Frankford approves budget, continues tower discussion


The Town of Frankford this week approved its 2016-fiscal-year budget, after some confusion.

Resident Greg Welch asked why the line item “operating transfer” for $29,210 was listed as going out of both the proposed General Fund Budget expenditures and the proposed Water Budget expenditures.

“Where is that being transferred to?”

“It’s kind of the intercompany transfer account,” said Councilwoman Velicia Melson. “It’s not necessarily $29,000 of expenses.”

Welch said the budget didn’t show the money going out and coming back in, but rather going out from each account.

“If we pay an expense out of the general fund that is part of the water, you have to book it into that operational transfer in order at year-end for the journal entry to pick that up by the accountant to make that adjusting journal entry, to do that adjustment between the two accounts,” she explained.

Melson said she, too, is a little confused by the process in regard to the line item adjusting for the income but noted there is a learning process.

“Because this is the first year we’ve had two separate budgets.”

Town Administrator Terry Truitt read an email from Jefferson, Urian, Doane & Sterner, P.A., the Town’s auditor, received after the Town requested a clear definition of the operating transfer account between the two funds.

“This is Tiffany Schrader’s response. She said, ‘It is basically funds that are general fund money but are ‘transferred’ to the water fund to pay expenses, or the other way, vice versa.

“‘So if the water fund is budgeted at a deficit, and the general fund is at a surplus, there is to be a transfer to effectively balance this budget. Transfer in on one side, out on the other,” the response said. "‘You don’t physically transfer the funds per say, but when you pay payroll, and there are payroll taxes and other entities of expenses, the funds will somewhat become general fund expenditures that create this transfer.’”

Welch said the items were showing an expenditure of $58,000 that doesn’t exist.

“You’re actually hiding $58,000 of revenue... I think it’s very clear that it’s not legit.”

Mayor Joanne Bacon admitted the discussion confused her.

Resident Marty Presley said the budget has to show the money going somewhere.

“It shouldn’t actually be in the budget — it should be a transfer,” he said.

“It’s voodoo economics,” said Welch.

Presley also said the pension match in the proposed budget looked off. Bacon said she noticed it, as well.

“It about doubled what it should be,” said Presley.

In the budget, public safety budgeted $10,000 for pensions, while $4,100 was budgeted for the pensions of non-public-safety employees, and $4,100 set aside in the water budget for pension matching.

Truitt said Frankford Police Chief Michael Warchol might have kept everything in the account because he didn’t have good working figures, as the Town is hoping to add another officer this year.

Presley said what was budgeted is a payroll of $166,000, which comes out to about $8,300 at the agreed upon 5 percent; however, the Town has budgeted $18,200.

Bacon said that, just working off of public safety budgeted wages of $89,000, only $4,450 should be budgeted for public-safety pensions.

Melson asked Truitt to confirm that any changes made to the budget would have to be advertised for two weeks prior to another hearing and a possible vote to approve the budget. Truitt agreed. She also stated that the budget would need to be adopted by July 15.

Welch said that in previous council meeting minutes, former town solicitor Dennis Schrader had said the budget would need to be approved no later than July 31, which is also what is stated in the Town’s Charter.

He added that the Town’s fiscal year runs from July 1 through June 30, and questioned why the council was approving the budget nearly two weeks into its new fiscal year.

“We’re already 13 days into this fiscal year,” said Welch.

Melson said she was not entirely pleased with the budget, as well.

“I will state that the budget is not 100 percent accurate. It is not how I would prepare and review a budget,” she said. “Given the time constraints…”

“That’s a self-imposed time restraint,” said Welch. “We’ve had all year to get this done. We had a time restraint in last year’s budget, and we didn’t have time to get it done right. Now we don’t have time to get it right again.”

Melson noted that the Town had been working on pension and healthcare issues, which impact the budget.

All council members in attendance stated that the budget process needs to be tweaked in the future.

“I think the whole budget process needs to be looked at differently next year. We need to get to a point where we’re comparing actuals instead of rolling year to year,” said Melson.

Melson motioned to adopt the proposed budget as published, with the public-safety pension to be reviewed and a possible amendment to reflect 5 percent of the salary.

The council voted 3-0 to approve the budget, with Council Members Charles Shelton and Jesse Truitt absent.

Town discusses water tower

The Town of Frankford is still mulling over what to do about the care of its water tower, after Steven Lewandowski of CABE Associates gave a presentation at the council’s July 6 council meeting regarding two refreshed bids to provide service.

In March, representatives of Southern Corrosion, based in Roanoke Rapids, N.C., visited the town and inspected the water tower. The company handles maintenance and repair for all Artesian tanks. Their estimated cost was $111,000, which includes pressure-washing the exterior of the tank, cleaning rusted areas, painting it and sterilizing the tank’s interior.

Pittsburg Tank & Tower Maintenance Co. of Henderson, Ky. also provided a refreshed bid of $190,576 for work to the tank; however, they did not visit the site.

Following a workshop in June, the council had requested CABE evaluate the quotes from the two difference maintenance providers.

“It was a little difficult because they weren’t apples-to-apples,” said Lewandowski, noting that, as Pittsburg’s bid offered substantially more services, in order to compare the two, they had deleted services from Pittsburg’s bid that weren’t in Southern’s in order to give a better comparison. “In doing so, the bids were actually pretty close. Southern was low at $111,040. Pittsburg’s bid was $115,145.”

The major items in both bids were the exterior and interior coating systems.

Lewandowski recommended the Town contract services with Southern Corrosion.

He noted that Southern Corrosion was proposing a 10-year contract; however, the bulk of work to be done in the first year.

“Then there would be an annual service for 10 years, at cost of $9,425 per year,” which would cover responding to emergency calls to the tank.

He noted that Pittsburg Tank & Tower Maintenance Co. did not provide any references, while Southern Corrosion did.

“They all gave very high remarks about Southern’s services,” he said. “We also learned that each one of those five references did not have a 10-year maintenance contract… Our point being that seems negotiable.”

Lewandowski recommended that the Town engage Southern Corrosion in conversation about an extended service contract, if that’s what the Town is interested in.

He added there are some services in Pittsburg’s bid that CABE recommends the Town discuss with Southern Corrosion, regarding safety and structural issues, such as the rods that cross the tank.

The council chose to table the discussion until a town solicitor is hired, and an inquiry is made as to whether or not the 10 years of service would be negotiable.

In other Town news:

• During the July 6 meeting, the council unanimously approved the purchase of an 8-gallon-per-hour chilled water fountain for the town park, at a cost of $375. Prior to its installation, the Town will look into making the location ADA-compliant.

• Frankford Police Chief Michael Warchol said he has concerns about trucks turning from Main Street onto Thatcher Street, and vice-versa, and plans to contact the Delaware Department of Transportation to see if they can be restricted in some way.