By WILLIAM F. AST III - H-P Staff Writer
Published: Friday, August 13, 2010 2:12 PM EDT
STEVENSVILLE - Members of the Stevensville Village Council had to swallow a little more bitter medicine on Thursday as a Michigan Department of Treasury official presented a preliminary audit for the fiscal year that ended March 31.
"Overall, the street funds are fine," MDOT auditor Derek Hall told the council. "Everything else is not so fine."
Todd Gardner, convicted in July of embezzling $271,696 from the village, was still village manager for a couple of months after the 2009-10 fiscal year started. The council is still dealing with the aftermath of the thefts, which started in 2006.
Hall said an examination of the records could only identify $2,997 that Gardner embezzled from April 1, 2009, the start of the 2009-10 fiscal year, until May 2009. Gardner was manager from April 2006 until May 2009, when the council didn't renew his contract.
Ironically, the street funds are in good shape because Gardner had failed to turn in the proper paperwork to the state, Hall said. Street funds owed to the village didn't show up until after he was gone.
"That's going to seem weird to the public," Hall conceded. "You have money to do street projects, but nothing else."
Despite the bad news in the preliminary audit, many of those shortcomings have already been taken care of, Hall said.
"It did happen, and you want to learn from it so it doesn't happen again," Hall told the council.
"Everything is better now," Hall said outside the meeting. "Everything is being corrected as they go forward. Obviously you can't fix things overnight, but the village is taking steps in the right direction to correct all the deficiencies in the report and to begin to resume being fiscally sound. ... Unfortunately they are just going to have to continue on paying for some of the stuff that's occurred over the past years."
That includes hefty lawyer fees attributable to lawsuits filed by or against Stevensville as the council under Gardner's urging battled Lincoln Township or the local water authority over various issues. But the council had to approve those suits in the first place, Hall said.
The council has limited itself to paying bills of no more than $35,000 a month until the arrearages caused by the thefts are made up. The village has received an insurance payment of $100,000 from the embezzlement episode, and has paid off one large bill with those proceeds.
Hall said the general fund as of March 31 had revenue of $479,000 and expenditures of $491,000, for a loss of $12,000. But an additional $107,000 was transferred to other funds, creating an overall general fund deficit of $119,000, he added.
Council President Lori Gibson after the meeting said she doesn't believe any more insurance checks will be forthcoming. She also said she doesn't know when the final audit will be presented.
The big problem remaining is a deficit of $723,000 in the village's Downtown Development Authority accounts. The village bought property along St. Joseph Avenue to expand the downtown area, but then the economy collapsed.
In other matters, the council discussed using Lincoln Township to perform building, mechanical, plumbing and electrical inspections in the village.
The council will likely vote on the measure in September. Trustee Don Meyer said the idea was pleasing as it showed the start of "rebuilding our relationship with our surrounding neighbor," Lincoln Township.
The council approved a notice of intent to vacate Lawrence Street. That's a small, never-built road stub off Ridge Road.
The council will hold a hearing at 7 p.m. Oct. 14 to see if anyone objects to the action.
wast@TheH-P.com