Legislative Joint Auditing
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Members, if you would start to get your seats, we're going to get started right at 9 o'clock. Two-minute warning.
warning now. Find your seats please.
Thank you. legislative audit joint audit committee to order the chair sees a quorum and our
first order of business is the adoption of the minutes of the June 6 2025 meeting do we have any questions I hear a motion already any questions if not do I hear a second all those in favor let it be known by I any opposed no minutes are adopted. All right, we're going to go right into the adoption
of the reports. The first one is the executive committee. Senator Dees, I believe, is going to do that report.
Senator Tyler Dees
Unverified
4:40
Thank you, Mr. Chair. The executive committee met Thursday, July 10th, 2025, and adopted the minutes from the meeting that were held, the past minutes that were held on June 5th, 2025. Staff reported to the committee the audit and the special reports scheduled to be presented to the standing committees and the full legislative joint auditing committee this month. Staff also noted reports that are anticipated to be completed soon. In new business, a request for a special report regarding fiscal impact statements was deferred until September meeting to allow the chairs to work with staff to develop a scope for
the report. A request was approved for staff to perform audits for the Blytheville School District for fiscal years 2024 and 2025. The approval of the 2024 audit was an exception from the committee's normal practice of requiring entities receiving a private audit to be up to date with their audits before accepting of the agreement. The exception was made because the district had been placed under the state's control. A request was deferred for a special report regarding UAMS Washington County lease agreement.
In other business, legislative auditor Kevin White gave the committee an update regarding payments to legislators. legislative audit will now pay members in the same manner they are paid in their respective chambers. With no additional business to discuss, the meeting was adjourned. The next meeting of the committee is scheduled for Thursday, September 11th, 2025, or at the call of the chairs. I move for adoption of this report. Okay, members. Thank you, Senator
Dees. You've heard the report and we have a motion to adopt the report. Do we have a second? I have a second. Any discussion on the
motion uh the only discussion that i will add is uh this affects your pay so uh it is going to be direct deposit unless you otherwise uh note to staff and so uh be patient with them as we transition to that system and with that all those in favor say aye aye any opposed no motion is adopted
the next report is the standing committee on counties and municipalities and i believe Representative Cooper. You are recognized to present that report. Thank you, Mr. Chair. The
Representative Cameron Cooper
Unverified
6:49
committee adopted the minutes of the meeting held June 5th, 2025. The committee also voted to send the letters to the three cities with delinquent 2023 audit reports indicating a deadline of September 1st, 2025 to have those reports filed. Additionally, the committee voted to notify the state treasurer to withhold turnback revenues from the 44 water and sewer entities with delinquent audit reports for 2022. As required by Act 453 of 2023, the committee voted to notify an additional
66 water and sewer entities with delinquent reports for 2023 of a September 7th, 2025 deadline to submit these reports. The committee considered a request from the city of Norman to repay less than 10% of general revenues for amounts owed to the street fund as required by Arkansas Code 277207. The committee approved the request from Norman to repay $200 monthly from the Water Department first and then the general fund until the balance is paid in full. The committee reviewed 11 deferred
reports and 269 current reports. Officials from eight entities were present to address findings. Nine previously deferred reports were filed and two were deferred. Of the 269 current reports reviewed, 15 were referred to prosecuting attorneys and the Attorney General, and three were certified to the Governmental Bonding Board. The committee filed 263 current reports, including the report for Garland County, with an objection to the report being noted. The objection included
a reference to an attorney general's opinion that was issued after the report's release date. The committee also deferred six reports to allow officials to answer questions or provide further documentation at a future meeting. Mr. Chair, this completes this report and I move for adoption. Thank you. You've
heard the report and we have a motion to adopt the report. Do we have a second? I see a second. Any discussion? If not, all those in favor say aye. Aye. Any opposed? No. Motion is adopted. The next report is the standing report on the Committee on Educational Institutions, and I
believe Representative Duke is going to do that. So Representative Duke, you are recognized.
Representative Hope Duke
Unverified
9:11
Thank you, Mr. Chair. The committee reviewed 70 audit reports consisting of school districts, educational cooperatives, and higher education institutions for the year ended June 30th, 2024. Officials from Falk School District were present to answer questions from the committee related to findings in their audit report, which was deferred from the June meeting. The Pine Bluff School District audit report was certified to the Governmental Bonding Board, and five school district audit reports, Clarendon, Gentry, Harrisburg, Highland, and Pulaski County Special, had findings that were referred to the applicable prosecuting attorney and attorney general.
The audits of Pine Bluff, Brinkley, and Dearmount-Judy School Districts were deferred to the September meeting so that school officials could be present to answer questions from the committee related to repeat findings in their respective audit reports. The committee filed 67 audit reports and deferred three audit reports that were brought before it. I move to adopt this report. Thank you, Representative Duke. You've heard the report and we
have a motion to adopt the report. Do I have a second? I have a second. Any discussion? All those in favor say aye.
Any opposed? Motion is adopted. The last report is the Standing Committee on State Agencies. I believe
Representative Unger is going to represent this report. Representative Unger,
Representative Steve Unger
Unverified
10:30
you are recognized. Thank you, Mr. Chair. Nine reports were on the committee's agenda yesterday. Three reports with the following findings were presented. Arkansas PBS made incorrect career service payments to three employees. The public employee retirement system, APERS, committed more
funds to a partial equity ownership agreement than what was approved by the legislative council. And finally, the treasurer of the state did not have sufficient controls in place to prevent redemption of two fraudulent warrants totaling over $613,000 and also paid 12 employees in excess of line-item salary appropriations. Various agency staff members were present to report on how the agencies intend to address the audit findings
and to answer the committee's questions. During the meeting, the committee filed nine reports. I move to adopt this report. Thank you, Representative Unger. You've heard the report,
and we have a motion to adopt the report. Do we have a second? I have a second.
Any discussion? No discussion. All those in favor say aye. Opposed? Motion is adopted. All right. The next item
on the agenda is a review of a special report, which is the disposition of matters
referred to prosecuting attorneys and the attorney general for the period January 1st, 2023 through December 31st, 2023. That report was early release on February 19th, 2025. Michelle Ashley is going to present this report. And so Michelle is here. Michelle,
you are recognized to present that report. Thank you, Mr. Chair. This report
Speaker 29
12:13
is issued to provide this committee a summary of the disposition of matters referred to the prosecuting attorneys and the Attorney General's
Office for calendar year 2023. Arkansas Code 10-4-419 requires the legislative auditor to notify the appropriate prosecuting attorney of transactions reflecting unauthorized disbursements or unaccounted for funds. The legislative auditor also notifies and cooperates with the appropriate prosecuting attorney on all matters that appear to involve a criminal offense. Furthermore, this code section requires the legislative auditor to report findings related to a prosecuting attorney's office to the attorney general for review and appropriate action. This code section also directs
prosecuting attorneys to report to this committee by June 30th of each year the status or disposition of any matter referred to them the previous year. Act 632 of the regular session of 2023, which was effective August of 2023, amended Arkansas Code 104419 to require the legislative order to refer to the Attorney General all matters that were referred to a prosecuting attorney. Matters were referred to both the prosecuting attorney and the Attorney General from August
through December of 2023 and are identified within the report with an asterisk. Arkansas Code 21-2-708 directs the Legislative Auditor to notify the Arkansas Governmental Bonding Board of audit reports reflecting improper transactions for which a public official, officer, or employee may be liable. The bond board determines whether a loss is covered by the Arkansas Self-Insured Fidelity Bond Program. Entities are required to meet a $2,500 deductible per occurrence before payment is made.
The Fidelity Bond Program Coverage Limit is $300,000 per occurrence. Examples of matters referred include receipts not deposited, missing assets, unauthorized undocumented disbursements, unauthorized salary payments, unauthorized bank withdrawals, improper loan of entity credit, conflict of interest issues, noncompliance with the public purpose doctrine, and potential violation of the speed trap law. As shown on the screen, using the 18th West Judicial District as an example, each Judicial
District's report page includes a map identifying the counties located in the district. In addition, matters referred or detailed individually by the counties in the Judicial District, the prosecuting attorney, the governmental entity involved, the year the matter was reported, the status, and payment by the bond trust fund when applicable. Presented in Exhibit 3 on pages 6 and 7 is a summary of disposition reports organized by a judicial district. Shown on this slide is the portion of the exhibit for the first through the third judicial districts, as well as the total for all districts.
Also shown on the slide, criminal charges were filed in 17 of the 143 matters referred. Seven cases are pending in court, and the remaining 10 cases in which a conviction was obtained and sentence imposed are listed by Judicial District in Exhibit 4 on page 8. This slide shows the information from Exhibit 4 regarding court-ordered sentences. Defendants entered guilty pleas in nine cases, and a jury found one defendant guilty. Restitution was ordered in eight out of the 10 cases, and defendants were sentenced to
probation in seven cases while the remaining three were incarcerated. Audit costs were included as part of restitution in two of the cases. This concludes my presentation on the disposition of matters referred by this committee to the state's prosecuting attorneys and the Attorney General for calendar year 2023. Representatives from the Office of the Prosecutor Coordinator and the Attorney General's Office are here to answer any committee
questions. Thank you, Michelle. Committee, you've heard the report, and as you heard, we have representatives from the Office of Prosecuting Coordinator and the Attorney General's Office available. Are there any questions for staff or witnesses regarding this report?
Representative Hope Duke
Unverified
16:29
Representative Duke, you are recognized. Thank you, Mr. Chair. I do have a couple of questions, I think, for staff. So there are a couple of items in here. I wrote down page 41, but there are, I think, 50 and a couple of others. throughout the packet where it says it there was a request for the state police to investigate or for law enforcement that was down I think on page 52 is there is that the it looks to me like that's been a while is there an update are they going to investigate it do we know the status on that or do we circle
back at that later and look at that and then I've got a couple other questions they're kind of related I don't if you want me to hit them all now or just I
i can get back in the queue whatever you want me
Representative Hope Duke
Unverified
17:16
to do right now you're the only one so i would say continue on okay so that's the one question that i have and
if you want to answer that one i can get to the other two after that whatever you all want to do okay so this this document is is currently being updated i mean we constantly update as we receive new information so we are currently working on matters that were referred in calendar year 2024 and that will also include
any matters that were not resolved in this report that I'm presenting today and that report will be presented to you hopefully at the end of this year so with anything that's not resolved we will always follow up until we get a case closed okay thank you that's helpful that will
probably answer my next question which was um I think it's page 73 it were just talked about restitution
that they were going to send a letter I'm trying to get through myself um and that was again the question that I had is was the letter sent and I mean do we know that I'm
guessing you're saying if you know it would already be entered in here if they were going to have restitution made and that may actually may be back on page 53 because there's another one that had that too Cal Cal can't read my own handwriting I don't know how to say the city of Callion, it's on page 54, thank you, where it says the prosecuting attorney will be sending a letter of caution, and if the funds are not reimbursed in a timely manner, the P.O.R. for this matter, law enforcement for investigation of prosecutions, and I'm assuming this is the last update we have on it.
