Where's my 4.1 Million Dollars, Dude?

That might be what Police and Firefighter Pension Trustees and the past and present City Council members are asking today

Update: Please refer to: "JackeHammer: I was wrong..."

The City of Springfield stated, in its explanation to Council Bill 2009-053 (Ordinance No. 25556), that, with Council approval, the net AT&T Mobility Settlement would equal the amount the City underfunded the pension plan during four past fiscal years, with interest. Council, clearly, unanimously approved the bill with that intent, also amending the budget, "In the amount of $10,225,361.00 for payment into the Police Officers' and Fire Fighters' Pension Fund to meet the City's net pension obligation," on March 9, 2009.

I could quote and quote from Ordinance No. 25556, noting the intent of the ordinance, and I could quote and quote from the March 9, City Council meeting, proving the belief of the City Council that the money the City would end up with, as a result of the AT&T Mobility settlement, would be enough to cover the entire net pension obligation, including the interest accrued at 7.5 percent through June 30, 2009 but, you can read the bill as linked above for yourself.

Clearly, our past Mayor, Tom Carlson, believed it was "a done deal."
Carlson stated in his State of the City address on March 5, "The newspaper put a lot of pressure on us through the editorial board but, your Council stuck to its guns (and) as a consequence of that, we are going to get enough money in here to make the full payment that we owe, with interest."

At the following City Council meeting, past Councilman Ralph Manley believed it was a big win for the City, "This is a real bonanza for us, and we're very happy that all of this settlement can go to these funds, and it's going to go a long way toward catching up some of the shortages we've had," Manley said.

City Manager Greg Burris said it would take the City from around $200 million in shortage to around $190 million in shortage amounts, "and, as the Mayor pointed out, it does make the City whole in terms of making that contribution that was recommended by the actuaries over those 4 years," Burris said.

Carlson, in an exchange with Finance Director Mary Mannix Decker asked her, "So, to say it another way then, if the Council approves this bill tonight, once the money's received, it will be placed in the pension fund and it would fully satisfy all the payments that the actuaries were requiring the City to make over the past 3 or 4 years?"

Decker responded, "Yes, that's correct."

So, what happened? Where's the pension fund's intended $10,225,361.00?

Section 1 of the ordinance might offer us a bit of direction. It states, " The City Manager, on behalf of the City of Springfield, Missouri, is hereby authorized to enter into an agreement with AT&T Mobility, LLC and those who conduct business on its behalf and named in eight tax protest suits filed in the Circuit Court of Greene County, Missouri, provided said agreement is in substantially similar form and content as the agreement entered into between the City of Springfield and Sprint Corporation and the agreement entered into between AT&T Mobility and Jefferson City, Missouri, upon the City Attorney approving the form of such agreement and the City of Springfield receiving out of said agreement the release of all taxes paid prior to June 30, 2009, and sufficient additional cash payment so that the City will receive, and have available to it, the total of $10,225,361.00 by June 30, 2009."

So, in other words, provided everything worked out the way the City, staff and attorneys thought it would, and then, with the City Attorney's approval as to the form of the agreement, and if, and if, when all was said and done, the City had available the $10,225,361, they'd put that amount in the pension fund.

Though the intent was there, the $10.2 Carlson and the past Council were counting on will not be received by the City of Springfield.

Although the bill, which the sitting City Council of the day approved in March, stated, under #3 of the explanation, "The attorneys' fees and costs for the City will be paid directly by AT&T Mobility...," and noted the stated intent, that "the City's NET settlement proceeds WILL equal the amount the City underfunded the pension plan during four fiscal years (FY2004 through FY2007), plus interest," and although staff recommended approval, "of this settlement... to meet the City's net pension obligation," it all flew out the window when the actual agreement was signed and notarized.

So, what was the agreement? What "form of agreement" did the City Attorney approve? That's the easy question, you can simply read the signed, notarized agreement* between all parties.

The City will receive only $6,125,000, rather than the budget amended amount of $10,225,361, and Lowther Johnson, Attorneys at Law, LLC will receive $4,375,000. All of it will come out of a pot of $10.5 million but, technically, AT&T Mobility will pay the City's attorney fees directly, just as the ordinance indicated it would.

The tougher questions to answer are what happened to the ordinance indicated amount of $10,225,361? Why did the agreement fail to provide the net funds in an amount sufficient to cover the City's net pension obligation plus interest, as intended?

