North Carolina State Treasurer’s Financial Problems
State officials are warning Spring Lake it faces a potential takeover if city officials don’t put the city’s finances in order.
The state’s Local Governments Commission expressed “deep concerns over potential budget deficits, long-standing budget disarray and an investigation into the missing money,” a statement from the treasurer’s office said Wednesday. ‘State.
State Treasurer Dale R. Folwell is chairman of the commission. Members of the North Carolina State Department’s Local Government Finance Division and State Treasurer are among them.
The commission voted unanimously at an emergency meeting on Tuesday to send a warning letter to Spring Lake, the statement said.
The city of 12,000 people ran a budget deficit of about $ 1.2 million in its general fund in the 2020-2021 fiscal year, according to Sharon Edmundson, who serves as committee secretary. The city’s budget only covers about $ 285,000 of the shortfall, she said.
City manager Samantha Wullenwaber has proposed a balancing budget that includes significant cuts and restores some fund balance in the general fund, the statement said. Members of the council of aldermen have indicated that they want to reinstate the cuts without any means of paying for them, he said.
Spring Lake’s property tax rate of 70 cents per $ 100 of property assessment is the highest municipal rate in Cumberland County, the statement said.
“There is no logistical reason for this city to be in the shape it is in,” said Edmundson. âThis city cannot afford to continue spending like it has. ”
The city council is due to hold a “public budget proposal meeting” on Monday, according to the city’s website.
Edmundson said the problem could come to a head at this meeting, when the board is expected to pass the budget. She said commission staff will attend the meeting.
If the board tries to pass a budget that is not balanced or financially sound, staff members “will recommend that the Commission step in to assume full control of the city’s finances,” the statement said.
State Auditor Beth Wood, who is a member of the commission, urged the commission to assume statutory control of the city’s finances, the statement said. She defended the new city manager and said aldermen lacked leadership.
“We are investigating and looking for the missing money,” Wood said. âThere’s a lot going on. ”
City council voted 3-2 at its June 14 meeting to hire Wullenwaber, according to draft minutes of the meeting posted on the city’s website.
Spring Lake is one of two municipalities in the state that has voluntarily entered into a financial management agreement with the commission, according to the state treasurer’s statement. The agreement is intended to help the city fulfill its obligations and duties under the law on the budget and tax audit of local authorities, according to the statement.
The agreement included a target for Spring Lake to develop a “well-thought-out budget for fiscal 2022 that is realistic in income and expense estimates,” the statement said.
Folwell said in the statement that the commission was created to ensure good stewardship of taxpayer resources.
“It is never our desire to have to get involved in the finances of the local government,” he said. âWe would much prefer that the government units all operate smoothly and without a wrinkle. ”
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Editor-in-Chief Steve DeVane can be reached at [email protected] or 910-486-3572.