BY TRACY LEE TATE
Times Staff Writer
LAKE BUTLER — In a special meeting on Jan. 9, the Lake Butler City Commission discussed several issues concerning budget overruns and spending, much of which had never been brought before the commission for approval.
The meeting was held at the request of Commissioner Melissa Hendrix who, at the regular commission meeting in December, had pointed out at several financial issues about which she had questions.
At that time the questions were related to current city monthly financial statements and the fact that some of the budgeted line items were already depleted or in which the balance of available funds was depleted more that would be expected for only the second month of the city’s fiscal year (i.e., line items in which the balance was depleted by as much as 80% when the expected expenditures would be around 17%).
Since that time, Hendrix has delved deeper into city finances, not only reviewing monthly financial statements but also reviewing the statements for city credit card purchases. She related some interesting numbers to her fellow commissioners.
Hendrix started her presentation by noting that the city ended the 2021-22 fiscal year over-budget in several areas and in the negative overall. She noted several line items where city (taxpayer) funds were spent in items that were never included in the original budget for the year and that were never brought before the commission for approval. One was the erection of a privacy fence at the Dekle Cemetery in the city and the largest for “grass cleanup” at the lake for which the city paid about $20,000.
Also noted by Hendrix were the raises being given to employees recently by City Manager Dale Walker as merit raises.
“The salaries we are paying now are way over the amount budgeted for them,” Hendrix said. “Some employees have received increases of up to 30%, while others have increased by 15% or 12%. One person’s salary has already exceeded the cap for that position. This year’s raises are costing the city $62,000 for 14 employees. When the commission approved the last personnel policy, they gave the matter of merit raises into the hands of the city manager, the public works director and the finance director without oversight by the commission.
She also noted that, in addition to their salaries, employees were receiving funds in their paychecks for other items as well.
“The city has a shoe policy, that was created before I was elected, that gave employees $100 for the purchase of shoes for work. I believe the original policy was for workers who required special shoes (such as steel-toed boots for public works employees) to keep them safe on the job. But now, all the employees are getting that $100 annually, even Mr. Walker. There are also issues with the uniform policy (see below) and the $8,000 per year stipend given to all city employees to cover hospitalization expenses, which is set to be increased to $8,500 in the proposed personnel policy that is awaiting commission approval.”
Hendrix said she had requested copies of past personnel policies, as well as the city’s credit card policy but has not yet received either.
Hendrix did request and received copies of the credit card statements for past months and said she found several alarming expenditures. The city has a few VISA and gas cards, some with high credit lines.
“Dale Walker has two VISA cards, one with a $15,000 credit line and the other with a $7,500 credit line,” Hendrix reported to the commission. “In addition, the public works director, the deputy city clerk and the assistant public works director all have cards with a $7,500 credit line.”
In looking over the statements, Hendrix said she found charges on Walker’s cards for purchases from Kirkland’s, Hobby Lobby, Michaels, the listing fee for Walker on the Top 100 Registry, a cup of coffee at the recent boat races, several lunches with employees and a $1,700 purchase of chairs (not brought before the council for approval of the expenditure). She said there was a charge for $242 for “dinner with a former employee” during the time Walker was in Austin, Texas, for a conference.
In the public works department, the workers are allowed to wear jeans as part of their work uniforms. Hendrix said she found charges in the card assigned to the public works director for jeans ranging in price between $69.95-76.95 per pair and that six pairs were purchased at one time at the mall. She also noted public works employee purchases on a city credit card for jeans in excess of $50 per pair. The public works director also made purchases at Dunkin Donuts, Chick-fil-a and for smoothie drinks on the city card assigned to him.
In city hall, the accounts payable specialist’s card showed purchases for $40-60 in candy monthly, book club expenses for several employees, the purchase of Happy Belly Tea, snacks and 84-count packages of coffee. Also on the card was a monthly expenditure of almost $300 a month for Centel Internet, which Hendrix questioned since the city gets internet service from Windstream. When asked, Walker said it was for security, but Hendrix countered that the city already paid for internet security services from another company. Another recent purchase was for a new computer printer costing $400. Hendrix asked Walker if the item had been added to the inventory of city assets and he said he did not know. Finance Director John Sapp said there was no such running inventory being kept and Hendrix countered that if that was so items could “just disappear.”
Hendrix asked Walker whether he reviewed the credit card statements and he responded that he did not do so every month.
Other questionable spending reported to the commission by Hendrix included $211 for 50 Christmas cards sent to employees, commission members and others, the fact that city workers were paying sales tax on purchases at stores like Home Depot and Lowes despite the fact that the city is tax exempt (accounts were never set up to allow this), the doubling of employee longevity awards in January, and a stipend for every city employee towards the cost and service for their cell phones
The other city commissioners listened to Hendrix’s report with little comment, but Fred Sirmones seemed shocked by what he was hearing and on two occasions asked how it was going to be addressed.
City Attorney John Maines was asked about dealing with the situation, and he said the first thing would be to freeze the merit raises until it could be decided how to deal with them and to collect the credit cards and put a moratorium on their use until the city could establish a policy governing it. Until then, he said the city would have to pre-approve expenditures using a purchase order system. The commission voted unanimously on motions from Hendrix to take both measures.
One of the main problems with the finances of the city, according to Hendrix was that most of the checks and balances on spending had been removed from the city processes, greatly reducing the city’s transparency. She noted the lack of a city procurement (purchasing) officer. The last one in place with the city was fired during the first few months of Walker’s hiring and never replaced, with Walker taking on the duties of the position. Maines said the commission could approve the reinstatement of the position and make that person answerable to the commission, giving monthly reports at its meetings.
Hendrix also commented on the fact that there seemed to be no 1099 forms for Walker’s fringe benefits, most notably that the city paid both his rent and provided him with a vehicle (he does not own a personal vehicle). She said that he put an average of 1,000 miles per month on the vehicle (in a two square-mile town) and that the gas receipts would seem to indicate that the city was paying for most, if not all, the fuel.
The commission agreed that there was a need to look more closely at the city’s financial position and spending and decided that they would set the time and date for another workshop on the issue at their next regular meeting on Jan. 16.
In comments from citizens at the end of the meeting, the discontent of citizens concerning the property swap with Welch’s Auto Repair, with him trading his business property on Main Street for the public works property behind the fire station. Both local Pastor Patrick Maxwell and city resident Rondall Huggins questioned the transaction, which was approved by the commission. Both noted that the difference in value would likely be significant and asked if the city desired to liquidate the public works property why there were no bids. (According to the Union County Property Appraisers Office the property on Main Street has an assessed value of $57,190, while the old public works location has an assessed value of $135,544.)
The trade is costing the city taxpayers as much as $100,000 for the construction of a new public works building and yard, the cost of which included the purchase of property. The city borrowed $80,000 from its surplus/reserve funds to help finance the purchase of the property and construction, leaving those funds depleted, but with the agreement that the funds would be paid back into the fund over time, with interest.
As to the old location of Welch’s Automotive, the city now owns it and plans to make use of a Brownfield grant to clean up any contamination issues and then attempt to sell the property. The location next door was leased by Welch for his tire business and that will move from Main Street to his new location soon.
