Mayoral candidates clash over finances, unity
Reggie Ponder, The Daily Advance Staff Writer Sep 20, 2023

Editor’s note: The Daily Advance’s coverage of 3rd Ward candidates who attended Tuesday night’s candidates forum will appear online Wednesday and in Thursday’s printed edition.

Mayoral challenger Christina Williams hammered incumbent Elizabeth City Mayor Kirk Rivers over fiscal control issues at a candidates forum Tuesday night as Rivers defended his record as one of unifying the city and inspiring progress.

Williams, who buttoned her answers to various questions by reading letters from citizens asking the N.C. Local Government Commission to take fiscal control over the city, asked rhetorically: “When did Elizabeth City become a city that has on-the-job training for its finance staff?”

She was answering a question posed to mayoral and 3rd Ward city council candidates attending The Daily Advance Candidates Forum at the Pasquotank County Courthouse asking whether they supported continuing to pay an outside accounting consultant up to $172,000 annually for fiscal assistance after having already paid some $500,000 to another outside firm for that service.

Rivers pushed back on the city’s critics, saying they have used the LGC’s scrutiny of the city and the city’s fiscal issues — which he said had begun before the current elected officials and current city manager took office — as a distraction from good things that are happening in the city.

He cited as examples of positive developments the growth that has taken place downtown and 10 new surveillance cameras that have been installed in neighborhoods and other areas.

The forum, which was moderated by retired attorney Mark Maland, also included City Council candidates from the 3rd Ward. But the exchanges between Rivers and Williams were especially pointed. Bennie Murphy, a third mayoral candidate, did not attend Tuesday’s forum. He previously had told The Daily Advance a family emergency might prevent his attendance.

Answering a question about funding for nonprofits, Williams circled back to incomplete city audits and lack of certainty about the city’s financial situation.

“We don’t know how many funds we have,” Williams said. There has to be certainty about that before any additional funds can be allocated for nonprofits or anything else, she said.

But Rivers said he is proud of investments the city has made in youth and proud of $15,000 that has been allocated to help people who are homeless.

Answering an audience question about unpaid invoices that were more than six months old, Rivers said the questioner should contact City Manager Montre Freeman and ask him directly about those kinds of things. Rivers said he is not the manager and does not get involved in those kinds of operations.

“As mayor my job is to be the big cheerleader for our city,” Rivers said. He said the focus on the city’s finances should not be allowed to be a distraction from positive things happening in the city such as increased enrollment at all three colleges and classes that are being offered in the city to help people become homeowners.

He went on to say that city officials want everyone to get paid for products or services they have provided.

Answering a question about communication with citizens about important matters, Williams described the city’s current communication with citizens as “abysmal.” She said she believes the current city council misuses closed sessions and is not transparent with citizens.

Rivers said he and members of the council are transparent by being in the community and being accessible to citizens.

“We are in the community to be accessible for all questions,” Rivers said.

Williams also accused Rivers of setting a bad example by returning property that had been stolen from the Northeastern High School Athletic Booster Club in 2021 without divulging the name of who had been in possession of the property.

Rivers defended his action, saying that his goal was to get the property back to the booster club. He said he was able to find out where the property was because of the trust that people in the community have in him.

Rivers said he is most proud of how city officials are working together in harmony.

“We need to talk about the ‘we,’” Rivers said. “We are working together.”

 

https://www.dailyadvance.com/news/local/mayoral-candidates-clash-over-finances-unity/article_d454a47a-57a2-11ee-8fa3-db7c37d4e947.html

Why does city still need outside help with finances?
Julian Eure, The Daily Advance Editor

While City Council’s recent decision to approve the hiring of Durham County’s former chief financial officer to help manage the city’s finances was a good move, it ultimately shouldn’t have been necessary.

Susan Tezai’s hiring as a financial consultant at a cost of $250 an hour — she’ll be paid up to a maximum of $172,000 — may be necessary to ensure city finances continue to stay caught up and that future audits like the one due Oct. 31 get submitted on time. But like state Treasurer Dale Folwell, we question why the city continues to pay for such expensive outside help managing its finances when it already has personnel on the city payroll — City Manager Montre Freeman and city Finance Director Alicia Steward — who are paid by taxpayers to perform this job.

