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Rocky Mount council hears $16M event-center write-off and a 260% rise in utility admin charges since 2014
Summary
Council members were told the audit includes roughly $16.6 million in bad-debt adjustments (about $15 million tied to new markets tax-credit unwinds), and that combined utility admin/service charges rose from about $12.5M in 2014 to roughly $34.3M in 2025, prompting cash-flow and labeling concerns.
Council members pressed auditors and staff over large accounting adjustments tied to the event center, the mechanics of new markets tax credits and steep increases in utility-related charges that get recorded as operating expenses.
A staff participant explained that about $15,000,000 of the roughly $16,600,000 bad-debt write-off was a balance-sheet transaction tied to new markets tax credits and the timing of credit unwind. "That $15,000,000 was always gonna go away," the participant said, describing it as an accounting unwind rather than an unexpected cash loss for the city.
Council members also highlighted a large rise in charges the enterprise funds pay to the general fund: one council member said the combined utility service/admin charges grew from about $12,500,000 in 2014 to roughly $34,300,000 in 2025, a roughly 259% increase, and requested the city standardize the naming of those charges in budget documents so the council, mayor and public are not confused.
On whether a 260% rise is reasonable, auditor Tim Lyons said he could not determine that without a detailed historical review of what was included in the amounts and how the charges were applied. "Without really doing a detailed dive into what exactly led to the 260% increase, I don't know that I can say whether that's reasonable or not," Lyons said.
Event-center cash pressures: one council member said recent internal numbers showed a roughly $7,800,000 cash shortfall when combining preliminary revenues, expenditures and debt service, while the audit presentation reduced that shortfall to about $4,700,000; the manager said staff will reconcile those differences and provide a detailed executive summary. Council requested a facility-level profit-and-loss summary (including the Imperial Center) showing revenues, expenditures and debt service so members can assess cash impacts and recovery strategies.
Next steps: staff pledged to reconcile the discrepant event-center figures and to provide the historical write-off and receivable-aging details council requested. The auditor said some items will require staff follow-up but the firm will return to present the final document when it is issued.