That's correct, so that would be one that we would consider under review, so we would continue to follow up on that one. Okay, thank you. All right. Any
other questions? If not, then do we need to think? All right.
If not, do we have a motion to file the report? Do we have a second?
Any discussion on the motion? If not, all those in favor say aye. Any opposed? No. Motion passes. All right. The next item on the agenda is the City of West Helena, the regulatory basis of financial statements and other reports for the period ending December 31st, 2023. And Jamie Bass is going to present this
report. So, Ms. Bass, you are recognized to present that report.
Speaker 59
19:53
Thank you, Mr. Chair. This presentation covers the audit report for the City of Helena West Telna for the year ended December 31st, 2023. At its meeting held last month, the Standing Committee on Counties and Municipalities deferred the report to this committee meeting and requested that the legislative auditor subpoena city officials to present to be present to answer questions. Located in eastern Arkansas, Helena West Helena is the county seat of Phillips
county and operates under the mayor council form of government the city council consists of six members who govern the city who govern the city which has a population of approximately 9 500. this report contained two material weakness findings first arkansas code requires that city management maintain an adequate accounting system to ensure proper safeguarding of assets we noted a lack of adequate controls as journal entries were not reviewed and approved by an employee other than the preparer these deficiencies were due to a lack of
management oversight and could lead to misappropriation of the city's assets a similar finding was issued in the prior report secondly Arkansas code requires the City Council to approve an annual budget and city management to function within that budget however due to the lack of management oversight street fund and landfill fund expenditures exceeded appropriations by approximately four $424,000, and $524,000, respectively. Also, general fund and street fund budgeted revenues exceeded actual revenues by approximately
$388,000 and $206,000, respectively. The effect of this overspending constitutes a control deficiency and a threat to efficient, stable operations to the city, leading to the second material weakness finding. As a result of overspending, the general fund, street fund, and landfill fund had deficit balances at December 31st, 2023 of $173,000, $192,000, and $239,000, respectively.
Another factor contributing to this deficit was various accounts payable in the general fund totaling over a million dollars. This included over $633,000 for payroll taxes, $140,000 for housing of the city's prisoners at the county jail and over 263,000 of various other vendors. In addition to the general fund deficit fund balance, failure to pay retirement system payments in 2024 resulted in the loss of the city's general revenue turnback received from the state.
As of the report date, payments to the IRS have not occurred since August 2023. Furthermore, the city's inability to pay its debts timely led to late payment fees, bank overdraft charges, utility shutoff notices, repossessions, and some vendors requiring cash payment on delivery. The remainder of this presentation covers the 11 management letter findings issued for the city. Findings referred to the prosecuting attorney and attorney general are noted on the slides. Nine unauthorized withdrawals totaling over $7,300 were made
from the city's bank account between May and July of 2023. The bank discovered five of these withdrawals and return $3,300 to the city in June and $1,500 in July of 2023. Because the city did not dispute the remaining four withdrawals, almost $2,500 could not be recovered. As shown on this slide, a review of credit card transactions selected for testing revealed that supporting documentation was not provided for numerous transactions for the city clerk and mayor during the four-month period reviewed for fiscal year 2023 and the two-month period reviewed for fiscal
year 2024. Subsequent to fieldwork, the city provided some documentation not previously available. However, the validity of transactions that remain undocumented could not be determined. During disbursement testing, we noted multiple issues. The city received a $50,000 donation from a non-profit organization to assist with purchasing an animal shelter building. However, the building was subsequently repossessed due to the city not paying the balance owed. Additionally, adequate supporting documentation was not provided for tested disbursements of $613 in non-compliance
with Arkansas Code. The city also paid approximately $7,500 to two vendors before work was completed in conflict with the Arkansas Constitution. As shown on this slide, the city failed to make payments tolling over $91,000 as specified in five finance purchase agreements. These payments were for police body cameras, a truck, two dozers, and an excavator. A similar finding was issued in the prior report. As of the report date, several of the items had been repossessed. Regarding the city landfill, we noted that the
supervisor prepared and approved his own timesheets and was paid over $26,000 in overtime. Additionally, the supervisor and scale operator, who are spouses, occupied an RV connected to city utilities. Compensation related to this personal use of city services was neither calculated nor reported on their IRS w-2 forms as detailed on this slide the city made payments totaling almost $4,000 for related party transaction transactions
without authorizing ordinances this is an apparent a conflict with Arkansas code a similar finding was noted in the prior two reports during testing of compensated absences we noted that of the five employees tested two employees were missing from the compensated absences list and the remaining three had incorrect rates of pay the list also contain negative amounts for four employees although employees do not appear to have been overpaid additionally the governing body reviewed the prior year audit report but took no action on
the action on the findings and recommendations in apparent non compliance with Arkansas code during our review of payroll we noted the following an employee did not prepare time sheets or leave slips as required by the city's policy total overtime paid exceeded the budgeted amount by over three hundred thousand dollars and the city also incurred penalties and interests totaling over 82,000 due to lack of timely payroll tax submission as discussed on the following slides monthly remittances to DFNA were not
submitted timely resulting in penalties and interest of over eighteen thousand dollars dfna could assess additional penalties and interest due to late filings and unpaid balances of 118 000 as of april 2024. the city entered into a payment plan with dfna to pay the balance over 25 months including assessed penalties and interest as a report date the city made eight payments totaling over 46 000. additionally withholdings and matching reported on irs form 941 were not submitted timely, resulting in penalties and interest of $62,000. The IRS could assess additional
penalties and interest due to late filings and unpaid balances of over $500,000 as of December 31, 2023. We also noted the city owes over $12,000 for taxes due on IRS Form 941 for the tax period ending June 30, 2021, which resulted in interest of $1,700. The IRS could assess additional penalties and interest and as a report date the city had made no payments on this this
slide represents the last two management letter findings vehicle allowance payments to the mayor totaling $10,000 were not reported on his IRS form w-2 street fund expenditures exceeded appropriations by over 424,000 in non-compliance with Arkansas code a similar finding was issued in the prior two reports mr. chair this concludes my presentation management responses are included in the report and city officials are present to respond to committee questions thank you
miss bass committee you've heard the report and
we do have representatives from the city of Helena West Island available
I think what I'm going to do though first since that was a lot of information is
see if there's any questions for staff before we make available the witnesses so resident Meeks you are
Representative Howard M. Beaty, Jr.
Unverified
28:26
recognized for question thank you thank you mr. chairman so a
Representative Stephen Meeks
Unverified
28:30
question I have is on the the landfill on the street fund we had these you know almost half a million dollars of overpayments what's the what's the
total budget on those two in the course of the year for the city any
Speaker 59
29:00
to look it up all right the total for the total expenditures for the street fund okay the
budget was one point 1.1 million approximately 1.2 million for the street fund and the the landfill fund is aggregated and we don't have that information available at this time but we can get
Representative Stephen Meeks
Unverified
29:22
it okay I'm just curious to see how big of a problem what percentage that you know $500,000 overpayment was for example if they only had a million dollar budget $500,000 is a huge overpayment whereas if they had a five million dollar budget it would be a smaller percent so that's kind of why I was curious about for the street fund
it's approximately 37% 37% all right thank you representative Beatty you're
Representative Howard M. Beaty, Jr.
Unverified
29:55
recognized thank you mr. chair I have a question if the mayor is here in attendance today yes
sir he is I was trying to get staff first but he is for for the mayor
Speaker 90
30:08
all right he is he is first up on on the
witness when we get there which I do not see any other questions in the queue of other members so at this point in time we would call Christopher Franklin to the stand here in the middle if you would when you get there if we would remain standing we're going to swear you in so if you could reach down and he's
going to help you there turn the mic on if you would for the record state your name your employer in your
Speaker 96
31:01
position Christopher Franklin all right and if you would raise your right
hand do you solemnly swear or affirm that the testimony you're about to give will be the truth the whole truth and nothing but the truth all right thank you you may be seated and we will recognize
Representative Howard M. Beaty, Jr.
Unverified
31:20
representative baby for his question thank you mr. chair mayor appreciate you being here today I guess my question goes back to the first response on the audit where you under the report on internal control over financial reporting where you respond this finding should not fall upon me as the mayor could you tell this committee what your understanding of the job description of mayor entails and what those responsibilities are yes sir as under
Speaker 97
31:48
advice of my counsel I have two cases pending so I won't be able to answer any
of your questions so you can't
Representative Howard M. Beaty, Jr.
Unverified
31:56
tell me what you thought your job description was not at this time well I appreciate
you coming anyway so just just to clarify what you what you just said you you
said under advice of counsel with pending cases, litigation, you won't be able to answer
any questions. That's correct. Okay. Senator Gilmore has a question. He
Speaker 105
32:23
may. No, you already asked it, so I guess I'm done.
Okay. Representative Beatty, you're back in the
Representative Howard M. Beaty, Jr.
Unverified
32:33
queue. You're recognized. Just to follow up on his statement, can you enlighten us on what pending cases you have
Speaker 97
32:39
outstanding right now? My attorney's not here. So I won't be able to enlighten you on that as well. Well again, thanks for
Representative Howard M. Beaty, Jr.
Unverified
32:47
your presence here today We have anyone else
from the city here. Mr. Chairman. Yes, sir. We have the
city clerk, Sandy Ramsey the city treasurer Derek Turner a and P director Helen Halbert and a
councilmember Don Etherley Who's also an a and peach here? So what I'd like to do is maybe call them up one at a time and swear them in Yeah,
Speaker 111
33:08
I hope we just release this gentleman. Yes, I'm sorry.
You are dismissed. Thank you. Representative Dalby, I missed you in the queue. Did you have a question for? Thank you,
Representative Carol Dalby
Unverified
33:24
Mr. Chair. I actually have a question for staff, and I'm sorry I didn't buzz in during that time,
but I was kind of thinking about it. If I understand the report that you just gave, that their accounts payable or their debt grew from $1.36 million
that's now grown upwards to $2 million. Have I done my math correct on that? If the staff could answer for me.
i'm looking at page five they've significantly overspent their budget by a million over a million dollars and then when you start adding everything up now they've significantly overspent by nearly two million dollars does somebody just i mean that's kind of rough numbers but could
somebody is that have i understood the report correctly
Speaker 59
34:32
um looking at the um finance the last five years um for 2023 the total liabilities was one point a little over 1 million and then in 22 it was 368 000. okay but when it's approximately 670 so what's their total debt
Representative Carol Dalby
Unverified
34:52
I guess is my question because it looks
like it's going up and up and up and there aren't any revenues or at least the revenues are staying stable but they keep
overspending can somebody just give us an idea of what that total debt is that city I mean I'm concerned about all of this yes for um for
Speaker 80
35:15
2023 it's approximately 1.6 million okay so we're we're heading up upwards to
Speaker 66
35:20
two million dollars correct yes in which that does not include short-term financing okay so if you included all of that my figures
Representative Carol Dalby
Unverified
35:26
roughly are correct around two million dollars now yes yes ma'am okay thank you mr. White you are recognized one item I also
Speaker 128
35:39
wanted to point out or draw to your attention
is in the financial statements on page 27 we have a subsequent event note and it includes some additional debts that were taken on even after our fiscal year end might be helpful to provide some of the information me just reading the note again it looks like on June 15th 2024 they executed a $226,000 finance purchase agreement for the purchase of an excavator on June 15th 2024 executed a $675,000 finance purchase agreement for the purchase of a dozer on September 12th 2024 executed
a $389,000 finance purchase agreement for the purchase of a fire pumper. And then on January 17, 2025, executed $805,000 agreement for the purchase of two garbage trucks and one knuckle boom truck. And the total I
Speaker 129
36:33
have beside me says $2 million. Do you have a follow-up?
