ELLERBE — The numbers from the town’s 2018-2019 audit report show that cuts will have to be made, according to accountant Ken Anderson.
Anderson, CPA with Anderson Smith & Wike, first talked about the overall fund balance with five years of information in hand, and stated that the 2014 balance sat at $1.1 million. Fast forward to 2018 and that number has dipped to $900,000, a drop of $200,000.
The sewer fund from that same fiscal year 2014 was $287,000 but in the four years afterward, fell to $102,000.
“Both of those are moving in the wrong direction,” said Anderson.
Anderson went on to say that the general fund for the year has a loss of $94,000; more specifically expenditures exceeding revenues by $94,114 with the sewer fund seeing a loss of about $78,000.
“We got together, myself, (Town Clerk) Jane (Smith), (Mayor) Fred (Cloninger), along with your new CPA Jeff Hamilton probably two, three months ago, and we’re talking about where you guys are heading and some things that you really need to look at,” said Anderson. “I think you guys are going to have to make some hard decisions.”
The group went over the various expenditures line by line, according to Anderson, and the town went up on tax rates in the 2018-2019 fiscal year. He said Ellerbe wouldn’t see that benefit until the next audit. But as far as the expenditures, combining the two together sees a loss of well over $100,000 a year.
Anderson said two items concerning cuts stood out.
“It’s really not my job to tell you where to cut, but when I do look at the numbers, there’s some numbers that jump out that are pretty easy,” he said. “One is law enforcement. You pay in general about $160,000, $170,000 a year for the Sheriff’s Department. You’re in the county limits, so I’m not taking anyone’s side, but if I were in your shoes, that’s the first place I would look at. There’s also a zoning officer. That’s something that’s diminishing, I think, where it’s flaming out.
“A lot of things are very hard to cut, but my feeling is those should be addressed as soon as possible.”
Cloninger said a contract with the county provides a deputy in the town 24 hours a day, seven days a week, 365 days a year, with two deputies posted sometimes in December. It gives the town added protection by having that deputy within the town limits, he added.
Under Anderson’s suggestion, however, the mayor acknowledged that potential cuts to the law enforcement presence in the town could have to be made.
“It’s just something we’re gonna have to discuss. We’re in the county. They can’t deny us coverage, but can they give us the coverage that we’ve been used to for 21 years. That’s how long the contract has been with the county,” said Cloninger. “It’s going to be some tough decisions that are gonna have to be made. The code officer, I can see that one being an easier cut because we’ve made a lot of progress in that. It’s a sensitive issue because people have that sense of comfort of knowing a deputy is right down the street 24 hours a day. If we do away with that or maybe cut back to a different time frame, that’s just going to be a sensitive subject.”
When asked if any thought had been put into Ellerbe having its own police department, Cloninger said that looking at the financial aspects of it, it’s costing the town $18 an hour for one deputy.
“I don’t know if we could afford that if you look at all the staffing, the equipment, the benefits,” he said. “I don’t think we could do it. I would be open to looking at it, though.”
Joseph Grooms, who is new to the council, asked Anderson how the town is losing that kind of money, and where the are losses coming from.
“What’s happened is over the last year, ya’ll probably should’ve gone up on rates,” Anderson replied. “You knew you had all this new infrastructure with the water-sewer project and all that played out the last ten years. That’s brought on a lot of additional costs. So the rates have got to go up to cover that expense. It’s not that you’re making less revenue, it’s just that it’s gonna take more revenue.”
The plan, Anderson went on to say, is to lay out all the numbers against each other after the 2019 audit and try to figure out where to go and where cuts can be made.
“I told you the two main things I think that just jump out are the coding officer and the expenses to the county for law enforcement,” he said. “Those two together are close to $200,000. I’m not saying there aren’t other areas to cut, but you need to lay those numbers out.”
Anderson said that Hamilton has all the information to conduct Ellerbe’s 2019 audit and hopes to have that finished in February.
“By then you should have some better revenue numbers,” said Anderson. “Then I’m hoping in conjunction with that, that maybe he can come help you with your budget. He can maybe help you guys line up where to cut, if you have to raise rates any more. Because at some point you can’t keep having these losses. It’s just a matter of time.”
