BY LISA STAYTON
MOUNTAIN CITIZEN
INEZ — The latest audit of the Martin County Public Library Taxing District (MCPL) revealed that cash in the bank “is dwindling,” a downward trend that began in 2020 after relocating from the former library facility to the Collier Center in Inez.
The MCPL board of trustees received the audit during a special meeting July 23 at the Collier Center. Jim Bryant, a certified public accountant with Wells & Company of Paintsville, reviewed the audit and commented on the district’s financial position. He explained the audit was for the fiscal year ending June 30, 2023.
“I know we’re already a year behind,” Bryant stated.
Bryant typically conducts the audit in December, but a delay occurred because the library did not provide the information on time. He said library chairman Maurice Mills explained the delay was related to health issues of library accountant Linda Sumpter’s family member.
“Hopefully, if I do it next year, I’ll be here in December, and we won’t be a year behind,” added Bryant.
For the year ending June 30, 2023, the library had total revenues of $619,322. Bryant stated that taxes accounted for the majority of the revenues at $429,588, while movie and concession sales added $88,238. The library also collected $48,411 in rent money. It received grant funding of $32,600, including $28,000 in ARPA funds from the Martin County Fiscal Court and a $4,400 grant from an unidentified source. The library also received interest revenue of $3,011 and “miscellaneous revenue” of $17,474.
Expenditures for fiscal year 2023 came to $708,778, reflecting the district overspent its revenues by $89,456.
Bryant noted the deficit was $275,252 in the prior year—July 1, 2021, to June 30, 2022.
“That’s because there were a lot of capital assets purchased the prior year,” he said. “Utilities and telephone were higher and your revenues were $549,000.”
Bryant attributed the additional $70,000 in revenues in 2023 to the movie theater and concessions.
“This was actually the first full year for the movie theater and concessions,” he remarked. “Your cinema film fees and your cinema supplies were about $67,500, so you weren’t losing any money on the community side of it.”
Bryant added, “The biggest issue, I believe, is the utilities to operate this building.” Utilities and telephone expenditures for 2023 amounted to $139,000. That amount was down from the prior year’s $164,000, which included the Roy F. Collier Community Center’s past-due bills.
“If you go back and look at the prior years when you were in the other building in 2019 and 2020, your utilities and telephone were averaging about $25,000 per year. It takes a lot of power to operate this building. So that’s kind of the thing I’m looking at right now—utilities and telephone. I think you’ve seen that in the financial statements that you get from Linda every month, so I don’t think that’s a surprise to anybody.”
Bryant then discussed the library’s fund balance of $521,851, which includes $198,565 cash in the bank and $323,286 in a certificate of deposit. Liabilities consisted of payroll taxes and retirement of $10,763, leaving a net fund balance of $511,090.
“The cash has declined greatly over the last several years,” Bryant commented. “The CD, you’ve had all these years, so that hasn’t changed other than interest being added to it. But your cash in the bank, going back to 2016, you had roughly $959,000; in 2017 it was $964,000; in 2018 you had $881,000; in 2019 it was $914,000. Then in 2020 it dropped to $750,000; in 2021 to $563,000; and last year down to $286,000. Now you’re down to $198,000. As you can see, really, it’s costing a lot to operate this building… I don’t think that’s a surprise to anybody.”
After concluding the 2023 audit review, Bryant glanced at the library’s financial statement for the fiscal year ending June 30, 2024, which library director Angela Begley brought to the meeting. He noted the certificate of deposit had a value of $326,000 on June 30.
“Your bank account at the end of June was down to $48,000,” commented Bryant. “These aren’t audited, but I’m sure they’re probably accurate. I’ve never had an issue with any financials that Linda prepared. So it looks like, unaudited, you had $142,000 excess of expenditures over revenues this fiscal year.”
The auditor concluded, “Your cash is dwindling.”
MCPL facilities director Kendra Fletcher told Bryant the district was expecting around $50,000 in motor vehicle taxes, suggesting the deficit would then be $92,000.
Bryant advised that the district needs to generate enough revenue “to at least break even or have a little excess.”
MCPL trustee John Triplett mentioned the library incurred a major expenditure recently for its new $223,000 LG air conditioning system.
“We borrowed against the CD for that,” Triplett said.
Bryant then questioned, “So you have a loan now?”
Triplett confirmed the loan.
Trustees rush to lease former library facility
Trustees immediately followed the auditor’s review with a discussion about leasing the former library facility on Main Street to Eric Mills to use for addiction recovery after-care services.
Fletcher and trustees Triplett and Barry Webb emphasized the urgency of completing the lease quickly.
“I am pushing the board to push this quickly because we do need the funds,” Fletcher said. “We do want them to get in there and get their thing started. That will take some of the load off us as well. And it’s a good thing.”
Fletcher informed the trustees that attorney Brian Cumbo confirmed via email that the library district had received and recorded a clear deed for the building.
“Now it’s just getting the lease approved and signed,” she added. “They would like to move in by Aug. 1.”
Fletcher announced that Mills’ organization, Thrive Community Coalition, offered to pay a year of rent in advance, totaling $18,000 at $1,500 per month.
“They requested a right of refusal to purchase the building if the board decides to sell,” she added. “That’s up to you if you want to add that to the agreement.”
Triplett instructed Fletcher to discuss the right of refusal with the attorney, noting the trustees could sign the lease and handle the right of refusal separately.
“Talk to Brian and find that out,” Triplett said. “As soon as you do, go ahead and set a special meeting to get the lease signed.”
Webb mentioned the district would use the upfront rent to pay for a fire suppression inspection in the former library building, a shift from his previous announcement at the June 26 meeting. Initially, Webb said Mills would cover the inspection and repairs on “two or three” of the building’s seven HVAC units, with costs deducted from the rent. That plan prompted MCPL trustee Denise Stepp, who suggested during budget discussions June 26 that the library should relocate to the former facility due to diminishing cash, to question Webb on the prudence of barter versus regulated procedures. Both Webb and Triplett shut Stepp’s comments down, stating the June 26 special meeting did not permit discussing anything other than agenda items. While the budget was on the agenda, the barter was not.
In his new announcement last week, Webb said that by using Mills’ upfront rent, the library would “not be out any money” in preparing the building for Mills. He also noted the former library was “draining us a little bit,” a statement with which Fletcher agreed.
No one provided the specific expenses related to the former facility.
“We need to finalize the lease by Aug. 1 so they can move in,” Webb said, gaining agreement from MCPL trustee Sheila Maynard.
Mills approached the trustees for the lease in February. The trustees agreed to lease the 10,900-square-foot facility and parking lots for $1,500 a month for the first two years and $2,000 per month starting the third year. Negotiations stalled in April when a title search revealed the library district did not own the building and the deed was under the Martin County Public Library District Construction Corporation. The district filed an action in Martin District Court and gained legal ownership.
Before the lease with Mills, the trustees permitted the Inez Volunteer Fire Department to use the building as an advanced training center where residents could attain certification as emergency response professionals. The Martin County Youth Wrestling Club also used the former library facility for practices, producing champion wrestlers, providing kids with positive experiences, teaching them respect, teamwork and leadership, and instilling in them a desire for excellence.