Cash flow becoming an issue for West Pelzer


By Stan Welch

The pressing question facing West Pelzer Town Council is whether enough revenue will come in between now and the final passage of the 2015-2016 budget to allow the town to make payroll and continue to function.

The repayment of the town’s current $40,643 tax anticipation note (TAN) is due on April 15.

While the town has the money on hand to meet the obligation, it leaves the town in a very tight situation. Figures indicate that the current week’s payroll, which totals approximately $5000, is on hand. Whether the money will continue to be available after that depends on cash flow.

Appropriately, cash flow problems are the reason that the TAN was executed in the first place. While the town has managed a balanced budget for the last several years, the times at which the town’s revenues come in do not lend themselves to a smooth operation. So last year the Council approved a TAN in the amount of sixty thousand dollars.

The town essentially borrows money from itself, and repays the loan, and attendant fees and costs, when the revenues come in. That original loan is due this week.

The council has already acknowledged that it will have to execute another TAN this year, but has also conceded that spending cuts must be found in order to make further use of the TAN unnecessary.

The second TAN, which would relieve the cash flow problem, cannot be executed until the next year’s budget is approved; an event unlikely to occur before the end of June.

To that end, Mayor Peggy Paxton has pledged to cut at least forty thousand dollars from the budget for the coming year. Monday night, she reiterated that pledge, after explaining that almost fifteen thousand in cuts has already been found. The police department has relocated to the Town Hall, ending its lease for the former office on Main Street. That savings totals approximately ten thousand dollars.

The Cintas contract for uniforms and other services, has been ended, saving an additional $4500. Paxton reported Monday that she is waiting on financial information from various sources, including Duke Energy, before bringing additional spending proposals to the Council. A budget workshop will be held when the information is available.

Discussion of a possible merger of municipal court arrangements involving West Pelzer and Williamston has been disrupted and delayed by the recently announced retirement of Judge Sherman Woodson, who had been serving both towns in that capacity.

Paxton made no effort to sugar coat the challenges facing the town. “We are cutting things we really need in order to get by. But I have said I’ll find forty thousand in cuts, and I will.”

Councilman Jimmy Jeanes reiterated his desire to maintain the police department at some level, and agreed that the Council must sit down together and find ways to make the needed cuts. “I don’t know how we’re going to do it, or what we can find to agree on, but we have to sit down and work something out.”

Another significant financial dilemma faces the town, as Jeanes also pointed out. The only bid received for the scheduled second phase of the town’s sewer upgrade project came in at more than $1million above the amount available for spending.

Considerable delays in the project account in part for the increased costs. The Town Council is faced with two choices, and then, only if the Rural Development Authority, RDA, approves of them.

RDA is the federal agency that provides funding in the form of grants and/or loans to municipalities like West Pelzer. They also determine the rate structure in the town to insure that the funds can be repaid in a timely manner. The Town, which is already approved for two million dollars towards the project, is considering restricting the project to the extent that is currently funded, rather than seeking the additional one and a half million dollars needed to complete the project.

In the interim, the town has applied for the additional funds, because there was a deadline to do so. Whether RDA and ReWa will accept the reduced project as a viable alternative is a question that has yet to be answered. As to the funds, if they are available, the percentage of grants funds to loans is a crucial issue in determining how much higher the water and sewer rates in the town might rise.

For now, the town can only sit and wait for answers.

At the start of the meeting Monday night, the agenda was amended in order to allow for a discussion whether or not to plant flowers in front of the Chapman Park sign.

Jim Riddle, who has been active in organizing a proposed series of public events at the park, asked that additional hospitality tax revenues be used to purchase and plant some flowers to make the park more attractive and noticeable.

That led to a discussion of installing a water line to allow for irrigation of the plants. Following a general discussion among the audience, and the estimation by town public works employee Jeff Pearson that a properly installed line could cost as much as five hundred dollars, it was decided that a thousand dollars would be equally allocated from the existing funds for the concert series and the water and sewer department to purchase, plant and maintain the flowers.

The plants are expected to be planted in time for the upcoming inaugural event in May.