The Ballinger City Council tax rate adoption meeting was contentious almost from the beginning. With property valuations going up 80% or more in recent years and now the city wanting to go back to their rollback tax rate, things have become heated at every council meeting. Valuations in the county increased over $66,000,000 dollars and valuations for the City of Ballinger increased over $16,000,000.
Numbers include the water fund, the general fund, government fund, etc., on the audit reports. A full look at all of the reports over the last 4 years, which show that the city has had financial issues long before Turney got here. The other point is that Turney arrived after the budget for the year had already been adopted by city council so his efforts would be limited to some extent until the end of FY 2019.
The findings from the city’s auditor, Gayla Fullerton, show that the city has rarely been in a positive financial position since 2015. In 2015, former city manager Bryan Grimes had 3 CDs cashed out on September 22nd, 8 days before the end of the 2015 fiscal year. This was to cover expenses for paving projects, equipment and other work so the money was put into the general fund.
Fullerton’s opinions, on page 63 of the 2015 audit states: “A significant audit adjustment is a proposed correction to the financial statements that, in my judgment, may not have been detected except through my auditing procedures. Several leases have been classified as operating leases, however based on FASB Statement No. 13 these leases are determined to be capital leases and therefore assets. Assets have been adjusted by $455,679 to reflect capital leases. The existence of such material adjustments indicates that the City of Ballinger’s system of controls did not detect and prevent such errors.”
On page 64 of the 2015 audit report, it states, “The City incurred expenditures in excess of approved budget amounts in numerous accounts.” The report made a couple of recommendations, one of which was: “Management and those in charge of governance should closely monitor expenditures in comparison to budget amounts. Department managers should make purchase only after examining funds availability.”
• June 2015 had a deposit of $357,907.21 with a withdrawal of $412,912.12 for a negative $55,005.21 balance.
• July of 2015 shows a deposit of $348,773.40 compared to a withdrawal of $323,149.13 for +$25,624.23 for the month.
• August 2015 shows deposits totaling $363,873.64 compared to withdrawals of $478,029.46 for a negative $114,155.82
• September 2015 had deposits of $708,553.37 and withdrawals of $418,967.44 for a positive $289,585.93. This was also the month that the CDs were cashed out for $360,000.00.
• October 2015 had deposits of $350,207.70 and withdrawals of $439,024.08 for a negative $88,816.38.
• November 2015 had deposits of $550,156.07 and withdrawals of $606,638.21 for a negative $56,482.14.
All of this left the city with a balance of $751.41 in late 2015.
The 2016 audit says that 2015 had a combined fund balance of $101,365. But there are other factors to consider, such as how much money the city had towards the end of 2016, even with the cased out CDs.
The fiscal year 2016 audit showed that the city ended with a combined fund balance of $315.882. The city had already started receiving repayment for a $225,000 grant where they had to pay for the work then submit receipts to receive the money. Between the grant repayment and the CDs, the city had $585,000 to work with, which is said to have been needed for an extensive paving project and the equipment.
During the tax rate hearing, Justin Busenlehner of Ballinger presented a document he said that he compiled through information requests to the city. His document says that there was $297,610.80 in the general fund in August of 2017. The actual auditor’s report for 2017, on page 4, notes that, “As of September 30, 2017, the City’s governmental fund had a [sic] ending balance of $60,634.” This, according to the document was, “… a decrease of $140,189 from the previous year.” The document that Busenlehner created also says that Bryan Grimes left November 30th, 2017 and that there was a negative balance of $46,593.10 in the city with a negative balance of $10,088.17 in the General Fund and a negative balance of $28,223.67 in the Water/Sewer Fund. On page 9 of the official auditor’s report from Fullerton it states, “As of September 30, 2017, the City of Ballinger had $5,811,652 in notes and bonds payable.” Auditor’s reports can be complicated but page 18 shows how the city ended up with only $60,634. According to the report, on the same page, the fund balance on October 1, 2016 was the $315,882. This left the city with a loss of $255,248 between October 1st 2016 and September 30, 2017. The difference with Busenlehner’s figures is that he shows that the city had $146,842.52 in the city’s fund. This differs significantly with the official auditor’s report.
Turney began work as city manager in August of 2018. He has been under fire several times after he took over. According to the auditor’s report, he had little money to work with at the time. The city had no reserves due to the CDs being cashed out and the grant repayment money being spent on various projects and for payments for a police vehicle loan ($61,601.38) and the Ballinger Community Center loan ($105,852.09), as well as equipment payments. According to the 2016 audit, on page 31, it shows that the city had “Notes payable” for a bulldozer with an annual payment of $28,640 and that will continue through May 5, 2020. Another payment is for a grader and backhoe with annual payments of $47,067 that would go through November 5, 2018. Another piece of equipment was a Bomag Roller with an annual payment of $18,334 through 10/15/2019. A police car annual payment is $9,480 until October 1, 2021. A brush truck has an annual payment of $19,000 that will continue until 2023. This alone totaled $122,521 when Turney took office. If the Grader and backhoe were paid off on time, then the city still has $75,454 remaining in annual payments.
