Bay St Louis Mayor defends administration against 2014 audit results, claims recurring problems are not rooted in dishonesty

And if you narrowly define the term “dishonesty” to cover criminal activity such as the conversion of municipal assets, embezzlement of funds and the like I completely agree with Mayor Fillingame because Slabbed has found no evidence of such wrongdoing and believe me when I say if I thought there was some hankey-pankey going on Slabbed would be on it.

That said there are two active investigations underway at City Hall including one by the gang at the United States Department of Justice.  When asked by Councilman Favre last night about the active investigations involving misspending of Drug Forfeiture funds City Attorney Donald Rafferty indicated that he thought the Administration would be vindicated and that brings me to another word in “misspending” “misspend” “misspent”, terms I have used to describe the problems in the City’s financial management. The Mayor made it clear in his remarks he thought the term was too strong. I took the liberty of looking it up for everyone during last night’s meeting posting same to Slabbed’s twitter timeline:

Meantime Wes Muller over at the Sun Herald wrote a pretty good account of last night’s meeting correctly framing the root problem of audit recommendations contained in bad audit report after bad report being roundly ignored by the Administration.

Bay St. Louis audit report has troubling findings, much like the last one ~ Wes Muller

Finally being as this is Bay St Louis we had to have an Alice in Wonderland type moment and that came when Councilman Seal directed local Alliance for Good Government President Lana Noonan to take down some numbers derived from the FY 2000 and FY 2014 audit reports pointing out that both the City’s General Fund Revenues and Water and Sewer Fund revenues were down compared to FY 2000.  It was a great point, made in anticipation of another tax increase for this year by the Councilman but I wondered if he understood the implications of what he pointed out.

You see folks I did not live in the Bay back in Y2K but I know plenty of people that did.  The local casino was doing well and the City, then under Mayor Eddie Favre enjoyed low overall property tax and water rates. The budget was also balanced albeit “cut close”.  My question would be during the year 2000 fiscal year was the City spending money providing free bus service to a small area of town? How about free dumpster service to certain businesses? The answer to both questions is no.  And the City’s trade vendors also did not have to wait several months to get paid and critical insurance coverages did not lapse for nonpayment of premium. To be sure the year 2000 was not all rainbows and unicorns for the City because it never is but my point is the basic financial functions of the City actually functioned and tax money was not wasted in direct subsidies to supposedly private, for profit businesses.

There is also a story behind those numbers that is bigger than Hurricane Katrina.  For instance the 2014 audit contains a finding regarding  very poor internal controls over the collection of Court fines and fees and Auditor Bell in fact pointed out the noticeable decline in Fines and Forfeitures general fund revenue over the past three years. That decline in revenues is completely “man-made” and the problem can be corrected without raising taxes a nickle if the City wanted to correct those problems, which was also reported in the 2013 audit.

What about the decline in Water and Sewer Revenue?  Again the 2014 draft audit contains findings about the City not following its own ordinances regarding termination of service for nonpayment.  You give people a free ride on their water and sewer bills and it is inevitable revenues will decline. Is the solution to stick the cost of the unpaid water bills on the paying customers or is it found in the City enforcing its own rules by making the deadbeats pay up or face a cut off of water service?

I guess that is the big point folks because without breaking a sweat I highlighted 2 of 14 major audit findings that directly impact the top line.  As Councilman Reed pointed out last night the overwhelming majority of the audit findings either impacted the top or bottom lines (via unnecessary increases in expenses).

I guess my question for the City Council is whether or not the public should sit back and just accept that a portion of their property tax and water bills are destined to be squandered with their taxes going up year after year to pay for the waste or will the City Council require some accountability for these well documented problems?

Finally no one can say for sure at this point if the total answer lies in doing the nuts and bolts things to run the City right or if a tax increase is required no matter what. The problem is that to the extent the City’s financial position as of September 10, 2015 is unclear I don’t know on what basis anyone on the City Council can use to make an informed decision. Such is the price of running a year behind on closing the books. The people here deserve way better, even the lady that blamed the audit firm for the City’s financial problems last night during the public comment segment.

In other business, the City awarded the Bond Counsel contract to Butler Snow, who shaved their fee to $19,500 including their expenses for the coming capital improvement bond issue

16 thoughts on “Bay St Louis Mayor defends administration against 2014 audit results, claims recurring problems are not rooted in dishonesty”

  1. Same ole, same ole Doug. This Coast was overbuilt by Fata$$ and his CONprofits so that they would not run out of money for booze and women. That is my story and I’m sticking to it.
    Just take a look at the buildings that were put in along the Coast. The bathrooms, for one, are fit for the Taj Mahal, or where someone with lots of money can pay for them!!!
    It would have been a lot more prudent to build simple bathrooms on the ground and replace them as needed if another hurricane came along, rather than the monstrosities that were built up on stilts JUST to justify the high costs of the buildings. Wonder who the elevator contractor was buddies with??? It is evident that a whole bunch of elevators were sold due to “zone designs”. And we all know that no one can control Mother Nature. All that will be left are the stilts that these houses are placed on if another Katrina comes along. So what is the purpose of this overbuilding?? Another boondoggle.

