Council approves using Local Option Sales Tax revenue to catch up back payments for gas, water and sewer
The Century Council Tuesday night approved the use of more than $219,000 from Local Option Sale Tax (LOST) funds to catch up on payments, one three years behind, after a recent meeting with the town auditors, to respond to the Escambia County (Fla.) grand jury's findings last summer.
Century CPA Robert Hudson met with Warren Averitt Audit Services representatives and others regarding the audit for the town of Century last week to discuss the audit findings.
Hudson said they discussed the best ways to utilize any infrastructure money.
“For the relocation of the gas line, we borrowed $498,000 and did a bond issue to do that,” said Hudson. “We make annual payments to do that and we are behind on those payments. One is coming up in June.”
Hudson said the town can use the money it has available through LOST funds at the state board of administration to pay that. Hudson said he discovered recently in the meeting that LOST funds can be used for things the town was under the impression it could not use that money for. He said once the town has responded to the audit findings, they can attest that they've paid the money, which will look good, as far as corrective measures.
“It's a little bit stronger to any finding to say that's already been corrected, instead of that we are going to get to that,” said Hudson.
He suggested use of LOST funds, about $994,000 available right now, for payment on the sewer water bonds to rural development beginning in 2020, which is approximately $95,000 to $98,000 a year they are paying on water sewer bonds. He said the town has a have a debt service that is coming out of their operating money.
“By utilizing the LOST funds to make those payments, it frees up $100,000 for equipment and other needs for council to designate for the water sewer funds and begin to build up council-designate reserves,” said Hudson.
He also suggested approval to utilize LOST funds on the state revolving loans in the water funds, which is an additional $25,000 that comes out of operations of the water fund.
He said this is not permanent, but doing it will allow the town to accumulate money into a reserve account and have for utilities.
A motion was made by Councilman Luis Gomez to approve the use of LOST funds for: the back payments on gas relocation bonds in the amount of $32,083 a year for three years, or $96,249; for payment of $95,000 to $98,000 on the water sewer bonds to Rural Development beginning in 2020; and for payment on the state revolving loans in the water funds for around $25,000, which comes out of the operations of the water funds. The motion was seconded by Councilwoman Sandra McMurray Jackson. The motion carried unanimously.
Gomez asked Hudson how the town got behind three years on the gas relocation payments.
“The gas has no money,” said Hudson.
Jackson asked Hudson how long the money been available. Brooks said the LOST funds have been available for a long time, but that the recent meeting revealed the funds could be used for loan payments.
Hudson said the approval of these payments would get it caught up and the town could respond to the findings that the debt on the bonds is up to date.
The council will hold a workshop to go over the audit at 6 p.m., Monday, Feb. 17 at Century Town Hall.
