Op-Ed: Throw out the rotten apples so Alpine City government doesn’t stink any more

By Pete Smyke

City of Alpine documents obtained through the Texas Public Information Act show that during calendar year 2012, 42 city employees took over $141,000 in payroll “advances.” This equals roughly eight percent of annual city payroll, and might better be described as “taxpayer money diverted to personal use” than “advances.”

Over half of that amount, $72,705.00, went to six city employees.

These six employees also appear to have participated in a repayment scheme in which $27,105 in City of Alpine checks were issued to repay outstanding advances on October 1, 2012, and to provide extra cash for five of the six employees. Additionally, a backdated deposit slip was apparently used to alter City of Alpine accounts at the end of the closing fiscal year, so that those outstanding amounts would appear to be repaid by September 30th, 2012, the close of the fiscal year.

Texas law prohibits public servants from deriving any benefit whatsoever from their public employment, and also strictly prohibits the use of taxpayer funds for personal gain. Nevertheless, allegedly during 2012 the City of Alpine’s former finance director took $24,100, the city secretary $18,350.00, a finance clerk $12,545, and water department billing clerks $9,150, and $4,460, respectively. Alpine Police Department employees allegedly took a total of $34,730 during 2012. So far only the former finance director has been terminated; all of the other employees are still working for the city, with several still handling and overseeing taxpayer funds.

The Alpine mayor and city council have insisted that this isn’t a problem because all of the amounts advanced were paid back, but in facttaking the money in the first place is a violation of state law and must be dealt with as a law enforcement issue. Intent and repayment may have bearing for a judge or jury, but they are irrelevant to taxpayers who rightly expect city employees to live up to their fiduciary responsibilities. Additionally, City of Alpine personnel policies state that “theft…bearing of falsehoods…knowledge of violation by another employee without reporting same…are just reasons for immediate dismissal.”

The city hired a forensic auditor in April 2013 after its yearly financial audit revealed improper employee payroll advances among other irregularities, but she was fired in mid-investigation in September, and the city council declined to replace her, effectively ending the city’s only investigation into these and other financial irregularities. (The forensic auditor did issue a report directly to city council allegedly showing credible evidence of financial wrongdoing by the former finance director, the city secretary, and a finance clerk, even though she didn’t specifically look into the payroll advances situation.)

The October 1, 2012, repayment scheme documents reveal that not all repayments were made in good faith. After the beginning of 2013, when the employee payroll advances became very public, thousands of dollars in repayments ($14,000 on February 28, 2013 alone) were made in cash, making their sources virtually untraceable. In addition, the 02.00 207.13 “Emergency Payroll Advances” account transcript shows monthly credits as lump sums, with little to no detail or breakdown.

According to monthly payroll records and the 02.00 207.13 account transcript, the majority of city workers appear to have taken advances “normally” and repaid them through payroll deductions. However, the six employees mentioned above appear to have received checks from the city’s general fund almost at will. It was not unusual for an employee at either level to take several advances in one month. The decision of when and how much to pay back appears to have rested with the individual employee, at least until the matter became public. (As an example, the city secretary allegedly received $18,350 in advances during 2012, with $9,400 of that taken in six checks in October and November 2012 alone. She repaid $14,293.35 that year, and continued to make repayments into 2013.)

On October 1, 2012, eight checks totaling $27,105 were issued from the City of Alpine General Fund to six different city employees. These checks were used to repay the 02.00 207.13 “Emergency Payroll Advances” account and to receive further advances ranging from $600 to $4,000. City documents indicate that most of the checks were issued sequentially.

Six of the checks are listed as advances from the 02.00 207.13 account, with one $10,000 check costed to three different computer accounts, and one $2,100 check costed to janitorial/custodial accounts. The six employees in question apparently wrote personal checks to the city as repayment for outstanding balances owed to the 02.00 207.13 account, and deposited the city checks in their personal bank accounts individually. (The former finance director signed over a $10,000 City of Alpine check made out to himself as his repayment to the 02.00 207.13 account.)

 

An additional $2,500.00 in cash from an unlisted source was added to the $18,805 in checks written by the city employees, for a total deposit of $21,305. The personal checks (including the $10k city check) were deposited into City of Alpine account #7082207 on a printed City of Alpine deposit slip (with no names next to any of the listed amounts) with the date “9-30-12” written by hand, but which shows a bank date/time stamp which indicates “10/01/2012 1:21 pm.”