    It is so sad that Bush entrusted all of that Katrina money to one big Fata$$. And the contractors stood in line to kiss his ring and a$$ in return for riduculuous contracts that cost the Taxpayers HUGE amounts of $$. This Gulfport port thing is just another boondoggle and way to siphon funds through Billy the Boy; as is the money flowing through Mr. Miller at the DMR, and the BOS and management at SRHS. Just how many more of these scams are around the Coast?? Why are there so many restaurants going up?? I have been told that Snotty Toddy and Joey Cloyd have major interests in some of these restaurants. How many damn restaurants do we need down here anyway?? It is all just one big circus. Round and round we go, where it will all stop, no one knows.
    The poor people in BSL now have to operate these monstrosities that were built by the elite and affluent who couldn’t care less. After all, they have what they want….our money! I think the ones who approved these designs should have to pay to operate them. It is no wonder that the Taxpayers are mad. It is the same all along the Coast. The politicos in Jackson stood back and watched as our Coast was trampled on the crooks. And it appears that the FEDS don’t give a flip either. Kind of like Sodom and Gamorrah.
    Heading to lunch now…..we are all behind you BSL Taxpayers!!!

  2. No doubt a detailed audit hit the nerve of Council Woman McDonald and Mr Rafferty! There are skeletons in the closet for sure!! Court Documents tampered with, fines reduced, sentences changed! Now who would have access to that? Issuing their own permits making up their fees for same etc. Having city employees provide services to their events with city property! Prosecuting their enemies! Silencing their critics in public meetings (Bobby Compretta). Look what is has got them “A throw out the THUGS mentality from the public”!

    We are a thug run city that has gone Rogue!

  3. Wendy says let Les fund it and let Raff handle it!

    She never made it back from the daffodil farm! Must have mushrooms they were growing!

  4. Post title: Bay St Louis Mayor defends administration against 2014 audit results, claims recurring problems are not rooted in dishonesty.

    “Numerous journal entries were made to the general ledger” and “later voided and re-entered again in-part or in-whole.”

    The financial “books” should be inviolable, “adjustments and corrections” are acceptable only for certain (and well documented each and every time) reasons. The exact chain of command instructing that the above referenced alterations/corrections were to be done to the financial records needs to be examined. The supplied “justification” for the each and every such change at the time, and the practical effect of each and every application of this practice may answer the dishonesty issue.

    The results may be contrary to the mayor’s expressed claim.

    1. 100% Correct. And along those lines the voiding of entire checks runs in violation of state law is as bad or worse in my opinion. The wording of the finding could be more precise but for checks to be run and signed in a Mississippi municipality means they had to be previously approved for payment by the City Council on a claims docket. When I use the term financial shell games this is exactly what I am talking about.

      When the checks are voided the related claims payable have to be restored. This explains why public records request for copies of Claims Payable Aging Reports were stonewalled time and again.

      This could not have been hidden had the City Council been receiving monthly every report listed in the Mississippi Municipal Audit and Accounting Guide that is given away free of charge by the Office of the State Auditor.

      So if there is a level of dishonesty in all of this, it certainly does not have to exclusively lie in the criminal realm to be present.

      Voiding checks and reversing financial transactions by general journal entry to conceal the dire financial situation is absolutely a form of dishonesty or in Catholic terms, it is a “sin of omission”.

      1. Voiding checks and reversing financial transactions by general journal entry to conceal the dire financial situation is absolutely a form of dishonesty or in Catholic terms, it is a “sin of omission”

        I am pretty sure these types of things are “sins of commission”.

        I had missed knowing entire check runs had been voided. The mechanics of how that could happen and then be “fixed” on more than one occasion without causing major difficulties with the city’s bank or creditors escape me at the present. Unless (hypothetically of course!) the entire check run had not been distributed to the payees. Why would any entity would run checks and then (hypothetically of course!) not distribute the checks to the payees? This is assuming (hypothetically of course!) that the entire run of checks were covered by funds when cut. Which probably goes to both intent and to whether it is sins of omission or sins of commission.