On the paperwork that he prepared, Busenlehner said that the general fund is at a negative balance of 524,455.73. The columns on his paper aren’t labeled so with such a disparity in numbers between him and the auditor, it’s difficult to see how he came to his figures. According to the official auditor’s 2018 report, on page 5, the city had an ending net position of $769,916. Page 3 of the report says that, “As of the close of the current fiscal year, the City of Ballinger’s General Fund reported an ending fund balance of $769,916.” The report also shows the water fund, “In the Water Fund, the September 30th, 2018 net position reflects $281,681 of unrestricted equity, which is a decrease of $102,393 from 2017.
Busenlehner also created a paper, “expenditure [sic] report for items charged to NOT IN BUDGTE [sic].”
The list is lengthy and is available on the newspaper Facebook with multiple documents from the auditor’s reports as well as a copy of the Texas Ranger investigation into the CDs that found no wrongdoing. Turney prepared the paperwork and worked with Fullerton to track down and find how the funds were spent, but it hasn’t helped with the chaos that is at city hall now. The city spent $9,000 and as previously reported only received a review of their controls and processes rather than an audit. According to Busenlehner, the documents show that the city had $220,253.56 in expenditures not included in the budget. Turney disagreed with Busenlehner’s findings. He said that city secretary Bonita Shields provided those numbers to Busenlehner and that they did not reflect the fact that Dorothy Dankworth paid $5000 of the total for the fountain. Turney also said that the Ballinger Rotary Club donated $5000 the scout hut renovations. He said that other calculations were off because of manpower or other factors. The “Fund View” for $39,250 on the document is the city’s new bookkeeping program that was used to replace the older system. Fullerton had made recommendations to updating procedures in some of her audits and some of her letters regarding the city’s processes. Another item, Nixle, is the emergency alert system that the city set up so that people in the area can be notified of emergencies, such as the tornado that struck in May and was on the ground for 19 miles as it tore through the county and Ballinger.
The turmoil has continued council meeting after council meeting. Earlier this month the council listened to employee complaints about Turney. They went into Executive Session for over 4 hours and left without taking any action. At the next city council meeting over 150 people showed up to voice their opinions, with the majority of them urging the city to retain Turney. Originally the meeting was going to go into Executive Session but according to the Texas Open Meeting Act, if Turney, as the subject of the meeting, requested that the meeting be open, it had to be open. Turney did request that it be open and the council voted unanimously 5-0 to retain him. After that meeting there were rumors that the Texas Rangers and sheriff’s department were going to investigate Turney because some of the employees, who had made the original complaints, now had different complaints that they say that they didn’t report the first time.
Turney was asked about Busenlehner’s numbers and said that the fund with $288,177.48 in the red was an accurate description of the city’s currently financial situation. He said that the $901,226 is not accurate and doesn’t know how Busenlehner arrived at that figure because some of the calculations and totals in the other funds are incorrect.
In response to criticism from those in Ballinger, Turney said, “When I came in here, the budget was already made. I had to ride it out. I could have said that we need to make drastic changes now. Could I have been more fiscally responsible? Sure. Of course. I could have stepped in and immediately made drastic changes instead of riding out the budget that the council had already approved. I’ve never made any bones about the fact that the city’s financial situation hasn’t been good. We’ve lived hand-to-mouth. This started long before I came onboard. The goal is, and has always been, to get the city back in the black. People need to know that. You can’t come into a negative financial situation like the city was in and immediately turn it around, especially when you have no reserves to work with and after the council has already adopted the budget for the upcoming year. It takes time, it takes cuts, it takes a lot of work.”
One area the city wasn’t making progress in was the collection of outstanding water bills. There was no collection service and the city, prior to Turney, didn’t make collecting on some past due water bills a priority.
The city’s credit status, according to Moody’s, was approaching junk status in 2017 and in junk status in 2018. Turney came onboard about 6 weeks before the end of the fiscal year and evidently had little impact on the credit rating dropping due to his short amount of time in office.
Many documents from the audit reports, letters from Fullerton, Moody’s Credit Reports, city council minutes, auditor recommendations, and the documents created by Busenlehner are on the newspaper’s Facebook page.
At the council budget meeting on September 16th, Turney said that the city had decided to keep last year’s tax rate. Turney said that due to the increase in valuations and the input from citizens that the city decided to keep the 2019 tax rate and to make budget cuts where needed. The budget proposal was presented and will be finalized on September 20th.