Carolyn Davis, the mayor of Denmark, S.C., speaks with a resident. Ms. Davis faces criticism over the city's debts. C. ALUKA BERRY/SPECIAL

Years of deficit spending mean that city employees haven't had a cost-of-living increase in five years, the police get by with broken-down vehicles that require costly repairs, and fees for city services have risen, said newly hired Clerk Administrator Pat Anduze.

No one in Denmark has mentioned a tax increase as the answer to the deep debt, but this Bamberg County city of about 3,640 has a long recovery ahead, she said.

``Let me put it this way: We're not hemorrhaging anymore,'' Mrs. Anduze said. ``We are in critical care, and we are trying to do the best we can, stopping all this spending, spending, spending on what they want with nobody having a budget and nobody being held accountable.''

Since Mrs. Anduze was hired in October, the city has increased revenues and decreased expenditures. But the city continues to wrestle with correcting overspending and mismanagement.

With more than two months to go in its fiscal year, Denmark has spent 91 percent of the $1.074 million budget for the approved general fund expenditures, which includes money for payroll, fringe benefits, attorneys' fees, supplies, maintenance, equipment and gasoline.

``I just made it very clear to our creditors that if we don't have the money, I will not send out a check. They will just have to wait,'' Mrs. Anduze said.

Bills that accrue in the next two months might be paid out of next year's budget, a continuous process that could keep Denmark in debt for years, she said.

Residents attending Monday's council meeting have their own prognosis for the city's future.

``There's nothing wrong with the city of Denmark,'' said Cynthia Hicks, expressing anger over newspaper articles about the city's problems. ``The city has not filed bankruptcy in any shape, manner or form. We're fine.''

Homeowner Blake Waller said Denmark has taken a big step by removing the checkbook from the hands of Mayor Carolyn Davis and hiring Mrs. Anduze as a full-time clerk administrator.

``Pat's going to save the day, and the council is going to clip Carolyn's wings ... '' he said.

A thousand-dollar monthly phone bill, tens of thousands of dollars in penalties and an annual audit made worthless by lack of record-keeping. Years of uncontrolled spending and poor administrative decisions have slowed cash flow in Denmark, S.C., to a drip. At 6 p.m. today on television station WJBF (Channel 6), Brian Farrell will show a history of blown budgets and warnings the city chose to ignore. Thursday: As law enforcement digs deeper into financial problems in Denmark, S.C., frustration and anger come to the surface. Residents want their city leaders to explain the state and federal investigations, suspicious business dealings and a $750,000 deficit. At 6 p.m. Thursday, Brian Farrell will look at the long-term effects that Denmark's money troubles could have.

The State Law Enforcement Division has no timetable for its investigation of how the city went from a $600,000 surplus in 1995 to $600,000 in debt by June 2000 under the mayor's leadership. But if state agents find evidence of criminal wrongdoing, 2nd Circuit Solicitor Barbara R. Morgan could take the evidence to a grand jury. Indictments could force a change in the city's leadership.

``A report will be prepared and will sent to the solicitor for any action that she may deem appropriate,'' SLED Lt. Michael J. Brown said. ``It's a complicated case, and we don't put time limits on our investigations.''

The state Forestry Commission also could use its arrest powers to charge those involved in the questionable sale of city-owned timber last year.

The investigations seem to only increase with time. An FBI agent stopped by City Hall earlier this month to inform Mrs. Anduze that his agency was investigating the transfer of money from the city's water and sewer fund to the general fund. That is a possible violation of the terms of a bond through the South Carolina Rural Development Association, which is a division of the U.S. Department of Agriculture. The association could pull the city's bond and take over or sell the city's waterworks, Mrs. Anduze said.

``I don't foresee them doing it, but it makes it very difficult to go back to them and ask them to underwrite another bond issue when you are violating the terms of the current agreement,'' she said.

Another lingering question for the future of Denmark is the makeup of city council. The February election is in legal limbo because protests were filed over questionable ballots, leaving the old council in control.

In the old council, four members favor reform and two others usually side with the mayor. If the eventual election outcome leans toward the mayor's favor, she could have enough council members on her side to win most votes and control the city's future.

But that might take awhile. It took two years to resolve the 1998 election protests of the school board race in Bamberg County, Mrs. Anduze said.

Denmark has taken positive steps to recover, said Eric Thompson, of the Local Savannah Council of Government, which provided bookkeeping assistance for the city in 1999 and 2000.

``I think Denmark is going to be OK. They just got a lot of catching up to do,'' Mr. Thompson said. ``They sometimes have not been able to pay their bills or haven't paid their bills. There are various agencies and organizations saying, `Hey you owe us money. We've got to get paid.'

``The biggest thing is to realize you got the problem, and then you start to treat it. And I think they are starting to treat it.''

Despite the criticism and finger-pointing at her, Ms. Davis said her motivation is to serve the community.

``It's been my experience that once you try to do something, you always have somebody trying to tear you down. If you don't try to do anything, nobody bothers you,'' she said. ``I have a very strong belief in God and ... I try to be of service to mankind; that's my goal. He will see us through these terrible times.''

Reach Greg Rickabaugh at (803) 648-1395.