Representative Carol Dalby
Unverified
36:46
I'm sorry, I'll get out of the queue because I see other people have let
up. But in that regard, as I understood that on page 27, all of that equipment got repossessed. Isn't that correct? And so they don't even have that equipment, but they've made all these purchases or lend-lease type stuff,
Speaker 128
37:12
correct? My understanding, Representative Dalby, is again, no, the equipment previously was repossessed.
Representative Carol Dalby
Unverified
37:16
this was new equipment that was purchased. Okay, so this is additional expense that they have now taken on in addition to what they spent
that got repossessed, correct? Correct. Okay, I'm just trying to understand, get my mind around it. I mean, I majored in English and not accounting. And on page 28, and this is for staff too, and then I, Mr. Chair, I'll get out of the queue. I'm sorry on page 28 on the the going concerns and everything all of this came
under the mayor's watch or the former mayor I don't know what his
title is considering the the legal position he's in but this all happened just recently this is not going back five or six years correct so the
Speaker 128
38:11
items we spoke to in the report are for December 2023 or for January 1 through December 31st 2020 so those matters are all underneath the current administration okay thank you
Representative Howard M. Beaty, Jr.
Unverified
38:23
thank you for clearing that up for me all right representative ladyman you
Representative Jack Ladyman
Unverified
38:33
are recognized for your question uh thank you mr chairman uh i think this is for staff but i didn't
understand mr franklin there is did he say he was the former mayor yes that's that's how he introduced himself he is not
um a uh he's not working with the city now not currently there is i understand there's current litigation in two cases and so
we did not get any of the details of that
so who is the mayor now is there a mayor i suspect that that some of our other witnesses can probably answer that
i don't know the answer to that i think i think there is a pending uh appointment uh i don't know if
Representative Jack Ladyman
Unverified
39:20
that's if they've decided on anyone but i understood i'd like to ask staff if if the mayor resigns or is removed who is automatically the interim mayor so my understanding is there's
Speaker 129
39:38
not an interim mayor I will say a little bit it's
Speaker 128
39:42
kind of getting outside the wheelhouse of where we're at I think maybe some questions potentially for some of the individuals who are still with the city to be able to answer my understanding is there's not like an immediate interim mayor there's a process replace
Representative Jack Ladyman
Unverified
39:56
a mayor well it's my understanding and I haven't looked at the law in a while but either the recorder or the treasurer automatically becomes the mayor because you have to
have somebody run in the city the do you know
Speaker 128
40:09
who that is I'm sorry I would I would defer to yourself or others in that matter that's kind of outside of what we typically have to deal with and I'm not
an expert and we can represent we can ask the
Representative Johnny Rye
Unverified
40:27
folks that are here all right thank you representative rye you are recognized yes sir really sir this is more or less a question just don't understand you know if you had a budget for say a road fund and then they go into contracts that exceed five hundred thousand dollars it sounds like someone was not keeping
checks and balances sir I wish we could get an answer
on that well I think we're gonna have witnesses and we can we
can ask them that question thank you sir
Senator Missy Irvin
Unverified
40:59
all right Senator Irvin you're recognized thank you mr. chair so the man that's that testified was
the former mayor okay where did he go he left the building it there's no requirement that that these witnesses stay to answer all of our questions in
case other questions may arise there's no requirement from legislative audit to require these people to stay through the entire report I would think that there should be that would be a suggestion but I have questions for the witnesses from the city who now are left to remain to answer the questions yes I believe he made it
clear that he was under advice of council was not going to answer any questions no matter what they were well that's fine but
Senator Missy Irvin
Unverified
41:48
he could sit there and say that repeatedly to the questions
that we should be able to allow to be asked so as as other questions arise from the testimony of the other city officials so it's my suggestion if you have a report of this magnitude that anybody that is here must stay through the entirety of the report out of just sheer respect of their constituents and this body and the people of the state of Arkansas. That would be appropriate behavior for anybody to display, I would think.
But I have questions specifically for the people of the city as to why and how and when they knew that this was happening and if they did anything about
it. Okay. Thank you, Senator Irvin, for your comments. And I think with that, no one else is in the queue. And so we will start with city clerk, Sandy Ramsey. If she is here, she could approach the witness table.
Ms. Ramsey, if you would stop at one of those mics and remain standing and introduce yourself, we will swear you in as well. all right uh if you would raise your right hand do you solemnly swear or affirm that the testimony you're about to give will be the truth the whole truth and nothing but the truth yes thank you you may be seated all right members who's up
Senator Missy Irvin
Unverified
43:32
senator irvin you are recognized thank you thank you thank you ma'am for being here i appreciate that you're here appreciate you
you're listening through the testimony i would just like i'm way over here ma'am sorry i know it's hard to find thank you thank you for being here i would just like to hear your perspective about the report? At any point, did you see that things were going
awry? Were you able to lend any kind of advice as to if you did see things going awry? Did you lend any advice? Or how did you handle the situation in the report that we've got here before us we kept
Speaker 163
44:23
the the administration and the city council apprised of the debt usually I would send out maybe every couple of weeks or every month to give them a report they
get their financial report prepared by our treasurer that shows our indebtedness and all of the purchases that you're talking about the lease purchases for the new equipment that's all approve at a city council after a presentation is made uh and then it's in the hands of the treasurer and myself to try and find the money to pay it after it's approved right but they were aware of the indebtedness and many of those bills go back to uh 22 or 23 well 22 when we encourage
some of them we have very little revenue coming in a lot of it goes out in payroll we were beginning to work on a plan to get everything out of debt it's going to take some severity and a lot of cutting and the removal and employees or whatever to get ourselves out of debt but we they are going to prepare a plan uh i think one was submitted to you uh it could we i didn't work on that plan but it can't needs to be a more in-depth plan but like I say our
population is dropping people are moving not because of anything we're doing but we have an aging population we have people moving for better jobs and we just don't have the revenue sales tax dollars and that's where we get the bulk of our revenue each month it might run anywhere from maybe $320,000 to maybe $425,000 that comes in on the 25th of the month and every two weeks I usually have a payroll net payroll of maybe $140,000
so I'm left with very little funds to pay bills with but we do the
Senator Missy Irvin
Unverified
46:27
best that we can do. You have a net payroll of $140,000 every two weeks? Yes,
Speaker 163
46:33
because in our city, a lot of our payroll is firing police. We've been short-staffed in the police department, which we incurred a lot of overtime, but we do know that we're going to have to do some severe cutting in a lot of the departments. The new mayor will make
those decisions, hopefully along with input from the treasurer and the city clerk. But like I say, some months I might not have, but maybe $60,000 or $70,000 to pay bills with. We do get some sanitation fees in in mid-month. We've had to assist our water department in paying a lot of their bills because they've had a lot of issues, but they are getting funding now thankfully from the state and the government where we can get some grants to get our water
system back up and running and in accordance and give
Speaker 166
47:30
our people what they need but that's in the process. So we hope to get reimbursed from the water department for a lot of that money and that will help us pay a lot of our extending debt. Some of
Speaker 163
47:45
our outstanding debt is like annual payments of maybe $30,000 or $40,000. That's why our revenue looks so bad. But I do
Speaker 166
47:52
realize we're behind in a lot of things, but we're working on it.
Senator Missy Irvin
Unverified
47:57
On the grant money that the state of Arkansas gave for your water system, was there conversations or is there any type of a recognition of the debt that the city incurred in other areas in that grant? I don't
Speaker 168
48:14
believe so. the treasurer could better tell you what was in
Senator Missy Irvin
Unverified
48:19
the grant. Yes, ma'am. And then one final question. Where, and I haven't looked at your plan, but where in your, are they looking at cutting?
I guess where is the majority of where you might be too large in personnel?
Speaker 163
48:41
the audit was one of the things was, you know, cutting some staff, cutting some services. We had hoped to sell our hospital, and that
Speaker 166
48:51
was going to help pay off a lot of our debt, but that deal didn't make it.
Speaker 163
49:01
But we're just going to have to take a hard look at things, and I'm sure our citizens understand what we're
Speaker 166
49:08
going through, and they're very helpful to us, but we're just going to have to cut employees and cut services and possibly cut benefits, maybe cut back on our time, and things like that. Okay.
Senator Missy Irvin
Unverified
49:19
Thank you for the questions. Thank you so much
for being here. Representative Ladyman, you are recognized. Thank you, Mr. Chairman.
Representative Jack Ladyman
Unverified
49:34
Ma'am, I'm over here. I didn't catch you. You're the clerk, is that correct? Yes, sir. I'm the city clerk.
Speaker 163
49:45
City clerk. who is the acting mayor now according to the attorneys in the absence of
Speaker 166
49:51
a mayor the city clerk handles the day-to-day operations and I work closely with the city attorney the treasurer and the one of our council persons who is here who is also an attorney to make the best decisions but as far as making any
contracts entering anything major we're not doing anything right now until we have a new mayor and what is that process the governor will be appointing a mayor interim
Speaker 163
50:21
mayor to serve out this term and but we haven't heard anything yet so are y'all still having council meetings
Representative Jack Ladyman
Unverified
50:27
yes sir we are we have two a
Speaker 163
50:29
month who runs those meetings the mayor Pro Tim who is Don ethily he's an attorney also
Speaker 178
50:35
on the council. Who's the council member?
Representative Jack Ladyman
Unverified
50:40
Yes, sir. So can he make decisions on
financial decisions on, I mean, you all have to stop the bleeding here and it needs to be done quickly. Is there anybody that can make those decisions right now as far as, you know, cutting personnel? I know that's difficult to do, but the sooner you do that, the better. Is there anybody that can make that decision right
Speaker 166
51:03
now? We've been advised not to make any major decisions like that. We have stopped hiring. We're not, except for police, which we have a shortage.
Hopefully we'll have a new mayor soon. The attorneys felt like it would be better for the new mayor to be totally involved. But we have decreased spending, except in emergency situations. We've stopped overtime, except in emergency situations, so we're trying to cut back what we can on our own. Is that your city attorney
Representative Jack Ladyman
Unverified
51:36
that advised you to do that? It
Speaker 166
51:39
was the city attorney along with our attorneys from the Arkansas Municipal League.