As Staff Writer Paul Nielsen recently reported, the city has already spent close to $500,000 on an outside accounting firm for help completing past-due audits and getting its monthly bank accounts reconciled. The Greg Isley CPA firm was hired at a cost of $100 an hour in October 2021 as part of a corrective action plan the city filed with the state’s Local Government Commission, the state’s financial watchdog agency which is supervised by Folwell’s office. The city had been added to the LGC’s Unit Assistance List in 2020 after failing to file its required annual audits on time.

Isley’s work for the city has paid off. Not only are the city’s bank records now being reconciled monthly, the first past-due audit for 2020-21 was submitted in April and the second, for 2021-22, is supposed to be completed sometime in August. Mayor Kirk Rivers has even claimed the city will submit the city’s 2022-23 audit due in October on time — the first time that’s happened since 2017, he says.

So if that’s the case, why does the city need to hire Tezai?

Rivers claims it’s because the current City Council, which took office 13 months ago, is still “playing catchup” correcting problems it inherited from previous councils, and because it wants to ensure the city is “on solid ground” financially. As explanation for the problems, he continued to cite turnover in the city’s finance director position since 2020 and said Steward has only been finance director for eight months.

While it may be true Steward has been finance director for eight months, she was named interim finance director by Freeman in August 2021 — nearly two years ago — just prior to the end of his first stint as city manager, and she had worked as the city’s assistant finance director before that.

Steward also has received some “enhanced coaching” from the LGC since the city entered an accountability agreement with the agency last October. Writing for the agency at the time, LGC Director Sharon Edmundson said: “An experienced finance officer, who is part of our Coach Team staff, will be available to mentor the Elizabeth City Finance Officer (Alicia Steward) as she works toward creating a foundation upon which both the Finance Officer and the city can build success.”

State Auditor Beth Wood, a member of the LGC board, recently raised doubts about whether that coaching has worked. During the board’s last meeting, she suggested the LGC commence with procedures that could lead to its takeover of Elizabeth City’s finances, indicating that the city’s current finance staff just isn’t up to the task. “People that have been there have said they don’t have a finance officer that can do their job,” Wood said, referring to Elizabeth City. “They have had people come in and try and help, and coach, but (they) just can’t do it.”

Rivers appeared to downplay the expense of hiring Tezai to help manage the city’s finances, noting that funding for her contract is being drawn from monies set aside for the city’s assistant manager position, which has been vacant for two years but still included in the budget.

But of course Tezai isn’t being paid to be an assistant city manager. She’s being paid, essentially, to do the job Steward and Freeman are already paid to do.

Folwell pointed that out in an interview with Nielsen after Tezai’s hiring. “The taxpayers are double or triple paying for these basic services,” he said. “This is not my opinion. Obviously, it is the opinion of the City Council and the mayor. Why would they enter into this contract if they didn’t think that they had problems? … The taxpayers deserve better.”

Indeed they do. How long will city taxpayers have to continue paying for extra help in its finance office? Explanations about “previous councils” and employee turnover only work for so long before they become excuses for failed performance. We’d encourage city voters to remember that when they go to the polls this October.

— The Daily Advance

https://www.dailyadvance.com/opinion/editorials/our-view-why-does-city-still-need-outside-help-with-finances/article_1cf91ff3-6405-5a55-9930-7949a7b033ff.html

EC Council hires consultant to help with city finances; Tezai to be paid up to $172K
By Paul Nielsen The Daily Advance Staff Writer

City Council voted Monday night to hire a financial consultant to assist with managing Elizabeth City’s finances — a move that could cost the city up to $172,000 and one that the state Treasurer said wouldn’t be necessary if the city had more qualified management.

Following a closed session, City Council unanimously approved a contract with retired Durham County Chief Financial Officer Susan Tezai to serve as the city’s financial consultant.

Tezai will be paid $250 an hour to assist the city with its finances and long-term debt management. The maximum she could be paid is $172,000 a year.

