Bonifay officials at odds over City's financial health

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EDITOR'S NOTE: This story has been updated to include events from Monday night's Bonifay City Council meeting. Due to time constraints, the attached video contains clips of that meeting, rather than the meeting in its entirety.


BONIFAY – City of Bonifay officials are currently at odds regarding the City’s financial health.

 

Mayor James “Eddie” Sims assured concerned residents about the City’s finances during a called City of Bonifay meeting held last week, stating, “We’re in great shape.”

But with the City’s financials showing nearly $700,000 in the red as of July 26, other members of the council are not as at ease.

 

Council member Rickey Callahan points to financial decisions being made without being brought to the Council – decisions that include cashing out hundreds of hours of sick and vacation pay, giving individual raises, and applying for grants, grants which will be reimbursed, but for which the City must front the funds.

 

“Raises have been given, sometimes as much as $5 an hour, to individuals without being voted on by the Council. And those grants, while they can accomplish good things for the City, we have to put that money up front, and now, they are all coming due about the same time, and we can’t pay them all until more money comes in,” said Callahan.

 

Public records show more than half a million in outstanding invoices for grants as of July 26, with the City having a shortfall of $659,867.42.

 

Public records also show that Mayor Sims acknowledged the City’s inability to pay the outstanding balances, specifically what’s currently owed to Holley Development Group for work performed to date on the fire department expansion project, nearly $125,000.

 

“Just had a meeting with the bookkeeper concerning the account funds to have the funds to pay Holley,” the mayor wrote in the July 12 email to Dewberry Engineering. “We will not have the account funds to pay this request for at least the next two weeks depending on DEO [Department of Economic Opportunity] since an older grant repayment has not been received by the City to be placed back in the line of credit for use. There is no way to expedite this process. Holley will have to just wait for payment unless the Council can provide the funds from another source.” Groundbreaking was held on the project in March, but the $850,000 in funds were appropriated from the state’s budget more than three years ago. 

 

On Monday, attorneys for Holley Development issues a Notice of Intent to Terminate the project on grounds of non-payment.

 

“Our client has been told by City of Bonifay officials that the city does not have the funds to make the payment and cannot receive grant funds until the payment is made,” write Aaron A. White, attorney with Dunlap and Shipman in the notice. “While HDC [Holley Development Corp.] understands this predicament, HDC cannot afford to work without compensation.”

 

The letter, dated Monday, July 26, gave the City the contractually agreed upon ten days to make the payment.

 

Bonifay City Council met in regular session that same day, with Mayor Sims advising he is confident the DEO will reimburse $277,000 in funds the City previously paid for an engineering study conducted for the stormwater drainage project north of Highway 90.

 

“We have contacted Senator Gainer’s office to see if he can expedite the process, but we are expecting that check any day now,” he said. 

 

Councilman Callahan said a number of personnel decisions made by the mayor have also affected the City’s coffers, an issue which was brought to his attention in May when he heard about an “incident” with a city employee.

 

“I started asking questions about how the city was responding,” he said. “It seemed that decisions were being made with no input from the City Council. In the following weeks, I became more aware of decisions being made with no input from the Council.  At that time, I asked for a workshop to be held to address the City Employee Manual and Charter to ensure that the City was adhering to its own manual and Charter. 

During this process, several instances were brought forth citing examples where neither the employee manual nor the Charter had been followed.”

 

Callahan states those instances include creating new positions, giving individual raises, cashing out sick leave and vacation pay, and applying for grants.

 

Public records show Mayor Sims on December 23 granted a city employee 18 months of leave after the employee pled guilty to a federal crime. Public works employee Stacey Paul pled guilty last fall to his part in a scheme to bilk the USDA of thousands in drought assistance dollars intended to help livestock farmers who’d suffered a loss of grazing land during a dry period in 2017. The 18-month leave of absence was effective January 8 and is in line with Paul’s 18-month prison sentence. While the leave is unpaid, Mayor Sims made clear in the memo his intent to re-hire Paul after his sentence is complete.

 

“At the end of this pre-approved leave of absence, [Paul] may return to full-time employment for the City of Bonifay without the loss of benefits or years served as an employee with the City,” he wrote.

 

Callahan states he has no issue with Paul being reinstated; however, he should not have been granted leave. “The is a policy in place,” said Callahan. “If he wants to try to come back after his sentence is served, he should have to reapply.”

 

The City voted to reverse the decision to place Paul on a leave of absence during Monday night’s meeting, an action initiated by the mayor himself after he explained he granted the leave out of a desire to help Paul.

 

“I did not look at the personnel policies and procedures,” admitted Mayor Sims. “… so, the leave of absence really is no good. It served the purpose of making him feel better that day, but that’s it.”

 

“There’s a larger issue than this,” Callahan replied in the meeting. “Our policy clearly states that if you’re convicted of a felony or plead guilty to a felony, that you are immediately terminated. If you’re immediately terminated, the supervisor can’t come to the Council and ask for a leave of absence.”

