By Sue Moore
“Past Vicksburg Village Councils have been spending faster than they could pay for things,” Bill Adams, village president declared at their January meeting. “We now understand the problem and intend to move from the past and focus on the future. We are heading in the right direction,” acting Village Manager Ken Schippers proclaimed in a written statement to the public.
This statement was the culmination of a year of investigation by the current Council as it began the laborious process of its forensic financial investigation into where all the money has been spent over the last few years. To accomplish this, a financial consultant was hired to investigate, a clerk has been appointed and finally a permanent treasurer was hired, all of which had been recommended by the Village’s auditors, BDO for many years.
The audit for 2012/2013 was presented to the Council a clean, unqualified audit, which is actually good in CPA parlance. Actual expenditures exceeded the budget by about $114,790 primarily because they purchased two new police vehicles, and were paid for out of cash reserves, it stated. The auditors said the staff was very helpful and thus the cost of the audit was $30,000 rather than the $50,000 or more that had been charged in past years.
The most alarming part was not the BDO audit that was revealed during the meeting, it was what Richard Dykstra and others unearthed internally as the opening statement declared:
“The Village council and staff believe that for the past five to ten years we have been operating without proper management, responsible fiscal controls and sound business planning. It appears there have been significant oversights by previous administrations. Few people knew what was transpiring until the village Council elected in November 2012, began to investigate.”
Where the real problems began to arise is also noted in the public statement that Schippers read at the meeting.
- He cited the $600,000 in lost revenue due to water and sewer hook-up fees not billed.
- The $350,000 in cost overruns to build the Angels Crossing clubhouse. These were cited as demonstrating ineffective management.
- The $1,400,000 land contract related to the procurement of the golf course was found to exceed the legal limits for the amount of loans a village of this size is authorized to borrow by the state of Michigan.
- There are indications that some financial transactions were not recorded in the Village financial systems.
- There were unusual expenditures from previous administrations which are being investigated.
“At this point, we must make significant reductions in debt and operating costs to achieve a structurally sustainable budget,” Schippers went on to say. “As a result, the Village is initiating necessary cuts in the general fund and police department budgets to make the Village structurally sound.”
These cuts became painfully clear when Police Chief Eric West made his report. Two officers have already found jobs with the sheriff’s department and others are probably looking around, due to concerns about job security, he said. The school officer position has been cut for the rest of the year (until June 30, the end of the village’s fiscal year) with that person going on the night shift although West is still trying to find funding to keep the position.
A list of the top ten accomplishments instituted by the 2013/14 Council was listed, probably the most important one, “bringing the Downtown Development Authority and the Brownfield Redevelopment Authority into compliance with State statutes and their Articles of Incorporation. By stepping up the responsibilities of these two groups, it is believed that many new initiatives and funding can come from these entities once the refinancing of debt has been achieved and new bonds issued.
The statement ended with a promise to focus on the future and not the past.