Atwater nearly declared bankruptcy seven years ago. Are things getting better?

An audit of Atwater’s spending shows its running deficit has improved in recent years, and officials say they plan to be fully out of debt spending by the end of the fiscal year.

Atwater’s worked in recent years with a deficit, which reached its peak at $4.1 million in 2014, according to Brett Jones, an independent auditor from Dublin-based JJACPA Inc.

The deficit, which was at $2.3 million in 2016-17 fiscal year, is now down to $1.4 million, according to the 2017-18 audit.

“We think the audit went very well,” Jones said. “The staff provided everything we needed to do our testing.”

The city has been in discussion with state officials for about a year to go over the spending plan. For some time, leaders openly worried about Atwater being taken over by the state.

City leaders have since brushed that fear off.

The city’s books have been a mess for many years with the budget borrowing from its own water fund to try to maintain services through the deficit. The city walked up to the edge of bankruptcy in 2012.

A state Department of Justice report released last week said the police department did not have a bank account for holding money taken during an arrest. Rather the money would be inconsistently placed in the general fund and not tracked.

“We’ve solved those problems,” Mayor Paul Creighton said on Monday.

The auditors reported no irregularities in how the city spends its money but stressed the need for leaders to continue to pay down its deficit.

“To address this situation, the City Council has taken action to begin to move the general fund toward a balanced budget position,” the audit says. “The city has worked with employees to reduce current operating costs through early retirements, layoffs, and salary and benefit reductions.”

The City Council previously adopted a resolution to use all cannabis-related revenue to pay down its debt before it can pay for services in town. The process to open dispensaries and other types of marijuana business has moved slow, but leaders say they expect to see the benefits soon.

“These items didn’t go as quickly as we anticipated. We will see the outcome in this year’s fiscal budget,” City Manager Lori Waterman said. “Our goal is to eliminate that (deficit) this fiscal year.”