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Killeen's 'credibility' at risk as investigation looms

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A decision on the resident-sought financial investigation was delayed Tuesday while the council takes a week to review its options, which vary widely from the original quest for answers into the city’s hidden financial problems.

A new plan underscoring seven key areas of concern was presented.

The new price tag “out the door,” as Councilman Richard “Dick” Young put it, is about $394,000.

But what residents were promised from the audit and what they could get could be dramatically different.

Residents and some council members have demanded for more than half a year a thorough analysis of city finances, specifically to uncover any fraud, misuse or misappropriation of public funds.

Residents also demanded an explanation for the city’s problem years; what caused budgets gaps so serious that it required the consideration of closing a public library and cutting off public safety funds, among other extremes? And, why were the council and residents surprised to learn in June the city needed $8 million?

Red flags raised by the Daily Herald included city administrators’: frequent changes in finance director; taking money from the fund balance or savings account to pay for expenses; shifting money from funds paid by residents for specific purposes, such as trash service, sewer and water, to the general operating fund to eliminate debt or buy more; and expenses exceeding revenues for consecutive years from 2013 to 2016.

The Daily Herald noted a lack of transparency when some council members said that administrators failed to provide important financial information about spending and dire financial straits.

That played a role Tuesday night when Councilman Gregory Johnson spoke out against making a choice to spend money on the spot.

“I don’t feel comfortable making financial decisions if I don’t have the information prior to ... not just this item but every item,” Johnson said.

Mayor Jose Segarra was quick to redirect the councilman to the current item.

Ultimately, the council decided it would wait.

The council’s top pick to perform an audit is Houston-based McConnell & Jones – a public accounting firm that said the city could do without a forensic audit. The city is negotiating with the firm on a contract.

The firm provided the council a price tag for each item the firm would examine, many of which were years that had not raised red flags and would cost extra money. The firm’s items include:

– The firm’s proprietary planning and quality control process ($34,708).

– Capital outlays from fiscal years 2006-2016 ($62,492).

– Use of bond money from fiscal years 2002-2017 ($84,448).

– Interfund transfers from fiscal years 2010-2016 ($32,176).

– Pay increases from fiscal years 2014-2017 ($22,751).

– City/owner agreements from fiscal years 2002-2016 ($36,692).

– Private roadway ownership from fiscal years 2002-2016 ($41,773).

– Spending during post-recall period from November 2011 to May 2012 ($34,892).

A midaudit briefing at $10,092 and the written report with findings and recommendations at $34,432 bring the total to $394,456, which includes travel and miscellaneous fees, according to a city presentation.

Young argued that the money would be well spent, and at about $3 per resident, “it’s a small price to pay.”

Councilman Juan Rivera was opposed to spending the money, and suggested a committee could be assembled with residents to circumvent an outside investigation.

“Four-hundred-thousand dollars is a lot,” Rivera said.

City Manager Ron Olson suggested it might be worth the investment.

Although an investigation might not yield $400,000 in findings, council members should not set their expectations there. It could provide a “true accounting” of what happened, he said.

“Are you going to find $22,000 worth of problems? I doubt it very much. … (But) the issue comes down to credibility ... the credibility of the city.”

WHAT’S NEXT

A consensus vote is anticipated at the City Council’s next workshop meeting, March 7, to decide which items to pursue in the investigation.

A contract has not yet been signed. The tentative contract approval decision is set for March 14, and if approved, McConnell & Jones would begin the week of March 20. A midaudit briefing is May 16 — 10 days after the city’s municipal election — and work is to be completed by July 31.

asierra@kdhnews.com | 254-501-7463

(10) comments

Alvin
Alvin

This is the personal opinion of this writer.
@Youngnco: My question is, 'Why are we still in the decision mode of operation????? What I have read in the article about the audit is, and the word, one of the words to describe what this city management, directorships, and even down to the supervisory level is, 'Malfeasance'. When you get 40% of supervisors not signing off on time cards, you get a city manager not approving 'on-call' compensation, and you have a Police department????, well you can get the picture where the Police Department fits. But why do we have to report this city police department is pulling approximately 60% of the total budget for this city????
And 'Why' do you want to take the estimate back to the year 2002???? If we start with the estimate to the year 2010, and start with, in my book, again, 'The question to be analyzed is: ' a thorough analysis of city finances, specifically to uncover any fraud, misuse or misappropriation of public funds'. From there any specific questions should and could be answered.' the 'Who, What, When and where' and if the answer is, go back another 2 years, then do it.
I am of the opinion that this committee has been 'misdirecting, diffusing, and in other words, misdirecting this council and in general, the citizens of this fair city for too long now.
In my book, we've already had an 'internal audit' and what did that get us???? I believe I can safely say, 'Nowhere'. Last year we had a city audit, which cost this city close to $400,000 to which the city auditor said, in essence, 'No Comment'.
You say, call your district councilman, well I've in contact with my district councilman, and I asked what I think is a pretty simple question, 'If we go by what is in the city charter which says, 'the city is to be ran by a city manager and council' and then you take what was last year's statement of record, to the State Attorney General, saying that the city did not have to 'divulge to the general public all of the city management staff's records, then 'Why do you have this conflict between the city charter and the reasoning behind the question that was asked by the city attorney to the State Attorney General???? This question has not been answered by 'MY' district councilman. There are quite a few 'questions that I have asked just to see the questions fall on deaf ears, or they just don't want to divulge the answer to these questions.
I'm of the opinion that 'we should 'Fire these councilmen/women who persist in putting themselves in a committee where they can 'influence the outcome' of items that are sure to reflect on ???? and get some citizens that will have the desire to 'come to a meaningful and moral decision', then you will be able to say, 'this is a committee that I can depend/be assured of what the outcome will be.
This has only been an opinion of this writer.
One of 3 who voted.

