The Town of Hollow Rock is still operating without a budget and is several months behind on bank reconciliation, according to discussions at both their regular meeting on Tuesday, November 18 and following workshop on November 20.
Several accounts will end in the red, and cuts have been made to the police department, sparking concerns among residents.
Regular Meeting
At the regular meeting, the board approved the new sanitation contract with Republic Services for five years.
As of now, customers will still pay $16.25 per month, but that will have to go up in time.
The contract shows that the town will pay Republic $15.15 per residential trash can, and that rate increases by 3% each year.
By 2030, the town’s cost per residential can will be $17.04.
The first reading of the budget was on the agenda, but several aldermen said they received the proposed budget that same day and needed more time to review it.
Budget Workshop
Aldermen discussed several budgetary concerns at the workshop on Thursday.
Board members said the town’s financial issues have compounded over the past several years, and recent reviews have uncovered bookkeeping errors, inconsistencies, and problems tied to the water fund.
Alderman Vivian Grooms said she spent two hours going through daily receipts and deposits for the water department, and while all deposits had been made correctly, the distribution had not.
“I just knew something wasn’t right,” she said. “The water fund owes enterprise fund and general fund a total of $40,135.26.”
She said the issue began around January 2024, shortly after a change in staff.
“I’m not blaming nobody,” Grooms said, “but that’s where the problem is.”
The delay in catching the error, she noted, is partly because Hollow Rock is behind on both its audit and its monthly financial reporting.
In fact, the town is two years behind on audits, which Recorder RaSha Higdon said is mostly due to auditing firm ATA being behind.
She said bank reconciliation has been behind since before she assumed the position of Recorder.
General Fund Budget
For 2026, Hollow Rock’s budget proposes general fund revenues of $372,115 and expenditures of $267,214, leaving a net operating income of $104,901.
Estimates for 2025 show that town will end in the black, with $160,510 in net operating income. However, that is only an estimate, given that Hollow Rock hasn’t had a proper audit since 2023.
Water Fund
Alderman Grooms mentioned that the deficit in Hollow Rock’s water fund also appears to be caused in part by depreciation.
A new Comptroller guideline requires municipalities to recover and save the cost of equipment that was purchased with grant money.
The town recently upgraded its water meters to new digital ones through an ARPA grant.
According to the budget, Hollow Rock’s Water Fund will end FY 2025 with a net operating loss of $30,747. 2025 Revenue was estimated at $294,488; expenses are 259,592; while depreciation is $65,643. Without depreciation, the Water Fund would be in the black.
For FY 2026, the operating loss will increase to $47,145. Revenue is projected to be lower at $290,682; with expenses totaing $272,184; and depreciation the same as 2025.
Sanitation Fund
According to Hollow Rock’s proposed budget, it estimated that the account brought in $49,863 in revenue, but expended $78,581.
The new budget proposes $82,053 in expenses, while retaining the same revenue, for a $32,190 deficit.
At the end of FY 2026, the budget shows that the account will only have $3,122 left in its fund balance.
Grooms said the something seemed off with sanitation, because the town charges more than they pay Republic for trash pickup.
Police Cuts
Alongside the town’s finances, Hollow Rock’s reduction in police coverage has become a growing concern among residents.
Officers are currently limited to just ten hours per week.
The decision was made administratively by Mayor Ronnie Webb.
Several officers are concerned by the low amount of hours, and Police Chief Tim Reeves is afraid that he will lose staff because of it.
Reeves also said that, aside from less patrol in town, the drop in hours might affect Hollow Rock Police Department’s eligibility for grants like the Tennessee Governor’s Highway Safety Office grant.
If an officer makes $16 per hour, their gross income for the week will be $160.
The mayor said he hopes to see more community involvement, and encourage residents to look out for each other.
He gave no indication when or if police hours might increase.
Hollow Rock’s next meeting will take place on December 16 at 5 p.m.
