Slabbed presents audit workpapers complete with after the fact spin: A case study in financial incompetence

Here is a 2013-2014 Audit workpaper that consists of a document obtained from City files:

Source: Bay St Louis City official not authorized to disclose information to the media
Source: Bay St Louis City official not authorized to disclose information to the media

Here is a related partial late payment dated a few weeks later:

Source: Bay St Louis City official not authorized to disclose information to the media
Source: Bay St Louis City official not authorized to disclose information to the media

Now for some after the fact spin courtesy of the Mississippi Municipal league, who are now helping Mayor Fillingame cover up the financial problems.

Source: Bay St Louis City official not authorized to disclose information to the media
Source: Bay St Louis City official not authorized to disclose information to the media

Next up is the late renewal of the City’s windstorm policy:

Source: Bay St Louis City official not authorized to disclose information to the media
Source: Bay St Louis City official not authorized to disclose information to the media

The first email by the City”s insurance agent of record:

Source: Bay St Louis City official not authorized to disclose information to the media
Source: Bay St Louis City official not authorized to disclose information to the media

Text of subsequent email from the agent of record to Councilpersons McDonald and Seal:

Doug & Wendy,

I was sorry I wasn’t able to attend the meeting this week. Had another schedule meeting at the same time.

The comments by the press and the auditors about no wind insurance for 24 days is incorrect.

In 2014, we provided a wind policy for the city with a $1m deductible. This allows us to get very low rates because the probability of that policy paying a claim is slim.

The reason we structured the policy that ways was because in 2007 my partner and I were able to calculate that going through the MWUA and getting a $1,000,000 Blanket wind policy with a 2% wind deductible and applying the coinsurance penalty was a substantial benefit because the MWUA rates were extremely low. To make a long story short. The MWUA figured it out as well and discontinued the ability for us to use the Blanket coverage in late 2014. They had the first $1,000,000 coverage on all large property schedules on the MS Gulf Coast and knew they didn’t want to be in this position. Their reinsurance company figured it out as well.

That loop hole closed for us.

The city had the primary wind policy in place they just didn’t have the MWUA wind deductible buy down policy in place for 24 days. As an agent I recommend all my client not to self insure. It was an issue of not having the finances.

In reality, the city self insured a $1m deductible for 24 days and saved over $2,000. I do recall there was no tropical activity at that time.

If the any council member would like to contact me in regards to clarity of the wind coverage please feel free to give me a call. I don’t have the other council members emails but feel free to forward.

So out of one side of his mouth the gentleman is saying he recommends to all of his clients to not self insure while out of the other he says that is exactly what the City did, during Hurricane Season no less.  While it is nice the gentleman pointed out that with the benefit of hindsight there was no tropical activity that is kinda the point in having insurance because one never knows about such things in advance. If a Hurricane had hit, that million dollar retention works out to about 7 or 8 mills of the 20 the City currently levies for operations and no insurer in its right mind would a cover a lapsed coverage time period that contained claims. These companies are not charity organizations after all.

To me though this whole exercise in trying to rationalize the financial mismanagement and flat out cash management incompetence illustrates the larger problem of bad financial priorities with the current administration because while large swaths of the City receive minimal to no City public works services and critical insurance coverages lapse because of a lack of funds, the Administration, at the behest of Ward 2 councilperson Wendy McDonald, does manage to find over $70,000 to fund free bus service that serves McDonald’s district. Few people ride the Bay St Louis Trolley for basic transportation but some enterprising citizens did find a way to take advantage of the Trolley Service as a party bus:

Until the gang stops trying to rationalize and cover up the financial mismanagement things will not get any better from a financial standpoint with the City. Could well be an election is the only thing that can truly fix what ails the City.

16 thoughts on “Slabbed presents audit workpapers complete with after the fact spin: A case study in financial incompetence”

  1. The Trolley driver is the loneliest man in America he has replaced the May Tag Repairman who was an American Icon! Les said his grand children use it!

    Insurance is not smoke and mirrors. You pay your premium and justify your claim and get paid for damages. Les is a voting member on the MML. I beleive his long reach has got to them!

    What happens with insurance money for all the Light Poles that get knocked down and not replaced? Go figure The General Fund!

    Bankruptcy is nothing to him it is a family tradition!

    I also beleive he should step down from his Chair as Chairman of the Utility Authority! They should be audited and this will be pushed. His control of anything must be questioned!

