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WINTERSVILLE -- On Thursday, a visiting clerk from the state auditor's office told Wintersville Council of a variety of errors made in past budgets prepared for the village, errors she said could have resulted in costly mistakes in the future.
"The budgets were technically over-inflated," Melanie Smith told Council, adding for the 2023-24 budget, she has removed about $4 million in contingency funds that weren't backed by actual money.
Smith, who was hired by the village following the departure of the village's administrator and fiscal officer, said the village's past financial projections reflected a zero budget approach.
She said the approach, which involves allocating all available funds, isn't illegal and it's not unheard of, but it's more financially sound for a municipality to carry over at least one-fourth of its budget for the next year.
Smith's arrival also followed the discovery the village owes about $138,368 in taxes owed for 26 of 72 parcels owned by the village and dating back to 1968.
Village Administrator Jessie Kosegi, who was hired in January, said he found notices for the delinquent tax payments in a locked drawer in the Village Building.
Smith said the village has owed taxes for at least 30 parcels since 1994. She said the amount owed for interest and penalties for non-payment hasn't been determined.
But she said the village, as a government entity, could have filed for an exemption leaving it liable for no more than $2.06 per parcel.
Smith said the village may seek a refund for the last three years only.
"How much we don't know," she said, adding village officials have been encouraged "to tighten their belts" in preparation.
Asked by Councilman Randy Spence if the village is fiscally sound, Smith replied, "Yes, you're lucky."
Later she said, "Is Wintersville in a bad situation? No, there are things that need to be tweaked."
Councilman Jason Mattern asked, "Is there any money missing? Any that looks like it's been stolen?"
Smith said the records indicate funds were misclassified, rather than removed.
She said after spending many hours dissecting the village's financial records, she found many examples.
Smith said revenue for the water and wastewater departments wasn't always directed to the appropriate department, as required by the state, and street crews who assisted with line breaks weren't always paid from the utility department's funds.
She said an employee who transferred from one department to another continued to be paid from his former department and no retirement fund had been established for a state loan taken for a major sewer project.
Smith said it was discovered that employees often were punching in for work early and out late. She said while the daily difference might only be minutes, the cost in overtime for the year could amount to thousands.
Spence noted the time clocks were implemented more recently, staff having signed in previously on paper.
He asked Smith why annual audits by an independent entity didn't produce such findings.
Smith said reports from such audits advised village officials of such discrepancies but council either wasn't informed or didn't understand.
She said a handbook, videos and in-person training in proper budgeting is available.
Mayor Mike Petrella said earlier Smith was hired to assist in developing the 2023-24 budget and to train a new fiscal officer.
On Thursday, she told council, "My goal is not to stay here. All I want is to clean it up and train the next person."
Petrella and a number of council members thanked Smith for her efforts.
She noted council met at midnight last Friday to ensure the new budget was submitted by its deadline.
Council met initially on March 30 to approve three readings for it. But Village Solicitor Jake Linn realized the meeting lacked three-fourths of council needed to suspend rules requiring readings at separate meetings.
As a result, special meetings were called for Friday afternoon and night to perform the task.
In other business:
— Council approved the final readings for amended ordinances addressing high grass and the parking of trailers, watercraft and other untagged vehicles or any inoperable vehicle. In both cases, residents now will be given 10 days to remedy the situation before being cited.
Through action by council in recent months, such violations will be investigated by a public nuisance officer appointed by Police Chief Lou Vandeborne.
While the change reduces the time in which residents must act, an appeals process remains available to them.
— Council approved the second reading of an ordinance changing the position of village building inspector to code enforcement officer.
— Council approved a raise for the foreman of the village's water department, as was done earlier this year for staff recently promoted to foremen of the village's other departments.
— Petrella said signs have been ordered for Beechwood Drive and Beechwood Boulevard. A resident recently complained that delivery services and others frequently confuse the two adjacent streets.
— The mayor announced council's next meeting will be held at 7 p.m. April 20.