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VOL. 106 NO. 25
By GARY STEWART
Editor of the Herald
Copies of letters ‘and city budgets acquired by the
Herald this week show that the City of Kings
Mountain's budget woes trace back
members of City Council were aware of if.
The current financial crisis apparently began in the
1990-91 fiscal year when budget expenditures exceed-
ed actual revenue by $1.3 million. City Auditor Darrell
Keller and Interim City Manager Maxine Parsons said
reserve funds had to be used to balance that budget
and the city has not yet recovered.
Thursday, June 23, 1994
budget woes go back to '90
"crucial" that the city take its budget woes seriously
and build a fund balance equal to 8% (approximately
gencies.
to 1990 and that
taken care of.
Keller said it is
$400,000) of the general fund budget in case of emer-
Numerous letters from officials from the Local
Government Commission, which is a division of the
State Treasurer's Office, have addressed the matter,
and on several occasions city officials have responded
to the LGC giving assurance that the matter would be
HB On December 28, 1990 Lee Carter, Director of
the Fiscal Management Section of the Local
Government Commission, wrote a letter to then-Mayor
Kyle Smith with carbon copies to City Manager
—_—
George Wood, City Clerk Jeff Rosencrans and auditor
Darrell Keller, stating that he had reviewed the audit
for the fiscal year ended June 30, 1990 and suggested
several actions needed to improve the city's credit rat-
ings.
The letter noted that the amount of fund balance
available for appropriation in the General Fund was
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Kings Mountain, NC 28086 « 50¢
24.56%. The letter further stated that had $2,250,000
not been transferred from the electric and gas funds the
general fund would have had a negative fund balance.
MW On December 20, 1991, Carter wrote Mayor Scott
Neisler and sent carbon copies to Wood, Rosencrans,
Keller and members of City Council, including Phillip
Hager, Jim Guyton, Elvin Greene, Jerry White, Fred
5.21% of total expenditures, and the statewide average
for comparably-sized units with electric funds was
Finger and Alvin Moretz, stating that as of June 30,
1991 the percentage of available fund balance was
See Budget, 3-A
tiie dB As i sat al St
SS Sahies Cobain SY
By GARY STEWART
Editor of the Herald
The Ad Hoc Committee appoint-
ed by Mayor Scott Neisler to com-
pare the proposed 1994-95 City
budgets of former City Manager
George Wood and Interim City
Manager Maxine Parsons met for
two hours Friday afternoon at City
Hall and then decided it could not
come to a decision.
Chairman Joe Smith said he
| would notify City Council that the
committee declared that Wood's
and Parsons’ budgets were deter-
mined by two different sets of fig-
ures and that the committee could-
n't determine which was more
accurate. Wood's projections were
based on the current year's budget
and Parsons' was based on the cur-
rent year's budget as well as histor-
ical data.
[Committee sends budgets back to Council
"To fully address the budget we have
to look at things that have happened
in the past.”
- Maxine Parsons
ask City Council to supply it with
copies of the city's October audit of
the 1993-94 budget. "We'll look at
that if they want us to," Smith said.
On numerous occasions, the
chairman called down Parsons
when she tried to explain how the
city arrived at its financial crisis.
Smith noted that the only purpose
of the committee was to look at
Parsons' proposed budget and the
information supplied by Wood in a
13-page letter to City Council last
week. Parsons insisted that back-
ground information was crucial to
explaining how she arrived at her
figures. Parsons' budget calls for a
four-cent property tax increase and
continued spending cuts while
Wood's memo indicated the tax
‘hike is not necessary and that the
city would have a $300,000 fund
balance at the end of the fiscal
year.
"To fully address the budget we
have to look at things that have
happened in the past," Parsons told
the committee. She later told the
See Committee, 2-A
late tax bill
By Elizabeth Stewart
of The Herald Staff
Councilwoman Norma Bridges'
face is red.
' After hearing recently at a City
Council meeting about the necessi-
ty of paying back taxes to brighten
the city's budget picture, she re-
ceived a notice from the Cleveland
County Tax Office that she is in ar-
rears on her and her husband
Bobby's personal taxes to the tune
of $3,526.81.
Bridges Textiles, owned by the
couple, also owes $219.52.
The city taxes are for the period
1992 and 1993.
Brenda Gardner of the county
tax office said that the couple had
remitted to the county in May a
check for city taxes for $2,000.
Mrs. Bridges said she was un-
aware the taxes are past due. She
said she called the tax office this
week and informed them that her
check for payment would be in the
mail.
In response to The Herald's
query Wednesday, Bridges said
"This is a private matter that I was
taking care of but since it could not
be a private matter this has been
taken care of this morning."
Bridges offered to show The
Herald a copy of the receipt upon
her return from Shelby.
By GARY STEWART
Editor of the Herald
City Auditor Darrell Keller says
there has been "so much confu-
sion" about the city's financial situ-
ation that "people don't know what
to think or who to believe."
But Keller assured the Herald
this week that the city is in a seri-
ous financial crunch.
The Local Government
Commission, which is a division of
the Office of State Treasurer
Harlan Boyles, has been pressing
the City to correct inadequacies in
its budgets since 1990-91. The
Herald acquired copies of letters
from the LGC to city officials dat-
ing back as far as 1990 addressing
the problems, and in one instance
the entire City Council responded
to one of the letters and addressed
| ways it would gorrect its financial
itua
received a phone call from Transco
"I' don't. understand how any-
one can deny we have a financial
problem," Keller said.
Keller issued the following
statement:
"The Local Government
Commission has existed since
1931. They monitor all units of lo--
cal governments in the state. When
they say you have a problem, you
need to pay attention. This is not
the time to deny there is a problem.
