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Wednesday, January 4, 2023

County Councilman Alex Saitta Weighs In on County Financial Audit

Below is the copied and pasted Facebook Post that Councilman Alex Saitta posted recently on his thoughts about the recent Pickens County Financial Audit.  Here is the link for those of you who are on Facebook:

Conservatives of the Upstate appreciate Councilman Alex letting us know his thoughts on the Audit...the good, the bad...and the ugly!  Transparency is needed and he is so good at exposing everything and not just the "celebration" items like many of our councilmen and administrator want to do. We the citizens need to know the truth, the whole truth, and nothing but the truth.  

Let's all remember...this is OUR TAX MONEY they are using...and be mindful that these are elected councilman that we need to be holding accountable for their decisions on raising taxes.

Pickens County's Financial Audit

I just read the 131-page financial audit of the Pickens County government for the fiscal year ending 6/30/22 (see item 1). Here are some highlights of the report and my comments.

The Audit:
The management of the county has the responsibility to prepare accurate financial statements in accordance with accounting principles generally accepted in the United States. The auditor determines whether those statements are free from material misstatement, whether due to fraud or errors. 

You can read that is the letter of Cherry Bekaert (external auditor): “In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the government activities, the business-type activities, the Alliance… as of 6/30/22.” (See item 2) 

The auditor doesn’t certify the money is being managed well or efficiently or the financial condition of the organization is excellent, good, fair or poor. All the auditor says is the statements are accurate or not. If a company is losing millions a year, but the financial statements are accurate, the audit would be favorable and the financial statements certified.

Audit: The total revenue grew to $86.1 million from $77.0 million the year before. An 11.8% increase. The cash balance in all accounts was $88.7 million or an increase of $9.1 million. 
Audit: On page 15 of the audit, these increases are explained. The county received its second payment from the Covid money of $12.3 million and the council approved a 9.9 property tax increase of $6 million in new revenue. 
Alex: The County is swimming in cash. That is one reason why I voted “No” to the historic property tax hike in Sept 2021. It is also why I recommended last month the county roll back some of that tax hike (see the video in the first comment below). 

Audit: The general fund (the fund the county makes is day to day expenses from) had a cash balance of $32.7 million that was unassigned and open for spending. That is 67% of the total annual budget. 
Alex: That percentage is typically 15% to 20%. Again, the county is swimming in cash. I remember when I was on the school board the auditor was talking about the fat cash position of the school district, and the trustee from Easley at the time said, “That’s a good thing.” I yelled out, “Not if you are paying it!” Same comment here. 

Audit: The library has a cash balance of $3.6 million or equal to 100% of its annual budget. That cash balance rose $332,000 this past year. Its cash balance has grown an average of 15% a year over the past 10 years.  
Alex: They library has its own millage rate, and its own saving account. It is swimming in cash too. EMS doesn’t have its own millage rate or its own saving account. Nor does the police, building codes, etc. The library is not a bank, and like the other departments it needs to come off its own millage rate and be like the rest of the departments. 

Audit: The total value of taxable property in the county is $11.0 billion. The assessed value is $626 million. (See item 3). 

Alex: What does that mean? All the taxable real and personal property in the county has a market value of $11.0 billion. Now when you multiple each property by their respective assessed ratios of 10.5% (manufacturing), 6% commercial and 4% residential, the assessed value is $626 million. Multiply that by the millage rate and you get tax revenue. 
Alex: The amount of property in 2013 was $8.2 billion and its assessed value $451 million. Today it is $11.0 billion of market value and an assessed value of $626 million. That is impressive natural growth, hence impressive natural growth in tax revenue at CONSTANT tax rates. Again, and it is glaring when you read this audit, why is the council raising tax rates?

Audit: County debt is $25.9 million down the recent peak of $34.5 million.
Alex: Paying down debt is good. Bravo! Most of that is the jail bond at $21.4 of the $25.9 million of outstanding debt. They didn’t have to borrow all that money for the jail. They had plenty of cash on hand at the time. Paying interest for years now, for nothing. The second mistake they made on the jail bond was non-callable for 10 years. When interest rates fell, they were not able to refinance is for a much lower interest rate.  

Audit: The county pension obligation is $57.7 million. Employees pay 9 to 9.75% of their pay into the pension and the county government 16.4% to 18.8% into the pension. Looking at the state pension fund, 55% is invested in equities. 
Alex: These two pensions are ticking time bombs, so heavily invested in stocks. If these pensions don’t blow up, in time these pensions will bankrupt many governments. The cash flows are not there. They are so unaffordable now, less than 5% of companies offer them today. 
To make it all work, these pensions need an 8% annual return on the portfolio. That made sense in the 1980’s and 1990’s when GDP growth was twice as strong. It made sense when the Federal Reserve was printing oodles of money in the 2000’s and 2010’s. There is little GDP growth and the Fed is being forced to stop the printing press. I think the jig is up for the stock market, hence these house-of-cards pensions.  

Audit: The past 10 years, EMS calls are up from 15,012 up to 18,722; Solid Waste tonnage from 36,482 up to 46,360; recycle tonnage from 4,842 up to 7,445; Park visitors: 6,619 up to 11,944; Library visitors from 544,840 down to 262,151; Marriage licenses from 781 flat to 801 (see item 4)
Alex: You can see why EMS and solid waste are my top priorities. 

Audit: The city of Pickens’ tax rate was 47.6 mills in 2010. 83.3 mills today.
Alex: The tax increases in the city of Pickens are out of control.

COTU agrees with Councilman Alex Saitta that taxes are out of control and evidently there's some over collection taking place! Council will not be having public forum 3-minute input until February, but we all need to be using those public forum 3 minutes as much as possible...and if you have more to say than you can say in 3 minutes...let's tag team and let the next COTU member pick up where you left off! 

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