City adds no new debt; pays off $1M on loans

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By Stephen Thomas

 SHEPHERDSVILLE - There was a day, not long ago, that the word "audit" was a bad word in the city of Shepherdsville.

Today, that's no longer the case: The Shepherdsville CIty Council welcomed a new audit, one that shows no new acquired  debt.

Jason Strange,  representing Smith & Company CPA's, PLLC, presented the city's official audit to the council.

According to Strange, featuring numbers up to the end of the 2012-13 fiscal year ending on June 30, the city has made improvements on its existing debt over the past three years.

"In our opinion, it's all square," Strange said. "It's a good, clean audit opinion."

Shepherdsville instituted an ordinance that required a city audit to be presented to the council annually, prior to Dec. 1. The ordinance was created to keep city officials abreast of financial issues through an independent outside agency.

City attorney Joe Wantland credited council member Bernard "Bernie" Brown for his efforts to establish the ordinance.

"We're way over a million dollars in debt reduction, and there's no new debt," Wantland said.

According to the audit, the city's internal control in past years did not identify adjustments to capital assets or compensated employee absences, as well as adjustments to its long-term debt.

The audit determined that the city controller, Bob Ryan, was a certified public accountant, which helped to identify adjustments and work with the city treasurer to move forward.

"I thank Ryan for his hard work," said council member Gloria Taft. "As the city grows, we need more money."

The audit showed that a previous year's audit required the city to establish sinking fund accounts, along with depreciation reserve accounts and repair/replacement accounts, to comply with debt financing agreements.

According to the audit, the city has come under compliance in that area.

As of June 30, the audit showed the city with $1,471,000 in bank deposits exceeding the FDIC insured limit of $250,000. If the bank holding the city's accounts were to fail, the city could lose the excess money.

The audit showed that the city has since pledged additional collateral to cover the deposits, in compliance with KRS 41.240.

Brown and council member Faith Portman were on the city council in 2011 when the city appeared to be on the brink of bankruptcy. Both expressed their satisfaction in the financial turnaround.

"It was chaos in 2011," said Portman. "We only had a few employees in the public works and sewer departments. The police and fire departments had to cut back. The council took pay cuts. It was a mess. We've come a long way, and thanks to our city employees."

"Three years ago our public works and sewer departments were understaffed," said Brown. "(Public Works director) Claude Middleton and (Sewer Department director) Chuck Keith did what they could. Those people are dedicated, and it means a lot to the city."

"I'd like to thank the individual city departments for getting their financial numbers to the council," added council member Dana Bischoff-James.

The positive audit does not mean that the city is debt-free; rather, it means that there was no new debt acquired during the 2012-13 fiscal year. The city continues to pay off substantial debts accrued over the past years.