Mayor Kirk Rivers said instead of hiring an assistant city manager — a position that has been vacant for two years but that has been budgeted for — the city will use that money to pay Tezai. He said City Manager Montre Freeman made the recommendation to use the money from the vacant assistant city manager position to pay for a financial consultant.

Rivers, who does not cast a vote unless there is a tie among the eight councilors, said City Council discussed the contract with Tezai at length before unanimously voting to hire her.

“The council asked a lot of questions and they were all very concerned to make sure there was no wasteful spending of the taxpayers’ dollars,” Rivers said.

Rivers said Tezai’s expertise is needed because the current council is “playing catchup” trying to correct problems it inherited from previous councils. He noted that the last time the city submitted an annual audit on time was in 2017. He also cited turnover in the city’s finance director position since late 2020 and the fact that current Finance Director Alicia Steward has only been on the job eight months.

Rivers and the current City Council took office 13 months ago.

“We are not excited about having all of this,” Rivers said. “But until we get everything caught up, until we get everything on sound ground, City Council will look at all avenues to make sure we put the city on solid (financial) ground.”

The city has already spent close to $500,000 on an outside accounting firm for help completing past-due audits and getting its monthly bank account reconciled.

The city hired the Greg Isley CPA firm at a cost of $100 an hour in October 2021 on the recommendation of then interim City Manager Eddie Buffaloe, who is now secretary of public safety for the state of North Carolina. The move was part of a corrective action plan the city filed with the state’s Local Government Commission at the time. The city had been added to the LGC’s Unit Assistance List in 2020 after failing to file its required annual audits on time.

State Treasurer Dale Folwell said Friday that he is not worried about the Tezai’s qualifications but is concerned about the qualifications of Freeman and Steward to manage the city’s finances, saying they are the “people the taxpayers are already paying for.”

“That is resulting in this expenditure having to be made,” Folwell said. “The taxpayers are double or triple paying for these basic services. This is not my opinion. Obviously, it is the opinion of the City Council and the mayor. Why would they enter into this contract if they didn’t think that they had problems? It’s like an onion, the more we peel the more we cry. The taxpayers deserve better.”

Tezai recently retired as the Durham chief financial officer after being appointed to the position Jan. 1, 2018. She was previously the assistant CFO in Durham for 16 years and spent more than 30 years with the county’s finance department.

The move to contract with Tezai comes as the city is still on the LGC’s Unit Assistance List. Besides the late audits, the city has encountered other financial bookkeeping problems, including a failure to reconcile its books for many months.

The city completed one of the two most recent past due audits (2020-21) this past April and city officials said Monday that the past-due 2021-22 audit, that was due last Oct. 31, will be finished in the next 30 days.

The city’s 2022-23 audit for the fiscal year that ended June 30 is due Oct. 31 and Rivers is confident that the city will meet that deadline.

“It’s been seven years since the city has submitted a budget on time,” Rivers said. “We are track to do three audits in one year.”

According to her profile on the Government Finance Officers Association’s webpage, Tezai earned a bachelor of science degree in accounting and had minors in mathematics and business administration from Elon University. She also completed the Public Executive Leadership Academy at the University of North Carolina School of Government.

She is a certified public accountant licensed by the states of North Carolina and Virginia and a member of the Government Finance Officers Association, North Carolina Government Finance Officers Association, the American Institute of Certified Public Accountants and the North Carolina Association of Certified Public Accountants.

 

https://www.dailyadvance.com/news/local/ec-council-hires-consultant-to-help-with-city-finances-tezai-to-be-paid-up-to/article_762ce81c-fc2f-5619-b6e6-c5a0f1c3e8ea.html

State auditor urges LGC to start process of possible takeover of city’s finances
By Paul Nielsen The Daily Advance Staff Writer Jul 11, 2023

State Auditor Beth Wood urged the state’s Local Government Commission Tuesday to start the process that could lead to a state takeover of Elizabeth City’s finances.

Wood, a Democrat who plans to seek re-election next year, told the LGC Tuesday afternoon that the state needs to take action before Elizabeth City faces the prospect of a possible bankruptcy. As state Auditor, Wood sits on the LGC

Two other commission members on the nine-member board also indicated it was time for the state to possibly step in but the LGC adjourned its monthly meeting without taking any action.

