Charles City County officials, adviser warn cash‑flow risks after $5.09M RAN; board outlines cuts and planning steps

At a public workshop, the Charles City County Board of Supervisors and financial adviser Davenport described a short‑term cash crunch that led the county to obtain a revenue anticipation note (RAN) of $5,090,000 to cover operating cash needs.

Kyle Alex of Davenport told residents the county’s unassigned fund balance and liquid cash declined beginning in 2022 and fell sharply in 2023–24, creating a risk that operating cash would be exhausted in the late summer and fall. “We really think you need as a county a multi‑year plan,” Alex said, urging the board to restore structural balance and avoid recurring short‑term borrowings.

Interim County Administrator said the RAN was necessary to avoid immediate interruption of services. Davenport explained the legal structure of a RAN requires repayment by the end of the fiscal year: “The RAN matures June 30 of next year,” Alex said, giving the county the winter and spring to develop a repayment plan tied to the FY2026 budget process.

The board described a suite of immediate actions to improve monthly cash management and reduce near‑term spending: asking departments for a 20% budget reduction, pursuing a five‑year utility plan, issuing an RFP to replace the interim public works director with an engineer, and shifting county deposits to interest‑bearing accounts. The interim administrator also cited expected revenue from a solar siting agreement that has already delivered $640,000 and additional building‑permit and operating receipts projected to assist repayment.

Residents and participants pressed for detail on causes and oversight. Public commenter Doreen Billingsley said the problem looked like multi‑year overspending on capital projects rather than an isolated cash‑timing issue: “This is not a cash flow problem, this is a spending problem,” she said, pointing to rising capital outlays over recent years. Davenport and the board emphasized the importance of separating recurring operating needs from one‑time capital spending and of confirming grant reimbursements and audit results before finalizing long‑term fixes.

Audit timing and internal controls were an area of particular concern. A resident quoted the county’s audit footnote describing repeated material weaknesses in internal control and asked what had changed; the interim administrator said the county expects the FY2024 auditor to present results in January and that the board has taken steps — including staffing changes and plans to hire consulting support — to address control issues.

On financing costs, Davenport reported the county netted approximately $5,000,000 from the RAN after fees and contingencies (the signed authorization was up to $5,090,000). Davenport advised planning for possible long‑term borrowing to fund capital projects rather than recurring use of short‑term notes.

The board said it will use the coming months to complete the FY2024 audit, refine cash‑flow projections, and build a multi‑year fiscal plan to repay the RAN and restore recommended fund‑balance levels. The CPA firm delivering the audit is scheduled to present in January; the board said it will publish answers to remaining technical questions and follow up publicly.

Next steps: Davenport will work with county finance staff on updated cash projections toward the RAN maturity date, the board will seek department budget reductions and a longer‑range plan during the FY2026 cycle, and the county auditor will present final audit results in January.