In 5-1 vote, Mayor offers only opposition to $1.6 million in new debt

By Joseph M. Morgan

joseph@southerntorch.com

RAINSVILLE, Ala.— The city of Rainsville recently conducted an independent audit of city finances that reported a budget surplus of $161,547 for the 2015 fiscal year (FY2015).

Councilman Joey Graham made public the audit’s findings at last week's city council meeting, commending the council for their show of fiscal responsibility. The council then voted to take out a loan for $1.6 million to pay for a $600,000 construction project—$1.6 million in new debt that both the mayor and city accountant say the city does not need.

The Certified Public Accounting (CPA) firm Grant, Croft and Associates, P.C. (GCA) conducted the outside audit. The FY2015 budget for the city of Rainsville was reported at $3,847,600. GCA’s audit of city finances reported total city revenues for FY2015 of $4,081,674.

Rainsville Mayor Nick Jones said the city brings in an outside auditor each year to provide citizens with an impartial, transparent report of how their tax dollars are being spent.

“Making sure we are good stewards of city finances is something I take very seriously,” Rainsville Mayor Nick Jones said. “The people of Rainsville have placed their faith and trust in us as city leaders to spend and invest their money wisely. I remain committed to that principle. I will continue to make sure that every dollar is accounted for and do all that I can within this body to rein in and prevent unnecessary or unwise spending.”

Councilman Joey Graham spent more than 30 minutes Monday night delivering a painstakingly detailed presentation highlighting and celebrating the details of the FY2015 financial audit and commending the council for their wise decision making. 

Following Graham’s presentation, the council moved on to other business. Things became heated when Jones confronted the council for spending $75,000 without following the standard procedure of getting council and mayoral approval before spending city dollars.

Jones asked the council why a $75,000 check to Jimmy Traylor Construction had been paid without the approval of the council.

“Every single invoice during this term has been put on a voucher and we voted on it before paying,” Jones said. “A $75,000 bill was never brought to this table. I want to know why this bill was not paid the way that we’ve paid every single bill this year. Who authorized this payment?”

Jones said his dispute was not about the amount or payment of the bill. He said his concern was that someone spent $75,000 without authorization.

At their previous meeting, the council discussed taking out a $1.6 million loan to pay construction debt, but opted instead at the mayor’s urging to host a debt workshop to take a look at each of the city’s existing debts before deciding whether or not to borrow more money.

Jones said he would prefer to spend money from the city’s budget instead of voting to take out a new loan for money the city does not need.

“I seem to have a very different sentiment in terms of how we manage our city’s finances,” Jones said. “It makes absolutely no sense to borrow money before we even need it. We have the finances to pay what we owe now. You don’t want to pay this invoice when we’ve got the money in the bank?

“What is the total that we owe, roughly $300,000 or $400,000?” Jones asked.

“No, we owe about $600,000 left on this project,” Councilman Joey Graham said.

To settle whether or not the city could afford to pay for the estimated $600,000 construction project using existing funds instead of taking out the $1.6 million loan, Councilwoman Melissa Ledbetter called on the city’s financial expert who happened to be at the meeting Monday night.

“Our accountant just walked in,” Ledbetter said. “She’s in the crowd. Betty, I’m sorry to put you on the spot. Do we have the money right now, as it stands, not to get that construction loan?

Rainsville City Accountant Betty Holcomb, C.P.A. responded to Ledbetter’s question, “You actually do have surplus in your general fund, possibly enough to pay it.”

“I have no doubt that we might eventually need to take out some small construction loans, but we don’t have to do that yet,” Jones said. “Not only does each member of the council say we should borrow money immediately, they want to borrow $1.6 million!? I cannot in good conscience put the people of this city on the hook for money we do not need. It’s simply not fair to ask our children and grandchildren to pay the interest on money they will never see and we do not need.”

Jones said despite the unanimous commitment from the council two weeks ago to host the debt workshop before making a decision about taking out a new loan, only one member of the council—Councilman Brandon Freeman—followed through on the commitment to meet to look at finances before deciding whether or not to take out the $1.6 million loan.

Debt workshop or not, the council was prepared to bring the matter to a vote at last week's meeting. Jones stated his position again before the matter came to a vote, arguing that he did not see the logic in borrowing money the city does not yet need or accruing interest on money the city does not have to have in its coffers to continue to operate efficiently.

After discussion the city the council moved forward with bringing the matter to a vote. The motion to take on the $1.6 million debt for the $600,000 project saw unanimous support from the council in a 5-1 vote with Mayor Nick Jones standing alone in opposition and casting the only “no” vote.