Confusion brings resolution

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Budget review

Bath Township’s board members were caught by surprise during their board meeting March 17 when Aaron Stevens, CPA for Abraham and Gaffney accounting firm, presented the 2013 unaudited budget to the board revealing the township’s budget was $720,822 “in the red.”

Stevens mentioned that certain revenue and expenditure line items would be adjusted during the actual audit, although the budget will “probably not” end in the black.

Trustee Ryan Fewins-Bliss believes final audited numbers will be “pretty darn close” to the unaudited ones.

It was evident during the board meeting that it was unclear why the budget was $700,000 over or who should be held responsible. “No one was keeping track of the checkbook,” said trustee Cindy Cronk. “No one wants to answer why this happened.”

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The revenue and expenditure report for 2013 had several pages with information yet to be entered in.
Photo by Brendan Smoker.

The confusion and passing of blame had some local citizens concerned about how the township’s budget was being handled.

2013 projected revenue

The tax revenue and expenditure predications for Bath Township ending Dec. 31, 2013 were a major factor in the budget shortfall.

The board budgeted revenue of $1,447,733 from property taxes but fell short just over $187,000. Police and fire tax revenues were also $115,354 short from estimates.

Another big revenue shortfall was interest from investments. The budgeted revenue from interest was $177,500, while unaudited numbers show revenues ended up $158,373 in the red.

Supervisor Paula Clark explained in a public address over the budget that interest is determined by combining the actual dollars received and the current market value of the investment instruments. If the market is down, so is the investment value.

The confusion

Another problem the board ran into was superintendent Troy Feltman abruptly leaving his position in September 2013. The board was not properly informed of Feltman’s financial plans and understanding of the budget.

Supervisor Clark has been legally required to fulfill Feltman’s position until recently elected Daniel Wietecha took over on Apr. 21, 2014.

It was also unclear on the treasurer’s and supervisor’s statutory roles. Bath’s policy states it is the treasurer’s responsibility to “receive invoices for township expenditures,” possibly implying to enter these entries into the computer although, statutorily, the clerk does this.

During the boards first work session on April 7 it was clear that no one knew who was supposed to be entering journal entries, or township expenses, into the computer during Feltman’s absence. Lack of entries may be one reason why no board member was aware that the township was not on budget.

Bath citizen Patti Thomas, with twenty years of financial background, believes the problem developed from misfeasance or malfeasance.

“This is not a fund balance issue, this is a performance issue,” said Thomas. “I’m concerned we are not getting the whole or real story here.  I want to know what really happened.”

Fund balance policy

Bath’s fund balance policy states the township’s goal is to maintain a minimum unassigned fund balance, a “rainy day” fund, of no less than 25 percent of the annual general fund expenditures.

When the unassigned balance exceeds 50 percent the policy states the money should be spent for purposes concerning unfunded liabilities (retirement fund), future debt, and Capital Improvement Projects such as fixing sidewalks and purchasing internet access.

When there is an excessive budget “cushion” it becomes ok to spend the fund balance. “(It’s) what you’re building the fund balance for,” said trustee Leon Puttler.

The fund balance at the end of 2013 was equal to 54 percent of the township’s expected spending.

The township’s unaudited revenue income was approximately $789,000 less than expected. While this number is not final, the township’s rainy day fund would end up around $2.5 million, down from approximately $3.2 million.

Even with the high revenue shortage, the 2014 fund balance will still be well over the minimum balance of 25 percent.

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Although expenses exceeded revenues in 2013, and is forecasted to do so in 2014, the end fund balance will still be at a healthy level.
Source: Bath Township’s general fund revenue report.

Finance committee

Monday, Apr. 21 a finance committee was created during superintendent Wietecha’s first day in office. The focus of the committee is to “discuss procedures and a plan for future budget and finance,” said Wietecha.

The committee is comprised of superintendent Wietecha, trustees Ryan Fewins-Bliss and Leon Puttler, and treasurer Jeff Garrity.

Wietecha said a finance meeting has not yet been set, but the board of trustees will use their May work session to work on the immediate budget. Recommendations will be presented at a future board meeting.

Changes do need to be made in regards to monitoring the budget; however, as treasurer Garrity has emphasized, “There is no financial problem in Bath Township.”

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