McLean

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Special to The Exchange

Maxton’s new mayor said the town is in poor shape financially and may have to make some tough decisions to correct it.

Sallie McLean issued the warning Tuesday after she was sworn in along with three new board members.

“I just want to let the citizens know how bleak things are right now. It’s not a pretty picture,” McLean said.

A recent audit showed that the town has a low cash balance, as well as a general fund fund balance of $90,000, down from $673,000 two years ago.

The town auditor — John Masters of the accounting firm S. Preston Douglas — said the town’s undesignated portion of the fund balance was a negative $140,000 as of June 30, the end of the 2010-11 fiscal year. In 2009, that portion of the fund balance was a positive $88,000, he said.

Masters said to satisfy the state’s requirement that 8 percent of a government’s total fund balance be maintained, the town is going to have to make a $340,000 “turnaround.” He also said the town’s cash on hand is down about $800,000 in two years, with the town having about $530,000 as of Tuesday.

The auditor said that the use of the $800,000 over the past two years was the “philosophical decision” of former Town Manager Vince Long, who did it with the “full approval of the board.” The money was spent, he said, to cover needs such as repairs to equipment that had lingered for years.

Masters also told the board that the town’s property tax collection rate for 2010-11 fiscal year was 82 percent. The state average, he said, is about 97 percent.

We (council) are going to have to do some things that the citizens are not going to like … , ” McLean said. “We are in a bind at the expense of the our citizens, who in the end will have to pay. We have some hard decisions to make, but with the help of the Lord this too shall pass.”

Commissioner Victor Womack noted that the public needs to get the “whole picture” of why so much money has been spent during the past couple of years.

“Most of that money went to public safety. Our Police Department was in bad shape,” he said.

During the public comment period of Tuesday’s meeting, former Maxton Town Manager Katrina Tatum said that she had reviewed the audit.

“This town is broke,” she said.

Hugh Montgomery, who has served as Maxton’s interim manager since Long resigned last month, said after the meeting that Tatum was exaggerating.

“We are not broke. That’s an extreme,” he said. “We will be paying our bills and meeting our town’s payroll for sometime to come.”

In other business, McLean and three new council members — Cynthia ‘Tiny” Johnson, Timothy McMillan, and Mark D. McEachin — took their oath of office. Voters in November ousted Mayor Gladys Dean and incumbent commissioners Emmett “Chip” Morton, Ray Oxendine and Vivian Brown Morrison. Morton did not attend Tuesday’s meeting.

Both Oxendine and Morrison thanked residents for giving them the opportunity to serve.

Dean made no comments during the meeting.

In other business:

— Cynthia Johnson was unanimously voted Maxton’s mayor pro tem.

— The board set Feb. 4 for its annual retreat.