Somewhere between the passage of that bill in early March, and April 21, our fair City lost an intended $4.1 million. Our police and fire fighter pension fund lost $4.1 million and the taxpayers of Springfield, Missouri lost $4.1 million. Okay, you say, you can't lose what you don't have, that is true but, by all previous indications, the City had a tentative settlement agreement for an amount $4.1 million greater than what the City will receive.

The moral of the story: Don't count on your chickens (or duck) before they're hatched.

*Source: "Springfield News-Leader"

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City Council Began Budget Discussions Tuesday

Kicked around the best way to tackle the issue

"This is the first in a series of meetings," City Manager Burris said at the Council luncheon today. He asked the City Council to give him an idea of how many meetings they thought they would like to hold in order to discuss and possibly make changes to Springfield's 2009-10 proposed fiscal budget.

On Friday, May 1, as the City Charter requires, Burris delivered a copy of the proposed budget to each member of the City Council. Councilman Jerry Compton, of course, received his copy a little later.

Springfield's Finance Director Mary Mannix Decker went through the budget, hitting the highlights and answering a few questions from Council members.

The City also released a new document with the budget. This year they published a smaller document, a summary, which targets the differences between last year's budget and the newly proposed budget. The document is 38 pages in length.

Also released today: a document outlining the repercussions of budgeted City contribution cuts to the City's non-profit service-agency partners.

Councilman Doug Burlison didn't believe the City Council would be able to give Burris a good idea about how many meetings they might want to hold to discuss the budget until they'd had a week to look it over, forming questions and comments. Other Council members agreed with Burlison.

Councilman John Rush felt he needed more time to understand the budget. He said he had been trying to figure out a systematic way of looking at it and had been unable to do so.

Decker said, in the past, they have gone over it page by page. And, while it is up to the City Council to decide their procedure, Decker suggested time might be better spent by considering specific critical issues.

They casually decided they would begin their discussion at the next City Council luncheon by looking over the changes from last year to this year's proposed budget and they specifically asked to hear from Parks Director Jodie Adams and the Director of the Springfield-Greene County Health Department Kevin Gibson.

Councilman Scott Bailes said discussing priorities would be more helpful to him as a starting point. He wondered about the wisdom of cutting the parks department in a couple of the areas cited. Bailes felt by instituting cuts at Mediacom Ice Park and other potential sales tax generating sites, if the Department would not be, not only absorbing the initial general fund budget contribution loss but, lose revenue from sales tax receipts. He wondered if the parks budget was restored in those areas, what might be cut in their stead. Burris noted the Parks Department had decided for themselves the areas in which they cut their budget to deal with the cut in contributions from the City, as proposed in the new budget.

All of the budget workshops will be televised on TV23 and available for viewing at their Web site.

In other news, Mayor Pro Tem Dan Chiles said he had talked with Mayor Jim O'Neal's wife over the telephone. She had indicated the Mayor had come through his hip replacement surgery very well. She said they are estimating the Mayor could be released from the hospital on Thursday or Friday.

Related: Proposed Springfield budget full of cuts Springfield News-Leader

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Employee theft usually IS a "complete surprise"

My Dad, the hillbilly philosopher, told me something when I was probably about 11 or 12 years old that always stuck with me, paraphrased, he said:

"Jackie, there are a lot of people in the world that aren't very good people but they are very likable. Some of the most likable people you'll ever meet may have little morals and little integrity."

I thought about that this morning when reading in the News-Leader about the "Aunt Bee of Niangua," Joyce Thornhill, who has been accused (but not convicted) of stealing money from the city of Niangua coffers.

"...it was a "complete surprise" when city leaders learned 58-year-old Thornhill might have bilked the town for more than $8,000, Niangua Mayor Roger Mepham said Monday.

"She was the nicest lady you'd ever meet.""

Similarly, when I talked to a family member who formerly worked at the Municipal Court with Rhonda Bateman, the relative grappled with a broad spectrum of emotional reactions along with several of his/her past co-workers with whom the relative stays in touch. Being family I assume it was off the record. They were personal conversations during a time when my family was spending a lot of time together due to my Mother's health issues and so, carefully, I'll mostly just mention the flavor of the discussion.