"There has been a total break-
down in communication. In the
June 16th Gaston Gazette, there is
a quote "all the bills are paid - they
have been covered." People are re-
lying on leaks from clerks at City
Hall rather than asking Mrs.
Parsons, who has the total picture,
for the facts. On Thursday, June
16th, witnessed by myself and an-
other City employee, Mrs. Parsons
Auditor: When LGC talks, pay attention
Gas Company. There is a bill for
April purchases for $184,109.
Transco was requesting payment
since this bill was now over 30
days past due. Mrs. Parsons told
them she would wire them $60,000
of this amount on Monday, June
20th, if the funds were available.
There is also $153,391 due Hath
Associates for accumulated losses
on gas purchasing contracts over
the past eleven months.
"The real danger is in looking at
only today and saying things are
fine. On September 1st, the City
has a. bond payment of
$261,076.25; on October 1st,
$5,700.99; on March 1, 1995,
$586,076.25 and on April 18,
1995, $155,700.00. This is a large
amount of money that must be ac-
cumulated. This takes planning to
See Auditor, 2-A
Kings Mountain swimming pool will be the place to be during Independence Day celebration July 4
Fourth of July celebration planned
Kings Mountain's annual Fourth
of July celebration will be held
Monday, July 4 beginning at 11
a.m. at the Parks and Recreation
Department.
Numerous activities are sched-
uled throughout the day. The event
will culminate with a fireworks
. display at 10 p.m. Department offi-
cials said the fireworks display will
Other cities amazed
at KM's benefits
By ELIZABETH STEWART
of the Herald Staff
While salaries of some city de-
partment heads compare favorably
and some are higher with cities of
similar population, the fringe ben-
efits of the 150 full-time City of
Kings Mountain employees are at
the top of eight area municipalities
surveyed by The Herald this week.
All eight city managers and fi-
nance officers contacted by The
Herald exclaimed about the differ-
ence in insurance and retirement
benefits in Kings Mountain, com-
pared even with two much larger
cities which like Kings Mountain
operate four utilitics.
Except for Kings Mountain, on-
ly Belmont pays a percentage of
dependent insurance coverage. All
but one, Lexington, pays 100 per-
cent of employee health coverage,
and none but Kings Mountain per-
mit their employees to retire after
20) years with full health insurance
benefits.
Seven of the eight operate on a
30-year retirement plan.
Two of the cities with higher
population - Lexington and
Monroe - operate-water, sewer, gas
and electric departments like Kings
Mountain and only two other cities
in Kings Mountain's population
range have an engineer on staff.
The city of Hendersonville, with
a budget of $14.9 million and a
city staff of 230 employees, em-
See Benefits, 3-A
be scaled down this year due to
budget restrictions.
Activities include:
11 a.m. - Horseshoe tournament.
Singles and doubles competition.
Entry fee is $2. Trophies will be
awarded to winners.
12 noon - Pool events, including
innertube relays, swimming relays,
big splash and little splash.
Ribbons will be awarded to win-
ners.
3 p.m.-5 p.m. - Music provided
by Hal Brothers, DJ, of
Cherryville.
6-10 p.m. - Music provided by
Hal Brothers.
10 p.m. - Fireworks display in
See Fourth, 10-A
Kings Mountain People
c church would never be
‘for City of Kings Mountain
On Tuesday afternoon, the City
of Kings Mountain had $366,291
in the bank, It had unpaid bills of
$627,141 and was also facing a
weekly payroll of $100,000.
It also had a letter from Transco
- its major gas supplier and a com-
pany that provides the transmission
lines for all natural gas the city
purchases - stating that unless a 30-
day late payment of $59,584.64 is
received within two weeks it would
take steps to suspend services.
Getting past due bills and letters
threatening a cut-off of service is
nothing new to the City of Kings
Mountain. Payments to the city's
electric and gas suppliers have
been late each month for the past
two years, and payments to the
City of Gastonia for treating Kings
Mountain wastewater at Crowders
Creek have also consistently been
late.
From July 1, 1992-June 30, 1993
payments to Duke Power for elec-
tricity ranged from five weeks to
two months late. That situation has
improved during the current fiscal
year with most payments made
within two weeks past the due date.
City auditor Darrell Keller said at
times the city has had to make par-
tial payment and hand-deliver it to
Duke Power.
Gas payments to several differ-
ent suppliers have also been con-
sistently late, and over $500,000 in
‘Our cash flow
is improving.”
- Maxine Parsons
gas payments which were due dur-
ing last year's fiscal year budget
weren't paid until the current fiscal
year.
Interim City Manager Maxine
Parsons said a representative from
Duke Power visited her last week
to express concern over the city's
payment record of the past two
years. She said she has been paying
Duke Power and leaving gas bills
unpaid "since we have the histori-
cal imbalance in the gas fund."
Parsons and Keller said the city
lost $153,000 last year because for-
mer’ City Manager George Wood
(with approval of City Council)
locked in a gas price for 10 months
and the city could have purchased
the gas on the open market for
$153,000 less. Parsons said going
with a locked-in rate cost the city
money in seven of the 10 months.
"Our cash flow is improving,"
Mrs. Parsons said. "Expenditures
for April and May have been at a
minimum. This is improving cash
flow as well as under-spending the
budget and will improve our audit
report for this fiscal year."
‘hurch 10 reopen
onference. of the
ugh
church on Piedmont Avenue was 2
moved to the rear of the property,
ater to be converted into a fellow-
ship hall. A new sanctuary wat
See Huffstetler, 3-A