The LGC does not meet again until Aug. 1.

The city is on the LGC’s Unit Assistance List because of financial concerns, including late audits and not having the city’s financial books reconciled for a period of many months. The city completed its 2020-21 audit this past April but it still has not submitted it 2021-22 audit to the state. That audit was due last October and the city’s audit for the fiscal year 2022-23 that ended June 30 is due Oct. 31.

Mayor Kirk Rivers said at Monday’s City Council meeting that the late 2021-22 audit should be completed in 30 days. City officials said back in May that it would be completed in June.

Wood said the LGC should “assess” the situation in Elizabeth City to determine if state intervention is needed.

“I think an assessment needs to be made,” Wood said. “It’s not an investigation, it’s an assessment.”

Wood also said that because of the late 2021-22 audit that the LGC doesn’t have a “clue where they (city officials) are financially.”

“My concern is that we don’t wait until they are bankrupt to go in and take them over,” Wood said. “We know about the issues now. People that have been there have said they don’t have a finance officer that can do their job. They have had people come in and try and help, and coach, but (they) just can’t do it. Then the leadership is not where it should be, according to those that have been there and working there. It can’t be cleaned up until the leadership changes is my point.’’

State Deputy Treasurer Sharon Edmundson said that the LGC could initiate a takeover process if the city missed debt payments. But she said as far as she knows that has not happened.

“We have not been made aware of any missed debt payments,” Edmundson said. “I think somebody would have called us if they hadn’t been paid.”

Another option for a takeover by the LGC would be violation of state statue G.S. 159-181, Enforcement of Chapter. G.S. 159 is referred to as the “Local Government Finance Act” and it has dozens of sections.

G.S. 159-181 states in part that “if any finance officer, governing board member, or other officer or employee of any local government willfully or negligently fails to follow the provisions of the chapter” that a state takeover could be warranted after notice and warning is given.

“I would tell you that G.S. 159 lays out what a finance officer should be able to do,” Wood said. “Your finance officer there cannot do those things. So, they are already severely non-compliant. The finance officer is the key. It says in there what they are supposed to do. They are already severely non-compliant so I think that hurdle is done. It’s just a matter of what the Local Government Commission does.”

Edmundson told the LGC that the city adopted a 2023-24 fiscal year budget and did not appropriate any fund balance. She said city officials “struggled” putting the budget together and that the city has been “more receptive” to the LGC’s assistance.

“They went to the wire getting that budget in, but they did get it in,” Edmundson said. “Of course, I still have concerns. They still don’t know what their current financial condition is.”

https://www.dailyadvance.com/news/local/state-auditor-urges-lgc-to-start-process-of-possible-takeover-of-citys-finances/article_05a14b64-06a3-5559-ac5e-4d17338b0981.html?fbclid=IwAR1XmEja04aGMLuybSWoFSbUcPJ9G9A9JjpCPHFHJsC9L_yCln75mUDUNbw

5 incumbents, 3 challengers file for EC October races
By Paul Nielsen The Daily Advance Staff Writer Jul 7, 2023

Mayoral candidate Christina Williams has kept one of her campaign promises.

Williams announced her second run for mayor on July 1 at the Pasquotank Political Action Committee picnic, saying at the time she would be the first candidate to file for the Oct. 10 municipal election.

Williams kept that promise.

She arrived at the Pasquotank Board of Elections Office on Edgewood Drive at 5 a.m. Friday morning and was the first candidate in line when filing began at noon.

First Ward councilors Joe Peel and Johnson Biggs were the second and third candidates, respectively, to file, both arriving at the elections office in the first hour of filing on Friday. Both ran unopposed in 2022.

Fourth Ward Councilor Johnnie Walton, Third Ward Councilor Katherine Felton and Second Ward Councilor Rose Whitehurst also field for re-election later Friday afternoon. Ronnie Morris also filed in the Fourth Ward while Moe Moore joined the Third Ward race.