There was a similar reaction on the part of those who worked with Bateman as there was on the part of Niangua city leaders discovering "Aunt Bee" was a thief. That "complete surprise" was coupled with indignation over the feared public assumption that all the employees of the Municipal court would be suspect, a sort of "how dare she impugn our collective integrity" attitude. Then there were the remembrances of the sweet birthday cards and small gifts that co-workers were given over the years by Bateman, the nagging fear that even the Bible that one co-worker received as a gift from Bateman could have been afforded by the bilked and misappropriated funds that Bateman plundered. I wondered, how does one hold in hand the very Word of God, read and study it's righteous instruction while wondering if it was, in essence, stolen from the public trust!? My relative told me the receiver was considering returning it to it's source...even that might be questionable, who was the source of the gift? Rhonda Bateman or the taxpayer?

After the audit of the Municipal Court I looked at employee theft as an angle for the second article I wrote about it for Community Free Press - Midweek. In "Are Springfield Funds Now Protected?" (August 29-September 11, 2007 issue) I noted:

"According to the FBI, employee theft is the fastest growing crime in the U.S....

"We don't anticipate that any of the government employees, are going to be stealing, and so, you're not prepared for that," said State Auditor Susan Montee when she discussed the Municipal Court audit report."

That is one of the reasons I wrote State Auditor wrong or lying, City of Springfield's Finance Director says, "checks not a problem." This was the second time I had either heard with my own ears or read another reporter relay that Springfield's Finance Director didn't really believe that a recommendation made by the State Auditor was a problem.

Regarding the State audit's discovery that city employees were not turning in detailed receipts to document employee purchasing card spending, Decker said she did not feel there was a problem with the issue:

"For the amount of transactions we process, we don't have a problem with receipts not being turned in, Decker said. "We do understand when people are traveling or doing a lot of business, occasionally a receipt will get lost and we try to accommodate that. It's just that we don't want that to become a habit."

According to Decker, in such cases employees are allowed to turn in a memo describing what was purchased with their card." - Community Free Press - Midweek, City Officials Grapple With Audit, January 2-15, 2008 issue.

Back to the article, "Are Springfield Funds Now Protected," I listed employee theft Statistics:

> $50 billion dollars are lost annually due to employee theft and fraud.

> 20 percent of all businesses fail due to internal theft and fraud.
> A company loses 1 percent to 2 percent of its sales to crime -- most committed by or in collusion with employees.
> One in three employees steal and it's rising 5 percent a year.
> 20 - 25 percent of the work force will cheat when the stakes are high and supervision is low.
> 10 percent of the work force will cheat no matter what.
> 75 percent of all employees steal at least once -- half of these, at least twice.
> 43 pecent of workers admitted stealing from their employers.
> Employee theft is the fastest growing crime in the U.S.

Naturally, all of us want to trust and give the benefit of the doubt to everyone, whether they are an employee of McDonalds, WalMart or our local city government and I don't mean to suggest that people who work for the city are more inclined to steal than other employees but neither would I suggest they are less inclined to steal than other employees. I just want to see employee theft taken seriously and I think a little less "benefit of the doubt," in light of those statistics might be called for, especially when discussing the public trust. Susan Montee said because we don't expect government employees to be stealing, "you're not prepared for that." We need to be prepared for that, we need to be preventing that.

Remember:

"Some of the most likable people you'll ever meet may have little morals and little integrity."

State Auditor wrong or lying, City of Springfield's Finance Director says, "checks not a problem."

Will these unfounded recommendations never cease!?

In Checks not a problem, city officials say, Didi Tang reported:

"Contrary to a claim in the audit report that some checks had been outstanding for more than four years, Mannix-Decker said she is not aware of such checks."

Interesting. the State Auditor's office must have been mistaken or lying when they reported at page 63:

"The Finance Department has not established procedures to routinely follow up on outstanding checks. At April 30, 2007, approximately 60 checks totaling over $9,000 had been outstanding for more than one year. Some of these checks have been outstanding for over four years."

I recently interviewed Mary Mannix-Decker, myself, for Community Free Press - Midweek regarding an audit recommendation:

"Another issue mentioned in the state audit was city employees not turning in detailed receipts to document employee purchasing card spending.During the year ending June 30, 2007, purchasing card charges totaled approximately $6.6 million. Finance Director Mary Mannix-Decker said she did not feel there was a problem with this issue.“For the amount of transactions we process,we don’t have a problem with receipts not being turned in,” Decker said."

Maybe the next question for Decker should be whether she thinks ANY of the recommendations of the State Auditor's audit report regarding the Finance Department were warranted or if she thinks that ANY of the citings are a "problem?"