A recent review of Hamilton County finances has caused a 22-year-old sewer debt to bubble back to the surface.
An audit of the county’s 2014 Comprehensive Annual Financial Report found that the county needs to put in place a plan to collect $6.5 million from the Hamilton County Water & Wastewater Treatment Authority.
In 1993, the county loaned the money to the WWTA to get started — with the understanding that one day, the taxpayers would get their money back.
That has never happened.
And Mayor Jim Coppinger said it’s not likely to happen soon, either.
“The bad part is the debt is on our books. At this point, we are not looking at doing anything but continuing to carry that debt,” he said Friday. “It was originally designed for them to pay that back, but as [the authority] got larger, it’s got more difficult for them to pay it back as they took in the other municipalities.”
Coppinger said WWTA’s money is tied up in expanding sewer services and laying lines.
“We could write off the debt. But we are hopeful that one day they will be able to pay it,” he said.
WWTA Executive Director Cleveland Grimes could not be reached for comment because his office was closed for the Good Friday holiday.
Aside from the decades-old sewer debt, the independent auditor found some “material weaknesses” in the county’s financial reporting.
That sounds scary, but it only means the county catagorized three funds differently than accounting standards say it should.
In 2014, the county labeled its school activity fund, sheriff’s fund and the juvenile clerk’s funds as special revenue funds.
The auditor found they were more accurately described as agency funds or part of the county’s general fund.
County Finance Director Albert Kiser said the auditor language “sounds much worse than it really is.”
The state has known for years how Hamilton County has been categorizing the sheriff and juvenile court funds, and they haven’t had an issue.
But this is the first year in about a decade that Mauldin & Jenkins has performed the audit rather than another firm, Kiser said.
“All it is, is moving [the money] from a fund all itself into the general fund,” he said.
At the same time, the county didn’t report about $3.7 million in equity it had in the Carter Street Corp., the city-county entity that owns the Trade Center. As a result, the county should have added that amount to its governmental activities fund.
The county’s education department was not spared, either. According to the auditor’s findings, the school system misreported about $7.5 million in property tax revenue as another type of income.
None of the findings indicated the errors cost the county any money, Kiser said. Ultimately, the county agreed and made the changes.
The County Commission held its first official audit committee meeting last week and named Chester Bankston as chairman. The committee is slated to have its first business meeting on Wednesday after an agenda session.
Contact staff writer Louie Brogdon at lbrogdon@timesfreepress.com, @glbrogdoniv on Twitter or at 423-757-6481.