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TROPHY WINNERS - These young ladies won trophies at Monday night's spring sports banquet at
KMHS. Front row, left to right, Keisha Wells, Crissy Johnsonbaugh, Tamy Welch and Tameeka Anderson.
Back row, Amanda Burns, Nancy Ely, Elisabeth Tiesinga and April Putnam.
End year with 12-10 record
Cavaliers eliminate KM 8-4
Kings Mountain's Mountaineers
saw their hopes of a state playoff
berth go down the drain
Wednesday night when they fell to
East Rutherford's Cavaliers 8-4 in
the semi-finals of the Southwestern
3-A Conference baseball tourna-
ment at KM's Lancaster Field.
The loss ended the
Mountaineers' season at 12-10.
They finished in a fourth place tie
with Burns and failed to qualify for
the state playoffs for just the sec-
ond time in eight years.
The Cavaliers, who shared the
regular season title with Shelby
and South Point, went on to defeat
South Point 5-4 in Friday's champi-
onship game. The Red Raiders ad-
vanced with an 18-6 win over
Shelby. East, Shelby and South
Point are competing this week in
the first round of the state tourna-
ment.
The Cavaliers jumped on KM
starter Brian Lefevers for two runs
in the bottom of the first inning and
were never headed. Kings
Mountain cut the margin to 2-1 in
the top of the fourth but East
scored five runs in the bottom of
the inning to win easily.
The Cavaliers collected 10 hits
off Levers a nd KM relief pitcher
Sidney Bridges while East starter
Brad Harrill limited the
Mountaineers to five hits.
A big defensive play on which
East left-fielder Marc Hill gunned
down Lefevers at the plate prevent-
ed Kings Mountain from tying the
game in the fourth and allowed the
Cavaliers to come in and break the
game open in the bottom of the in-
ning.
Kings Mountain collected three
of its five hits off Harrill and
scored three runs in the top of the
seventh on run-scoring doubles by
Bridges, Bryan Leftwich and Mike
Cobb.
Score by innings: R-H-E
KM 0001000 4-5-1
ER 200510 x 8-10-3
Brian Lefevers, Sidney
Bridges (4) and Kevin Melton,
Chris Burns (6); Brad Harrill
and Tony Dobbins. W - Harrill.
L - Lefevers.
Western North Carolina Golf Tournament set at Apple Valley
A $6,000 purse will be up for
grabs in the Western North
Carolina Open Golf Tournament
June 12-13 at Apple Valley
Country Club near Lake Lure.
The format is 36-hole stroke
play. Entry fee is $100 and the field
is limited to the first 120 appli-
cants.
Applications may be obtained at
any golf course that is a member of
the Mountains Chapter of the
Carolinas PGA. All applications
should be received no later than 5
p.m. Wednesday, June 9.
To be eligible to play, applicants
must be a resident Professional
Member of the Mountain Chapter
of the Carolinas PGA or an ama-
teur with a 7.0 handicap index or
less who is a resident in the
WEstern North Carolinas Chapter.
For resort and accommodations
information call (704) 625-3000.
Mail applications to Al Godwin,
Director of Golf, Colony Lake
Lure Golf Resort, 201 Boulevard
of the Mountains, Lake Lure, NC
28746.
KEETER FORD
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College Grad Rebate 400.00
Ford Rebate 600.00
Customer Downpayment 1,000.00
Dealer Discount 2.54090
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* All rebates assigned to dealer. **Based on approved credit. Restrictions Apply, Ask Dealer For Details.
As Low As
$176.52:
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- Thursday, May 25, 1995 -THE KINGS MOUNTAIN HERALD-Page 7A
TE CIty OF KINGS MOUNTAIN
NORTH CAROLINA
P.O. Box 429 * Kings Mountain, North Carolina 28086 * (704) 734-0333
G. Scott Neisler, Mayor George A. Wood, City Manager
I appreciate Gary Joy publishing the State response to ny proposal of achieving 8% fund balance this year. An
informed citizen is a good citizen. I wanted to provide you with my rebuttal letter and as you will see, the state made
many wrong conclusions to my plan.
March 27, 1995
Mr. Robert High
N.C. Department of State Treasurer
Local Government Commission
325 North Salisbury Street
Raleigh, N.C. 27803-1388
Dear Mr. High
I received your letter and memorandum of March 23, 1995, and would like to comment on ten specific areas
discussed.
1. On Item #1 of the memo, you said my statement is Iisans that counting the $574,849 under spending of
the FY 1993-1994 budget, and the $611,723 surpluses built into the FY 1994-1995 budget, the uy would have a $1.2
million turnaround. There is nothing misleading about it. I said it would be a turnaround from the FY 1992-93 Audit
of $1.2 million, and it will be.
I did not say the $574,849 would be available as a Supls at June 30, 1995. I said the amount in FY 1993-94,
coupled with the budgeted surpluses of $611,000 in FY 1994-95 would genie a surplus. That is a big difference.