Williams said she sat in her car and did some reading “on different things related to the city” while waiting for filing to open.

Williams is expected to face Mayor Kirk Rivers in October. Rivers announced in May that he plans to seek re-election.

Williams finished third in the 2022 mayor’s race, receiving 361 votes, or 13.37%. Rivers won the race with 1,364 votes, or 50.50%, while former city councilor Jeannie Young finished second with 972 votes, or 35.99%.

“This is the first step for Elizabeth City getting from the red to the black,” Williams said. “Obviously, we are in a bad financial situation and that is not going to change until we have new leadership, and probably qualified management.’’

Peel, who served three terms as the city’s mayor from 2011-17, was first elected to City Council in May 2022. He said he believes his experience in city government is needed on City Council.

“I’ve got experience and council is at a point where it needs some level heads and some people with experience,” Peel said. “I would hope that the voters will look at my past record and consider me as someone to vote for.”

Biggs, who is also serving his first term on City Council, said it has been a pleasure to serve the First Ward and the city. He believes his experience as a banker is beneficial to the city.

“We have accomplished a lot” in my first term, Biggs said. “We have had a lot thrown at us in the last year. I feel I have done my best to serve the citizens of Elizabeth City as a whole, but in particular in the First Ward, to the best of my ability. We have completed a (past-due) audit and we are well on our way to completing another past-due audit.”

Candidate filing for the city’s Oct. 10 municipal election ends at noon on Friday, July 21.

Early voting for the city election for mayor and eight council seats starts Sept. 21 and the deadline to request an absentee ballot for the Oct. 10 election is Oct. 3. The deadline to register to vote in the election is Sept. 15.

Candidates will file at the Pasquotank Board of Elections office and the filing fee for mayor and City Council is $10. After Friday, candidates can still file from 8 a.m. to 5 p.m. July 10-14 and July 17-20. Filing on the final day, July 21, will be from 8 a.m. to noon.

 

https://www.dailyadvance.com/news/local/5-incumbents-3-challengers-file-for-ec-october-races/article_b7efb406-3255-5001-a577-59bafc6e4ddf.html

It’s official – I filed at noon today to run for Mayor of Elizabeth City! I have read many letters from our citizens already and I wholeheartedly agree with the concerns about our city’s financial health, absent transparency, mismanagement, and lack of direction.

Make no mistake, “it ain’t all good” in Elizabeth City – in spite of what our city leaders are telling us! We are being lulled into a dangerous complacency. We are being lied to. We are being misled. We need new leadership and qualified management immediately to turn things around. I vow to take our situation seriously and work tirelessly until we are moving forward as the Elizabeth City and Harbor of Hospitality I know we can be!

If you would like to reach me to discuss your concerns regarding the city, or to share ideas, my cell number is 757-286-9073. Please feel free to call me anytime to chat.

If you want to see your city run properly, please tell your family and friends to actually show up to the polls to VOTE for me on October 10th, or during early voting that begins September 21st.

~ Christina Williams, July 7th, 2023 Facebook Post

PAC founder Williams to make 2nd bid for EC mayor
By Paul Nielsen The Daily Advance Staff Writer Jul 3, 2023

Christina Williams is seeking a rematch with incumbent Mayor Kirk Rivers in Elizabeth City’s non-partisan municipal election in October.

Williams, who run unsuccessfully for mayor in last spring’s delayed city election, announced her second bid for the city’s highest elected office at the Pasquo-tank Political Action Committee’s annual picnic Saturday afternoon at Journey Christian Church. Williams, a registered Republican, founded the PAC in 2021 and is the group’s executive director.

Rivers told The Daily Advance back in May that he would seek a second term as mayor in the city’s Oct. 10 election in which all eight city council seats will also be up for grabs. Filing begins Friday at noon and ends July 21 at noon.

Williams finished third in the 2022 mayor’s race, receiving 361 votes, or 13.37%. Rivers won the race with 1,364 votes, or 50.50%, while former city councilor Jeannie Young finished second with 972 votes, or 35.99%.

Williams said she is running to improve transparency in city government and to fix the city’s financial troubles. To improve transparency, Williams said one thing she will do if elected is hold regularly scheduled town halls.

