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Nola Sizemore

Staff Writer

Tightening their spending belts was a topic for discussion at a meeting of the Evarts City Council on Tuesday.

Certified Public Accountant Richard Scruggs presented his 2011-2012 audit of the city. He said the city is “strong,” but with cuts in coal severance funds cautioned that the city needs to begin checking all expenditures.

“In order to keep the city strong, you’ve got a lot of things looking at you this year that you didn’t have last year,” said Scruggs. “Coal severance money — you’re going to have a decline in that. All cities will have that. The population in the county is declining, that will affect you. The jobs aren’t what they used to be and that’s going to affect you. People are losing jobs. You’ve got a lot more things coming from the outside that will affect you as a city.”

Scruggs suggested the city look at all their expenses, such as phone and electric bills, supply bills “to make sure they are getting everything they are supposed to be getting from these companies and getting rid of the things you don’t need.”

“You just need to justify all your expenses,” said Scruggs.

“If I were in your position, I would ask Kristi (Lamb) to bring the phone bills in for the council to look at,” he said. “Kentucky Utilities (KU) bills, look at them. Every bill needs to be looked at by the council. You don’t need to do it every month, but from time to time. Delinquent sewer, water and property tax bills need to be more aggressively collected. As you all may have read in the newspaper recently, fiscal court is asking questions why they’re paying this and that. That’s something I’d highly recommend you all do too.”

Mayor Eddie Manning said he had disconnected the phone in his office as a way of saving the city money. He said while looking through bills, he found where KU was charging the city $28 per month for a school crossing in front of the old high school that had been taken out years ago.

“We got that taken off our bill,” said Manning. “We’ve been going through our bills like Richard has suggested. Last October our coal severance check for three months was approximately $19,000 and that was great. This October the check was for $9,000 for three months. I’m telling you by the time you pay your dispatching, radio and cruiser fuel, that’s almost $9,000 in a three-month period. That’s the reason it’s really important we spend this coal severance money we now have on things we know is coming up because the money is not going to be there, especially for our fire truck payments. We’re looking at everything — trying to find ways to cut back. When you take a $20,000 loss in a year in coal severance, it hurts. That’s what we keep our police cruisers on the road with.”

Manning said fuel prices have steadily increased, costing the city $1,400 to $1,500 a month just to keep police cruisers on the road patrolling.

“We saw this coming and we have been cutting our expenses,” said Manning. “We need to make sure we are pro-active in this. We need to get it before it gets us. We’re lucky, we have things other cities don’t have. We have opportunities other cities don’t and we need to look into them.”

Findings reported in the city’s 2011-2012 audit were:

*Proper segregation of duties is lacking in internal control for all areas of the accounting process. The city continues to address this issue;

*The Depreciation Reserve account in the proprietary funds has not been properly funded during the year. The city will try to refund the account as funds are available;

*Receipts from the water, sewer, sanitation and county garbage departments totaling $985.18 were not deposited into the city’s bank accounts during the first four months of the fiscal year. The city has now implemented procedures to make timely deposits and to reconcile the billing system’s audit report to each bank deposit.

In addition, the city began using pre-numbered receipts for all other departments. The Kentucky State Police have been notified and are conducting an investigation;

* The city should consider prohibiting the cashing of personal checks from city funds, renegotiate its interest rates on long term debt and consider creating interest bearing deposit accounts.

Reach Nola Sizemore at 606-573-4510 or at nsizemore@heartlandpublications.com