Leachville's money problems still hot topic

Wednesday, August 16, 2006
Alderman Bruce Wilson goes over city budget and detailed expenditures with Police Chief Kenneth Womack, following the council meeting. (Town Crier photo/Nan Snider)

Heated controversies continued Monday evening, Aug.7, between Leachville Mayor Ralph Wells and councilman Bruce Wilson as they entered into discussions on regulating the city's cash flow and payment of back taxes.

City clerk Ruth Ann Keith gave the treasurer's report, detailing balances in each city department account. Account balances included: General Fund, $49,256.91; Street Fund, $9,302.86; Melody Theatre, $1,028.93; Industrial Account, $8.76; Police Car Donations, $23.60; Fire Department, $3,040.66; Act 837 Money, $7,533.75; Firemen's Pension, $12,715.72; and Cemetery Funds, $45.91.

"We are keeping some accounts open just in case we receive extra funds," Keith said. "We can't touch the trust money given to the cemetery, only the interest. We have two CDs for the funds set aside for the proposed settlement of the tax debt to IRS. They are at Heritage Bank and Southern Bank of Commerce, and each are drawing 5.5 percent interest. There will be no penalty for early withdrawal."

"We started with $118,000 set aside and now we are down to $105,000," Wilson said. "We need to get $2,800 more from somewhere."

Mayor Wells advised the council to move on with the council business.

Leachville Police Chief Kenneth Womack gave the July police report, listing 261 contacts made during the month, which included 108 citations given, five felony arrests, and six DWI arrests.

Womack also reported the Police Department applied for and received a $4,309 Justice Assistance Grant (JAG). The Police Department, along with the Fire Department, applied for an Arkansas Department of Health grant for two AED Defibrillators, estimated at $1,800. The defibrillators are due to be picked up on Sept. 14. Each department will keep one of the defibrillators. The Police Department turned over $5,637 to the city's general fund. Court cost collected for July was $2,150, with the city's share of the cost $158.

Councilman Wilson asked Womack what the grant money was going to be used for?

"Only what is listed on the application, or for needs," Womack said.

"Bruce, this money can't be used to pay taxes," Wells said.

"Make sure you stay under the amount," Wilson said.

Mayor Wells would not allow Wilson to continue his questioning of Womack.

Mayor Wells read a letter he sent to State Representative Marion Berry, concerning the city's tax situation. Wells asked Berry for help and advice.

Wells letter read: "You will note that if the city was only required to pay the tax for the three years (2001-2003), the amount would be $227,405.26. This is the amount he (tax consultant Frank Heath) recommends to offer to the IRS. If the offer is accepted for the tax only, the city might be able to compromise the penalties and interest, which amount to $183,613.45.

"The bottom line is the City of Leachville cannot pay any of the tax to be honest about it. If there is any way to get this whole thing waived, that is what we would like to do. On the other hand, if that is not a possibility, we need to get the debt reduced down to an amount of money that the city could pay."

"We talked about sending the letter in June and now it was sent in August," Wilson said. "I hope that it won't take two or more months to get an answer."

"I can count," Wells said. "I didn't go to dental school, but I can count. It is my business to run the day to day operations of the city."

"This is my business too," Wilson said. "The city council deals with the money. I don't talk with the city employees. I just look at the financing part."

"Oh, I heard that you talked to the employees today," Wells said.

"That is a lie, Mayor," Wilson said. "You are good at that."

During Council comments Wilson discussed the 2006 city budget.

"We have to know what we have coming in, so I have gone over the financial records, department by department," Wilson said. "Administratively, we are at 63 percent with expenses, and by the end of July we were over 5 percent. Percentages matter, we are over $72,013, right now. Legal fees are 95 percent over. The cemetery is under budget. The street is over 2 percent. The Police Department is over 41 percent for $33,000. Why is it over so much? That is a lot with donations and all. The budget is being hidden from us or just not looked into.

"We need to establish control of the spending," he said. "They don't need to spend it, if we don't vote on it. There is the problem. What do we do to fix it? The city finances are controlled by the city council. I'm going by the numbers and we wonder why we are down. It simply was not watched."

"Three years of taxes not paid and we had no clue," Wilson said. "Now the council is being blamed for 2001-2003 taxes. We need to see what we can do to fix some of the problems."

Police Chief Womack contended the money donated to buy the two police cars was never in the initial budget.

"You'll have no control over the drug money, or the JAG grant," Womack said.

"And no control over the mayor," Wells said.

Wilson contended he had factored the 2006 budget as well as the donations from individuals and the city, when doing the Police Department figures.

Wilson made motions setting a hiring freeze and all purchasing orders of $500 to be approved by council.

The hiring freeze was for all employees of all departments. Employees will not be paid if hired by the Mayor, when not approved by the council. Motion passed unanimously.

Motion establishing a purchasing order rule that anything over $500 must be approved by the council passed 4-1, with Bob Crites voting against and Mark Wheeler abstaining.

"I'm not spending any money," Wells said. "I sign the checks because ya'll don't have the guts to do it."

"Guts is not what I lack," Wilson said. "The mayor did not keep an eye on the city's business."

"You have hurt me on every move you have made," Wells said.

Back to the purchasing order limitations, Wheeler asked about putting in an emergency stipulation.

"My concern is they will use and abuse any emergency stipulation." Wilson said.

"We can always spend money when we have a real emergency," Wells said. "If a pump went down, I'm going to buy a pump. I can spend up to $10,000 if needed, and that is a law."

In other business:

*Keith requested permission to attend the Clerk's Institute training at the University of Arkansas, with a cost to the city of $800.

"This conference helps me to better understand procedures and FOI," Keith said. "It helps me learn what to do in the office every day, and better ways to do it.

The council approved Keith's expenses to attend the conference. The vote was 5-0, with alderman Bob Crites abstaining.

*The council passed Ordinance 2006-3, opting out of the federal Shielded Outdoor Lighting (HB1027) requirement to have shielded lighting throughout the city. The cost to change out the 205 lights was deemed prohibitive.

*Three beauty shop owners spoke out against the $50 cost of the city's Privilege License stating it was unbalanced and unfair.

"I agree," Wells said. "It should be a privilege for us to have you here. Some bigger businesses are paying less than you."

"We all opposed privilege license," Alderman Tommy Stone said. "But we felt we had to do something about it."

"We all agreed to work on it and the $50 amount just came up, and we just voted on it," Alderman Bob Crites said. "We should reconsider this and review the Privilege License again."

"Just don't pay it," Wilson said.

The owners agreed they did not plan to pay it.

Wilson recommended another working committee meeting for Aug. 17, at 7 p.m., to talk about the city's privilege license situation. The council passed unanimously.

*The city received a letter from Arkansas National Resource Commission and Miller-Newell Engineering approving of the awarding of the water tower bid to Phoenix Fabrications, of Indiana.

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