“I think there is a total disregard for transparency in Elizabeth City,” Williams said. “If you google City Council Elizabeth City and you pull up the monthly cash balance report it still has not been updated since 2018. We shouldn’t be hiding financial information from the citizens.’’

Williams said she is concerned that Rivers and some other elected officials are ignoring directives and advice from the state’s Local Government Commission regarding the city’s financial state.

Elizabeth City is on the LGC’s Unit Assistance List mainly because of not submitting audits on time. One past due audit has been completed but the 2021-22 audit still has not been completed. The city and the LGC entered into a financial accountability agreement last October.

“We are, obviously, in a lot of financial trouble,” Williams said. “The city is not complying with the state, they (city) still haven’t explained where a lot of missing money has gone and we have extreme infrastructure needs.’’

PB Mares, the private accounting firm that completes the city’s annual audits, did not report that the city was missing any funds in its past-due 2020-21 audit. The firm is currently completing the city’s also late 2021-22 audit. The city is on the LGC’s Unit Assistance List because of the late audits and because of its failure to reconcile its monthly bank statements for a 15- to 16-month period.

Williams believes that because of her work with the PAC and with local and state Republican party leaders, she has built connections that will benefit the city if elected.

“I also have the connections with local and state officials to effectively bring ideas and solutions to Elizabeth City,” Williams said.

The May 17, 2022 municipal elections were scheduled to be held in October 2021 but were delayed because needed U.S. Census data from the 2020 census was not available for the legally required redistricting of the city’s four wards. That May city election also coincided with Republican and Democratic primaries which featured several contested state and local races.

In the last contested October mayoral election in 2017, fewer than 12% of the city’s voters cast ballots. Williams believes the key to victory is getting voters who want a new direction in the city to the polls.

“There are a lot of differences in this race,” Williams said. “For one, we don’t have a primary so it is just municipal. Voter ID is in place now, we have felony voting restrictions in place now. The Democrat Party chair, who did a fantastic job for them for a long time, has retired so they are without an organized, seasoned chair. The Republican Party has an organized chair for the first time in a long time.”

Williams said she intends to be the first candidate to file at the Pasquotank Board of Elections on Friday. For the last municipal election, Williams filed on the final day.

“I don’t want to be accused of splitting the vote and I want to make sure everybody knows that I want to do the job,” Williams said.

https://www.dailyadvance.com/news/local/pac-founder-williams-to-make-2nd-bid-for-ec-mayor/article_56fc0cdc-a715-5c69-b4b5-706d4f46e842.html

In letters, 20+ citizens ask LGC to ‘please take over’ finances
By Paul Nielsen Staff The Daily Advance Writer Jun 22, 2023

The state’s Local Government Commission has received almost two dozen letters from city residents asking for the state agency to take over Elizabeth City’s finances.

Deputy state Treasurer Sharon Edmundson told the LGC at its June 6 meeting that 23 letters from city residents have been sent to the agency with “all basically saying the same thing.”

“They want the LGC to step in and take control of the finances of Elizabeth City,” Edmundson told the LGC at its June 6th meeting.

The 23 letters to the LGC were sent between Dec. 11, 2022, and June 4 of this year, with 18 being sent in May. The Daily Advance received copies of the letters from the state Treasurer’s Office on Tuesday.

State Treasurer Dale Folwell sent a letter to City Council in March asking the city to ask the LGC to step in and assume control of the city’s finances. Folwell said in the letter, which became public about a month after he sent it, that the city was facing a “cash crisis.”

Elizabeth City is currently on the LGC’s Unit Assistance List mainly because the city was late submitting required fiscal year audits of its finances.

The city’s 2020-21 audit that was due Oct. 31, 2021, was delayed because of financial bookkeeping problems dating back to the summer of 2020. But it was submitted to the LGC in April and it showed 12 material weaknesses.

Since the 2020-21 audit was not completed on time the city’s 2021-22 audit that was due last October 31 is also late. City officials have said that its outside auditor PB Mares is currently working on the audit and it should be completed in the next few weeks.

