The Danielsville City Council took steps to bring the city’s SPLOST (Special Purpose Local Option Sales Tax) fund balance back into compliance with state law.
The council voted May 7 to “cash in” five certificates of deposit at BB&T Bank totaling $75,660 in order to replenish the city’s SPLOST fund after the city auditor discovered that some of those funds were used for expenses other than water and sewer upgrades, as required by the state.
City clerk Susan Payne and Mayor Todd Higdon said $65,500 in the SPLOST account had been used over a three-year period (2010, 2011 and 2012) by the previous administration for expenses other than the specified water and sewer upgrades. Payne said the primary use of the funds had been to help make a large annual ($76,000) debt service payment to BB&T in January of this year.
Payne said the auditor determined that $6,000 in SPLOST funds were used for other purposes in 2010; $21,493 in 2011 and $38,000 this year.
“They basically borrowed (funds) against the SPLOST account (to pay other expenses),” Payne said.
Higdon pointed out that the city was not losing the money from the CDs, but simply transferring the money into the SPLOST account to make the city compliant with state law regarding the funds, which are designated for “new” water/sewer upgrades only.
Payne said approximately $259,000 of an original $600,000 balance is still owed on the BB&T loan, which was originally taken out in 2001.
Payne said the loan should be paid off in 2015.
In other business, the council also voted to solicit bids on a number of surplus city lawn mowers and other maintenance equipment that is not being use. Higdon told the council that the city is still paying insurance on these items though they have not been used in recent months.
Higdon said he’d like to see the sale generate enough money to purchase new equipment, including a new mower.
The council welcomed new member John Hendrix at the start of the meeting Monday night as he was officially sworn in.