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Mid-year budget update tale of two guesses for city, county

Illustration by Ben Hillyer
Illustration by Ben Hillyer

By Vershal Hogan & Lindsey Shelton

The Natchez Democrat

NATCHEZ — Even the most fiscally skilled government budgeters acknowledge that it’s a bit of a guessing game.

Government leaders take what they know from past experience, apply any anticipated changes and then hope for the best.

Last week marked the halfway point in the fiscal years of the City of Natchez and Adams County’s governments.

With six months of the budget year in the books, now is a good time to pause and examine how the budget guesswork is shaking out.

Looking at the state of city and county finances is a tale of two vastly different guesses.

Adams County’s budget guesswork seems to have been solid. The county’s finances are right on track, with expenses and revenues pretty much in line with their best guess.

In the City of Natchez, however, the state of the city’s finances is anyone’s guess.

Flying blind in Natchez

Halfway through the year, the City of Natchez has no idea where its approximately $24.2 million budget stands.

The Natchez City Clerk’s office staff has spent approximately the last six months sorting through the 2011-2012 fiscal year’s books to close out them out, Mayor Butch Brown said last week. Updating the city’s current fiscal year’s budget numbers has not yet begun.

Closing out the books should take approximately four to six weeks, accountant Nancy Hydrick said.

Hydrick and Christine Brinegar were hired by the city last November to organize the city’s books.

The two accountants say discrepancies between the city’s books and accounting software were so bad they had to back into numbers on some accounts just to get a starting point.

The entire payroll module of the accounting system, Hydrick said, has to be rebuilt from scratch.

“This was all deep in the system setup,” Hydrick said. “On paper, it looked correct.”

The reason for the delay in closing out last fiscal year’s books, city officials say, stems from a combination of problems. The mess certainly did not happen overnight, Brown said.

Brown said the problems were obvious to him even before he took office in July 2012.

“It was very apparent to me that something was not working in terms of presenting up-to-date and accurate financial numbers and disclosure to the board,” he said. “Some aldermen were very vocal about not having adequate information for meetings and were quite concerned with the tardiness of the annual audits.”

Perhaps the most vocal critic of the city’s financial uncertainties is Ward 6 Alderman Dan Dillard. He has made it a practice of voting against approving the city’s docket — or list of bills to pay.

Dillard said it’s because he doubts the accuracy of the financial information provided by the city clerk’s office.

“Every year it is a struggle to get up-to-date, accurate information,” Dillard said.

Dillard said he, too, has asked for an update on the current fiscal year’s budget, and is worried that none can be provided.

“There very well could have been over-expenditures or revenue that didn’t come in,” he said.

Brown does not think that is the case, but he admits with no current set of financial reports no one knows.

Ward 1 Alderwoman Joyce Arceneaux-Mathis, who is the longest serving current alderperson, said the problem of not getting accurate data from the city clerk’s office is relatively recent.

“When Mrs. (Frances) Trosclair was the city clerk, she would hold us to the fire, and she would keep us current on any of the fiduciary matters,” Mathis said.

Brown said it has been explained to him by city staff that the Springbrook accounting software, which the city purchased to replace its 20-year-old accounting system, was “difficult to learn.”

Brown said he was also told that for years and years the city’s bookkeeping was largely in the hands of the city’s data processor, the late Gary Valentine, and others who were working manually and from memory.

That is too big of a job for just one or two people, Dillard said.

“(Valentine) was a data processor, and he essentially became the city’s accountant because there was no one else there to do it,” Dillard said. “I think that was the emphasis for employing the accountants, so the whole system didn’t depend on one person.”

Deanne Tanksley, an accountant with The Gillon Group, the firm contracted to perform the city’s independent annual audit, told aldermen in June 2012 that the city clerk’s office needed a strong accountant.

The city’s last completed audit suggested problems included the lateness with routine accounting matters such as bank reconciliations, which are essentially like balancing a personal checkbook, Tanksley said.

“Once you get behind, it’s very difficult to get back on top,” she said.

The added work of converting to the new accounting software, Tanksley said, also took time away from the routine work needed by the city clerk’s office staff.

Tanksley said she does not think the public understands just how massive of an undertaking the software conversion was.

“I’m not trying to make excuses for them, but it’s a very big deal,” she said. “I don’t want the city clerk’s office staff to get slammed, when they have a very limited staff, and it’s a nightmare.”

City Clerk Donnie Holloway said he has been understaffed ever since he took office in 2000. But Holloway said he never has asked the board of aldermen to hire extra help.

“Monies were tight,” he said.

Holloway admits that the accounting work Valentine and other staffers were charged with was too much work.

“We had people doing two or three jobs, and it was just too much,” he said.

