The Leachville City Council discussed the recent CPA report, accepted the resignation of city clerk/recorder, voted to become a city of the first class, and set city wide clean up date when the council met in regular session April 12.
Leachville Mayor Ralph Wells opened the meeting by reading a prepared statement on behalf of the city.
"In January 2004 several instances of non-compliance in the City of Leachville's General Fund became available to the mayor, city council, and city attorney. At this time we made a decision to hire Don Ray, a certified public accountant, to perform an agreed-upon procedure of the general fund and related accounts, in accordance with standards established by the American Institute of CPA for the year ended December 31, 2003.
"I, the city council, and city attorney have copies of the accountant's report which exposes several instances of non-compliance. There have been several rumors circulating around town, some true and some false. We now have the facts and I ask the citizens of Leachville to let us continue to solve these problems as peacefully as possible. If you have questions, or suggestions, please discuss with me personally or the city council members, city attorney, or accountant. If you will do this we can work out our problems, without hostility or bad publicity for our town, which we all love very much.
"At this time, I regret having to read to the council a letter from one of our elected officials (Treasa Austin). Everyone has looked at her position as part-time, but the responsibilities of her job were tremendous. She has done a lot for our city and I'll hold my comments until I've walked a mile in her shoes."
Wells read a letter of resignation received from Austin. The letter stated, "This letter will advise you that I am resigning my office as city clerk/recorder for the City of Leachville, Arkansas, effective at 5:00 p.m. today (4-6-04). I have had several personal problems which have not allowed me to fulfil the duties of this office in the manner I would have preferred. Please express my appreciation to the members of the city council for their support during my term of office. In the event I can be of assistance to you or the city council during the transition from my resignation to appointing my replacement, please let me know."
The council voted to accept Austin's resignation.
"Have findings (CPA report) been turned over to the state?" Alderman Bill Hetler asked.
"It is my understanding that the findings are being audited by the state (Legislative Auditing Committee)," City Attorney Mike Bearden replied.
"Mike do you think any thing was done that warrants prosecution," Alderman Rick Hamilton asked.
"Possibly, but probably not enough," Bearden said. "Legislative (auditing committee) would decide whether situation warrants this. All restitution has been made at this time. Bonding insurance will be checked into. Was nothing done that was illegal basically, just nonfeasance of office."
Ray's independent accountant's report on applying agreed-upon procedures, exception listed included: Under receipts - (1) The Recorder Treasurer did not issue receipts for all revenue received in the General and Industrial Accounts funds; (2) Deposits were not made in a timely manner and apparently resulted in non-sufficient funds charges by the bank in the amount of $2,440; and (3) The Recorder/Treasurer did not maintain cash receipt journals for city funds during 2003.
Under disbursements - (1) The Recorder/Treasurer did not maintain cash disbursement journals for city funds during 2003; (2) During 2003, purchases in the amount of $19,531.97 were made on the city's credit card, which included $8,351.44 of charges that could not be documented during my examination; (3) I noted apparent charges for personal items by Recorder/Treasurer Treasa Austin in the amount of $326.99 and Police Chief Kenneth Womack in the amount of $221.58. These amounts were reimbursed to the city in 2004; and (4) I noted payments for late fees on the city's credit card in the amount of $75.00 and finance charges in the amount of $326.09.
Under Payroll - (1) Employer and employee payroll taxes in the amount of $85,468.71 were not remitted to the appropriate federal and state agencies. This amount is comprised of $56,927.83 in the General Fund and $28,540.88 in the Street Fund; (2) I also noted an overpayment of salary to Recorder/Treasurer Treasa Austin in the amount of $5,537.58; and (3) The Recorder/Treasurer did not maintain individual files for city employees.
Alderman Hamilton inquired about use of city credit cards. Alderman Hetler requested that all cards be cut up but one. Alderman Wallace requested that the card not be left in a drawer. Hamilton requested that credit card stubs be brought to meetings.
"I think that this would be a good time to change the way this position is filled," Wells said. "Don Zimmerman with the Municipal League was contacted. The city could pass a resolution to become a first class city therefore enabling a city treasurer to be hired with hours and salary set. Then a recorder would run and be paid a separate salary.
"The city council is over the city's finances and property and the mayor is over day to day operations," Wells said.
"This is a bump in the road for our town," Mayor Wells said. "But we
have many things to be thankful for, such as, the announcement of
Dollar General coming to town, a new bank, Southworth, Teleflora, a
Mexican food restaurant, Sanders, Inc., Adams Land and all our other
businesses that have been here for years. We are very proud of all the
businesses in town and hope to continue to grow by working together."
The council voted to set up a committee to go through resumes for the new position, in order to fill the treasurer/bookkeeper position. Alderman Karen Wallace will serve as chairman of the committee, with aldermen Sheila Spurlock, Estus Williams, Rick Hamilton, and Bill Hetler as members.
The recorder/clerk handles the ordinances, city council minutes, etc. An advertisement to fill the position will be published in the Town Crier.
A motion was made and seconded to adopt Resolution 2004-3 to become a first class city.
Alderman Rick Hamilton inquired about changes from second class to first class.
The major differences between first and second class cities was detailed in a printout prepared by the Arkansas Municipal League staff, dated Jan. 17, 2003. Changes included: Home rule; Purchases over $10,000 must be bid unless waived by council; City fills mayoral vacancy, if more than 6 months left in term; two aldermen per ward; city attorney must be elected to a four year term; city clerk elected for four year term in 2006; treasurer may be elected for a term of four years, appointed, or combined with city clerk; mayor may vote to establish quorum at regular meetings; police department may establish under superintendence of mayor.
The resolution passed 5-1, with Hamilton voting against. Motion carried.
Wells reported that the city's insurance paid $3,500 for the theater roof repair.
Aldermen Estus Williams and Bill Hetler agreed to serve on a city wide cleanup committee to list properties needing cleaning up and to bring list back to the police department for it to be taken care of.
The pumping station in the orchard was reported as not working, with an estimated cost of $25,468 to purchase a new one. Council discussed purchasing a new pumping station, with one year financing at 5 percent of purchase price as down payment or using cash already in a CD. No decision was made.
Alderman Spurlock requested that letters sent out requesting payment be made in a timely manner. Also, she stated that garbage pickup is not being done, and Knight's Disposal should be notified.
City agreed to work with attorney Bearden to get city incorporated property of Adams Land Company, for Dollar General store, and to supply water and sewer.
A park grant of $75,000 will include $37,500 from Arkansas Parks and Tourism, and the city's matching part to include $18,750 in in-kind labor and $18,750 in cash.
Floyd Rose inquired about use of four-wheelers inside city.
Alderman Wallace requested that the water office remain open at lunch, as previously agreed upon.
Police Chief Womack explained that the state law supersedes the city ordinance on four-wheelers, Act 833 traffic manual says operators must be age 16 or older, or under direct supervision of a parent or guardian. Nothing can be done if riders under age 16 are on private property. ATV's and four-wheelers have to abide by the same rules on motor insurance.
The next regularly scheduled council meeting is set for 7 p.m. May 3 at city hall.