Chowan County, N.C., borrows to cover June shortfall

By CONNIE SAGE

Correspondent

At an emergency session Thursday, cash-strapped Chowan County borrowed $125,000 from its reserves to cover June's employee payroll withholding taxes.

"We're out of cash," County Manager Peter Rascoe told commissioners at the specially called meeting at the county's finance office.

Commissioners voted to borrow from its Finistar-General Fund investments on the condition that the money be returned to the account as soon as possible.

The special meeting was necessary because the county's budget ordinance requires specific board approval for any transfers from restricted reserve funds.

Employees were paid on time in June, but the cash was needed for federal and state payroll taxes and retirement benefits.

"We had to have money in the account by 2 p.m. today, or our account would have been overdrawn," Rascoe said.

"These expenses and the revenues to cover them were budgeted, so it's purely a cash-flow problem and not one of any type of budget oversight," Rascoe said.

Property tax bills were mailed to Edenton and Chowan County residents on Wednesday.

"Our hope is we'll have the cash in July and August," Rascoe said. "We went through this last July - we can't print money."

County Finance Manager Lisa Jones said she discovered that she had erroneously keyed in a journal entry and found the shortfall.

"We're just borrowing money to get by," Commissioner Kenny Goodwin said. "I want it clear to the public we're putting the money back."