2. You state that Working Capital in the Utility Funds will be $176,900 less than my Fopossl projected because
you discovered this amount for an accrual of bond interest payable was omitted from the audit. Obviously, I was
using the working capital as stated in the audit, and this is the first either I or the City Council has heard about this
accounting error. I can’t use something I have no knowledge of. This is yet another example of why some council
members and I are frustrated: the financial information we are given is often inaccurate. However, let me point out
that while this affects working capital, it does not affect the cash projection for June 30, 1995 at all.
3. You spent a considerable amount of time discussing whether the Gas Fund could make the $600,00 transfer to
the General Fund, since the actual gas sales were lower than the budgeted gas sales. However, your staff did not
consider the other side of the equation, gas purchase. By February 28th, gas sales were at a 56.8% of Dugan However,
gas purchases were only at 50.4%, a significant savings on the gross margin. The Budget projects the following gross
margin on sales:
$5,105,572 Sales
3.735.298 Cost of Gas for those Sales
$1,370,274
Projected Gross Margin (36.7% faivp over cost)
The $1,370,274 covers all the other costs to run the gas system and make all the $600,000 transfer to the General
Fund, with the exception of a few minor revenue sources which are doing fine.
At February 28th, the actual numbers were as follows:
2,901,223.06 Sales
1.884 065.73 Cost of Gas for those Sales
1,017,157.30
Actual Gross Mon (53.9% markup over cost)
In other words, the gas system needs to make $1,370,274 on sales after subtracting the cost of the gas. It has
already made $1,017,157.30 in the first eight months of the fiscal year, many of which were low usage summer
months. It has earned 74.2% of the necessary money in just 66.7% of the fiscal year. And March and April will be very
good months while May and June will not. Averaged together, they fairly represent the average usage in the first 8
months. If $1,017,157 was earned in 8 months, then similar results for the last 4 months would generate over $500,000.
And what is needed to meet the budget?
$1,370,274 Total Needed to Meet Budgeted Margin
Margin Earned through 2/28/95
353,157 Needed in the last 4 months
Therefore, the last 4 months should earn $500,00 before the City would experience a problem meeting the
budgeted earnings. Does your staff really think this is going to happen? And our flex-rate will keep the margin form
being a problem as the retail price floats monthly based on the underlying cost of gas. If anything, the Gas Fund is
He Bn a better than budgeted year in terms of profits, even though the sales may be below what was budgeted.
Again, your staff did not factor in the expense side of the equation before concluding that the Gas Fund might be
experiencing difficulty. It clearly is not.
Your letter states also that the Electric Fund has budgeted $1,000,000 in transfers to the General Fund, but has
only been able to make $641,666 in transfers through January 31st. What is the problem? If you divide the $1,100,000
by 12 months, then multiply by 7 for the 7 months in the fiscal year through January 31st, you get what? $641,666! In
other words, your staff expressed concerns about this when the budgeted transfers are being made monthly just as
rojected.
7 Since the Electric Fund is able to make the transfers to the General Fund; and the Gas Fund is able to make the
transfers as explained above; and the property taxes, prior years’ property taxes, local option sales taxes, and the
utility franchise taxes are all coming in well ahead of the budgeted revenues according to the February 28th finance
report, the General Fund will exceed the budgeted revenues. These are the major sources of the revenues for the
General Fund, and all are on course to meet or exceed the budgeted revenue, including the transfers.
4. You have spent a considerable amount of time discussing the Powell Bill, but have taken Mrs. Parsons’ word
for the low percentage of our Street Department's expenditures (31% and 14% for two months) that she claims were
Powell Bill, eligible. But I had talked to several area city mangers in similar-sized cities who said that normally Powell
Bill, eligible expenditures in the Street Department would be about 75%! Obviously, we have a major difference of
opinion within our City on whether her figures are accurate. If you just look at the list of Street Department functions
at are eligible as opposed to those that are ineligible, common sense tells you that her percentages are extremely low
for a full year of Street Department activities. Therefore, I still believe we should lepitimalsty reduce on Siroet
Department expenditures by $174,999 in the General Fund and pay them from the Powell Bill Fund if the
documentation reflected how the department manpower should be used. We will be reviewing that documentation
shortly.
L You stated that the Inventory component of Working Capital “...would reduce the subsequent year’s budget
for inventory purchases.” Therefore, you reduced Viorkiog Capital by $537,698 of Inventory in the Jiility Funds.
Please review the current Budget, which has this year’s and last year’s budgeted line items for materials and supplies
and tell me where they have been decreased. I never counted it as cash, I counted it as Working Capital, just like the
auditor did on Page 31 of the Audit under Segment Information. Therefore, you are ae the working
capital by removing inventory from the Working Capital when it is, in fact, a current asset. My proposal assumes no
increase or decrease in Inventory this year.
The City does not operate a central warehouse. All supplies and materials are expense to the individual utility
fund as purchased. A physical inventory is made at year end to reflect changes in quantities and prices. The supplies
belong to the individual utility fund, not to Warehouse Fund.
6. On page 4 of your memo, you state that the reduction in current capitalized leases and long term debt as a
source of working capital is wrong. It is not. Working Capital is defined as current assets minus current liabilities.