Many of the letters are critical of the leadership and experience of City Manager Montre Freeman and the city’s Finance Department and their ability to manage the city’s finances. Some also criticize the city for having to hire the outside accounting firm Greg Isley to help straighten out the city’s financial statements.

The letters also contain criticisms of the city’s ability to properly address needed infrastructure improvements to its aging water and sewer system.

Gerry Anderson wrote in his letter that he was born and raised on Main Street, graduated from Elizabeth City State University and returned home to the city after retiring following a 40-year work career. He wrote on May 10 that “public confidence in government depends on proper stewardship of public money.”

“Our city’s reconciliations and audits are not up to date,” Anderson wrote. “There are significant unexplained discrepancies reported in our accounts. Our inexperienced city finance staff appears to lack the necessary expertise to make sense of it all. As a result, our city is simply unable to accurately forecast future revenues and expenses and cannot plan and prepare an accurate budget. In the meantime, our proud city is being held together by Band Aids, duct tape and baling wire.”

H. Creighton Foreman said in his June 4 letter to the LGC that he is a retired CPA with 37 years of experience in finances. He asked that the state “please take over the finances of Elizabeth City.”

“The current finance department and management cannot handle the situation,” Foreman wrote. “HR (Human resources) continues to hire personnel that cannot handle basic accounting procedures. We need to quit spending taxpayer funds on expensive additional CPA services to complete the job that the personnel have been hired to do. These employees need to be replaced by personnel that you (LGC) hire.”

Foreman suggested in his letter that Pasquotank County be hired to take over the city’s finances.

“Pasquotank County seems to be able to handle their finances,” Foreman wrote. “We need to merge EC into the county.”

David Harris told the LGC in his letter dated May 11 that he served as Pasquotank county manager for eight years in the 1980s and he understands the importance of local governments maintaining strong and stable finances with public accountability.

“It is more than evident that the city manager does not have the knowledge and experience to manage the city,” Harris wrote. “A majority of the elected officials on City Council do not understand the importance of the financial problems that are going on.”

Harris further wrote that it is time for the city to have sound financial management and accountability and that can only be achieved by the LGC “taking complete control of Elizabeth City’s finances.”

“Enough is enough,” Harris said.

Peter Thomson wrote on May 10 that city residents are torn between two realities of “what the LGC says and what our untrained manager and mayor say.”

“Our downtown is booming, our population is growing and our finances are in a mess,” Thomson wrote. “Please consider taking over here before things get worse.”

 

https://www.dailyadvance.com/news/local/in-letters-20-citizens-ask-lgc-to-please-take-over-finances/article_99d2c424-c255-5f0c-b845-d46ca702369d.html

LGC chief contradicts city on finances being current, says current year’s books out of balance by $1.3M
By Paul Nielsen The Daily Advance Staff Writer May 2, 2023

The city of Elizabeth City’s financial books have not been reconciled despite statements from city officials that the books are current, the head of the N.C. Local Government Commission told the agency Tuesday.

State Deputy Treasurer Sharon Edmundson, who is also the director of the LGC, also told commission members in Raleigh Tuesday that Elizabeth City had cut off outside accounting firm Greg Isley CPA’s access to the city’s financial records. Isley is the firm the city hired to help it with its financial bookkeeping problems.

Edmundson, however, told the LGC that access may have been reinstated after she said Greg Isley met with Mayor Kirk Rivers last Friday.

Asked to respond to Edmundson’s comments, City Manager Montre Freeman said Tuesday evening that Greg Isley’s access to the city financial records was cut off for a time because of a suspected breach of the city’s computer system but that the company’s access has now been restored.

As for Edmundson’s comment that the city’s books are not being reconciled, Freeman said he doesn’t know where the LGC chief got her information. City Finance Director Alicia Steward told The Daily Advance in an Oct. 26, 2022, email that the city’s accounts were up to date.

“We are now reconciled up to September 2022,” Steward said. “There are still a few open items that we’re working on, but the process is nearly complete.”

Freeman said a representative of the auditing firm PB Mares, who just completed the city’s 2020-21 audit, also “made that statement as well” that the city’s finances were up to date.

