Inzer says Century can’t keep going as is
In a meeting held at Century Town Hall last Thursday, independent financial consultant Robert Inzer outlined his recommendations to address the problems a February 2019 grand jury report released following an investigation regarding the current operation of the town.
Inzer was recommended by Florida League of Cities University Director Lynn Tipton as a resource to assist the town in its financial recovery.
Inzer compared the town Century to other rural Florida cities, noting issues such as the lack of industry and significant employment opportunities and limited commercial property, which has led to a shrinking population, inadequate work force, and a 50 percent level of poverty in the town.
He pointed out some advantages, such as the substantial amount of revenue the Capital Trust Agency (CTA) has brought the town for more than three decades.
He also noted some disadvantages, such as the remote location, an unskilled workforce, the lack of medical facilities and no natural environmental features, such as a beach, river or large lake to make the rural community attract visitors, skilled employees or industry.
Referring to financial records, Inzer referred to fiscal year (FY) losses in Century's gas, water and wastewater utilities between 2017 and 2018, totaling more than $400,000, and that FY2018 indicates a loss preliminarily of $200,000. The first four months of FY2019 alone appear to be at a loss of $67,000.
'The simple fact that Century could absorb losses of this magnitude and still have sufficient liquidity to operate indicates that prior to this period, the town had sizable net unencumbered resources. The town is bleeding through them quickly, and absent turning around its financial management operations quickly, is fast approaching a fiscal cliff,' Inzer concluded in his report.
Inzer's findings and recommendations for the town's financial status are: due to the breakdown of relationships between town officials is a result of poor communications and lack the of understanding of their roles and responsibilities or failure to appreciate those roles; due to the severely limited 40-year-old town charter, the town should retain the services of an individual or institution familiar with Florida governmental structures to work with the mayor and commission in a comprehensive review of it; due to the lack of accountability over employees and supervisors, the town should hire a strong executive administrator who would provide oversight in employee accountability, coordination among department directors, better staffing of the council on problems, solutions, implementation schedules and on-going monitoring of town activities; continue to support the operational changes in the gas department (such as installation of new gas meters, checking all accounts for underbilling and lack of billing and collect) or aggressively consider either selling the system or entering into an operational agreement with a company to manage the system; due to the water and wastewater systems suffering from years of neglect and underfunding of maintenance and lift stations needing to be rebuilt, the town should aggressively consider all options including sale or contract management of the systems and examine every connection to see if a bill is being rendered and that the meter is correctly calibrated; due to the thin coverage of 20 employees operating four utilities for a population of 1,500, the town should consider either hiring good talent, able to provide monitoring and depth currently missing, or consider sale or contract management for some of the utility functions with a public or private operator; due to budget balancing problems, the town should contract with the city of Pensacola or Escambia County to ask for assistance in revamping its budget process, with annual and monthly reviews of revenues, expenditures, activities and reserves; dues to an outdate policy and procedure handbook, the town will need outside assistance to develop appropriate policies and procedures and managerial/administrative oversight to follow up and ensure compliance; due to the special revenue fund depletion of $4 million for an interfund loan to the general fund over the last five years to make up for utility revenue losses, the town should continue to review past expenditures to determine which qualify for use of theses restricted funds and make the appropriate adjustments; due to the extremely weak tax base and insufficient ad valorem tax revenues, the town should consider the imposition of a utility tax on electric, gas and water services to provide a stable source of revenue; due to the continual late nature of Century's annual financial audit, the mayor and president of the council should meet as soon as possible and enter into an engagement letter.
An engagement letter to Warren Averett agreeing to pay $30,000 instead of the initial $21,000 was approved at the Monday, June 3 meeting. The company sited 'added complexities and increased audit risk with several known factors that will require us to expand our audit procedures to address…...includ[ing] concerns over the utility billing cycle and other specific concerns noted in the grand jury report' in a letter to town officials on May 31, 2019.
At the following council meeting last Monday, Councilwoman Ann Brooks told the council she had received a phone call from former long time Gulf Breeze City Manager Edwin “Buzz” Eddy, who retired in 2017, offering to work with the town to address the problems and get the town back on track. Council members discussed where the money would come from to pay Eddy and what the scope of work would be, although no action was taken.
Councilman Luis Gomez suggested a special meeting with Eddy. Brook told the council she would invite him to the next council meeting at 7 p.m., on Monday, June 1, to discuss his assisting the town.
“It was very good meeting,” said Century Mayor Henry Hawkins. “I concur with most of the stuff he says. We're moving in the right direction to get the charter redone and a lot of things redone. They're seriously looking at his recommendations.”