Representative Jack Ladyman
Unverified
51:45
So are there any things that you can do to cut expenses like office supplies and those kind of things? We're
Speaker 166
51:53
not buying anything we don't have to have. using everything we can find and like I say we're not buying anything major except like gas oil and grease to keep the equipment going where people are giving us different things that we can use so we're we're watching our money yes so the plan
Representative Jack Ladyman
Unverified
52:15
you talked about that y'all developed who developed that was
that collaborative between the employees no and these council or who was that the
Speaker 166
52:25
The plan that was submitted in the audit report to you was prepared by Mayor Franklin and the Chief of Staff, James Valley. Okay. All right. Thank
you. Thank you. Just a couple of follow-up questions. One regarding the mayoral vacancy. Has the city council notified the governor of the vacancy officially or formally?
Speaker 163
52:52
everything's been done according to procedure, according to the law. Yes, sir. She knows there was a court order when the mayor was removed. It's all been submitted
Speaker 166
53:01
to the governor. Okay. And so that has
been officially, I know we all have the media, but the official action of the council to notify the mayor. Okay. And then secondly, and I was looking at the report, you were referring to cuts as part of the plan, but I'm not sure that that was actually in the actual report.
Oh, was it not? Okay. Yeah. Okay. All right.
Representative Johnny Rye
Unverified
53:32
Representative Rye, you're recognized. Yes, sir. Thank you. Thank you, Mr. Chairman. Ma'am, let me ask you this. I heard you refer to 2023, which is a couple years ago. Could you see this at the end of the year? Could you see that this was exceeding, especially in the road fund, of how much you were spending up against what
Speaker 168
53:53
was budgeted? yes sir we we uh we kept the
Speaker 166
53:56
council advised as to the expenditures and what we had
uh and what the revenue was but but
Representative Johnny Rye
Unverified
54:02
at the same time ma'am you actually were you spending more at
the end of the year on record than what was actually budgeted yes
sir you were well okay one more question okay um for this 2025 year ma'am we're into july of the amount that you have budgeted for 2025 have you exceeded 50 percent or or anything or what are you doing as far as
the percentages what has been used for this year up against what has been budgeted for
Speaker 166
54:38
the year okay that would be a question for the treasurer uh mr turner handles all of our finances
Speaker 178
54:44
uh he would know what percentages and i honestly
don't remember yes ma'am thank you ma'am all right representative mcgruger you are recognized thank you mr
Representative Jessie McGruder
Unverified
55:03
chair thank you ms ramsey for being here today and all the citizens of west hall who have arrived here
I'm born and raised in West Harbor, Arkansas. I watched the community as it has been a slow decline, and I'm very concerned about this issue we're facing right now. As I noticed the decline, my question for you, Ms. Ramsey, is when the mayor who was just removed took over was there a balanced budget when he arrived no we
had overspent okay so this has been it and as I know I think when I was growing up the population was about 23,000 there and I see now it's about 8,000 people yes sir this has been a constant decline over over the years and along with the water issue it's just imploded yes okay well thank you for being here thank you for the work that you're doing as we transition and any support that I
Senator Tyler Dees
Unverified
56:11
can offer please let me know thank you senator Dees you are recognized
thank you mr. chair thank you mr. Ramsey right here in front of you in the middle here um uh i was hoping to ask a few more questions to the former mayor but um with the response we got at i do have his responses in the report and um i'd love to know your thoughts on his response because what i'm reading in layman's terms
it looks like it he's saying um it's not on me it's on the city clerk and i believe you're the City Clerk yes sir and I see the phrase of weakness described do you believe that's an accurate portrayal
Speaker 168
57:02
of the situation oh as far as I'm concerned yes
Speaker 166
57:11
ma'am no I can't explain why the mayor said what he said I just know I am a
good city clerk I try to find the money to pay the bills I've been with the city for over 35 years I haven't been city clerk that long but we work diligently to try and work with our vendors and things and thank goodness they're very understanding and but the responsibility of running the city is It's not totally on the clerk or the treasurer.
It's always been a joint effort to make sure we do things right. But I can't explain
Senator Tyler Dees
Unverified
57:58
his comment. I will make every effort to encourage the city treasurer and city clerk to rectify this weakness without delay, was his phrasing in the response. Are you under any active litigation or lawsuit? No,
Speaker 166
58:12
not personally. The city has some lawsuits, but I personally
Senator Tyler Dees
Unverified
58:15
don't have more. You are not, correct? Okay, thank you. And then lastly, I believe Representative Magruder asked us, but is the population about 8,000 people?
Speaker 166
58:24
It's about 8,000, yes, sir. As I said, our population is decreasing because a lot of our persons are moving to be near their families, moving for better jobs, have job changes, of course. And then we have a – our population is elderly and retired. And, of course, our revenue, a lot of it is dropping simply because people shop out of town.
We don't have a lot of stores. And so that takes our tax dollars. So with having gone through this
Senator Tyler Dees
Unverified
59:06
experience, which nobody wants to, and thank you for being here today. I thank the former mayor for being here
today. These are not fun meetings to have to go through for sure. But having gone through this experience and this audit and this report, what would you tell other city clerks and other cities and municipalities, what have you learned through this
so that other folks don't have to go through something like this?
Speaker 168
59:31
Well, I think they just need to make sure
Speaker 166
59:35
that they keep their council and their citizens abreast of everything going on, whether it's financially, or any changes that are being made. And I think that all of the elected officials need to know their responsibility. It's not so much that you walk in and sit down for a meeting and then you go home and you don't ever ask any more questions. Council members need to be involved and need to have comment. And you think there was an issue there?
I think all councils in the state, the councils need to be involved in the operation. I realize they are not responsible for the day-to-day operations, but they need to know what's going on. And they need to ride around their city, and they need to stay up to date. Thank you, Mr. Ramsey. Representative
Speaker 207
1:00:26
Hawke, you had a question. Thank you, Mr. Chair. Mr.
Representative RJ Hawk
Unverified
1:00:29
Ramsey, as a former city council member myself, I hear what you have said.
And by the way, I think you're doing a graceful job at sitting at the table answering these questions. Um, you advise the city council every month or every meeting about the spending on whether they should or shouldn't make those appropriations, correct? Yes, sir. So as the city is declining in population, as the revenues are not coming in, when a, when an expenditure for a dozer or a mini X or whatever comes to council, it is your
recommendation at the council that we probably shouldn't pay for this because we don't have the money correct that's
what we've told yeah and so then it was on the city council to go off of your go against your recommendation to approve these expenditures correct
Speaker 166
1:01:21
well after the presentation is made as to why they may need the equipment even though we tell them that we're going to have trouble making a payment on it or we don't need to make a payment on it or whatever it's It's their
Speaker 211
1:01:33
decision to vote on it, and then we just try to find the money to make a payment.
Representative RJ Hawk
Unverified
1:01:39
Okay, but I just want to make it clear,
though, that it was your recommendation that we don't have the money to pay for this stuff right now at the
Speaker 166
1:01:48
city council meetings. Well, we don't come right out and say it, but we tell them, you know, this is what your debt is, this is what your declining revenue is, and then they all know that we're having trouble making payments anyway, And it's up to them if they vote on it, the
Speaker 211
1:02:03
treasurer and I just have to find the money. Thank you.
Senator Fredrick J. Love
Unverified
1:02:12
Senator Love, you're recognized. Thank you, Mr. Chair. Ms. Ramsey,
I'm to your left. Okay. So I want to go back to something that was first brought up by, I think it was Representative McGruder. So, I mean, let me ask you this, or I can ask staff. when when did the former current the current mayor the former mayor the gentleman that just left when did he come to office january
1st 2023 okay january 1st 2023 okay so miss ramsey
in your testimony with mr with representative magruder you said that you all didn't have a balanced budget before then or did you all have a balanced budget before then or when is the last time you had a
Speaker 195
1:03:03
balanced budget well you you do an amended budget at the end of the year and you balance your your numbers out okay you'll have to ask
Speaker 171
1:03:11
the treasurer how what the revenues were at that
Senator Fredrick J. Love
Unverified
1:03:13
time okay thank you for clarifying for clarifying that with me because i want to know i want to ask the question to the correct person okay okay um so as far as your
your two biggest budget items i i've seen that uh you all did a equipment purchase to kind of put you all in a debt now the equipment purchase that you all made before with the knuckle boom truck and i think the staff said knuckle boom truck garbage trucks and everything like that um so you all said that you all had equipment that was repossessed before then so can you kind of tell me what was going on there you had equipment repossessed and then
you all had to buy
Speaker 162
1:03:58
new equipment we had three pieces of equipment well four pieces of equipment through caterpillar
Speaker 166
1:04:04
financial that we used for the landfill and we got behind in the payments and we couldn't pay it so that was repossessed i want to say in 2024 our caterpillar has since sold the equipment at auction and i'm awaiting information from them as to what i'm
going to owe on it and then we needed a loader and two garbage trucks and those were purchased and financed through one of the local banks. It was financed for like $800,000, and our monthly payment is about $16,000 on that. And you said these are garbage trucks? Two
Senator Fredrick J. Love
Unverified
1:04:49
garbage trucks and a
Speaker 166
1:04:51
loader with a boom truck with the grapple on it.
Senator Fredrick J. Love
Unverified
1:04:56
I got you. Okay. And then also, you all have debt in regards to tax filings. who who who is
who is filing the taxes for you all the treasurer handles all of the taxes
Speaker 178
1:05:09
and setting up payment plans with either the IRS or DFA so he could explain that better okay
Senator Fredrick J. Love
Unverified
1:05:17
all right and then last thing I want to I want to ask you is going back
to your biggest debts or you you testified that their payroll
is probably one of your major debts um is is is that your testimony I mean like payroll is is
Senator Fredrick J. Love
Unverified
1:05:38
your next largest debt if if payroll is your largest or or is payroll your largest debt well
Speaker 166
1:05:45
I guess payroll would be the largest it would be like 140,000 every two weeks
Senator Fredrick J. Love
Unverified
1:05:51
roughly okay and then if it what's your next largest debt
Speaker 166
1:06:07
a health insurance premium okay and then
Speaker 163
1:06:11
three times a year I have to pay the property insurance to fleet insurance and our workers comp insurance and those are
Speaker 166
1:06:18
my my big debts and um all right so so all all of it's kind of surrounding
Speaker 227
1:06:24
payroll it's all yeah oh wow okay all right uh mr
Senator Fredrick J. Love
Unverified
1:06:31
chair i'll get back in the queue
for all right representative mayberry you are
Representative Julie Mayberry
Unverified
1:06:42
recognized thank you uh representative hawk and And Senator Love asked quite a few of the questions that I had listed here. But how long have you
been there in your position? I came in as
Speaker 168
1:06:57
city clerk in 2006, I believe. But I've been with the city since 1987.
