By Ally Lanasa, Staff Writer

(Aug. 13, 2020) The Berlin Mayor and Council on Monday agreed to write off half the $3.4 million the town’s separate sewer fund owes the general fund, while committing to repay the remaining $1.7 million to the general fund over 10 or more years.

Currently, the mayor and council receive quarterly financial reports, but the councilmembers asked for more detailed reports with suggested actions to prevent future interfund loans such as this one.

“We’re on top of this a whole lot better than we were as far as quarterly meetings and knowing how we’re doing,” said District 1 Councilmember Troy Purnell.

However, District 2 Councilmember Zackery Tyndall requested an end-of-the-year analysis presentation. District 4 Councilmember Dean Burrell argued that was too late.

“If we get to the end of the year, and we don’t know how much we’re going to be over or under, it’s too late,” Burrell said. “That’s the information we need while we’re operating and during that operating time, we need to change what we do.”

Finance Director Natalie Saleh recommended biannual reports in addition to the quarterly reports.

Town Administrator Jeff Fleetwood said he would also provide Saleh’s perspective for improvements at the end of each quarter.

In addition, a virtual audit will be held with the mayor and council on Sept. 11, Saleh said.

Prior to the meeting, Tyndall submitted questions to Fleetwood about how much the enterprise (self-sustaining) funds owe to the general fund.

At the time of the meeting, Mayor Gee Williams said the sewer fund owes the general fund nearly $3.4 million, the stormwater fund owes the general fund $122,323, the sewer fund owes the water fund $373,893 and the water fund owes the general fund $74,954.

Tyndall asked if they could meet to discuss the repayment process of the other transfers, and Saleh agreed.

“We’re going to have to make additional investments,” the mayor said. “Are we going to repay ourselves and make that the priority or are we going to have the funds available to invest in the water, wastewater facilities to allow us to meet all the environmental and also the capacity standards that are required? You know, what’s more important? That’s why I think you need to reflect on this some more.”

The mayor and council also discussed the draft resolution to establish a general fund reserve policy with Fleetwood and Saleh.

Fleetwood said they are looking for suggestions to improve and finalize the resolution.

Tyndall said he would like it to be simplified with less confusing categories.

According to the draft resolution, the town should have a budget stabilization reserve “in an amount sufficient to ensure continuity of Town General Fund operations for a three-month period.”

“I think we need to have, like we do with many ordinances and things, a summary at the top that anybody can basically understand with a basic knowledge of our financial system, including members of the public, that states the general three-month requirement and so forth. Just a simple statement at the very top and then you can have what I call the supplemental information,” said Mayor Gee Williams. “But I think that needs to be at the top and not buried in here.”

Based on the suggestions, the overall policy will be simplified to one reserve fund, said Fleetwood.

A resident also submitted a question for clarification about the following statement under the purpose section of the resolution: “The Town will establish and maintain reserve balances to: (c) enable the Town to implement innovative opportunities for the betterment of the community.”

Fleetwood said an example of that would be further growth opportunity. Another example he provided occurred about a year ago to correct issues in Heron Park.

“We beat around the idea of taking the money from one of the assigned funds, so when we did that, when we discussed that it was a consensus here that no, we’re not going to touch that money. That money is there for that reason,” Fleetwood said.

The reserve policy would establish a minimum of funds that are not assigned to anything and can be used for emergencies.

Currently, the town is looking at a roughly three-month equivalent of the annual general fund expenditures for a reserve balance, Fleetwood said.

According to its website, The Government Finance Officers Association (GFOA) recommends “at a minimum, that general-purpose governments, regardless of size, maintain unrestricted budgetary fund balance in their general fund of no less than two months of regular general fund operating revenues or regular general fund operating expenditures.”