A deficit issue involving utilities has been resolved in the village of Iola.
The Iola Village Board passed a resolution to forgive the utility debt to the general fund.
Attorney Bruce Meagher explained that the debt was not an actual cash deficit, but rather a problem created by auditors following protocol procedures.
“It primarily reflects accounting entries, so it wouldn’t make sense to transfer funds,” Meagher told the board at its Jan. 13 meeting.
According to auditor Mike Lensmire, the water fund owed $344,723 and the sewer fund owed $225,718.
The resolution wipes out any debt the water and sewer utilities owe to the village.
Resolution 14-01 included the following statements:
“These accounting entries have been carried on the books for more than 30 years and never presented a financial or fiscal problem to either the utility funds or the general fund.”
“At the time these expenditures were made for the purchase of the capital assets, it was never anticipated that the utility funds would repay the general fund for the cost of the improvements.”
“The general fund of the village is in sound condition and there are adequate funds available to pay the ongoing expenses of the village.”
The resolution also noted it is “permissible under Wisconsin Law for (the board) to forgive the debt owed by the two utility funds.”