Not Enough Cash On Hand To Cover Current Expenses
BENSON – The Town of Benson owes more money than they have cash on hand. That’s what members of the Benson Town Council were told during a special-called meeting Monday night.
Former State Auditor Beth Wood, who is now the director of rural government services at a private accounting firm, was summoned last week to take a look at Benson’s cash position and report her findings.
The report caught town commissioners by surprise. They were shocked to learn the Town of Benson appears to be broke.
Wood submitted a snapshot report showing that as of July 18, 2025, the Town of Benson had a balance of $1,225,970.19 in their checking account. Two other checking accounts had balances of $208,404.90 and $28,555.76, bringing the total cash on hand to $1,462,930.85.
As of July 18, payments (checks) totaling $242,458.81 had been mailed to vendors and not yet cashed. There were additional pending payroll, fuel, water, and electricity payment drafts. Plus $234,397 in outstanding invoices had been paid, but the checks had not been mailed to vendors.
Calculating the expenditures currently due, on July 18, the Town of Benson had a negative cash position of ($578.262.66).
The financial summary said another $123,430 in recurring monthly bills for health insurance, vision and dental would be due in early-August. That number was not included in the negative cash position.
Some invoices that were due in June 2025 have yet to be paid.
Commissioner Will Chandler said, “I don’t think anybody sitting here thinks anybody padded anybody’s pockets, but I’ve asked about this and asked about this and why isn’t it in a fund and I’ve been told you could not. We had to put everything in General Fund. I’ve run a business for 40 years. I’ve never done crap like that.”
Beth Wood replied, “The Local Government Commission has urged towns (and) counties to use a central depository. So that’s what you’ve done. One bank account that everything comes out of. But there is a mechanism for making sure when you write that check, the cash leaves the bank (and) it goes against the account where the cash is sitting on paper… We need to go through there and figure out all those negative numbers.”
Wood said it appears restricted funds in the General Fund may have been spent on other legitimate expenses, including day-to-day operating costs. It will take more time for Wood and interim Town Manager Steven Harrell to figure out.
Revenue The Town of Benson will soon receive a $22 million grant from the State of North Carolina for Wastewater Treatment Plant improvements. Benson has already spent $700,000 towards the project. Once the grant money is received, town officials hope they can be reimbursed $700,000 to put back into the General Fund.
Officials anticipate approximately $85,000 in revenue from a Sales & Use Tax payment and $295,000 in utility drafts in early-August. Those two revenue sources should help pay some of the outstanding bills.
No Financial Updates Mr. Harrell, the interim manager, said the Town Board should have been receiving financial updates, at least once per quarter, on projects. Some project ordinances require those quarterly updates. Commissioner Chandler said the Board has not received any of those updates.
Wood added that the Board needs to be receiving financial reports each month, to compare the adopted budget to what is being spent. “If 50 percent of your year has gone by and you’ve spent 75 percent of the budgeted item, you’re in trouble. If you watch this every month, now you can start asking the right questions.”
Commissioner Chandler replied, “What if you ask the right questions and don’t get any answers? You need to make some changes.”
Harrell plans to review each individual project and grant to see when the Town can be reimbursed for expenditures already made. The interim manager said a good number of projects had engineering fees paid upfront and hopefully those funds can be reimbursed in the near future.
Harrell said the current fiscal year budget, adopted July 1, 2025 would likely have to be revised. He promised a more thorough report and recommendations for belt-tightening “corrective action’ at the August 12 regularly scheduled Town Council meeting.
Restricted Funds Commissioner Chandler said money has been set aside each year, for approximately five years to go towards the purchase of a fire truck. Chandler said he was shown “on paper” the money was there two years ago but now “we don’t have it.”
The restricted fire truck money may have been spent on other expenses. The urgent financial review will help answer that question.
Chandler said he asked the prior administration how much money was in the bank and how much money the town owed. He said he was unable to get an answer.
Fund Balance Commissioner Chandler said the former manager told him in 2023 there was approximately $2 million in reserve funds in the bank.
Chandler and other board members want to know how much, if any, funds remain in the reserve account.
Shortfall Monday night, the Benson Town Council learned there isn’t enough revenue being generated in the Electric Fund to cover electric department expenses.
Commissioner Chandler said he recently learned a water meter cost the Town $300 but customers were only being billed $150. “We can’t do anything neutral. We’ve got to make a profit off everything…. Here’s meters we’ve lost our butt on.”
Officials learned Monday night, the Utility Department has zero cash.
Commissioner William Neighbors asked if the negative balance had anything to do with rates being too low. The Board learned current water, sewer, and electric rates can not support the system alone. And due to rapid residential development it is a compounding problem.
Mr. Harrell, the interim manager, said the property tax rate can not be changed after the start of the fiscal year on July 1, but he will recommend changes on August 12 to help begin the process of moving Benson out of its financial crisis.
Neighbors likened the pending recommendations to placing “…a bandage on the bleeding.”
One immediate step taken Monday night was a temporary hiring freezing. Vacant positions will not be filled until further notice.