City Finances, Co-mingled Accounts Addressed

By Will Johnson
Messenger Reporter

ELKHART – With the firestorm of controversy the Elkhart City Council has found itself in over the last several months, an invitation was extended to Mayor Mike Gordon, Mayor Pro Tem Billy Jack Wright, Elkhart City Secretary Carla Sheridan and City Attorney Blake Armstrong to clear the air.

The city leaders accepted the invitation and on Friday, July 28, they sat down with The Messenger to discuss a wide range of issues facing the city.

The first part of this article covered the recent turnover of the city council and issues surrounding the relationship between the Elkhart Volunteer Fire Department and City Hall.

The second part of this article covers the city finances and the possibility of a future tax hike.

A question about where the city stood as far being able to start moving forward was answered by City Secretary Carla Sheridan.

“I would say we are a long way from it. Again, the oversight and not paying a lot of attention to matters that should be basic to running a city were overlooked,” she said.

She provided an example about franchise fees owed to the city which had cost Elkhart “… revenue the city needed, but we lost. The lack of separation between the water fund and meter deposit fund caused inaccurate numbers in the water fund.”

Sheridan explained all accounts should have at least a three month reserve but said peeling back the convoluted structure had helped increase the balance in all accounts.

“The accounts need to stabilize and grow,” she added.  “However, you’re looking at over $2 million of work the city needs to do on its wastewater plant, wells and water lines. We’re not going to get there overnight. The ordinances need to be looked at, reviewed and updated,” Sheridan said. “We need to go in the direction of getting a website. That is something I am working on now and hope to present at the next council meeting so all our citizens can see actual documentation and the facts.”

She cautioned it may take upwards of five years for the city to get “… it’s head above water.”

The city secretary stressed she felt the current council had needed steps to straighten out the city financials. Sheridan said the city’s previous outside auditor had recommended hiring a bookkeeper but no action had been taken until recently.

“Had we done that a long time ago, we might not be in the mess we found ourselves in. We are a long way from where we need to be,” Sheridan said.

Mayor Pro Tem Billy Jack Wright said “… it was an ongoing, repetitious practice” from past councils which helped lead to the intertwined accounts the current council is dealing with.

As the meeting continued, it was mentioned an increased revenue stream would significantly help the city. One way to increase city revenue is through a tax increase and the question was posed if the city of Elkhart anticipated a tax hike in the near future.

“I foresee that being a necessity, if some of the other items being handled now are not addressed,” Sheridan said. “It has been discussed before. No one wants to raise taxes but you do what you have to do.”

She said there were ways around a tax increase but emphasized the account structures currently in place needed to be cleaned up first so actual dollar amounts could be seen.

“We’re paying for mistakes that were made years ago. That’s what hurts,” Wright said.

“Elkhart is a poor city,” Mayor Mike Gordon said. “I hate raising taxes just like everyone else, but that might be our last alternative. We don’t want to, but we may have to.”

As the discussion neared its end, a question about what the future holds for Elkhart.

“To me, it’s a battle. It’s a thankless job, but we’re willing to come in here and do our job and try and improve this city. The only way we can go is up. We’re taking little baby steps and we can see the light at the end of the tunnel, but it’s a long tunnel. We have a lot of stuff we’re doing and we’re starting to chip away at it,” the mayor said.

“I see it going in the direction the taxpayers choose for it to go in,” Sheridan said. “They can either start coming to the meetings and getting accurate facts or they can believe the social media posts versus the accurate documentation.”

Will Johnson may be contacted via e-mail at wjohnson@messenger-news.com.