Representative Julie Mayberry
Unverified
1:07:04
Okay. And has this finding come up before audit before? Not like this, no. not like this okay um i also was kind of wondering i think that there's other people here from the city and i feel like you're having to field all the questions and i didn't know if maybe some of the the city council members or the treasurer would be willing to come up and kind of answer some of this since we did have some questions about the city council um like representative
hawk had asked if we could bring them up is that possible
so yes that's a good question uh what i had stated earlier was that
we were going to go in the order one at a time and next up is treasurer derrick turner after that uh a p director helen halbert and then after that council member don etherly so if if you feel like you're you're working uh miss ramsey too hard then we can save
some of these and then recall her later uh there's several in the queue now and i'm going to work through each one of them but if if you would like we can let her
catch her breath and drink a little bit of her water and then have her back up if some
of the questions don't get answered all right seeing no objection i'm going to not dismiss you but i'm going to allow you to step away and then we'll recall you we won't have to swear you back in thank you very much for very uh patiently answering these questions and so next up derek turner city treasurer
mr turner if you would do the same just stand there at the microphone and state your name employer and position uh derek turner city treasurer all right and if you would also raise your right hand and do you solemnly swear or affirm that the testimony you're about to give will be the truth the whole truth and nothing but the truth thank you you may be seated
and uh senator kroll you're first in the queue and i'm going to call on you you're recognized thank you
Senator Steve Crowell
Unverified
1:09:25
chairman uh i got two things one i kind of wanted to
talk about the debt uh that had the
city has had uh it's my understanding that before this administration last administration was there you were 173 thousand dollars in debt and in the first year you increased that by 458 thousand and since then up to date as of last week you're at 2 million 9 95 thousand is that what's happened with this
administration city yes so then I'm going to go to my second I guess comment question
so we allowed four things to be repossessed all we had
left in payments was a hundred and seventy six thousand dollars but yet this last year and we would have had those four items and not been repossessed yet this last year if I remember on the thing it was somewhere around a million and a half we started in new leases on those type of items is
that correct yes what would as the treasure what was the thought process of allowing them to be repossessed and now we're gonna
Speaker 242
1:10:52
well uh the thought process was that as the city clerk stated that you know the everyone is aware around the table administration and the city council members are aware that we are having financial difficulties but certain circumstances like the landfill requiring
by state law they have to have certain equipment to operate so if we didn't have this equipment the landfill was shut down and so that's why the city council made the decision to get the equipment at the landfill the the old equipment the equipment that had been repossessed wasn't working
Speaker 244
1:11:30
it was in disrepair and we needed new equipment to to to keep the landfill open okay
Senator Steve Crowell
Unverified
1:11:38
one last question then i'll get back in the queue james valley uh who's a former mayor
was the chief of staff for the current or for mr franklin is he still employed yes sir and so we have a chief
of staff that is taking salary to the mayor that's not there yes sir okay representative brown you are
recognized uh thank you mr chair um
Speaker 251
1:12:15
it seems to me that reading this report that clearly this is not a sustainable operation and the plan of what we're going to sell the hospital to try to get us to right the ship there's not more hospitals you can sell so i guess my question is is at any point has the city discussed filing bankruptcy
not to my knowledge all right thank you mr chair senator love you are recognized for questions
Senator Fredrick J. Love
Unverified
1:12:43
thank you mr. chair and i i didn't i didn't get
to ask the the clerk this but i'm i'm going to start with this um kind of define your role with the with the administration as far as your treasurer what is it that
Speaker 254
1:13:01
you're that you do My role as a treasurer primarily is to provide the city council with a financial
Speaker 242
1:13:09
report and to maintain the city's financial records. Okay.
Senator Fredrick J. Love
Unverified
1:13:14
Now, because we're in the testimony with the clerk now, do you all make recommendations?
You know, because, you know, when we're looking at it, we're looking intuitively saying that, hey, wait a minute, you don't have the money to pay for this. Why would you do this? So are you all making recommendations to the council? You're advising the council?
Speaker 242
1:13:43
me. Okay, so when the department head or the mayor decides that they need equipment, particularly, say, the sanitation trucks, so we didn't have any sanitation trucks that were operational
or they would work for a brief period of time. And so it was imperative that we were able to pick up the citizens' garbage. And so during those discussions, it wasn't at one meeting. It probably was over several months of meetings. We would, and the city council is aware of the financial difficulties that we have. And so we know that it's something that we can't afford without worsening the financial condition of the city.
But those are items that are imperative that we have. I mean, these decisions aren't like capricious decisions. They're not just, they're not mindless decisions. They put a lot of thought into it, I believe. And these things, we need the sanitation trucks to pick up the city's garbage. We need the landfill equipment to keep the landfill open. So even though they know that the city is going through its financial struggles,
Speaker 256
1:15:08
they know that they have to make these decisions to
Senator Fredrick J. Love
Unverified
1:15:13
keep the city operational. They have to pick up the city's trash. Okay, well, then the last question I'm going to get back in the queue is this, is that, as a treasurer, I'm going to go back to your largest, the clerk said your largest debt is your payroll. Yes. And Representative Magruder, when he had questions, we were saying that you went from $23,000 to $8,000.
However, the funds have declined, but your payroll continues to either grow. So if this did not start with the current administration as far as your debt, how long has it been since you all had a balanced budget? I
Speaker 242
1:16:04
mean, the budget, when it's passed, has to be balanced.
Senator Fredrick J. Love
Unverified
1:16:09
Okay, but you all are in current debt.
What I'm saying is, let me ask you like this. If you see that
your payroll is your largest debt,
Speaker 242
1:16:26
why have you all not cut your payroll? That is a good question, and that was one of the proposals that I guess the former mayor had discussed with the city council prior to his removal. from office.
I don't know the specifics of which positions or who they were going to cut, but they had presented staff cuts to the city council. Okay. What form of government do you all have? Do you have a city manager form, or
Senator Fredrick J. Love
Unverified
1:16:58
is it a strong mayor form of government? Strong mayor form. Okay. So then the mayor could just
cut the positions, could he not? Yes, sir. So they don't have to be approved by the city council?
Speaker 244
1:17:17
I'm not sure. I believe he could. I believe out of respect for the council,
Speaker 242
1:17:22
I think they kind of want to be on the same page. But I think the mayor, he has the authority to hire and fire in the city. So if he wanted to just not really get rid of a position, but if he wanted to fire a person and in the state of Arkansas, I think they have a, what do they call it, the at-will state. So if he wanted to get rid of a position or a person, he could.
But I think they wanted to have some discussions and do it in an efficient way.
Speaker 221
1:17:53
Okay. All right. Thank you. I'll get back
in the queue. okay i think in the interest of time and because some of these questions are bouncing around and we've we've heard reference to the city council i think what i'm going to do at this point is i'm going to ask miss ramsey to come back up just in case uh she didn't answer all your questions but i'm going to ask the other two uh miss albert helen halbert the amp director and then don etherley uh the council member and and amp commission chair to come to the table and that
way we can kind of maybe cover all the questions and and wrap this thing up pretty quick miss Ramsey you're already sworn in but miss Albert if you would rate for the record state
your name your employer and position and all right
Speaker 270
1:18:47
and I'm gonna actually do both of you at
Speaker 54
1:18:51
the same time I swear both of you in so if you would
mr. etherly is it etherly or etherly etherly if you would also for the record state your
Speaker 272
1:19:06
name employer in position okay thank you so if you both would raise your right hand and if
you do you solemnly swear or affirm that the testimony
you're about to give will be the truth the whole truth and nothing but the truth yes thank you you may be seated
we'll start out with representative hawk here thank
Representative RJ Hawk
Unverified
1:19:36
you guys i i think this might be for the treasurer uh if not for the clerk um with the litigation going on with the former mayor that was just happening is the city paying those legal funds or is that on a personal level where he's having
Senator Matt Stone
Unverified
1:19:55
to pay those legal funds i believe in if i'm incorrect
Speaker 242
1:19:59
let me know uh there is a
there's a situation in which the city is paying for legal representation that was something that
Speaker 256
1:20:09
and everything else the mayor has separate council that he is paying for himself so is the city attorney is
Representative RJ Hawk
Unverified
1:20:17
do you guys have a city attorney yes sir so is this city attorney representing the mayor in that or is it outside council that you're having to pay for outside council okay and that wasn't i'm assuming that wasn't budgeted in the previous budget for
for monies to be paid for so this is just more debt on top of the already growing debt yes sir Okay, thank you.
Representative Wayne Long
Unverified
1:20:47
Representative Long, you're recognized. Thank you, Mr. Chairman. I've got a question for the folks from the city and also one for staff, if I could. I'm not sure which one of you, Mike, could answer this over here. But how many total employees do you have? And if you could give us a breakdown on how many of them are police, fire, sanitation, landfill,
maybe miscellaneous employees, because it sounds like, you know, since that's your greatest expense, we're kind of interested in finding out just maybe
Speaker 254
1:21:16
if you've got too many employees. I believe we have in the neighborhood of about 120 employees
Speaker 256
1:21:24
for the city, and we differentiate the city and the water department. So for the city, I would
Speaker 235
1:21:32
say around 120 employees and around 20 for the water department.
Representative Wayne Long
Unverified
1:21:39
And how many would be for police and fire, do you think, sir? Police and
Speaker 254
1:21:47
fire? Yes, sir. Close to 50. You mean just officers or staff as
Speaker 282
1:21:53
well? Yes, sir. We'll say in the 50-employee range. But
Representative Wayne Long
Unverified
1:22:00
for a city of 8,000 people, that seems like y'all got a lot of employees. I don't know. I've never been in city government, but that's not a really big city.
So have y'all not really seriously looked at maybe trying to cut way back on these salaries? Like I said earlier, the
Speaker 254
1:22:23
former mayor, they have made a proposal to cut staff, cut salaries. But I guess he just didn't have time to begin implementing the plan. Thank you, sir. And I had a question
Representative Wayne Long
Unverified
1:22:37
for staff. I guess it would be for staff.
This is my first term on audit, so you have to forgive my ignorance. But I know that the state has a law. In fact, when a school district gets in financial distress, we're basically the state goes in and takes over the school board and fires the superintendent. I was wondering, is there anything like that in place for municipalities? And if not, I think we might need to look into doing something
Speaker 291
1:23:09
like that. Representative Long, there's nothing of similar form for cities that I'm aware of.
Thank you, sir. Appreciate it. Representative Vrye, you
Representative Johnny Rye
Unverified
1:23:33
are recognized. Three until present time with this situation. Does that sound about right? 2023. I know the audit is for 2023. I don't know. Okay. Well, let's just say this.
You got all these folks that are working for the rub. city fund or road fund got the normal folks and maybe the general but you got all this equipment back in 2023 and that equipment you're probably paying payments on it by the month knowing that this went over about a half of a million dollars did you when did you get to the point in the year. Let's just say you got into October, November, when everything starts getting
kind of lean and you say, look, we've got a payment for this and this and this, but we got all these folks on payroll. Did you ever have a message that you threw out there at city council saying, hey, look, we've gone as far as we can go with the amount of people that we're paying and the amount of money that we have for equipment here, are we going to make cuts to make this thing balance out by the end of the year or maybe you could let us know what happened there?