The problems worsened, Holloway said, when Valentine became ill and left in October 2011 and another employee was fired.

Holloway said he is optimistic about smoother operations in his office in the future.

“I think we’ve got a good staff here now, and we’ve got the help we need now.”

Holloway said a lack of training on the new software was a problem.

“Our people did not get the training they needed, and it was just too much,” he said.

Dillard disagreed and said the city’s accounting problems start at the top.

“You have to have capable and competent administration over the city clerk’s office,” he said.

Natchez is only one of a few cities in the state with an elected city clerk. Many cities have a city clerk that is appointed.

Dillard said he wants to explore the option of Natchez joining that list.

“Just because you’re elected doesn’t mean you have the necessary qualifications to understand these processes,” Dillard said. “We’re probably going to look at (the city clerk’s position), as opposed to just getting elected, that there be some sort of demonstration of a sense of accounting or financial responsibility.”

Although the mayor and Dillard said they expected no big surprises once they get accurate financial information, Dillard said operating without an up-to-date budget makes him uneasy.

“I don’t know that there is some big thing out there that we’re going to find,” he said. “But not knowing is worse than knowing, and it creates all this anxiety and frustration.”

Adams County A-OK

Halfway through the fiscal year, Adams County’s government had spent 55.1 percent of its $22,246,318.42 budget.

For the same period, the county received 71.8 percent of its projected $22,294,834.63 in annual revenues.

Adams County Chancery Clerk Tommy O’Beirne’s office provided a 90-page, line-item list of budget expenditures by county departments and a 39-page list of revenues by department the same day it was requested last week, and County Administrator Joe Murray was able to generate individual line-itemed department reports from the county’s bookkeeping software upon request.

Murray said that even though the county appears to be operating right on target for expenditures and well ahead on receipts, taxpayers shouldn’t read too much into the numbers.

That’s because the budget is basically a guess, he said.

“When I make the budget, I try to get as close as I can, but you have no idea what is going to happen during the year,” he said. “It’s not like we operate the same month-to-month. A lot of stuff, if you look at all your receipts and your expenditures, your numbers could be skewed because you have a lot of different receipts that come in heavy during different parts of the year.”

For example, Murray said that while the budget appears to be exactly on target for the moment, it likely would appear to skew higher in July when the county has to make an $816,000 bond payment.

Supervisor Mike Lazarus likewise said some expenses, like insurance costs, have to be paid at the beginning of the fiscal year, making expenses look like they’re heavy at the beginning.

The county administrator also said revenues may appear to be high at this point in the year because tax collections are done in the first part of the calendar year.

“Ad valorem taxes for property and vehicle tags, most of that has already been paid,” he said. “You still have people who come in and may be a month or two late. Of course, when (the tax collector’s office) goes to public information in the (news)paper as far as the tax sale, you will have a lot of people come in and pay that toward the end of the fiscal year to keep it from going to tax sale or having their name in the paper.”

But in a few cases, the county has seen some unexpected funds.

Murray said petroleum taxes are coming in higher than expected. Board of Supervisors President Darryl Grennell said the closure of the juvenile detention center in Pike County has resulted in a boom in out-of-county youth prisoners at the Adams County Juvenile Justice detention center, for which the county is reimbursed.

At the halfway point for the fiscal year, the county had already received 60.1 percent of its projected revenues for prisoner housing reimbursement with $76,475 in reimbursements.

Grennell said he makes sure to touch base with Murray about the budget on a monthly basis.

“I feel somewhat comfortable with the budget as it stands,” he said. “We have saved in some areas, and we spent more than anticipated in some areas — items with the road department — but I feel optimistic it will all balance out by the end of the fiscal year.”

Lazarus said Murray will periodically provide the supervisors with the budget, and if any of the supervisors have a concern about a particular item, he or she will meet with the county administrator to discuss the problem if one exists.

“Joe looks at it every day, and we look at it pretty regularly,” he said. “And he will alert the board if something is out of whack.”

Lazarus said the supervisors also have the opportunity to review every check written on the county books.

Both Lazarus and Grennell said keeping up with the county’s budget has become easier, in part, because department heads are more conscientious about the dollars entrusted to them.

“The departments have become really conscious of their budgets,” Grennell said. “The economy has had a lot of impact there, so a lot of our department heads are very conscious about their spending. Compared to my early years on the board, it is much different with both the board and the departments being very conscious about spending dollars.”

At the mid-year point, the chancery clerk’s office had spent 47.3 percent of its $166,750 budget; the circuit clerk’s office had spent 55.8 percent of its $110,864 budget.

The county attorney’s budget stood at 52.4 percent spent, having spent $38,107.90.

The Adams County Sheriff’s Office spent 45.2 percent of its budget in the first half of the year with $1,225,959.47 in expenditures.