Clinton City Council now has a clear road map as to how $5 Million in money that should stabilize electric rates for every customer in the city is not available to accomplish its assigned purpose.
Since 2015, off and on, the money has paid other city obligations.
At issue is the Rate Stabilization Fund, a pile of money that council always thought was designated ONLY for electric rates but which never had a clear caveat to city staff that it could not be used to pay other bills.
An independent review now has shown exactly how that happened.
As a consequence, a fund once thought to be $8 Million now has a balance of $3 Million, according to Mayor Pro-tem Ronnie Roth. The independent review, presented to council Nov. 6, is about a half million short of what the actual figure is, Roth said, because the most recent payment is outside the scope of the review’s final payment review date.
“That’s a lot of money not to include,” Roth said, “but I know you were doing what you were instructed to do.”
The review relies on financial figures provided by the city staff. The City has long contended that this is not “missing money.”
Rather, it paid city bills, even without the council’s expressed knowledge or consent.
This is not a forensic audit.
“This is not an audit report. We do not provide an opinion,” said Grant Davis of the audit firm Mauldin & Jenkins. Instead, the review is guided by six “agreed upon procedures” reviewing the electric Rate Stabilization Fund from 2015 to 2022.
The City made 19 withdrawals from this fund - 16 are traceable as to who authorized the withdrawal and what expenses the money paid.
The first 3 withdrawals are not similarly traceable, the council was told.
The precise review dates are October 2015 to June 30, 2022. The half million dollars that Roth referred to was deposited after June 30, 2022.
Roth used a credit summary from the city’s electricity supplier - PMPA - to develop the $3 Million current balance figure. Just adding up all the credits issued to Clinton by PMPA over the years (without the city spending any of this money) the balance should be $8 Million.
Roth said, “$8 Million is a more accurate number - our balance is just over $3 Million” and the difference is what was spent out of that fund.
Davis conceded that all reporting in the independent review was done with information “per city officials.” Davis left copies of the report with each council member, and the city staff, for further review.