Speaker 235
1:24:51
Well, I can answer a portion of that. And if Councilman Earthley wants to add
Speaker 256
1:24:59
more to it, you know, that would be fine with me. But the equipment was in the landfill. It wasn't in the street department. It wasn't in the road fund. in the landfill and as I stated earlier the equipment was necessary to keep the landfill open and so the landfill only has about six or seven employees we had
a new landfill director and he had gone out and spoken with some local businesses and we had projected an increase in landfill revenue and so that was also a deciding factor in us getting the equipment for the landfill and so since we've gotten that equipment we've been on we've made on-time payments with the landfill and before that time like I said the The equipment was in disrepair, and there was a period in time when management maybe was kind of on shaky ground
and revenue had declined, receivables had increased. And so when we got the new person in, they started calling the people that owe money to the landfill. Revenue started increasing. And like I said, they went out to some businesses and we had a projection and increase in revenues for the landfill. And that's when the city council decided to approve the purchase of the equipment.
But it was primarily based on the increase in revenue and the need for the equipment
Speaker 244
1:26:52
to keep the landfill open. Yes, sir.
Representative Johnny Rye
Unverified
1:26:56
Now, let me ask you this. Yes, sir. When did you get to that point, sir, that
you said, look, we've got a certain amount coming in each month for payroll that we've got to meet. We've got a certain amount for this new equipment and for existing equipment that's out there. When did you make that turn when you knew that you had to really make some cuts, sir?
Speaker 256
1:27:23
Well, if you ask when we came to the point where we knew we had to make payroll and we had other bills to pay, that we've been in that position for a while. But like I said, there are certain essential functions of a city that we have to provide for our citizens. fire protection, you know, someone mentioned something about a pumper, so we purchased
a pumper, and sanitation services, and that was the garbage trucks, and the place to take it, which is our landfill, and so all of those purchases were things, and like I said, there were lengthy discussions, this wasn't like a one meeting, five minute discussion, this was over a period of several months and so and they came to the conclusion that these are services that are absolutely essential to the function of the city and they this is my and
from my point of view they made those decisions to purchase the equipment knowing that we um had the financial problems and i think somewhere in the back of their minds and like i said it's it's my personal
Speaker 244
1:28:45
opinion that they knew at some point that we would come to the point where we would have to do
Speaker 256
1:28:51
something about staffing those were comments that were made that i personally heard after the meeting and at the walmart and at the gas station
and the restaurants we have those discussions that eventually we would have to get
Representative Johnny Rye
Unverified
1:29:10
have to make some significant and severe cuts follow up please let me ask you this sir for 2025 we're in july
yes sir all these cuts and i'm sure that you've made and let this equipment go back and all that other kind of situation how do you stand for 2025 as far as balancing out and projection
Speaker 254
1:29:31
for the entire year sir well i did i had my 2025 treasurer's report
that i give to the city council
Speaker 256
1:29:37
i think uh senator love asked the question earlier or someone i think with senator love about well i think it was someone else asked about the percentage where that we were at uh with expenditures and so we haven't completed the june statement yet but as far as may is concerned we're at about 40 percent of the budget as of may so if we if we keep
Speaker 244
1:30:05
going at the at the current pace we should be under budget if we keep going
Senator Steve Crowell
Unverified
1:30:10
that I'll read right now yes sir Senator Crowell you are recognized ma'am you had mentioned a lawsuit that the cities were involved in what what are they that the lawsuits that the city
Speaker 189
1:30:41
are involved in I I don't know what all of them are there are some from equipment operators that are suing us for payment the county is we owe according to the audit we owe the county of they say 140,000 for a lawsuit that we had with them we settled on it pending the sale of our hospital uh so we'll owe that but uh i'm not
aware of all the lawsuits that are out there they go
Senator Steve Crowell
Unverified
1:31:16
to the city attorney first okay uh one more question i guess i don't know who this is for but you know we're talking about cutting staff making cuts but yet in this audit we paid over three hundred thousand dollars in overtime And I just at what point when you saw the budget and you saw the treasurer's report Did we decide as city council members or whomever to say this is okay?
Speaker 305
1:31:53
probably city council member I'll answer that the
Speaker 272
1:31:59
answer is never I respectfully disagree with some of the characterizations of how these items get taken care of in the city. Through the first quarter of this year, I would say we had sufficient revenue to operate,
but our payroll was almost 80% of our revenue was payroll. And we have what I call reckless practices with hiring of employees and excessive, abusive overtime. My review is just ridiculous. And we had a finance meeting with the council this year, and we asked for some corrective action.
We were told that cuts would be made. We were told that the cuts would be made. I don't know what those cuts are today. There were none that were reported to the body. But there was a proposal that came from the mayor, and most of those proposed corrective actions, I think one was something that was actually doable, But the rest, I don't think, addressed the main issue.
And I told him at a council meeting, I'm really not for this proposal because I think the thing that has to be controlled is the spending from the executive. I think the city of Helena, West Helena, has sufficient revenue to operate. But there's some spending that is just, as I described it, has just been reckless. And if it's controlled, I think the city can operate and function. As a council member, I have identified places where I think cuts can be made,
and some of them involve staff. I'm mindful of the fact that people back home are watching this, and so I don't want to throw something out recklessly. But I think there are sufficient opportunities in places where we can make budget changes so that we can get out of the hole that we have. Most of our debt is payroll-related. It's payroll-related. It's taxes, it's lobby, it's APERS. And some of these things we didn't find out about.
We got an e-mail from APERS in February. But the council didn't know that these things existed. This is what caused our meeting at the end of the first quarter to just kind of do a deep dive into the financial situation. but we can create a profitable situation. The contractors, the vendors, I want to say our budget this year was the contractor's provision for one department was overrun by February,
Speaker 305
1:35:04
and we just adopted a budget, let me say March. We just adopted the budget on January the 30th or February 1st, whatever the deadline was of this year. But a lot of this was discretionary, wasn't all absolutely, in my opinion. There was some reckless
Speaker 272
1:35:25
discretionary spending. And I think that if that is controlled, the city can function and survive. Okay, I just have two more little things.
Senator Steve Crowell
Unverified
1:35:35
Number one, I agree, it's probably your payroll. I agree, that's one of your big things. I called my three largest cities that are all larger than Eleanor-Wiss, Eleanor. And the most that they have for employees is 122. And you just testified you're in the 170s. So I think you're a little over on your employees. And then their overtimes average $32,000. And most of those are because of instances. I want to get back to the equipment one last time.
You said there were equipments in disrepair. How often were these payments due? Were they due every month? Were they due every quarter of the ones that were repossessed? The payments were due monthly. So you only had 12 payments. So you're telling me in seven months, in eight months, and in five months, they were in disrepair? They had been in disrepair for a while.
Senator Matt Stone
Unverified
1:36:36
I mean, they would break down
Senator Steve Crowell
Unverified
1:36:38
frequently. But you had them 12 months because you only had 12 payments before they were. It says three of 12 payments of the 12 payments were not made. So you only had them for 12 months.
Speaker 256
1:36:52
That may have been three of 12 payments for fiscal year 2023. But we had that equipment for more than a year. Okay. All
Speaker 308
1:37:00
right. Thank you very much. Last question. Sorry. I'll get back out of the queue.
Speaker 305
1:37:07
Councilmember, what is the role of James Valley? He occupies the position of chief of
Speaker 272
1:37:20
staff, so named under this administration, under this previous administration. It was previously a position titled public works, and in that position, we had a public works director. We attempted to—this is going to be more historical. Under a previous administration, we attempted to remove the department heads to obtain a cost savings.
And that is, instead of having a street department head, a sanitation department head, or a landfill department head, we consolidated one position, public works, and that person would manage
Speaker 305
1:37:52
all three departments. Under this administration, that position was retitled to chief of
Speaker 272
1:37:59
staff. And actually, Ms. Halbert was the former chief of staff. But her position was actually the administrative assistant or executive secretary to the mayor. And so this position was titled chief of staff, but it was essentially the public works director,
the person who's supposed to oversee those departments on a daily basis and manage them from a department head
Speaker 310
1:38:21
standpoint. And that's the position that he occupies. All right, thank you. Okay, members,
I want to be respectful of all of the questions that are out there. We've been going for a while now, and I just want to kind of encourage you to ask the new questions, or if your question is not fully answered, then go back and ask about the equipment or whatever.
But let's try to address, because there's some issues that haven't even been addressed yet that you may not have questions about. But let's try to not be repetitive with the questions
as we move forward and hopefully wrap this up soon. So with that, Representative Dalby, you're recognized.
Representative Carol Dalby
Unverified
1:39:05
Thank you, Mr. Chair. I would like to turn to page 8 of the report, and I have really two questions, and I think the people are there at the table. First of all, for the Treasurer, there was a finding that the mayor received a total of $10,000 that was not reported on the Internal Revenue IRS Form W-2.
My question is, has that been corrected, and
Speaker 254
1:39:33
have those taxes been paid on that? Well, currently it has not been corrected. What happened in the previous administration was that we were giving the mayor, he has a vehicle allowance, and that vehicle allowance is $1,000 a month, And the auditors brought it to our attention that that should be W-2 income.