Youngnco

Tuesday evening we discussed Killeen's Forensic /management audit. To cover the items asked for by citizens and council members the fee will be just under $3 per citizen and completed by July.
$396,000 is allot of money to find any possible issues in the city's financial health....... But.... If you remember last April , May and thru the entire budget process while we tried to balance a budget that was $8 million upside down ... The estimate was that this audit would cost millions and take years to complete..i never believed those using such crazy number$.
Please understand that much of what we will cover goes all the way back to 2002-2017. This should paint a picture of when-what-why and Who as it pertains to your tax and fee dollars and how they were spent.
I encourage you to call your councilperson and be heard on this issue should you have any additional information or concerns.
At the same time as this external audit is conducted there will also be an internal audit of additional areas. All of the findings will be made public in a full and transparent manner.

Alvin
Alvin

This is the personal opinion of this writer.
@eyewatchingu: With this report, this indicates how poorly the city of Killeen has been operated. In my opinion, it's no wonder that this city doesn't know 'Cum Here from Sic'em'. And I firm;y believe that this makes it imperative to get an audit as quickly as possible and a forceful one at that, not a quick gloss over. I am firmly of the opinion, my personal opinion, that the city council, the mayor, and all input from the finance department should be stopped ASAP and another committee formed in it's place to 'get to the bottom of this as it has gone on for too long.
But that is only opinion.
One of the 3 who voted.

eyewatchingu
eyewatchingu

@ Alvin did you see this Payroll Audit Fiscal Year 2013 CITY OF KILLEEN?
I am quoting from the pdf file : "Observation 1: $5.4 million increase to base pay via incentive pays and overtime.

A report was requested from the Finance Department for the purposes of analyzing employees’ gross pay and the relationship between gross pay and base pay, with base pay being the approved pay rate for each employee, and gross pay being the total pay before taxes and benefit deductions. The analysis revealed that during FY2013, the total increase to base pay via incentive pays and overtime was approximately $5.4 million. In further breaking down this increase, it was noted that 70 employees increased their base pay by more than 30% via overtime and incentives. 14 of the 70 increased it by more than 50%, and 5 of the 70 increased it by more than 70%. One employee in particular increased their base pay by $44,462 during FY2013, causing them to be the 13th highest paid employee of the City for a total gross pay of $111,720, and also causing them to be paid more than the assistant directors of the department and many other superiors. Three other employees of the same department increased their base pay to such an extent as to also be paid more than the assistant directors of the department and many department heads of the City. "

Here is the link http://www.killeentexas.gov/files/2013-Payroll-Internal-Audit-Report.pdf

Alvin
Alvin

This is the personal opinion of this writer.
@eyewatchingu: Oh, OK then . Now the count is up to three. We;re really gaining on the total count 'for the districts and for the city wide count.
One of the 3 who voted.

eyewatchingu
eyewatchingu

@Alvin Hey come on I voted. sadly I can not make a comment at this time. I will say this much Vote Teel for City Council Dist. 1

Alvin
Alvin

Me:
This is personal opinion of this writer.
@Oldwoman: Glad to that are at least 2 of us.
Yes I had to smile when I read the headline: Killeen's 'credibility' is at risk. I think I can safely say that, in my book at least, Killeen's credibility went out the door during the reign of Timothy Hancock and went down hill from there.
There is no credibility in the Killeen, Texas administrative ranks, whoever they they may be.
The Subcommittee,in my personal opinion, is a joke. All of the horse power that exists among that membership, Councilmen Kilpatrick and Richard “Dick” Young, Councilwoman Shirley Fleming, City Attorney Kathy Davis, Finance Director Jonathan Locke, and City Auditor Matthew P. Grady, are on the committee. But I think I saw mayor Segarra, Ms. Farris, city manager, Ron Olsen. As I said I could only see the backside of 50% of this meeting and have no idea what was being said.
Going back to the issue, Kilpatrick, who in my opinion is a non issue, City Attorney Davis as the legal entity, Finance Director, Jonathan Locke, who should know what's going on in the financial arena, City auditor, Matthew P. Grady as the city's top man, and they can't determine 'what needs to done in the arena of a forensic audit.
And what's this about 'The city is negotiating with the firm on a contract.' How can you be negotiating for a contract when this city doesn't know what it wants???? I'll say again, 'are we or are we not in continual negotiations with this firm or are we not????' if so, why then are we 'still in the continual gathering facts and ideas' when we are conducting negotiations???? Do we the cart before the horse???? Seems to me like we do.
I'm of the opinion that 'this is just a side show to warrant non-movement of the primary issue. I may be mistaken, but I don't think that I am. I feel that this is a voluntary action depicting the council and a sub-committee that is clouding over the issue and when they have the council confused enough, and action will be taken, tho not the correct and proper action, and then they can say, 'the council made us do it'!!!!
Copy: 'But what residents were promised from the audit and what they could get could be dramatically different.
Residents and some council members have demanded for more than half a year a thorough analysis of city finances, specifically to uncover any fraud, misuse or misappropriation of public funds.' End of copy.
Of course I am only a 'non-entity', not worthy of mention, and this is only my personal opinion.
One of the 2 who voted in the election.

