When you borrow money from yourself, who do you send to collect?
While not enough aldermen showed up for Tellico Plains to have an actual meeting Thursday night, those who did attend (Harkey Yates, Kim Bolix, Jamie Sisson and Mayor Roger Powers) listened to the town's annual audit.

Terry Moats of Brown, Jake and McDaniel, an accounting firm out of Knoxville, told the board the town was indeed getting by, but just barely and only because whenever the general fund fell short, the town borrowed money from the Water and Sewer Department to make ends meet.
"The town's fund balance has been going down for about five-six years," Moats said. "It's reached a point where your liabilities now outweigh your assets."

There was no mention made of where the town's fund balance now sits, but at one time it was down to $3,000. It's generally recommended that town's have at least two months of operating expenses in the fund balance, meaning Tellico should have around $93,000 in its fund balance.

"You've borrowed about $150,000 from the Water and Sewer Departments in the past few years," Moats said. "You need to keep an eye on it because it's the kind of thing that can't go on forever."
Like most small towns, Tellico is in this predicament because the leaders don't want to raise taxes, something Yates admitted.

"We haven't raised taxes in years," Yates said. "Every time the reassessments raise property values, we lower the tax rate."
Moats confirmed this, saying that in the last two decades, Tellico's property tax rate has gone from 69 cents to 55 to 49 and its current rate of 43. "That is one of the lowest tax rates you'll find in the state," he said.

"We've done some annexations in the past, to bring in extra money. If we hadn't done that, it'd be even worse now," Powers said. "But we have an elderly population and we don't want to put any more of a burden on them than we have to.

"But we are paying our bills," Powers added. "We're stuck up here in the mountains and we usually don't get the help we need. And it is hurting our population in terms of work. You can watch everybody leave in the morning as they drive to another town to work and that can hurt sales tax collections as they're not here to shop during the day or buy their lunch here. If we had more jobs here, we wouldn't be having this conversation.

"We've never had a lot in this town," Powers concluded, "but we've operated on a shoe string and we've always done all right."

While the board didn't seem too concerned that tomorrow will eventually come, Moats did say that despite the low fund balance, things were looking OK for the town.

"The Water and Sewer Departments are in good shape, and your debt load is light," he said. "You have some police cars and the energy upgrade at City Hall to pay for, but neither of those are a burden. If you can just get some money into the fund balance, everything will continue to run smoothly."

michael.thomason@advocateand democrat.com | 442-4575