Custer City out of money, says Meacham

Put simply, the Town of Custer City has been spending more money than it’s been bringing in and it can’t continue to do that.
That was accountant Russ Meacham’s explanation of Custer’s financial woes which led to the elimination of its only paid police officer from its budget for Fiscal Year 2019 that Meacham’s office prepared and was adopted June 21 by the town’s City Council. It also led to a raucous council meeting held last Friday that was attended by nearly one-fifth of the town’s approximately 372 citizens.
Meacham’s firm, RSMeacham CPAs & Advisors of Clinton, was hired at an emergency meeting of the council on Feb. 9 to serve as financial advisor to the town.
“Our investigation found they have been spending more than they’ve been taking in for about five years,” Meacham told the Clinton Daily News Tuesday. “Their sales tax has dropped significantly. Their level of spending cannot be sustained at what they’ve been spending.
“The town board had to determine what services or programs they were going to cut if they were not going to raise water and sewer rates. They’ve eaten into their cash surplus established seven, eight, ten years ago. They have gradually whittled it down, and they can’t continue to do that.
“You can’t make it any simpler than you’re spending more than you’re bringing in.”
While stating that, Meacham said even with all the cuts that are in the budget adopted June 21 and with utility increases which are also included, it still projects a loss of $10,516 for the fiscal year which began July 1.
Other “highlights” contained in a memo he sent with the proposed budget before its adoption were as follows:
•Recurring revenues are budgeted at 90 percent of revenues (as required by state law). If collected at 100 percent, an additional $7,700 would be available in Fiscal Year 2019.
•No pay increases are budgeted for any employees.
•No spending for capital improvements (basically property, automobiles, etc.) is included in this budget. (Last year’s had $40,000.)
•No police funding is included.
•Funding of $4,115 is included for a part-time animal control position, with all but $500 of that in salary and benefits. Salary alone is listed at $23,400.
•Utility rate hikes of 15 percent for water and trash collection are included plus an increase to $20 per month for sewer services. “These increases are expected to generate an additional $67,950 in revenues in FY ’19,” said the memo.
The budget was presented to the council on May 31, so its members apparently had three weeks to consider it before its adoption.
Total spending for the new year is projected at $286,777 with $142,967 of that in the General Fund, $87,188 in the Enterprise Funds (water, sewer and trash collection), and $9,000 in the Fire Department. Fire Department revenues are expected to total $15,623, but the excess will be carried over to the next fiscal year which – combined with that from prior years – should provide a carryover of $48,855 going into Fiscal Year 2020.
At last week’s public meeting complaints were voiced about the town having two Water Department employees when it used to have only one. A salary schedule accompanying the budget lists two with their combined salaries and benefits totaling $112,946.50. The salary alone for one is listed at $40,408 and for the other at $41,592.