OAKDALE — An independent audit of the city of Oakdale says the city may have violated the state Constitution when it granted employees a one-time supplemental pay.
Accountant Royce Scimemi found the supplements, totaling $40,577, may have been in violation of the state Constitution, which prohibits the donation, loan or pledging of any public funds.
About 60 employees received the one-time pay as approved by the city council and mayor in November 2018. No elected officials received the payments.
“Employees have not had a raise since 2008, when we start looking at what we can do to reward those people we are looking towards a one-time adjustment rather than an hourly raise because it gives you something that you can do something with instead of 50-cents a check or an hour,” City Clerk Lisa Schaefer said. “In addition if you are giving a raise you are obligating that and you never know if your revenue is going to be there.”
According to Scimemi’s finding, the payroll payments appear to be a gratuity for services previously rendered by the employees.
In responding to the finding on Monday, Mayor Gene Paul and Schaefer said an attorney general opinion is being sought to determine whether the adjustments were allowable. The city is also seeking direction from the attorney general’s office to prevent any future potential violations.
Schaefer said city attorney Ray Rush gave the city approval to make the one-time adjustments after looking into the legality of the measure.
“We know we can’t give bonuses and that was not our intentions,” Schaefer said. “We wanted to be able to reward them for good performance while living within the budget. Our attorney came back to us and said yes we can do this as a one-time adjustment for future services in order to meet the criteria of the Constitution.”
During a review of the town’s finances for the fiscal year ending June 30, 2018, Scimemi found the town did everything right, but the adjustments should have been stipulated to a particular event or tied to a goal, Schaefer said.
“We had done everything just short of that, except tie it to a goal, so now we’re sitting with the city attorney saying one thing and our auditor saying another,” Schaefer said. “It comes down to the interpretation of the law. When you go to classes with the legislative auditor, they always tell you to get your city attorney’s advice and we did, but the auditor comes in and says ‘You didn’t do this.’ ”
The attorney general’s opinion will direct the city how to move forward, she said.
“The main thing there was no fraud and no elected official received anything,” Paul said. “We were just strictly trying to do something good for the employees.”
In a separate finding, the city may have violated the public bid law when it failed to get quotes to buy two vehicles.
State law requires three phone or fax quotes for purchase of materials and supplies between $10,000 and $30,000 with the contract awarded to the lowest bidder. The city purchased two vehicles, one for $10,581 and another for $10,080 without receiving the required quotes.
The city also purchased a well shaft for $23,078 under the emergency provisions, but the city failed to certify the emergency at a public meeting or to publish a public notice within 10 days of declaring the emergency.
Schaefer said the city will monitor large purchases in the future and obtain proper documentation to ensure compliance with the bid law.
In a repeat finding, the police department under former police chief Joseph Locket was cited for failing to keep time and attendance records for police employees.
Newly appointed Police Chief Scotty LaBorde is already taking action to see that accurate time and attendance records are maintained for all police employees.
Overall, Paul said he was pleased with the audit despite the findings.
“To come from a big deficit to seven years later having a big surplus of over $300,000…. that’s good considering there is not a lot of income coming in to the city,” he said. “It has taken a lot of handwork and dedication to get there.”
The city’s focus for the next 10 years will be improving infrastructure, streets and drainage. The city has some exciting projects on the horizon that it has been working on for the past two years, Paul said.