RIDGEWAY – After Ridgeway Town Council went on a spending spree in June, 2017, spending more than $113,000 from a capital expenditure fund that did not exist, interim Town Administrator David Hudspeth suggested Council amend the budget to accommodate that spending. As part of that amendment, Hudspeth suggested the Town cash in all its CDs, worth about $409,000, and deposit the cash into the Town’s general fund to go toward creating a capital expenditure account and beefing up the water fund.
Since the $409,000 included a little over $80,000 in CDs commonly referred to as the POR CDs and purchased with funds raised by the Pig on the Ridge festival, Hudspeth’s plan to cash in the CDs didn’t sit well with the four POR steering committee members, three of whom are also founders of the town’s popular annual barbecue festival.
Councilmen Don Prioleau, a member of the POR steering committee, and Heath Cookendorfer pushed back.
“I don’t agree with cashing in the CDs,” Cookendorfer told Hudspeth. “Once we cash them in, they’re gone. I would like to see the Pig on the Ridge funds restricted. Being in the general fund, it can be borrowed [by the Town] if we run short on things. I don’t like that,” Cookendorfer said.
Hudspeth assured Cookendorfer, during the Dec. 14 public meeting, that the CDs would not be cashed in until they matured.
“I think if you wait until they mature you may not need to liquidate all of them,” Hudspeth said during the meeting, which was digitally recorded by The Voice. “…this is not something we’ve got to do immediately,” Hudspeth assured Cookendorfer, ‘but as they come due we’ll look at the money we have if we still need cash, then I think that as those CD’s mature, we’ll try to move them around where they need to be. But I wouldn’t suggest, unless there’s some reason we really had to, to cash them in advance,” Hudspeth said. “…we’ll wait till they mature to move things around. We’ll look at this sometime between now and the end of the fiscal year, you’ve still got six months. You’ve got that amount of time to do it,” Hudspeth again assured Cookendorfer.
Mayor Charlene Herring and Council members Angela Harrison and Doug Porter voted for the budget amendment, Don Prioleau was not present and Cookendorfer voted against.
But, to the surprise of both Cookendofer and Prioleau, on Jan. 12, 2018, the day after the amended budget was passed by the second and final vote, Mayor Charlene Herring forwarded an email from Hudspeth to Town Clerk Vivian Case that instructed Case to, among other things, “Close all Pig on the Ridge CDs and deposit funds into the new POR checking account.”
Cookendorfer said that after he learned the CDs had been cashed, he asked the town clerk for the maturity dates.
“None of them were even close to maturity,” Cookendorfer said.
At the Feb. 22 meeting, Cookendorfer challenged Hudspeth for breaking his word and misleading Cookendorf into thinking that the CDs would not be cashed until they matured.
Hudspeth quickly changed the subject to the importance of getting a higher interest rate by moving the cash from the CDs, where they earned a little less than one percent, to the state government’s investment pool where they will earn one percent.
While Hudspeth admitted at the Feb. 26 meeting that the Town lost as much as $600 in penalties on one CD by cashing it early, he said the penalties on others were as small as $6 and $14.
In his own defense, Hudspeth placed the blame on the budget amendment ordinance that was passed by Council on Jan. 11.
“It didn’t say, we couldn’t or wouldn’t” [cash the CDs prior to their maturity.]
Asked about his change in position from stating in the public meeting that the CDs would not be cashed in until they matured, Hudspeth told The Voice that he couldn’t recall exactly what he said two months earlier at the Dec. 14 meeting.
Information on the 10 CDs that the RW admin cashed in early in January.
Article updated 11:10, 3/2/18 to show CD information.