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Short Saratoga Town Council meeting sees heated discussion over changes in fund balances, motion to declare certain funds restricted denied
“I think it’s this council’s responsibility to hold the reins on the finances. It’s not the responsibility of our accountant nor, honestly, is it the responsibility of the Town staff.”
This comment from Councilmember Jon Nelson came during a heated discussion among members of the Saratoga Town Council during their April 21 meeting. That discussion took up the bulk of the limited meeting and centered around changes made to the Town’s financial statements between February and March. Notably, the discussion took place in the absence of the town clerk, Suzie Cox, who left the council chambers following a motion made by Nelson.
Ch-Ch-Changes
The concern raised by Nelson related to multiple enterprise funds, which have been the subject of ongoing debate as the Town of Saratoga works to complete their audit of the 2019/2020 fiscal year. In his initial comments, Nelson stated that funds that saw “marked changes” to the cash allocation included:
• The water fund with a prior balance of $1.38 million and a new balance of $584,000
• The sewer fund with a prior balance of $713,000 and a new balance of $301,000
• The landfill fund with a prior balance of $125,000 and a new balance of $54,000
• The weed and pest fund with a prior balance of $394,000 and a new balance of $146,000.
After reading off the funds and the changed amounts, Nelson asked what had led to the major adjustments. Cox informed the council that she and treasurer Sammy Flohr were aware that some changes were being made by James Childress, the Certified Public Accountant engaged by the Town of Saratoga. Nelson responded that he believed those changes were made by treating the funds as unrestricted.
“They are not unrestricted. They are always restricted funds. They’ve always been restricted funds,” said Cox.
The discussion of whether or not an enterprise fund is a restricted fund has been another ongoing debate. On April 7, Nelson appeared before the Board of Carbon County Commissioners (BOCCC) with concerns regarding funds for by the Saratoga-Carbon County Impact Joint Powers Board (SCCIJPB) that are managed by the Town of Saratoga (see “Taxation without representation?” on page 2 of the April 15 Saratoga Sun). At that meeting, it was stated by BOCCC Chairman John Johnson that it was “pretty clear” that enterprise funds would be restricted.
Following Cox’s statement, Nelson made a motion that the Saratoga Town Council affirm that no direct or implicit approval had been given by the governing body currently or prior to transfer enterprise funds into the general fund and that those transfers had been performed without council approval.
Nelson’s motion also sought to classify the following funds as restricted; water fund, sewer fund, airport fund, landfill fund, community center fund, Bridge Street reconstruction fund, ARRA meter project fund, 2019 Specific Purpose Tax Fund, and weed and pest control fund. Additionally, Nelson’s motion required that all due to/due froms be recorded in the financial statements.
Under discussion of Nelson’s motion, Councilmember Bob Keel asked if Nelson was looking to make it the stance of the Saratoga Town Council that the funds listed in his motion were to be considered restricted. Nelson stated that was his intention and it was his opinion that the financial report given to the council proved that reclassifications of the accounts had been made to allow for the current account balances.
“I think it’s important for this council to take a position on this and we want to protect those funds for the purpose for which they were intended. That we represent to our constituents that when we charge them a water fee, that’s going to water and that when we charge them a sewer fee, that’s going to sewer. Landfill’s the same and weed and pest control would be the same,” said Nelson. “That it’s important that we live up to that and we not usurp that money into the general fund to offset a general fund deficit.”
This statement from Nelson was in reference to a February 28 email sent from Childress to the Town of Saratoga in which he states that the general fund for the period of 2014 to 2018 had been experiencing overruns. Childress added, in that email, that he believed the financials supported his understanding that money had been transferred from the enterprise funds into the general fund.
“In truth, the general fund was relying on outside inputs from other funds to satisfy its disbursements,” Childress wrote.
In that same email, Childress informed the council that the enterprise funds had been showing an unrestricted status through 2018.
As discussion continued, both Councilmember Steve Wilcoxson and Councilmember Judy Welton encouraged the idea of waiting for Childress to finish the work he had been directed to do by the Saratoga Town Council. As was reported previously (see “No body, no crime” on page 16 of the February 26 Saratoga Sun), the council directed Childress to integrate adjusted journal entries and examine the airport, landfill, water and sewer funds.
Ultimately, Nelson’s motion failed by a vote of 1 - 4 with the other three council members and Mayor John Zeiger casting the dissenting votes. A second motion was made by Keel, directing Welton to contact Childress about the changes made in the financial statements. That motion passed 4 -1 with Nelson casting the dissenting vote.
Offering explanations
Later in the meeting, Welton read from a text message sent by Cox explaining the changes in the funds.
“These funds are a result of Sammy (Flohr), Kelli and James and Cassell working on the reconciliation of the books. If we can get a report to the council, that will explain it better,” wrote Cox. “However, the way they have done the reconciliation have cleared up the cash allocations that we have been working on for some time.”
In emails made available to the Saratoga Sun on Thursday afternoon, Welton contacted Childress about the changes in fund balances between February and March the day after the council meeting. Welton informed Childress, “we were pretty well ‘beat up’ from Jon Nelson last night in the Council meeting and I told them I would get an explanation.”
It should be noted that the same email, which had been provided to the council at the April 24 budget workshop and was also made available to the Saratoga Sun reads “last night in the council meeting there were questions and I told the council that I would get an explanation.” Additionally, the top of the email is addressed to Cox from Welton and asks the town clerk if the emails can be printed as a whole for the council, adding, “I did some editing from the original emails. Let me know & I’ll bring them to the budget workshop.”
It also appears that the correspondence from Welton to Childress were not the only parts of the email that were changed. Correspondance from Childress to Welton also appeared to have been changed prior to being presented to the council on Friday afternoon.
Under Title 16-4-201 of the Wyoming State Statute, a public record is defined as information that is created, accepted or obtained by a governmental entity in the course of its official function and transaction of public business. This includes written communication in electronic form at a meeting or outside a meeting.
According to Bruce Moats, media law attorney, the email between Welton and Childress is a public record and should not have been altered. Moats added that the changing of the phrasing constitutes a change of the official record of business done by the Saratoga Town Council and could call into question the credibility of other public records.
Childress, responding to Welton, stated that his office had made adjustments to conform to the June 30, 2019 balance in the draft audit report.
“The negative balances on the combined cash report we have seen in the past should be adjusted to conform to actual and this step is part of moving that direction,” wrote Childress.
In a later response, Childress proposed that Welton, Cox and himself discuss the financials prior to council meetings “to ensure they are communicating what they need to and you will have an understanding of what is taking place in these steps of the process.”
The next meeting of the Saratoga Town Council will be at 6 p.m. on May 5 at the Saratoga Town Hall.
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