The Fleming-Neon City Council received its audit at its August meeting and learned in a later item of business that there are some areas it may have to shore up to qualify for a Community Development Block Grant from the Kentucky Infrastructure Authority. Nicholasville accountant and former Jenkins resident Rodney Welch presented the city with a four-year look at its finances and the 2013 version showed some accounting deficits in city utilities.
Although Welch explained that the deficits were the result of figuring in deprecation — the wear and tear and the aging of water and sewer infrastructure — the overall picture showed deficits in the revenue vs. expenditures for the Water and Sewer Department. He warned that while depreciation is an accounting tool that shows projected losses from depreciation, it has to be figured.
The total revenue for water and sewer stood at $555,973 in 2013 against total expenditures of $946,138, for a net operating loss of $ 390,165. Although the depreciation amount of $412,803 caused the negative balance, the city has already seen water and sewer problems in the last few years from the aging infrastructure.
Sandy Dunahoo of Nesbitt Engineering and Kentucky River Area Development District Grants Manager Jennifer McIntosh reported on the possibility of obtaining a Community Development Block Grant (CDBG) through the Kentucky Infrastructure Authority (KIA) to rehabilitate the city’s water and sewer facilities. Dunahoo, Project Development Specialist for Nesbitt Engineering, told the council that KIA may have some suggestions for city utilities. Other city governments in the county have been forced to raise rates to eliminate deficits in utility programs before qualifying for state and federal loans.
The total assets for Water and Sewer, including all infrastructure, stood at $10,520,654, and current assets stand at $176,862. Liabilities stand at $1,199,670, leaving a net asset balance of $9,320,984. A more troubling balance was shown in the amount of water the city treated in 2013, 119,228,900 gallons against the amount sold, 49,185,770 gallons, or 41.25 percent of water treated. Welch also said that the city is breaking even on sanitation fees and added that the city has to eliminate delinquent customers from the water and sewer rolls.
“You have to be ready to disconnect,” said Welch.
Welch also introduced new rules that have been made for auditors and municipalities, including a statement that both sides are responsible for seeing that there are no “material misstatements” in financial documents. He said the new requirements have added a good deal to the text of audits. The city’s general fund stands at $329,256 for 2013 and property taxes for 2013 were $19,594. The total expenditures were $337,648.
In other business, Police Chief Mike Dingus introduced former Jenkins Police Chief Adam Swindall as the city’s newest officer. Swindall served in the City of Jenkins Police Department for several years , including as police chief, following his appointment in 2010. Dingus said he is pleased to have an officer with Swindall’s experience on the force.
The council voted unanimously to proceed with an application for a CDBG Planning Grant after Dunahoo explained that in order for the general CDBG application to succeed, the city will first need to apply for a planning and design grant from KIA. Dunahoo told the council that by presenting a complete design and plan, the odds of receiving the full CDBG are much better. She said the city will need to respond to KIA about its intentions to seek the planning grant by August 26, and the council voted unanimously to proceed.
The council also voted unanimously to adopt the Kentucky Department of Transportation’s Municipal Aid Package, which will provide $18,171.19 for road repair and maintenance within the city limits.
In response to a question about the status of the old Letcher County library building, Mayor Susie Polis said she has not had any contact with the library board since the last council meeting, but added that she will contact it soon. Councilman James D. Collins added that the city will need to use some county equipment to mount the ART project sculpture created by Kentucky Heritage Artist Doug Adams. The planned unveiling of the sculpture was delayed by the need to move the site and install a better mount.