 

“That’s right,” the mayor agreed.

 

Councilman Robert Urquhart added that the City is “not in the business of being personal friends.”

 

“We all have sympathy for our friends and neighbors, but the City is “not in the business of being personal friends,” said Urquhart. “We have rules the government has to go by. We all have to make tough decisions.”

 

The Council agreed to Mayor Sims’ recommendation to rescind the leave of absence, resulting in Paul’s official termination. Paul will ultimately be able to reapply for the position.

 

On May 6, the mayor issued a directive to finance staff regarding a city heavy equipment operator whose personnel record shows instances of arriving at work while “under the influence.” Records show that employee, who had been reported as a “no call, no show” for four days prior to the mayor’s memo, had agreed to repay the $2,624.11 cost to replace a fire hydrant he had damaged. The damage was done while the employee was off duty; however, he was allegedly driving under the influence at the time of the incident, an occurrence which City policy lists as grounds for termination. 

 

The mayor’s memo absolved the employee of the repayment obligation, as well as instructed that he be paid for all unused vacation and sick leave. As of May 14, records show the employee had 86 hours of sick leave and more than 161 hours of vacation pay, collectively totaling a little more $5,000. 

 

With respect to raises, Mayor Sims states no raises were given without approval of the Council, with the exception of raises built into the City’s policy, such as those given for completion of a certificate or promotions.

 

Public records show raises given in 2020 are notated for those purposes; however, in 2018, records indicate Mayor Sims gave six employees hourly raises ranging from $2 to $5 for a collective hourly increase of $18.5. While other raises notate when raises are given due to completion of a certificate or promotion, those six actions are simply notated “per Mayor.”

 

“When raises aren’t built into our budget, they can cause a perpetual financial issue,” said Callahan. “There is a reason we have these meetings."

 

An audit of the 2020 fiscal year, which ended in September, was certified by Carr, Riggs, and Ingram CPAs, Inc. last month. The document did not raise major red flags for that fiscal year, but noted, “… City personnel lack the skills and experience necessary to enable them to prepare the City’s schedule of expenditures of federal awards and state financial assistance including note disclosures. We recommend that City personnel continue to develop their knowledge of generally accepted accounting principles in order to ultimately prepare or provide technical reviews of the schedule of expenditures of federal awards and state financial assistance.”

 

City Clerk Beverly Gilley stated that specific finding is given by the CPA firm every year due to the City’s lack of having a CPA on staff.

 

Councilman Callahan approached the Council during Monday’s meeting with the idea of requesting a governmental audit to look into the City’s finances in greater detail. City Attorney Michelle Jordan stated she would look into the process.

 

Mayor Sims asserts that while the City has its challenges, it is actually “in great shape” and that worries about finances have been brought on by “misinformation.”

“The [balance] sheets floating around is misinformation since they are worksheets,” he said. “They change daily and include grants. I am not including grants since they use the line of credit for paying and reimbursement of funds. The sheets floating around include the grants, and that would look bad. The audit report would be accurate since it is what has actually taken place and not a worksheet. The City has a line of credit set up which pays these grants, and we deposit the reimbursement there. That account is specifically to pay grants.”

 

The mayor says he anticipates the city being back on track when the new fiscal year begins, that the current situation is a common occurrence that will right itself through the upcoming revenue sharing.

 

“June, July, and August, we can count getting our revenue sharing cut to zero,” he said. “It gets picked back up in September and in October, the state gives it back to us. We will catch up then. That’s why the budget will balance back out. Always in June, if you don’t cut your expenses out altogether except for your employees, you’re gonna go in the hole. We had too many things, like pumps going out [that couldn’t wait]. If we had held off, we would have had more money in the bank, but we couldn’t wait.”

 

When asked if the City was at risk for declaring a financial emergency with the state, the mayor gave a firm, “No.”

“When it comes in September, we’re back in shape big time,” he said. “We’re in the black,” he added. “We may not have $500,000 in the bank, but we’ll finish up probably with $200,000 in the bank.” Sims later amended his statement to say after a discussion with the bookkeeper, the City would have a shortfall of about $112,000.84 until revenue sharing was deposited this fall.

 

Meanwhile, public records show that City Attorney Michelle Jordan emailed the City a copy of the Florida Statute which governs municipal financial emergencies saying, “Be sure to review the attached statue about a local government financial emergency. I don’t think you are there yet, but we need to be mindful if we are not able to pay debts on a regular basis.”

 

Councilman Callahan said the City’s financial woes are very real – and that some of them could have been avoided by following policy and Charter.

 

“It is vital that the City Council be given any and all information available and then be allowed to make these decisions in a public meeting,” he said. “I think the City of Bonifay has some challenges ahead, and we can't meet those challenges without being informed and working together under the Charter by which we are governed.”

 

‘I just want to see transparency in our City government, and I feel that if the City Council is not going to be utilized as set forth by the Charter, then we are all wasting our time and efforts,” he added.

 

The Council will meet again in a budget workshop at 5 p.m.Tuesday, July 27.

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