When the current liability accounts named “Current portion of bonds and notes payable” and “Current portion of
obligations under capitalized leases” decrease from one year to the next, as they will from FY 1994-95 to FY 1995-9,
the amount of that decrease is a reduction to both current liabilities. A reduction in a current liability account by
definition results in an increase in Working Capital.
7. Your discussion of the increase in Capital Outlay spending did not contradict my assertion that the $387,000
increase over the previous year was neither mandated nor necessary. In fact, the amount you stated was mandated,
when subtracted from the budgeted amount, leaves far more than the $387,000 increase over last year. Therefore, my
oint remains valid that since the 4x tax increase and the 8% residential water and sewer rate increase only generated
$190,000, and we budgeted $387,000 in budget outlay than the previous year for items not mandated, we could have
cut $190,000 of those non-mandated capital outlay items and never implemented those two increases.
8. You stated that the Undesignated Fund Balance used in my proposal is not the same as the State's definition
of Fund Balance Available for Appropriation. We have always been under the impression from our auditor that it was
the same. Consequently I would appreciate it if you would mail us an itemized list of the Balance Sheet accounts, and
their amounts, that make up the Fund Balance Available for Appropriation figure you used.
9. You state that the budgeted $611,000 of surpluses may materialize, but may not be converted from receivables
to cash at June 30, 1995. Virtually all our General Fund revenues are recorded on a ash basis. And those that are not
would not have changed much since last year in terms of a year-end accrual. So, those surpluses should be in the form
of cash. I pointed out in my 5 that the City had tightened its i bill collection policy effective in October,
1994. This affects over 80% of our revenues. Those bills not paid on the 25th are cut off by month-end. Cutoff, or the
threat of it, results in full payment for almost all accounts, except those given extensions or permanently leaving the
system. That is a marked change from our previous policy in which cutoff did not take place until the first of the next
month. Consequently, a lot more delinquent accounts receivable were on the books at month-end previously, which
are paid in full b month-end. Yet your analysis of the proposal completely left out that fact when you stated that
conversion to cash might not take place a month-end on June 30, 1995. To illustrate the significant improvement this
policy change has brought, below is the Cash on Hand at month-end, as stated in our finance reports, after all bills
due by month-end have been paid.
October, 1994 $ 894,151.94
November, 1994 $1,165,272.67
December, 1994 $ 868,291.42
January, 1995 $1,102,332.90
February, 1995 $1,065,145.10
Let me also point out that the February figure is after the large utility bond payments due March 1st that you
expressed concern about had already been paid in full! And the over due utility accounts receivable at month-end
have dropped markedly, as our building register will attest.
My proposal is, in fact, extremely conservative when you take this improvement into account. Your concerns
about the surpluses not representing cash at June 30, 1995 have not taken this into account.
10. Fina y, you letter and memo imply that I do not believe that there are any financial concerns. That is not my
osition at all.
? Our cash flow problem ended at least as early as October, 1994, as the Cash on Hand from the finance reports
clearly shows. I maintain that by June 30, 1995 all bills due by June 30, 1995 will be paid, and if no bills are prepaid,
we will have over $600,000 in Cash on Hand. This is based upon at least $611,000 in surpluses plus - cash
conversion from accounts receivable discussed above. What I have constantly said that we now have a Budget with
$611,000 in new cash surpluses built into it every year. You have questioned at length whether those surpluses would
be there due to concerns about Gas Funds. But | have clearly demonstrated that the Gas Fund will meet its budgeted
profited aging, and therefore make the transfers to the General Fund. All the other funds are doing fine as well, as
ou stated.
: In addition to that $611,000, we have increased capital outlay by $387,000 over the previous year’s budget. We
can easily reduce the capital outlay back to the levels of previous years, and together with $611,000 surpluses have
$998,000 of surpluses built into next year’s budget, the rs year's budget, and the years after that. What I have
said is that we could have cut this capital outlay by $190,000 this year and not put in the tax and utility rate increases.
What I have said even though City Council did impose them this year, they could remove them next year, and
the $998,000 would decrease to $808,000. We are paying our bills when due and the $808,000 would be a further
significant and rapid improvement in our froma] position. We could repeat the $808,000 improvement in tinancial
position every year. I do not consider it hai or irresponsible to build up our cash reserves each and every
year by “only” $800,000! That in fact, is the situation we are in, and out latest finance reports clearly prove it. :
he taxpayers and the LGC saw a $574,000 improvement in FY 1993-94 at June 30, 1994. You will see at least
another $611000 improvement by June 30, 1995. And the City has the capability of having an $800,000 improvement
each and every succeeding year without the 4c tax increase and the 8% residential water and sewer rate increase.
Consequently, we have turned the corner and just as I have stated from the beginning, and we are in a position to
pity increase our cash reserves without these unnecessary tax and utility rate increases.
hat has been, and remains my position on the matter.
Sincerely,
J Sel Tear
G. Scott Neisler, Mavor
Pd. By Scott Neisler
To date 1 have received no response to this letter. They have told me they had no time to do it.