According to City Auditor Joan Sanders' report Alabama law states that no member of the municipal governing body or of a municipal board shall be financially interested or have any personal beneficial interest, either directly or indirectly, in the purchase of or contract for any personal property or contractual services.
"During the fiscal year ended 2008, and for a number of previous years, Fagan Auto Parts, Inc., provided services to the City of Piedmont as well as personal property purchases," the report said. "While there are exceptions to this law approved by the Attorney General's office, none of the exceptions reviewed appeared to be applicable to this circumstance."
Because of this report, Councilman Brent Morrison made a motion to authorize Mayor Brian Young to turn this matter over to City Attorney Ron Allen.
"Right is right and wrong is wrong," Morrison said during the meeting. "I don't care if it's you, me or anyone else."
The council also learned some startling news about the city's 2008 fiscal year at its meeting Tuesday night. Without transfers from both the electrical and the water, gas and sewer utility funds, the city would have been in the red $1.4 million dollars.
In a presentation to the council, Sanders reported that the city had spent much more money than it brought in, despite an increase in nearly every form of revenue.
According to Sanders, revenue from property taxes, fines, services and other local taxes increased in 2008, which helped to generate over $3 million in revenue for the city's general fund. Piedmont also saw revenue growth in the electrical fund and water and gas charges.
But after $4.3 million in total expenditures, the general fund faced a $1,110,181 loss on the general fund alone before any money was transferred from the utility funds.
The city transferred $627,941 out of the electrical fund, but only transferred $174,130 into it, leaving the fund with a deficit of $188,965. The gas, water and sewer fund had nearly $1.8 million transferred out of it and only $102,738 back in, putting it $462,879 in the hole.
"It's a quality of life situation where we're going to have to balance between how much you let the utility department help the city," Piedmont Mayor Brian Young said. "The amount is surprising. What's really surprising is that they took money we had in reserve and depleted it. That's the most disturbing part to me. There was probably $800,000 to $1 million in a CD account and it was used last year."
Young remains optimistic about the city's progression through the current rough economic period and says the city is taking steps to continue to reduce costs.
"We're in a lot better shape than we were in October from a day to day standpoint," Young said. "Yes, we're extremely tight. We've got around $8,800 in the general fund. We're not in a situation where we have a lot of extra funds.