  5. Okay, I am going to throw this out here on the sight because it is obvious to me that the great majority of those who post here are a lot smarter than me regarding accounting and legal matters.
    Doug has defined mis-spend as to “fritter away foolishly, wrongfully, etc. And I accept that, but with regard to the Mayor and City Clerk Kolf’s absconding with the utility bills that they were responsible for forwarding to the Solid Waste Authority and the Hancock County Utility Authority for services the city does not and and cannot provide, I am not sure I accept just “mis-spent.”
    First of all the money collected by the city from users was not generated by the city as in building fees, hall rentals, court fines, etc. The city was simply the billing agent for Solid Waste and Hancock Utility Authority.
    Sooooooooo that money never belonged to the city.
    Therefore, I am leaning toward “steal” which Webster’s defines as “to take another’s property, etc. dishonestly, and in a secret manner.” Let us not forger Hizzona never communicated to the Council that he was doing this or asked their permission to violate the contracts with these agencies.
    Now let’s look at embezzle– Webster’s definition of that is “to steal money, etc. “entrusted to one.” Solid Waste trusted the city to do their billing and forward that money to them.
    Now these words may have a different meaning in legal terms and that is why I need the help of my fellow “posters” here.
    But in my mind they took money that was entrusted to them by two agencies who were legally entitled to it.
    I wonder, really wonder, how long it would have gone on if Brenda Ford of Solid Waste, and Bill Johnson of Hancock County Utility Authority hadn’t given interviews in the Sea Coast Echo saying they were in need of their money to operate their agencies and pay their bills. At the time this little scheme was discovered they were 3 consecutive months into it to the tune of $370,000.00
    As I said I can understand the Mayor “misspending” money generated by the city, but to me this is very very different.
    Help me out here, guys.

    1. To be a crime Lana they must derive a pecuniary benefit directly related to their actions and robbing Peter to pay Paul does not qualify. It is why I’ve cautioned and again now strongly caution commenters here against making allegations of criminal activity.

      Check out Hanlon’s Razor:

      Never attribute to malice that which is adequately explained by stupidity.

      It applies here.

      Sure, the gang had a duty to pay the Utility Authority just like they had a duty to comply with the law in seeking loans and leases. They also had a duty to spend the current year property tax collections on current year budgeted expenditures. The administration has failed on every count. That is the story in my opinion.

      But since you brought it up, that $370,000 “line of credit” with The First is a good indicator of the floor amount of the accumulated deficit the Mayor has done his best to hide on the Enterprise Fund side of the equation. The misspent Drug Forfeiture money is the same floor indicator on the general fund side.

  6. I am biased toward honesty! But, theft, deception, dishonest etc. Is the same. If you lie you will steal! All honest people know that and beleive that! It is an ages old conclusion! The question is di you think les lies? LOL he is the best……the worst part is Wendy, Bobby and Raff will swear to it!

  7. Okay! So I am totally confused. The check we write out and send to Hancock County Solid Waste (address is a PO box) is being deposited into a BSL bank account. My payments to the Hancock County Water and Sewer are being sent to Hancock County Water and Sewer. Does the city receive these funds also? Is this legal? Especially since I have never seen a city employee service the Hancock County Water and Sewer system. I have seen the city meter reader wandering my neighborhood where there are no meters. And as you can tell, I am in the annexed area. To add insult to injury, there is no water service in my area. Both the City of Bay St. Louis and Hancock County refuse to provide it. They continue to place the blame on each other. The rate for solid waste in the annexed area is higher than the rate for the city. I guess you could add, “discrimination” to “misspend” and “misspent” Reminds me of when the Federal Government seized the “Bunny Ranch” for back taxes and tried to run it themselves. It closed down. Proves politicians can’t even sell whores and whiskey.

  8. Spyderwoman,
    I believe, as a resident of the annexed area, Wards 5 & 6, you pay your Solid Waste and Utility bills ” directly” to the agencies that provide the services. That did not change with annexation.
    But, here is the really bad news for you—when thy our Mayor and city clerk got caught taking utility payments to these two agencies that were paid by residents of Wards 1thru4, they went to the First Bank Nd took out a &500,000 loan to cover what they did and put it in the whole city’s name, which includes YOU!!!!
    So, even though you don’t receive utilities from the city, you are having to also participate in paying this loan off!!!! Pretty sick, huh?’n

  9. Thanks, Doug. Sun Herald did a pretty good job this morning on covering the meeting.
    At least the facts are getting out there.
    The Solid Waste Authority minutes are some interesting reads as well. Remember Hizzona is Chairman.

  10. Once again the Echo Sugar Coats the BS going on in BSL. Fact There is $50,000 in the police forfeiture fund. Fiction The Mayor signs a affidavit every year stating that he has read & understands the equitable sharing agreement & it is an accurate account of the funds. Fact This is Under Penalty of Perjury for the undersigned officials certifying this report. Fact More to come.

  11. More CONprofits. When will it all end???? What has happened to the moral fortitutude of the leaders in this State?? Or are these leaders transplants also??

  12. “Misspent” “Misspend” “Misspending” Bottom line Les did not do legal, proper accounting practices. Honest or Dishonest he has to be held accountable to the people of BSL for his actions. I have always heard ignorance is not a defense. He knew exactly what he was doing and asking of his administration. Shame on ALL of them for playing games with our money to satisfy his budget that we all know is so over, due to the amount of employees (his friends & family) and benefits. We need to clean house now.
    The saddest of all of this mess that Les has gotten the city into, is at the expense of our wonderful Police Dept. These men and women go out everyday and risk their lives for us and the Mayor spent their money. Now they need new equipment and can’t afford to buy it.
    This is Dishonest and Shameful in my opinion.
    Spending the Waste Water money and not paying them is Dishonest and Fraud.

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