And so what we began doing with the previous mayor, and maybe with the one before that, but I know with the previous mayor, we had set up the tax payments for that vehicle allowance to come out of his regular check because that those were two separate checks we would give him his payroll check and we would give him his vehicle allowance so no w-2 has
Representative Carol Dalby
Unverified
1:40:29
been issued in that regard no ma'am
Speaker 254
1:40:32
but we're in where we were in process of correcting it but he's been removed
from from office because i mean there's some a situation that doesn't happen automatically we You have to be
Speaker 256
1:40:45
cognitive that you're doing it, and I wasn't aware that it wasn't being done, and when the heart had brought it to our attention, he was removed from my
Representative Carol Dalby
Unverified
1:40:58
office before we could. Okay, thank you. And then the other question I have may be
for the A&P. It says the city made payments of nearly $4,000 for related party transactions without authorizing
ordinances for catering services and for christmas parade decorations and services has that money been paid back the money has
Speaker 316
1:41:22
not been paid back but we did pass conflict ordinances
Speaker 270
1:41:27
with the council and my commission approved those expenses before they were
Representative Carol Dalby
Unverified
1:41:32
paid and who is the a amp commissioner member that received that payment matthew harvey
Representative Carol Dalby
Unverified
1:41:43
and who were the um who was the spouse of the employee that got the money for the parade
Speaker 270
1:41:50
decorations and services lakeitha fluker and she's married to a fireman and she's been involved with the christmas parade for years so
Speaker 319
1:41:57
that was not something i was aware of that it was a
Representative Carol Dalby
Unverified
1:42:04
problem before then thank you mr. chair i have lots and lots of questions but i recognize the time and it certainly appears to me that this has been a city that has been mismanaged for for a while but
certainly has really been mismanaged in the last year or so with the escalating debt and not taking care of business but with that i think the report speaks for itself and i appreciate
our staff for their thoroughness in this report thank you
thank you senator love you're recognized for a very new question of
Senator Fredrick J. Love
Unverified
1:42:42
course I have any questions so I'm over here to you also left I want to actually go to the revenue side in
the last I guess in the last several years have you all raised any rates on your water sewer garbage collection talk to me
Speaker 305
1:43:05
rates in what was actually last year November of 2024 okay we raised our water rates after having a rate
Speaker 272
1:43:12
study and that came after the water crisis that we had in Helena West Helena and one of the things that I guess we didn't touch on so I appreciate your question is that in 2025 because what was
happening in the city is the water department collects both sanitation and water fees and then they were in order to keep their doors open they were utilizing the sanitation fees which were supposed to go to general fund since January they there's been absolute 100% transfer of sanitation fees so the general fund has actually received a boost this year as opposed to the years prior. But we did do a rate increase with the water. Sanitation, I think the last time we
Speaker 305
1:43:58
increased sanitation fees might have been 2018 or 2019, but I could be mistaken about that. I think
Senator Fredrick J. Love
Unverified
1:44:12
So, I mean, I wanted to look at your revenue. So, let's get back to your budget, Just as a question, so when you all are balancing your budget, are you all balancing against the revenues that are incoming, or how are you all coming up to the balanced budget?
Is that going to be based on predicted
Senator Matt Stone
Unverified
1:44:34
revenues coming in? Yes, projected revenues and then the appropriations
Speaker 242
1:44:41
are made according to revenue projections. Okay. Based on
Senator Fredrick J. Love
Unverified
1:44:45
your revenue. Yeah, but we start with the
revenue projections. Okay. All right. I think There's
some things I want to say but I'll yield. Thank you
Thank you senator love next up senator stone you're recognized Mr.
Senator Matt Stone
Unverified
1:45:10
Turner they right here the equipment that was repossessed yes sir was it new when it was
purchased most of it was new one piece of equipment that was purchased was a dozer we purchased two dozers one was new and one was used everything else was new
you mean for the of the
Speaker 331
1:45:36
equipment that was repossessed yes yes sir and how long did y'all
Senator Matt Stone
Unverified
1:45:41
on that equipment? Oh, about two years. And you said it's in a state of disrepair. It was constantly breaking down. I'm sitting there thinking, you know, when I'm not a legislature, I've owned and operated heavy equipment the last 46 years, and a piece of equipment all the last 15 to 20 years.
Yes, sir. That would be the equivalent of me going and buying a new car and six or eight months later let it go back because that car was in a state of disrepair. I'm just sitting there thinking, what is going on with the equipment operation and maintenance for something to be purchased new or a late model piece of equipment two years later to be in a state of disrepair? I mean, that's another problem that you have. If it's breaking down, you have to buy new.
You've got problems just stacked on top of problems. I'm just appalled that a new piece of equipment was bought in two years later before it's even paid
Speaker 254
1:46:47
for. It's in a state of disrepair. Yes, sir. And
Speaker 242
1:46:51
that was something that came up in several council meetings, that the equipment
Senator Matt Stone
Unverified
1:46:58
wasn't being properly maintained. You know, I've noticed things are coming up. It's being discussed. seems like y'all have discussed payroll labor equipment repair ad nauseam but there's no action
being taken i have not heard one affirmative positive action that you've taken yes sir you know sometimes you got to quit talking and go to work yes and take action that'd be my recommendation yes
sir representative magruder you are recognized thank you
Representative Jessie McGruder
Unverified
1:47:35
mr chair thank you all again for being here uh i have uh observed your meetings i
appreciate you all being online and i've heard you being the voice of reason at times uh brother ethically uh but uh my question is the water issues uh how much of your budget was spent on the water issues that you all have been
Speaker 242
1:48:05
experiencing the water okay when you're asking about how much of the budget has been spent
okay so we it wasn't we didn't budget for a new whale because we didn't know that the whale was gonna we were having problems with the way so that wasn't budgeted for and well i would have to say not a lot of the things
Speaker 256
1:48:34
that with the water crisis were budgeted for uh the whale for one thing and the extent of the leaks
Speaker 242
1:48:42
the extent of the uh pipes that need to be replaced
We didn't really have a knowledge of how extensive that was while we were budgeting. We budgeted for, I'm not going to say normal, I'm going to say normal repairs for our city. It may not be normal for any other city, but the repairs were extensive. So we budgeted for the amount of free leaks that we were experiencing. But once the crisis began and we became aware of the pump, of course, I think that was over a million dollars that wasn't budgeted for.
And then we also became aware of how extensive of the need that we had for to replace the pipes. So if you ask that question, I'll say none of what we are preparing to do
Representative Jessie McGruder
Unverified
1:49:35
was budgeted for. Okay. Also, I know you all bought new equipment for the landfill. Yes, sir. I understand that there's a coalition of landfills or a coalition of counties that come to your landfill.
Are all those still coming to the landfill? Because I do know there were some issues. And has that gave you all a revenue hit in regards to your
Speaker 242
1:50:00
budget also? That's giving us a revenue hit because at a point in the past, they weren't. And we still have some that aren't coming. we had some issues I don't want to name the counties or the cities but we did have a problem with some counties and cities that didn't want to come and we
kind of got some of that resolved but not all of it and so that that that is a problem that we're also facing I'm glad
Representative Jessie McGruder
Unverified
1:50:35
you brought that up okay and I observed I'm there every other weekend for service in my church. I know there have always been some issues with the grass, and I can recall a council meeting where you all had to vote on purchasing a new moor, and I know when I was coming, especially during this time of year,
sometimes grass would be unbelievably high in the city. Do you still have that equipment, or was it repossessed, or what are your plans? Because you can't encourage people to come to the city when
Speaker 242
1:51:08
it looks in disarray. But we recently, we lease our moors to cut the grass in the city, and we just recently renewed the lease for new moors. I think we got a couple of additional ones. Okay. I
Representative Jessie McGruder
Unverified
1:51:23
do have other questions, but I'll ask them offline with respect to time.
Representative Brown, you are recognized. Thank
Representative Matt Brown
Unverified
1:51:36
you, Mr. Chair. And thank all of
you for being here. This question is for the city council member, and I apologize, sir. I didn't note your last name. If you could repeat it for me. Etherley. Etherley. Yes, ma'am. Thank you very much, Mr. Etherley. When a city's population declines from approximately 23,000 to 8,000, that doesn't happen overnight.
That happens over a period of time. Was there, was the employee, the number of employees, was that ever reduced over time? I don't understand why you have so many employees when you only have 8,000 population. I'll answer your question by
Speaker 305
1:52:23
saying I agree with the premise for which it's based. However, in the state of Arkansas, you have a strong mayor form of government.
We pass a budget. It's balanced every year. It has limitations. We can't make him follow it unless we go and tackle him. And so there are things that have happened that were beyond our knowledge, beyond our control. I learned just in the last two weeks that we took on three new employees while all of this is going on. We just, as a council member, you can know these things, but you don't have the ability to stop it.
It has to come from the executive. I would respectfully say that that has remedied itself at this point. And so what we await is the new executive and someone who's going to be fiscally responsible and address these issues in a way that they should be addressed. The council does all it can to try to make sure that the things that are needed, I'm on record as saying this year we should only spend money on things that are crucial to our operation on a day-to-day basis.
That was my position. In fact, I voted against the garbage trucks, but the majority of the body understand that we've got to pick up garbage. I wanted further budget talks, and that didn't happen. I don't put that out there to say that my position is so much greater. I'm just saying we do what we can, but at the end of the day, when we leave the council table, we're not in charge of day-to-day operations. And I think the operation, and I'm not saying anything that I haven't said at a city council meeting,
has been absolutely awful. It's been awful. But we, at this point, from what I've seen, I continue to say we can survive. We can operate. if it's done responsibly and I think there are changes that we can make for the city of Helena West Helena that can allow it to continue to operate. Thank you
Representative Matt Brown
Unverified
1:54:34
for that statement and I just want to say for the record that I don't want any of my questions to appear to be disparaging you
personally or any of your decisions because you all seem like very ethical caring and concerned people for your community but um are you and the reason i picked on you was i think you're the acting mayor are you not and and based on that could you not be the and i know you said you wanted to wait for a new mayor right could you not make some of those difficult decisions to let
people go or ask people i mean there's got to be people sitting around idle if you've got enough employees for 23 000 and you've only got 8 000 people in your population there's got to be people sitting there twiddling their thumbs i would think that's a
Speaker 305
1:55:32
good question i believe you to be correct the court order in this matter when when mr franklin was restrained from acting we were advised by the Arkansas Municipal League
there was a statute and they provided it to us that allowed the clerk to immediately step in and handle day-to-day operations upon his removal there's a void so the court order directed the former mayor to turn over all of his keys and city possessions to the mayor pro tem that would be me and empowered me to carry on the day-to-day operations of the city that's only been since Monday this week. I'm a practicing attorney. I've been
in court. This is my second day not being in court this week. It empowered me to carry on the day-to-day operations of the city. I hear what you're saying. The Arkansas Municipal League conference with our city attorney yesterday and suggested that we make no hiring or firing decisions. The anticipation is that
Speaker 272
1:56:36
the appointment will come quickly and that the person who's permanently in that position but you I understand what
Speaker 305
1:56:44
you're saying I guess I could go in it's just against legal
counsel right now as advice for me to go in and just start doing stuff turning over the apple cart so to speak but I guess at some point you have to decide whether or not the appointment is coming quickly or whether it's not coming quickly and move on and so I reckon with that in the last 24 hours as well, that at some point we still have to move on one way or another. I understand. Thank you for your
answer. Representative Ladeyman, you have her recognized. Thank you, Mr. Chairman.
Representative Jack Ladyman
Unverified
1:57:21
Well, Representative Brown asked some of my questions, but, sorry, Mr. Etherley, I just texted the
Municipal League. You knew this answer already, but since you're a first-class city, you are the acting mayor right now. That's correct, right? Per the court order, I am. Well, per the municipal EUR. You've answered that, and I appreciate y'all being here and answering our questions. But there was a comment about the overtime.
If you're going to cut personnel, you're already spending a lot of money on overtime, as Mr. Treasurer, you said. But question, the overtime, I think, was in the police department. Is that correct? Not totally. I mean, was the majority
Speaker 305
1:58:09
of it police? There was a lot in the police department, but there was some different departments, administration, sanitation. We were averaging about $19,000 a month in overtime this year along, through the first quarter. It was ridiculous.
