City seeks loan to make payroll

The City of Holly Springs got hit with shocking news August 13 when the State Auditor came to town and told elected officials they will withhold up to $450,000 before sending any more sales tax revenue to the city. The auditor cited failure to provide City audits, which have been lacking for 2022, 2023 and 2024.

A special called meeting by Mayor Charles Terry Thursday, August 14 at 5:30 p.m. took up a concern that the city may not be able to make payroll for the month, which ranges between $300,000 and $310,000, said city clerk Jerrica Jones. That figure is what will be required to get the City to the end of August, she said.

“But we need money to get through December,” Jones said. “A motion was made to authorize the mayor and city clerk to go to the Bank of Holly Springs to discuss all options - a line of credit, a secured loan or a shortfall note with the bank.”

Jones said the city has about $500,000 in CDs that the city can borrow against and put a hold on it until the City “can pay ourselves back.”

All aldermen were present at the meeting with Alderman- at-large Dexter Shipp and board attorney John Keith Perry Jr. present telephonically.

State Rep. John Faulkner and the state auditor officials met with the board August 13 to ask if the auditor would release its intention to withhold state sales tax revenue to the city of up to $450,000 until the City is in compliance, Jones said.

Jones said the state auditor will release sales taxes to the City of Holly Springs once the threshold of $450,000 is met.

“The focal point of the discussion is this shortfall is not due to the present administration,” Jones said.

She added that Ward 4 alderman Patricia Merriweather pointed out during the special called meeting that the board of aldermen during the former Sharon Gipson’s administration had expressed over and over its concern for the need to complete audits, “but the aldermen’s concerns fell on deaf ears.”

Mayor Charles Terry said the City is going to be pushing to get the audits done and met with TVA (Tennessee Valley Authority) representatives and utility department general manager Wayne Jones about getting the information gathered that would be needed for the audits.

He said both TVA and Wayne Jones expressed the importance for the City and the Holly Springs Utility Department to gather up reconciled checks, bank statements, invoices and receipts, “cash flow, the whole nine yards, in order for us to get the audit completed.”

Terry said the state auditor’s office will help guide the city through the process of bidding the audits out and selecting a company to perform the audits.

The City’s audits cannot be completed until the HSUD audits are completed.

HSUD general manager Wayne Jones repeatedly asked for audits of the HSUD during his tenure with the utility department, beginning May 28, 2024.

Terry said the 2021 audit is in hand but the 2022, 2023, and 2024 audits have not been started.

He said if the city can get a loan to carry the financials through December, new ad valorem tax revenues will begin arriving January 2026

to help the city get back on its feet.

He said the administration requested the state auditor be lenient but they said they can’t do that.

Shipp said the city was blindsided by the decision of the state auditor to withhold sales tax revenues. He said the former board of aldermen kept asking and asking Mayor Gipson to get the audits done.

“I can’t wait to see how the audits turn out,” he said.

He said the audits will be the solution to the city moving forward.