The $21,305 deposit amount can be seen listed as a credit at the end of September in the “-End of Year- Transcript of G/L Accounts” (p.248) for the 02.00 207.13 account with the date “09/30” on the same line. The next page of the transcript (p. 249) shows the 02.00 207.13 account balancing out to zero on 9/30/2012, the end of the fiscal year.

The city receipt for this deposit included in the “End of Day Cash Receipts Report” on October 1, 2012 (#41828) shows the deposit(s) received from “PR ADVANCE” and going to account “02.00 207.13 EMERGENCY.” There are no names whatsoever on this receipt, in contrast with other city receipts which contain detailed documentation of check and cash payments.

The dates on the personal checks written to the City of Alpine by the six employees also vary, with three checks written as 9/28/2012, and three dated 10/1/2012. (The last working day of the old fiscal year was Friday, September 28. October 1 was a Monday.) Given that all of the city checks were issued on October 1, having multiple backdated personal checks would tend to reinforce seeming coordination between the employees making these repayments.

Taking and repaying an advance in good faith is one thing, even if it is against state law for public servants to do so. It is quite another matter when city administrators turn their backs on their fiduciary responsibilities, and apparently conspire to game city finances in order to divert well over one hundred thousand dollars in taxpayer funds for personal use by themselves and other employees.

If these city staff members were comfortable allowing money to be diverted for personal use from payroll accounts—the most scrutinized part of any budget—one must also ask which other accounts may be compromised, and how. Clearly there were few if any qualms about shifting money between accounts and trying to hide it. Not terminating these apparently corrupt employees virtually guarantees additional unwelcome surprises in the future, especially since they had access to the city’s old financial software code, and plenty of time to “rearrange” inconvenient numbers.

The very city officials who were supposed to prevent this from happening were apparently full participants in the scheme to divert taxpayer funds. The former city manager and finance director, the city secretary, the billing clerks, and the Alpine Police Department employees all took their jobs knowing that those jobs required them to act within state laws and regulations, and to protect the citizens’ interests as a duty of trust. The results of this investigation show that working within the law and in the citizens’ interest appeared to be a minimal priority.

Equally distressing is the mayor and city council’s inability to treat the situation seriously, to the point of letting its own internal investigator be terminated, allowing possible criminal wrongdoing by city employees to go overlooked. The mayor and city council also overlooked a glaring conflict of interest by allowing the former Alpine city attorney on whose watch all of this happened, and who was elected 83rd District Attorney in November 2012, to run a “politically acceptable” investigation which found virtually no evidence of wrongdoing.

The initial public information request asking for documents pertaining to City of Alpine employee advances was submitted on March 25, 2013. It took until October of that year, a formal complaint under the Texas Public Information Act to the Brewster County Attorney, and a threat to refer the City Secretary for prosecution by an Assistant Attorney General before documents were finally made available.

The City’s original response to the March public information request, signed by the Alpine city secretary and dated April 9, 2013, stated that “no such document is on file in my office or with the city hall,” which proved over time to be a bald-faced lie.

So this isn’t just about a few employees taking milk money at the end of the month. It also appears to have devolved into a conspiracy organized at the highest levels of the Alpine City government which allowed over $141,000 to be diverted to personal use by city employees in 2012 alone, followed by an attempt to cover it up when alert taxpayers rightfully started asking questions.

The disrespect this demonstrates for the citizens of Alpine is so great as to be difficult to measure.

The Alpine Municipal Swimming Pool was closed for the entire year of 2012, even while city employees were apparently diverting over $141,000 to their personal use. That money could have hired a grant coordinator on the city staff, fixed our terrible streets (or the swimming pool), supported the Sunshine House Senior Center and Meals On Wheels, or been used to repay the growing City of Alpine debt. Instead, it found its way into the pockets of city employees, apparently with the approval of the highest City of Alpine officials, who were themselves also diverting funds.

Governments are founded on trust. Alpine City officials need to make rebuilding trust with the citizens their number one priority, especially given the careless and dishonest way the city has been managed in recent years. Terminating the worst offenders still on the city payroll, and treating the actions of these current and former city employees as the serious law enforcement matter that it is, would be a good place to start.

Editor’s Note: Click here to see “207.13 Account w o totals,” the yearlong listing of City of Alpine employee advances broken down by month, a public document obtained through TPIA.

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