  2. The Regime is in shambles. This Fiscal Year is over in 7 days. Next years audit will have the siphoning of funds from the Harbor, The $13 Dollar Utility Debacle, Misuse of City Equipment by employees for profit and even possibly implicate The City Attorney taking advantage of this, Wendy’s use of position to help donors and other events for her benefit, City Attorney Reviewing, approving and setting a rate for his own event, Court Documents being tampered with, Fraudulent Pay Roll and time card administering, just a few things. The Insurance should be interesting as well as the Flood Policies routinely go in and out of Force along with other issues. Stay Tuned!

  3. Okay, the Trolley Video. Was this a private party? When did it occur?
    Was it during the ordinary hours of operation that was supposed to be open to the general public? Did these folks rent the Trolley and pay for the time they used it with regard to paying the driver and fuel? And most importantly, does Coast Transit Authority allow drinking on their vehicles?
    The terms of agreement between the City, Hollywood Casino, and CTA would be an interesting document to look at.

    1. To partially answer your questions, the vid came from the Facebook page of someone on the bus.

      Your question regarding the possession and use of Alcohol on a CTA bus is a good one.

      When it comes to Slabbed, RFP pretty well fits the term prescient as this comment back on September 2 foretold this post.

      As is my wont my focus was always on the high dollar economic concepts that RFP highlighted in the public choice theory concepts of the Forced Rider and the Free Rider.

      I know the identity of certain of the riders on the party bus and I edited the original video to edit out a face. What I will say is the party included some very successful business people that own very stylish cars that they use for their transportation needs. The likelihood of that demographic ever using the Bay St Louis Trolley for its intended purpose is somewhere between slim and none. The likelihood that 99% of the people that live in the City whose taxes pay for it will ever ride the bus is between slim and none. We’re the quintessential Forced Rider.

      To the extent some people in the Forced Rider demographic found a way to use the service, even if not for its intended purpose, illustrates another highfalutin concept called the Pareto efficiency or inefficiency as the case may be, criticisms of which turn up at the Nobel Prize and a discussion of social choice theory. Its my brain food of choice in fact.

      To simplify in the Mississippi Code the concept of a Municipality run by a Mayor-Council form of Government is a social compact where people in an area agree to form a legal entity to provide certain statutorily mandated services like Police, Fire Protection and Public Works in exchange for paying another level of property taxes.

      While nothing prevents a municipality from giving away free bus service that marginally benefits one part of town for instance, it seems pretty silly to be expending money on any extra frills when basic services are not being provided within the City limits. What I’m talking about is not sexy, rather it is the nuts of bolts of what a City should be doing, at the minimum, for its residents here in Mississippi. Its pretty much the same everywhere in fact.

      I personally have no political aspirations but if I were on the City Council, I would not spend a nickle outside of a budget other than one which provides for basic Citywide Services in Police, Fire and Public Works. When the Administration can demonstrate that the City can honor its end of the social compact with its Citizens and actually cut the grass on the public rights of way on a regular basis, run the mosquito truck on a regular basis, run the grapple truck on a regular basis in Wards 1 and 6 for instance (insert other wards and unmet services here) would be the day I’d consider things like giving money to nonprofit organizations or funding free bus service.

      It is not rocket science despite the highfalutin economic concepts.

  4. Well, well, well….let’s see now….looks like another arm of the regime is being lopped off. It has been a long time coming, but slowly and surely the locals have had enough.
    Mr. Mayor might end up in the caboose with the DMR people. Wonder if he is buddies with Snotty Toddy, Billy the Boy and his brother-in-law, or Joey Cloyd? Wonder if he has been on any fishing trips with a has-been Jackson county supervisor on the birthday trips?? Wonder if he has any buddies at the SRHS? And now it appears that even up in Wiggins that some of the regime is mismanaging funds from medicare or medicaid to pay salaries and BMW payments???
    Where the hell did these people come from??? Mars??? I know they can’t claim stupidity because no one is stupid enough to not know that the money didn’t belong to them! What bozos they are. Not a brain amongst them.

  5. Holy Little Trolley That Could Batman,

    Whether the patrons on the bus paid for their private party or not doesn’t matter if one of those patrons got drunk and fell and cracked his skull and became to live in a personal vegetative state ; and if that same person had a financial earning potential of $100,000/yr for 20 years you could be looking at a 5 Million dollar suit when you figure in another $100,000 for yearly medical care with of course compensation for pain and suffering of patron and family.

