Fouke’s $79,000 in state aid is gone for good — but the mayor told lawmakers the town can finally “write the check” for its overdue audits

FOUKE, AR. — Fouke has permanently forfeited $78,986 in state turnback money over water and sewer audit reports that were never filed — but Mayor Terry Purvis told state lawmakers last week that the town has finally saved up enough to pay for the audits and start digging out.

Purvis appeared August 13 before the Arkansas Legislative Joint Auditing Committee’s Counties and Municipalities committee, which has spent more than a year pressing dozens of cities and towns that failed to file legally required water and sewer reports. In a follow-up interview back home, the mayor walked through exactly how a town of 350 water customers ended up here — a story of a mandated water tower overhaul, audit bids that doubled, a nonprofit lifeline that fell through at the worst moment, and $200,000 pulled from the town’s emergency reserves.

In July 2025, the committee had the state treasurer place the turnback funds of 43 delinquent entities in escrow under Act 453 of 2023. Deputy Legislative Auditor Joe Archer told the committee that 40 of the 43 have since filed their reports and been fully reimbursed. The last three — Fouke, Biggers in Randolph County and Ulm in Prairie County — have now forfeited their escrowed money entirely. The combined loss is just under $126,000, which will be redistributed to other Arkansas cities, and all three towns remain ineligible for future turnback until they catch up on their reports.

“Those three communities and their $126,000 total, as far as they’re concerned, is gone,” the committee’s chairman said. “Unless we change the statute, they won’t ever see that money going forward.”

“I can write a check now”

Purvis told the committee the only thing standing between Fouke and compliance has always been money.

“The only hurdle I have is the cost and being able to pay for it,” Purvis said.

That has changed, he said. Purvis brought the city’s most recent general fund bank statement showing a balance of $137,005.40 — far above the $40,000 to $50,000 the town typically carries.

“I didn’t come before you today just to show you a budget,” Purvis said. “The only thing I wanted to show you is I can write a check now.”

The mayor said the town got there by cutting non-essential spending and saving over a period of months, along with drawing partly on reserves that he intends to pay back. He said the city is working with a Magnolia CPA to begin the audits and plans to keep going until Fouke is fully caught up.

“I take full responsibility for losing that money, but I had to be able to write the check if I’m going to have the audit,” he said. “I’m going to get it done — not only for this round, but we’re going to keep going until it’s caught up.”

The chairman was sympathetic but blunt, noting Purvis had told the committee at an earlier meeting that he was shopping for a better price on an audit.

“You’re kind of like your car broke down on the side of the road — you can’t argue with the tow truck driver on how much he’s charging you,” he told Purvis, adding that he had specifically asked the legislative auditor whether the money was totally gone. “Unless the General Assembly changes the law, it is.” The soonest that could happen is January, he said, and he doubted the votes were there.

When Purvis referred to “losing” the money, the chairman offered a correction: because the funds were withheld in escrow before ever reaching the town, “he didn’t lose it — he never had it.”

Purvis drew praise from committee members for showing up at all. “We sometimes have local officials that don’t pay us the courtesy of showing up and answering our questions, and we appreciate you coming,” the chairman said.

The mayor, in turn, singled out state Rep. Carol Dalby of Texarkana, who sits on the committee. “Miss Dalby don’t even represent us,” Purvis said. “She’s always there to help when I call her.”

Separately, the committee filed Fouke’s 2024 city audit report, which found the street fund overspent its budgeted appropriations by $27,000 and that the city council did not document its review of the prior year’s audit — both repeat findings.

“City after city”: audits small towns can’t afford

In the interview, Purvis said the root of the problem is simple: the state used to perform small towns’ water and sewer audits itself. It still audits Fouke’s general, fire and street funds every year, but the water and sewer side now falls to private CPAs — at prices that have exploded.

“I’m getting bids at anywhere from $14,000 to $22,000,” Purvis said — this for a water department that takes in $3,800 to $4,200 a month from 350 customers. “It’s not like Texarkana, where we take in millions of dollars. I wish I did. I don’t.”

He said Fouke was far from alone in raising the alarm before the auditing committee. “City after city after city telling them, look, this is unsustainable. We need help,” he said. Many small-town officials hoped the Legislature would create a way to get audits done at affordable rates. “That didn’t happen. So now all of us have to navigate how we’re going to pay for this.”

A boil-order threat and $200,000 from reserves

Purvis traced Fouke’s cash crunch to two back-to-back infrastructure emergencies. First, major failures at the town’s sewer ponds forced a total rebuild of the lift station — “the only thing that’s left that’s original is the concrete pads,” he said. Not long after, the Arkansas Department of Health ordered the town to refurbish its water tower, warning that the alternative was a boil order lasting the entire three-year project.

“If I had to issue a boil water order for three years, I would have to hire guards around my house to make sure they didn’t burn it down,” Purvis said. “We had to get it done.”

Bids for the water tower came in at $293,000. Fouke had $148,000 in leftover CARES Act pandemic funding — “praise God I had that $148,000” — which covered roughly half, but the money had to be spent by December 31, 2025, or returned to the federal government. The contractor billed the city on December 30, about 72 hours before the deadline, which meant Purvis had to keep $148,000 sitting in the bank all the way to the end in case the town had to pay it back.