Representative Jack Ladyman
Unverified
1:58:23
So my point is you may have overtime in one department, and you're fine in other areas, so you could cut in some areas even though you've got overtime. So my question is, are you having trouble, like in police, are you having trouble getting people to take those
Speaker 305
1:58:42
jobs that would cut your overtime? We were in the police department. Our police department was significantly down. Within the last three weeks, they've been able to hire about four or five new officers,
which would alleviate the overtime. We're working on also a COPS grant to pay those officers. So that it doesn't have necessarily a budget impact, but that's in the works. But they did bring on some new offices, and that will alleviate the overtime issue substantially because we were down to some very alarming numbers in the police department. And literally, you had offices working almost around the clock. I understand. So
Representative Jack Ladyman
Unverified
1:59:20
you might be able to cut in other areas, in other departments.
Speaker 345
1:59:24
There's definitely some places where cuts can be made. Okay.
Representative Jack Ladyman
Unverified
1:59:29
Well, I appreciate you all being here. Appreciate your answers. Thank you. Representative
Rye, you're recognized. Yes, sir. Thank you,
Representative Johnny Rye
Unverified
1:59:47
Mr. Chair. Now, you're the acting mayor now, sir. Yes,
Speaker 352
1:59:51
sir. Now, the mayor before you. Yes, sir. How long was he there?
How long was he mayor? Yes, sir. How long was his tenure in office? He was
Speaker 305
2:00:03
sworn in in January of 23, and he was removed on Monday. 23? Of 25. 25. Okay, but now
Speaker 352
2:00:10
the one. About 30 months. Yes, sir. But the one right before you, sir. Yes, sir. When did he come in? I'm sorry. The mayor. The mayor before. Yes, sir. Before you. January of 2023.
2023. Now, before him, there was another mayor.
Representative Johnny Rye
Unverified
2:00:30
Yes, sir. Okay. You bound to, got to a point that you said, look, this is in trouble. Yes, sir. Okay. Now, when was the alarm sounded that we know that even though we're buying this equipment, leasing or whatever we may be doing here, and we've got a certain amount of people on the payroll, when did that emergency occur knowing that you were really fixing to fall into some real trouble, sir?
Speaker 305
2:01:00
For me, it came last year. Last year? Yes, sir. Okay. I mean, I've made multiple comments, statements on council. I mean, our meetings are recorded, and I appreciate Representative Magruder. He says he watches the meetings, and he alluded to that. I've been saying we have to stop for a long time. Yes, sir.
Representative Johnny Rye
Unverified
2:01:21
But one other thing. You've got a situation here that we're in now that's basically you've got a third of the amount of revenue, probably, that you did five years ago, maybe?
Speaker 352
2:01:32
Is that about right? It's not a third.
Speaker 305
2:01:38
No, it's not. No. Our revenue, I think, is going to be around the $8 million, $9 million range. Correct me if I'm wrong, the treasurer is here. It's down, but it's not. We're a small town, so any amount of revenue loss is significant. But it's been around the $9 million to $10 million range within the last five to six years.
So it's down, but maybe about $1 million annually is what I'm guessing, without having the documents
Speaker 352
2:02:12
in front of me. One more follow-up, sir. 2023. Yes, sir. But
Representative Johnny Rye
Unverified
2:02:17
2024. Yes, sir. The budget between 2023 and the budget in 2024, was it cut a tremendous amount, sir? Was the budget cut a tremendous amount? The budget cut, uh-huh. Because you had all this equipment, you had all of this, the employees.
Did you not make some cuts, big cuts in 24? I
Speaker 352
2:02:37
would say we did, but, again, we can't control
Speaker 305
2:02:42
what happens when the mayor goes in and tells some people, yeah, you can have a job, go over there, and they start working. Our budgets are always balanced. They always have, we always pass a balanced budget. What happens after that is we depend on the people who write checks and print checks and sign checks
to stay within those line items. And so as a council member, after we adopt an annual budget, it's kind of out of our hands as to what's happening on the ground because we're not involved in the day-to-day operations. Some of this equipment repossession I found about, like, let's say, for example, the state taking part of our turnback funds, I read that in the newspaper. There was no presentation to the body on that. And so that's just the way it happens sometimes.
But we always passed a balanced budget. I mean, we didn't pass a budget that was overrunning the
Speaker 352
2:03:49
revenue. It's on paper. On paper. On paper. Yes, sir.
Representative Johnny Rye
Unverified
2:03:54
But like you're saying, even though you may have passed a balanced budget for 24, you may have spent $500 million more, I mean $500,000 more than it would have been if you'd have stayed with your normal budget, you exceeded that. Yes, sir. Yes, sir.
Representative Howard M. Beaty, Jr.
Unverified
2:04:20
Representative Beatty, you're recognized. Thank you, Mr. Chair. Just a two-part question, reviewing the report where the mayor says, hey, it's not me, it's not my job, not my role, and the issue that he makes the statement, the issue is not management and oversight. So my question for each of you is what direction or oversight or instruction
did the mayor ever provide you in the discharge of your duties? Did he ever give you any insight or any direction in fulfilling your obligations? And
Speaker 262
2:04:57
each of you can respond to that. Excuse
Speaker 254
2:05:00
me. I'll respond first to that. We're elected officials. America has no say so in how we perform our duties. Most
Speaker 256
2:05:07
of our duties are dictated by the statute, the state of Arkansas.
In response to that response, I think that has something to do with the journal entries, which I make when I do the financial statements. And he's actually right that I make the journal entries. And I think that finding was due to the fact that I didn't get the approval from another employee before making the journal entries. And so that's just to protect the integrity of the financial statements to make sure that I don't go in there and just try to cover something up.
And so the way we've corrected that is that when I make journal entries to give them an accurate financial statement, the city clerk approves the journal entries. But other than that, the mayor doesn't dictate our duties and responsibilities. That's given to us by the
Speaker 288
2:06:08
state of Arkansas. Anyone else want to respond?
Speaker 305
2:06:20
I don't know if I understand your question. Are you asking if he tried to tell us what our responsibilities
Representative Howard M. Beaty, Jr.
Unverified
2:06:26
were? Right, if he tried to influence you, direct you into what your duties were or the actions that were taken that led to some of these problems that are here in this audit. No, absolutely not. I would say no. Is there anyone else that exerted any influence or tried to direct you into doing any of the things that led to what's in this audit report outside of the mayor?
Speaker 18
2:06:52
Not for me. No. Okay, thank you all. represent
Representative Johnny Rye
Unverified
2:07:05
around you do you have another question yes sir I'll try to make this short you recognize thank you sir well go when I mentioned sermon farming the starting the alarm what was the alarm made and someone stepping forward and saying look you got a balanced budget here but you're exceeding this at least
on a quarterly basis you know like the first quarter of the year second quarter and say hey look you've already overshot your budget for this part of the budget at this time of the year we can't go any farther with this yes sir
Speaker 256
2:07:45
and just like councilman air delivery and I were on the same page we agreed when we bought the sanitation trucks both
Speaker 254
2:07:55
of us agreed that we should look further into this it's not that they shouldn't that there
Speaker 256
2:08:01
was not a need for the sanitation trucks but we just want to look further into it and like mr. Ethel said they the City Council voted to go on and purchase the trucks and he voted no and both of us suggested that we look further into the issue so i mean the alarm has been sounded we there are times when we can give our opinion about how things may proceed how a vote should be i'm not going to say how a vote should be made
but we we're that the the city clerk and i primarily and the city attorney we're there primarily to answer questions or to get some counsel into finances and other legal matters but of course you know that the city council makes the ultimate decision but there there are many occasions where our ability to pay what for whatever was on the table has come up but there's you know you get four
four votes can pass you know anything okay members seeing no
one else in the queue you've heard the report before we let you go
I want to personally thank you as well for being here and answering all these questions so patiently and it sounds like most of you all have been in hell in the West Ellen all your life and so I know these decisions are difficult and maybe even painful to have to deal with them and i want to commend you and encourage you to to do all you can to to to right
the ship so thank you and with that you are dismissed thank you so members you've heard the report do i have a motion to file the report motion and a second uh any discussion on the motion if not all those in favor say aye any opposed no motion passes all right members last item is other business and under other business i'd like to recognize kevin white to introduce a few special guests thank you mr chair um
Speaker 373
2:10:12
like to take a moment introduce a few guests we have in
the room today back in the corner behind this post to your right we actually have seven interns of legislative audit who came over the past couple days to watch the committee meetings they hail from the university of arkansas fayville arkansas tech university u of a monticello arkansas state University. They're spread across the state from Harrison to Russellville, Cabot, Little Rock, Monticello, and Centerton. I want to thank them for being interns with us and the experience they've had, as well as thank this body for providing the appropriation
Speaker 128
2:10:43
changes this last session and making it possible. Thank you.
Thank you, Mr. White. The next meetings of the
Legislative Joint Auditing Committee will be held on September 11th and 12th.
No new business, And with that, we are adjourned.
Agenda
A. Call to Order by Chair
B. Adoption of Minutes
C. Reports of Executive and Standing Committees:
D. Review of Reports:
E. Other Business:
The next meetings of the Legislative Joint Auditing Committee will be held September 11 and 12, 2025.
F. New Business
G. Adjournment
Documents
| Title | Type | Pages | Source |
|---|---|---|---|
| Agenda — LEGISLATIVE JOINT AUDITING, Jul 11, 2025 | Agenda | 1 | Official source ↗ |
Speakers
Senator Jim Petty Chair
Unverified
Senator Tyler Dees
Unverified
Representative Cameron Cooper
Unverified
Representative Hope Duke
Unverified
Representative Steve Unger
Unverified
Speaker 29
Speaker 59
Representative Howard M. Beaty, Jr.
Unverified
Representative Stephen Meeks
Unverified
Speaker 36
Speaker 90
Speaker 96
Speaker 97
Speaker 105
Speaker 111
Representative Carol Dalby
Unverified
Speaker 80
Speaker 66
Speaker 128
Speaker 129
Representative Jack Ladyman
Unverified
Representative Johnny Rye
Unverified
Senator Missy Irvin
Unverified
Speaker 163
Speaker 166
Speaker 168
Speaker 178
Representative Jessie McGruder
Unverified
Speaker 207
Representative RJ Hawk
Unverified
Speaker 211
Senator Fredrick J. Love
Unverified
Speaker 195
Speaker 171
Speaker 162
Speaker 227
Representative Julie Mayberry
Unverified
Senator Steve Crowell
Unverified
Speaker 241
Speaker 242
Speaker 244
Speaker 251
Speaker 254
Speaker 256
Speaker 221
Speaker 270
Speaker 54
Speaker 272
Senator Matt Stone
Unverified
Representative Wayne Long
Unverified
Speaker 235
Speaker 282
Speaker 291
Speaker 288
Speaker 189
Speaker 304
Speaker 305
Speaker 308
Speaker 310
Speaker 316
Speaker 318
Speaker 319
Speaker 321
Speaker 322
Speaker 331
Representative Matt Brown
Unverified
Speaker 345
Speaker 352
Speaker 262
Speaker 18
Speaker 373