ms. Waycaster said new software and mistakes caused by the turnover of employees was mostly to blame for the harshness of the opinions. And there was a long list of findings including issues related to spending in excess of appropriations, a deficit in the state street aid fund for the second year in a row, vehicles and purchases not declared as surplus, the failure of accounting for state sales and liquor taxes, and the failure to update new water rates for all residents.
There is no penalty from the state comptroller for repeat findings, she told the council, but there will be a letter of reprimand saying to do better.
The findings were blamed mostly on the turnover of employees and nobody to close out the year. "Most of the people in those leadership roles last year, are no longer with us," said Mayor Elizabeth Baker.
Part of the audit is that the city will have to submit its plans to rectify the problems. City Manager Matt Justice, who inherited the city’s problems, said that the number of findings was due to the turnover of key positions and other staffing issues. "We do have a plan in place and expect that the issues will not repeat next year,” he said. The fixes are all in process to be corrected by the end of this fiscal year, he stated.
Councilman Clay Crumbliss said there is the perception among some residents that Signal Mountain is in financial trouble. But he said the auditor’s report shows that the liquidity, cash and investments are in good shape and the city has low debt. Ms. Waycaster said there have been mistakes, but overall the finances are healthy, and there is enough money to cover debts. Most of the problem is with internal control issues. But now the newly hired Finance Director John Harr is in place and knows what to do, she said.
"It is the auditor’s job to give us the factual report and in holding the staff accountable," said Councilman Crumbliss.
The contract between Signal Mountain and Waycaster CPA was for the past two years. There was a consensus among the board members that there should be a policy for putting out a request for proposals on some regular schedule to have a comparison, but this is not the year to start that since it is almost too late to change accountants. The council will vote whether to accept the audit bid for another year from Waycaster, at the next council meeting.
Before the start of the meeting Finance Director Harr was sworn into office along with newly chosen Councilman Charles Poss.
In regular business, there was discussion about several items related to running the town. Extensive repairs are needed at some of the town-owned properties, which includes the town hall building, the library, fire station #1 and the MACC. In February, the council decided to have a comprehensive assessment of the city-owned buildings to help decide how to prioritize the work. The town hall will require more than the others and the inspections are continuing there, but work on the library is moving forward. Two bids were received to replace siding on the library. The low bid was $35,000 from Abbott Enterprises. A resolution to award the job to Abbott will be voted on at the next council meeting.
Republic Services is the waste hauling business currently being used by the town. The service was bid out for the coming year and, from the two bids received, Waste Connection was the low bidder at $363,380. There was a consensus for City Manager Justice to begin negotiations with Waste Connection for the next fiscal year. Although that is the low bid, it is still $25,000 more than the current contract with Republic, and the town will see an increase of $80,000.
Another item discussed was the procedure being used for vehicle replacement, purchasing and disposal. The council should declare the item as surplus and then agree that it can be disposed of. But the procedure that was used during the past year did not follow the correct process which was one of the findings by the auditor regarding vehicles. City Manager Justice said, "Today the city has a policy and it will be followed for asset replacement. It also sets the standards for what can be replaced without council approval.”
Another topic was the need to establish an emergency response plan. The town will take advantage of the services that Hamilton County can provide to supplement procedures that Signal Mountain offers. Whatever the plan, the important thing is for residents to communicate the plan to citizens of the town. There may be a registry used for contacting the residents, and Hamilton County has the ability to reach all phones via location. But it will be important to let the community know the procedure before it happens, it was stated. The city manager suggested putting a preparedness page on the Signal Mountain website.
Mr. Justice gave the council the good news that the town was given a $21,000 discount from its insurance broker when the policy renews for the coming year.
A proclamation was made to honor the young resident Townsend Collins Jr. for his courage and quick thinking by noticing and alerting his parents to smoke, flames and a loud noise coming from a neighbor’s house. His awareness resulted in his parents calling 911 and the Signal Mountain Fire Department getting to the house fire on Rock Crest Drive in just minutes. This shows the impact that one person can have, no matter his age, said the proclamation.