Folwell Not Optimistic City Can Fix Financial Woes

Folwell not optimistic city can fix financial woes
By Paul Nielsen The Daily Advance Staff Writer Dec 9, 2022

Representatives of the state’s Treasurer’s Office will meet with Elizabeth City City Council Monday night in closed session to discuss the city’s continuing financial management problems.

State Treasurer Dale Folwell said Friday afternoon that he asked city officials for the closed session meeting because he is not optimistic that the city can correct its financial problems.

The city entered into a financial accountability agreement with the state’s Local Government Commission in October in an effort to help get the city off the agency’s Unit Assistance List.

“I am losing hope that is going to be possible,” Folwell said of the city correcting its financial problems. “I was actually shocked that (the closed session meeting) was granted because we are going to tell them what needs to be done and when it needs to be done by.’’

Folwell has previously stated that if the city can’t correct the problems that a state takeover of the city’s finances is an option. But on Friday Folwell did not elaborate on what would happen if the city does not meet the state’s demands that will be discussed Monday.

“We will cross that bridge when we get to it,” Folwell said. “We are not conquerors, we are rescuers. The city staff and the governing board, we can’t care more about Elizabeth City than they do.’’

Mayor Kirk Rivers said Friday the meeting with state Treasurer’s Office officials is a “good thing.”

“Everything is going smoothly, everything is moving forward,” Rivers said. “The audit is coming in, they (city staff) are working through budgets. Everything is going great.’’

The city still has not submitted its 2020-21 audit, that was due in October 2021, and its 2021-22 audit, that was due this past October, to the LGC for review. The city also has not successfully reconciled its books for the 2021-22 fiscal year, a process that needs to be finished in order to complete the 2021-22 audit.

Folwell said not being able to reconcile the books is a major concern for the state. He said not having the books reconciled means the city does not know how much money it has and that should be a concern for the city’s taxpayers.

“The audits are a concern but the inability to reconcile the books over an extended period of time should not just be a concern to the people in Raleigh but should be a deep concern for the taxpayers of Elizabeth City,” Folwell said. “Reconciling the books is like knowing how much is in your checking account, whether what comes in or what goes out. I think the taxpayers of Elizabeth City would be concerned if they didn’t know what is in their checking account.”

As part of its financial agreement with the city the state is requiring City Manager Montre Freeman to submit a draft budget for the 2023-24 fiscal year that begins July 1 by May 16 to the LGC to review.

“We want to see if he knows how to budget or not,” Folwell said.

The state has never been faced with a government entity the size of Elizabeth City this close to the brink of a takeover and Folwell said that sound financial management is a must.

“We are just not talking about any city, we are talking about Elizabeth City,” Folwell said. “It is an important regional city in our state.”