The rest came out of the roughly $200,000 the town keeps in reserves for disasters — money Purvis said he refused to replace with a bank loan.

“If I borrowed that from a lending institution, I would have been able to tell that legislative audit committee: last one out of Fouke, turn the lights out,” he said. “We could not pay it back. We couldn’t even pay the payments.”

Paying the reserves back is now his biggest worry. “That’s $200,000. I have got to pay that back to the reserves, and right now I don’t have a clue how I’m gonna do it,” he said. “But we’re gonna figure it out.”

The nonprofit Communities Unlimited, which the Arkansas Municipal League connected him with, had been preparing to bid out Fouke’s audits at a lower rate — and is still performing the town’s state-mandated rate study free of charge, a service Purvis said typically runs about $18,000. But staff departures at the nonprofit ended the audit help about four months in.

“If they would have come through — and I understand what happened — I would have been in the perfect timing to get everything done before this last committee meeting,” Purvis said. “That delayed me four months.” The town missed the committee’s filing deadline, he said, “so here we are.”

“Every penny will be audited”

The audits are now underway with an accounting firm in Magnolia. Purvis said his city secretary is transmitting records electronically from the town’s accounting and water billing software, and he’ll drive the paper records to Magnolia himself if he has to.

“Every bill, every penny that has been spent, every penny that has been taken in will be audited,” he said. The firm will complete the three delinquent years first, then keep working — three years at a time, plus current reports — until Fouke is fully caught up. “I’ve got the money to do that.”

Purvis said he expects the town to be eligible for turnback again next year once the reports are filed. That money, he noted, isn’t tied to the water system — most of it goes to Fouke’s street fund.

As for when water customers will see a rate increase — which Purvis acknowledged is coming, and which will be sized to cover future audits — he said that depends on the rate study. “I don’t have an end date of when we’re going to receive it.”

Purvis pointed to the town’s balance sheet as evidence of how he operates. “The only debt we have is our squad car, and we’re right close to paying it off. When I pay it off, this town has zero debt. Period,” he said. “If I order something done, I’ve got the money in the bank — not the budget, in the bank — to write the check.”

“We get what we get, and we have to live within our means,” he added. “I’m not like Jerry’s General Store — I need a little extra cash in the water department, I can just put a little bit of water in that hamburger and raise it up a buck a pound. I can’t do that.”

“Leave my water alone”: Purvis on data centers

Asked about the swirl of rumors around data center projects in Bowie and Miller counties, Purvis said no one has approached Fouke — the town doesn’t have the hundreds of acres such projects require — and the city has signed no non-disclosure agreements. But as a next-door neighbor, he’s made up his mind.

“I am totally, totally against — let me say that again — totally against those data centers,” Purvis said. “The number one biggest reason is the massive amount of water they use. How’s that gonna affect us?”

If one ever came knocking, he said, “I’m not signing nothing for a data center. Nothing. Do like China — go build it underneath the ocean, use their water. Leave mine alone. Period.”

Despite the sleepless nights — he’s looking forward to getting eight hours again once the audits are done — Purvis said the town has “a lot of great things going on.”

“I’ve been here for 42 years. My career in electronics has taken me to many, many cities, and this is the best place I’ve ever come to,” he said. “I love Fouke.”

The other two towns that forfeited turnback are in similar straits: Biggers is behind on audits dating back to about 2016 — its CPA estimated roughly $25,000 to bring the town current — and Ulm is working on an engagement letter with an auditor, according to testimony from Municipal League and audit staff.

Miller County cited on bids, assessor’s vehicle use

Miller County was among 20 reports referred to prosecutors and the attorney general’s office. Auditors found the county executed a contract to re-roof the Miller County Health Unit before advertising for bids — and awarded it to the highest bidder — while bid documentation for the health unit’s office renovations could not be produced, and most of the construction contracts reviewed were never recorded by court order or filed with the county clerk. Auditors also found the county assessor drove a county vehicle 949 miles on a personal vacation in June 2024 without reimbursing the county the $636 value of the trip. The report was filed without questions.

Reached for comment, Miller County Judge Cathy Hardin said the matter “was turned over to the attorney general in 2024 by Michael Rayburn, and the AG’s office found no evidence of any wrongdoing.” She added that she would be happy to answer questions, but “I know I will never be able to answer all the questions to suit everyone.”

Around the state

The Fouke and Miller County items came amid a long afternoon of findings from across the state: Cotton Plant and Wabbaseka officials described unpaid federal payroll tax debts that have ballooned to $345,000 and roughly $267,000 respectively; Jefferson County was cited — again — for more than $305,000 paid in 2021 for solar panels that were never installed, a matter now with a special prosecutor; and findings referred to prosecutors or the attorney general’s office included incidents in Crossett, Fairfield Bay, De Queen, Rockport, Union County and Montgomery County. The committee moved to escrow half of Fargo’s turnback for continued non-compliance, started a 60-day compliance clock for Lead Hill, and flagged four more entities — Black Rock, Omaha, Briarcliff and Garner — that are now at the same stage of delinquency where Fouke stood last July. Dozens of other reports were filed or deferred to September, including 155 with no findings at all.

The committee meets next on September 10. As the chairman put it while previewing a packed agenda of deferred reports: “September’s gonna be fun. Get your tickets early.”