    Beyond great catastrophic legal libility which probably has another multi – million dollar deductible it appears that maybe this trolley is just another ” marine fishing boat” that has evolved, grown wheels and taken to the land for more politico celebrations. Darwin would be proud!

  6. That party was a political favor to a high level chamber member whose face was omitted. Les always gives philanthropy to the high level chamber members! The chamber has $440,000 in payroll all top heavy and the tax payers move their furniture for them and give them free trolley parties! They thought of the trolley idea so they need affirmation from the tax spending authorities! Lol…….it is kind of amusing that they don’t see the end of it.

  7. The mayor – council form long ago failed the city of Bay St Louis, as did Fillingame. The high level chamber members bought and paid for him long ago.
    City government is no game, nor are city finances. The car wreck that is this administration has failed and must be replaced. Bay St Louis, like most smaller cities, needs to move to a manager – council government. High value backers can continue to buy the government with no way to stop them. At the very least this way one person in government will be hired for the skill set s/he possesses and not personality.

  8. It is kind of I’ll wash your back if you wash mine….
    The relationship with some ”high ranking” chamber member and the mayor is exactly that, oh and let’s forget to include little Miss Wendy, please don’t leave her out of the loop. She would be so crushed if she were not part of the Limelight!! If it is a free ride she is on board along with the city attorney who can’t wait to say what the mayor wants to hear and just collect his paycheck each month. Who cares what the laws and rules and regulations they should follow. Les does what he wants and Rafferty gives his blessing.
    I hope these people take a lot of sleeping pills at night, I should would not be able to sleep with all of this on my conscious.

  9. They have no conscience! They are driven by their own personal ends! The chamber like all parasites will fall off when the corpse is no longer a viable host! They have a voracious appetite for tax dollars!

    They have gala’s that glorify their donor’s and then get the ones in influential positions to repay them with political access, TO TAX DOLLARS. There is collusion at all levels. The McDonald Family has controlled the Port and Harbor for decades. They are board members on the chamber and Port Commission! Ahha. $9000 in contributions! Where does it end? Until someone goes to jail it won’t stop! That doesn’t mean we we will either!

  10. “The chamber doesn’t take care of the Masses it takes care of the Haas’s”! Look at the Chamber Tax Returns! $440K in salaries with the Charming Director getting the lions share of it! They just need a little more love from the tax payers to make it work! Don’t question just give!

  11. Please correct me if I am wrong. Did not Les Fillingame work for the City of Bay St. Louis in a financial capacity when Eddie Favre was Mayor? Now we are in a financial mess but it is not his fault? Another question. This audit revealed the same mistakes being made (if not more) since their last audit. Since it is not the fault of the Mayor, they why are they still employed? And how could one question the head of the Chamber. She is a most learned person. Not that I buy designer clothes on a regular basis, in fact, this suit allowed me change from a $100.00 bill. A PLAIN NAVY BLUE, PIN STRIPE SUIT. Yet, at a Christmas party eight years ago, Ms. Haas declared how nice I looked in that Ann Taylor. I am still astounded to this day how she knew what brand it was without looking at the label. Years of education and even more years of a shallow personality. She deserves the unwarranted salary. You know I am old, but not that old. Bay St. Louis has changed so much, I went to the bank to cash a check, in person and not at the drive through. I was asked for identification. Maybe they thought I worked for the city and my check would bounce. Or maybe there are no more people who care about who is local unless you are one of the “well connected”. Anybody want to buy a house?

    1. Tonight’s Meeting , Fact / Fiction Still no budget. Fact Miss leading information given to council for budget. Fact. Could have a few hundred thousand $$$ shortfall on next years budget because of the BS given to the council. Fact Hurry & adopt it. Fact Tonight’s Docket had invoices from 2014. Fact. Miss using tax dollars that are for specific funds. Fact Mayor blames council for last two years of problems. Fact. Mayor Always blames everyone else. Fact. Council , You gonna believe your lying eyes or your deaf ears. Everything you need to know is black & white. Do your home work & stop the LIES & MISS SPENDIG !!!!!!!! This is Our City not Your City or les & dons.

    2. Less had a position in Eddie ‘s administration, but not a financial advisor. Before, he was back rupture and also worked as assistant manager at Winn Dixie under Bobby Compretta.
      Tish is far from learned. Very far.

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