Big trouble in little China

Big trouble in little China

While the city of China might not be totally broke, it isn’t far from it, say current council members and Mayor Margaret “Peggy” Harkrider. The absence of funds in city coffers hasn’t yet gotten to the point where drastic measures have been undertaken, but as Harkrider told The Examiner, tough decisions might play out in coming months.

China Mayor Pro Tem Edwin Broussard said the city’s financial hardship stems partially from an inherited problem due to former City Council panels allowing fiscal responsibility to wane in the years prior to the current board taking over.

“We’re looking at trying to fix the budget now,” Broussard said. “We’ve got to fix a lot of wrongs.”

And that costs a lot of money.

To start, the city had to hire an independent auditor to come in and look at a backlog of financial analyses from 2008 on. City Secretary Cindy Flores said Charles Reed & Associates out of Silsbee were given that task. In the meantime, former China Mayor and Councilmember Butch Sanders referred the case of missing audits to the Jefferson County Sheriff’s Office for review, in a way asserting that funds might be missing from the city’s bank accounts.

JCSO spokesman Rod Carroll said his agency did look into the allegation, but after speaking with an accountant from the auditing firm, the sheriff’s office is fairly certain no money is missing.

“This is a small city and they don’t have a lot of money or enterprises,” Carroll said, adding that the manner in which the city’s regular accounting was configured made it difficult to audit. A lack of “separation of duties” was noted in the auditor’s findings, although to Carroll, no wrongdoing seems to have occurred. “The case is still an ongoing thing, but I’m confident that what the CPA is telling me is accurate.”

While the audit might be accurate, the findings aren’t necessarily good news, said Councilmember At-Large Cecile Wright.

“We’re in the black alright, but not by a lot,” Wright said. According to her, all the city’s reserves added together wouldn’t sustain the municipality for a single month should hardship arise. Catching up on three years of audits hurt the already struggling city, she said, but so has inflation, replacing expensive city equipment, costs associated with the City Hall building, “and apparently the old council was behind in a lot of stuff.”

Mayor Pro Tem Broussard listed the city’s electric bill at more than $5,000 a month – just for the pump station and city hall. The expense has ballooned to the point where, at a recent city meeting, the council was hesitant to add $150 a month for 14 streetlights every councilmember in attendance agreed was needed.

“We’re just so far from where we need to be in this budget, I hate to add anything more,” Broussard said regarding the lightening proposal. “Right now, we’re trying to tighten up on the budget, and this is just adding to our bills.”

Broussard said after the meeting that he would like to revisit the issue and see streetlights go up in the city, but he would like to make sure the city could afford the bill first.Councilmember Robert Murff said the city would have more expendable revenue should they find a way out of the current City Hall building, an old elementary school on Broadway Street not far from where the old City Hall was located. Murff and Broussard explained at length the problems associated with the old school house – from drafty windows and doors to lack of heating – and wistfully longed for a new home for the city. The old City Hall, they said, was sold to current Councilmember Kewpie Comeaux before she was appointed a member of the council at the end of 2011. The 30 x 40 foot portable building was removed from the city’s property and is now used for a far less official duty.

“It was old and tore up,” Comeaux said as to why it was on the market in the first place. “I moved it out back of my house for storage.”

The $3,000 China received for the sale of its City Hall didn’t go far. Added to auditing costs, salaries and general overhead, China has spent more than $25,000 replacing lift pumps at its water treatment facility.

“You wouldn’t believe the stuff they put into our system,” Mayor Harkrider said. Secretary Flores backed up the mayor’s statement with pictures detailing debris, grease and trash all packed into the city’s sewer. Making matters even worse is what David Waxman calls “inflow and infiltration.” Waxman, of Waxman & Associates, was brought on by the city of China to aid in bringing its water treatment facility into compliance. The city is currently “on notice” by TCEQ.

Waxman said a large portion of the problem arising in China’s water treatment plant results from “Swiss cheese” PVC pipelines located on properties owned by individual residents. This means “any water hitting the ground ends up in your plant. This isn’t good.

“These leaks might not be a big problem to the homeowner, really,” Waxman said. “But they’re a huge problem to you.”

Waxman said the city is in danger of sanctions arising from the water treatment facility issue totaling more than $10,000 a day. “And remember,” he added, “you’re already on notice.”

To help get the sewer lines fixed, the city has been awarded roughly $200,000 in grants for property owners who fall under 80 percent of the median income for Jefferson County. The grants pay for 100 percent of the work, and will benefit both the homeowner and the city, Waxman said.

“People are wary when you tell them the government is going to give them something for nothing,” Waxman mused. “But in this situation, that really is the case. We want to get this work done. The city needs to get this work done. And we will do everything we can to see to it that it happens.”

Homeowners, and even renters of property with troubled lines, can go to City Hall for more information on how to obtain the grant assistance.

In the interim, however, Mayor Harkrider and the China City Council are having to come up with ways to keep the bills paid. An attempt to sublease part of the old elementary school that currently houses City Hall was cut short due to a leasing arrangement China officials signed with the Hamshire-Fannett Independent School District for use of the building, but a second path to increased revenue was taken. Residents will be contributing a little more than usual to their water bills, as the user fee will increase in March from $5 to $15. Broussard said this was the first increase to the water bill since 2003.

A privilege afforded the residents of China in the form of zero city property taxes is also in danger of going the way of the dinosaur. Councilmember Wright said the proposal would be so unpopular it might get them all killed, but Mayor Harkrider insisted the city is running out of options to stay afloat.

“By raising the water user fees, we are still holding off and not instilling taxes,” Harkrider said, although setting up a city tax is within the council’s power. “We may have to end up putting a tax anyway, though. Every other city has one.”

Jennifer Johnson can be reached at (409) 832-1400, ext. 231, or by e-mail at jennifer [at] theexaminer [dot] com.