Audit sent to state attorney
BY TRACY LEE TATE
Times Staff Writer
LAKE BUTLER — One item stands out as a clear expenditure that was not made in the public interest by former City Manager Dale Walker and was noted as such in the recent audit of his spending of city funds provided to the city commission at a special meeting. This was the property swap between the city and local businessman Johnny Welch.
From almost day one of Walker’s tenure with the city he focused on beautification and the eradication of what he referred to as “blight” in the business district on Main Street. While there were several problems he found on Main Street, his focus, along with then Mayor Jack Schenck, was Welch’s Auto Repair and Welch’s Tire. Walker finally dealt with this problem by arranging a property swap with Welch, trading the city public works facility for the auto repair business (which Welch owned) with the agreement that he would also move his tire business from the adjacent building, which he rented.
Apparently, the goal was more important than the numbers, as the public works site was property with a usable metal building, while the auto repair site was less than an acre with a very old, small block building. According to Union County Property Appraiser Bruce Dukes, the auto shop had a taxable value of only $57,190 for its 0.241 acres, while the public works facility was valued at $135,544 for its one acre — a difference of $78,354.
During the audit, auditors found no documentation of the property values and no record of any tangible benefit to the city from the transaction. The transaction also did not follow established city purchasing policies.
At the time of the transaction, both Walker and Schenck made comments to the effect that the lost value was “well worth the price” of removing the “eyesore” from Main Street.
The transaction left the city with no public works facility, so then Walker purchased about 15 acres of land from a private party, with a building and pole barn on site, as a new home for public works. The building which, according to Interim City Manager Richard Tillis was not appropriate for the purpose and which could not accommodate the department’s vehicles, was then renovated extensively to prepare it for use.
It has not been completed, but the audit revealed that the money used for the purchase and renovation came largely from funds granted the city under the American Rescue Plan Act (ARPA).
The city of Lake Butler had received the Federal ARPA Grant for $903,540. The money was placed in the city’s operating funds, rather than being placed in a sequestered fund as should have been done. The commission had informally agreed to reserve the money for replacement/renovation of the city’s lift stations to accommodate the new wastewater treatment plant, but never voted on the matter.
Commissioners never approved the spending of any of these funds, yet they were used to make the land purchase and the expense of the building renovation. Although the grant funds were under the management of a consultant, they were spent, and all funds were reported to the federal government as being spent on allowable operating expenses.
According to the auditors, “these funds were not spent in compliance with the City Commission assignment and state budgetary requirements.”
Another expenditure made by Walker benefited him directly. Walker had been discussing a payout program where city employees could redeem a large portion of the value of their accrued sick and leave time hours for cash, reserving a small number of hours for emergencies. With the approval of Schenck, by email, Walker surrendered 600 hours of accrued sick leave at full value. On July 8, 2022, Walker received payment for the full value of these hours, as a “test case,” in the amount of $27,762.85.
The city commission never approved the buyout, and it was not specifically provided for in the manager’s contract. It also did not comply with the executed personnel policy, substantially exceeding allowed payout amounts.
The auditors also noted several instances where the city’s bidding policies were not followed for large purchases and could have resulted in “kickbacks and self-serving related party deals occurring without detection.”
The city of Lake Butler will have a great deal of financial cleaning up to do. The ARPA money will have to be replaced to cover the cost of the lift stations and the operating funds will require attention. Due to the potential for wrongdoing, the audit will be forwarded to the State Attorney’s Office for review and possible charges. Only time will tell if the city can recoup part or all the funds in question.
