Kokomo Tribune; Kokomo, Indiana

April 11, 2014

Bunker Hill dangerously close to bankruptcy

Clerk: 'This town has been running on thin ice. The ice finally broke.'

By Carson Gerber Kokomo Tribune
Kokomo Tribune

---- — BUNKER HILL — A last-minute tax refund has saved the town of Bunker Hill from shutting down and temporarily laying off all its employees.

Clerk-Treasurer Lisa Wilson said the town’s coffers would have been completely emptied after making the final payroll payment next month to its eight workers.

After that, the town wouldn’t have a cent to its name, forcing all government offices to shut down, including the town’s community center.

“Literally, after payroll, we were looking at having nothing. Nada,” Wilson said.

The town’s dire financial situation has gradually developed over the last three years due to gross mismanagement by the former Clerk Treasurer Sarah Betzner, who failed to get state approval on the town’s budget three years straight.

An internal investigation by Bunker Hill officials in February revealed Betzner racked up nearly $19,000 in late fees, penalties and interest on unpaid bills during her three years in office.

Betzner also continued to pay former town employees’ health insurance out of the town budget, sometimes for two years after they had quit, said Bunker Hill Town Council President Robert Cox in an earlier interview.

Betzner resigned in January after she again failed to get state approval on a budget.

Once Wilson was appointed to the position later that month, she said she realized the town’s finances were in serious trouble.

Wilson and the town council launched an internal audit earlier this year, which revealed the town had overpaid more than $38,000 in taxes since 2007.

Wilson said she filed for a tax refund to get the money, but the IRS said it couldn’t send the cash for three to four months.

“This tax money was my last resort,” she said.

With a little over a month before the town’s offices would be forced to close, Wilson said she contacted the office of Gov. Mike Pence to ask for help.

“I was doing everything I could to find the money,” she said. “I said our town is going bankrupt. We are going to have to close unless I get some money.”

Wilson said the governor’s office responded immediately. They contacted the Indiana Department of Local Government Finance and the State Board of Accounts, who called the IRS.

The IRS responded by sending an expedited tax refund so the town could keep the lights on.

Wilson said the town should receive a $32,000 refund in the next few days. She said the IRS ended up taking more than $6,000 out of the refund because the town hadn’t paid any utility receipt tax since 2009.

Then the town got another boost.

The unincorporated town of Miami, located about 5 miles south of Bunker Hill, is building a new sewage collection system that will pipe its waste to the Bunker Hill water treatment plant.

The Miami Sewer Board, which is overseeing the project, cut a $30,000 check earlier this week to start paying for the waste treatment, Wilson said.

“That money literally saved this town,” she said. “I can sit back now for a few days and breathe again.”

Wilson said the tax refund and waste-treatment check should be enough to pull the town through until June, when it will receive more than $180,000 in property taxes to refill the coffers.

The county distributes property taxes owed to every local taxing unit twice a year.

Until then, though, Wilson said she’s keeping a hawkish eye on each expenditure the town makes.

“I will not let people just go out and spend money,” she said. “I’ve put a stop to it … As long as we watch what we spend and only do mandatory or emergency spending, we’ll make it.”

Wilson said the town will remain tight-fisted until it builds up its funds. She and the town council also are working to put together a state-approved budget for the first time in four years, Wilson said.

The Indiana State Board of Accounts is conducting an audit and investigation into the town’s finances. Wilson said town officials are working closely with agency to help solve its budget woes.

“This town has been running on thin ice, and the ice finally broke,” she said. “Now, we’re trying to save it again.”

Carson Gerber can be reached at 765-854-6739, carson.gerber@kokomotribune.com or on Twitter @carsongerber1.