Edmundson’s comments prompted state Auditor Beth Wood, a member of the LGC, to suggest that the state take over the city’s finances and have the Greg Isley firm act as the city’s finance officer.

Edmundson told the LGC that Freeman also has stated that the city’s bank accounts are reconciled. But she said “that is not the case.”

The city has still not submitted its 2021-22 audit that was due Oct. 31, 2022. The city submitted its late 2020-21 audit last month; PB Mares deemed it a clean audit.

Edmundson told the LGC the city’s “22” (2022) accounts are out of balance by over $128,000 and that 2022-23 accounts “as of last week” were out of balance by $1.3 million.

“I can get an update where we are but I know as of January when I checked, we were current,” Freeman responded Tuesday evening. “The Isley firm is doing our bank reconciliations and those are done a month after. If we are working on February, that is about done, kind of right on time. I don’t know where she (Edmundson) would have got that information from.”

Freeman said that the 2021-22 audit has not been completed and he was not sure what Edmundson was referring to regarding the 2022 accounts being $128,000 out of balance.

“We have multiple accounts so I am unsure what account she is responding to in terms of the $128,000,” Freeman said. “That is the first I have ever heard of that. However, we are preparing to move into 2022 (audit) and if there are some things that need to reconciled I have full faith in the PB Mares firm that we will be reconciled and ready to go once they put their stamp on it. They are very thorough and that firm (PB Mares) has done great work.”

Edmundson said based on “how the city operates” it is possible that Freeman was told that the books had been reconciled when they had not been.

Wood asked Edmundson if there are any concerns that “cash has gone missing” because of the discrepancies. She also asked if there is a need for an investigation.

“I asked Greg (Isley) that and they said they don’t think so,” Edmundson responded. “There is no internal control, basically. Working in 2021 they did not find any evidence (of missing money). I don’t know what they will find in ‘22, ‘23 — that remains to be seen.”

Edmundson told the LGC that the Greg Isley firm was attempting to work on the financial statements needed for the past-due 2021-22 audit but that as of April 27 they “had been denied access to the city’s accounting records except by requesting very specific items from the finance officer.”

“They (Isley) no longer have access to the financial system,” Edmundson said. “I don’t know that for sure. That is what he (Isley) said.”

State Treasurer Dale Folwell asked Edmundson if the city gave a reason for denying Greg Isley access to its accounts.

“They acknowledged it happened but it may have been reversed at this point,” Edmundson said. “I know Mr. Isley had a conversation with the mayor (Rivers) on Friday.”

Freeman said Isley’s access to accounting records was reduced because the city suspected a log-in by someone that Isley had not approved.

“We have to protect our platform so we can protect the city tax dollars and financials,” Freeman said. “When we saw that, we saw it as a red flag. I had a conversation with our IT (information technology) director and he agreed it looked like a potential breach. We had to work through that process and I got an email from Mr. Isley thanking us for ‘taking care of our access.’ That working relationship is good.”

State Secretary of Revenue Ronald Penny reminded the LGC that the current City Council, Rivers and Freeman inherited the city’s current financial difficulties. Penny suggested that he and Folwell meet with city officials “to have a conversation.”

“We can figure out what is going on, what the steps are that they will take and what we (LGC) can do to help them,” Penny said.

But Wood asked Penny what he was going to do “when the city manager sits in front of you and tells you that the books are up to date and the bank recons (reconciliations) are done.”

“We can push back based on the records,” Penny said.

“I think you have a problem when he (Freeman) sits there and tells you a lie,” Wood quickly responded. “That is what he said in an open meeting. That is not true and I don’t know why he would mislead his council. Then you have the spreadsheets and the books and I don’t why you cut off their (Isley’s) access.”

Wood said “something is wrong.” She said a state takeover of the city’s finances and having the Greg Isley firm act as the finance officer would end this “silliness.”

“That is certainly an option,” Edmundson said.

 

https://www.dailyadvance.com/news/local/updated-lgc-chief-contradicts-city-on-finances-being-current-says-current-years-books-out-of/article_f29d4c36-7736-5548-89d9-ebec993f285e.html