Cloverdale finances point of contention for council members

CLOVERDALE -- Tension ran high at the Cloverdale Town Council meeting Tuesday evening following several months of disagreement between board members.

The issue of town finances was again addressed following remarks from council President Don Sublett who disputed previous statements by board member Dennis Padgett concerning Clerk-Treasurer Cheryl Galloway.

Padgett had been previously stated in a heated argument that during the first two months of this year Galloway had spent more than $80,000 on Khron and Associates, a firm which helps with balancing the town's finances.

"Mr. Padgett said that Cheryl spent over $80,000 in the first two months of the year," Sublett said. "She did not spend $80,000. I find your remarks in error, Mr. Padgett, and very disrespectful."

According to town claims records, in the first two months of the year only $26,150 was spent. However, over the course of a little over a year, $85,620 was spent.

"I totaled up $85,620 that we spent in 15 months," Padgett said. "These are her (Galloway's) exact numbers. She made the statement that she spent over $80,000. This is the problem with the money here."

Council member Coweta Patton also spoke up, standing up for Galloway during the meeting, complimenting her on the hard work she has put in since she was elected.

"Cheryl knew what Khron and Associates was and wasn't doing. She (Galloway) has worked night and day. I can't tell you how many times I've driven by here and Cheryl's car is parked out here," Patton said. "It's been just Cheryl or her husband helping her free of charge."

The Keystone Maintenance agreement was also a point of discussion as the town is due to renew its contract. The current contract will expire in September.

To renew for a year would cost the town $12,170 as well as $6,750 to update the software, which is needed for all the town's financing.

The council could not agree on whether or not to proceed with Keystone for another year and tabled the item, which will be discussed in a special meeting on Tuesday, July 23 at 7 p.m. The council hopes to explore other alternatives in hopes of finding some savings.

Galloway also gave the board some welcome good news as the town recently received $12,866.76 from the state's Riverboat Fund, which can be used on almost anything.

The council also got some welcome news as the town can finally move forward with the Food and Beverage Tax, something officials hope will generate some much-needed extra income.

The council agreed to pass Ordinance 2013-4 Food and Beverage Tax, which just establishes the tax itself.

The ordinance allows the town to collect one percent of the gross retail income received from taxable food and beverage transactions.

The food and beverages that the tax applies to anything that is furnished, prepared or served by a retail merchant. For example, anything that is sold that has to be heated or food sold at a deli counter at a grocery store will be taxed.

Merchants will then pay the sales tax to the Indiana Department of Revenue, who will then pay the money out to Cloverdale.

In order to pay the town the money it is entitled to, the council also established a Food and Beverage Tax Receipts Fund, Resolution 2013-7, which passed unanimously.

Back in 2009 the council at that time created an ordinance to establish a town court, Ordinance 2009-11. However, this ordinance was never recorded at the Putnam County Courthouse and council members began discussion Tuesday evening about the possibility of making the town court a reality.

The council was informed that the ordinance had to pass within a year of creating the court through an election and therefore it must create another ordinance if it wishes to proceed.

Although no ordinance was created Tuesday evening to re-establish the court, council members gave the impression that they will be passing a new ordinance in the future.

The council will also be interviewing a financial consultant during the special meeting on July 23.

The consultant itself has been a point of contention between board members as some see it as spending money they don't have on something.

"I've been on this board since about 2006 and it seems like over the years the clerk uses the financial consultant as a bookkeeper and not doing her job," Padgett said. "I don't mind having a financial consultant, but what are we getting out of it? I understand we're a mess, but why are we in a mess? A pencil works fine. It's a lot of money.

"It seems like we want to hire this help out that we don't have the money to pay for. You've got to have a little common sense with this stuff."

Town Attorney Alan Yackey advised Padgett that although Cloverdale previously had Khron and Associates as an accountant, it was not a financial consultant.

The new consultant that the majority of the council hopes to hire will help look for grants, ways to save as well as advising how to spend the town's money in such ways as refinancing.

Curry Engineer Lori Young also gave the council an update on the Doe Creek Lift Station, which was previously funded with a grant.

The council officially received the certificate of substantial completion.

"The lift station is working well," Young said.

Young also provided the council with two change orders, which were never previously presented. Both orders related to adjusting prices for work done to complete the lift station.

Young brought good news to council members, informing them there was nearly $3,200 left over in the grant, which the town could use on other work that may be needed in the town.

It was suggested that Utility Manger Rich Saucerman use the extra money for the replacement of the manhole at the American Legion.

The next town council meeting will be on Tuesday, July 23 at 7 p.m.