OldWoman
OldWoman

This article had me at the headline: "Killeen's 'credibility' at risk..." and I asked myself, "What credibility?"

Citizens have been waiting for an audit not only for 6 months, but rather years, and some have simply wanted to know where all the money went, and where some of the money came from that was being spent. We don't need an audit, if someone would simply step up and honestly (LOL did I mention the City and honesty in one breath?) tell us how they have finagled the money matters since Connie Green's payout.

Another one of the few who voted.

Pharon Enochs

The contents of this posting are in deed the opinions of Pharon Enochs
I ponder how some of the members on the city council can say there was no criminal activity involved in any of the money problems that are facing the city. How can that be said with a straight face if there has been no financial investigation of any value actually done. There have been reports of a former city manager using his personal credit card to purchase items for a party that was not approved by rules and was reimbursed by the city. It was also reported he appointed a city employee to a department head position and approved back pay during the time frame of the recall of city council members and there was not enough city council members to approve this appointment plus paying back pay was not allowed. Then of course there was a relative of a former major who was getting contracts from the city and was not on the list of contractors. On one contract that involved this individual there appeared to be fuzzy math in approving the work done using a number of invoices. The bottom line being the contract exceeded the cost which required approval by the city council. Someone on the city staff said my fault and everything was then closed or was it? I noticed that members of the city council do not want to in any way make any reference to the audit being a investigation of wrong doing? Why? Is there some fear there might be and someone may be embarrassed. The citizens of Killeen have asked for and deserve an honest and open investigation. There was a movie which had a line in the story was, "You cannot handle the truth." Being just myself, as a party of one believe most of the people can handle the truth but I have some doubts if some members of the city council can based on their statements. There is an old saying if you can't stand the heat get out of the kitchen.

Alvin
Alvin

This is the personal opinion of this writer.
Copy: 'A decision on the resident-sought financial investigation was delayed Tuesday while the council takes a week to review its options, which vary widely from the original quest for answers into the city’s hidden financial problems.
Continuation of copy: 'The new price tag “out the door,” as Councilman Richard “Dick” Young put it, is about $394,000.' End of copy.
Well it is the observation of this writer that the statement by Councilman Richard “dick” Young about the price tag of $394,000 is only half of what the previous council, in secret, voted on and paid out, $750,000, at the drop of the hat, so why all of the procrastination now??? This council and it's 'select subcommittee' just today met, again, and apparently they could not come up with an answer, and it's been 6 months.
Now it's 'A new plan'. That to me seems like, once again, this council and it's select subcommittee 'is in the throws of something akin to total misdirection of the city council and the citizens':
Copy: 'Residents and some council members have demanded for more than half a year a thorough analysis of city finances, specifically to uncover any fraud, misuse or misappropriation of public funds.
Residents also demanded an explanation for the city’s problem years; what caused budgets gaps so serious that it required the consideration of closing a public library and cutting off public safety funds, among other extremes? And, why were the council and residents surprised to learn in June the city needed $8 million?' End of copy.
I would ask the question, What is the 'service in question of the 2nd library and is it sufficient to keep open a library when facilities, such as the 'main library' are now open??? Duplication for the sake of duplication is, in my opinion, wrong when such facility's are available. Yes it's more of a problem when the 'ease of personal use is for the 2nd library to remain open.
Yes, the citizens of this city have demanded, I hate that word, demanded, but in this case it is apparent that nothing short of 'demanding' for an explanation of just what went on and what caused this city's problems can be resolved, and it hasn't so far.
Copy: 'Residents and some council members have demanded for more than half a year a thorough analysis of city finances, specifically to uncover any fraud, misuse or misappropriation of public funds.' End of copy.
There, it has been said,'a thorough analysis of city finances, specifically to uncover any fraud, misuse or misappropriation of public funds'. I think that the general guideline pertaining to these line items should be enough for the 'select subcommittee' to function. Never mind the generalized containment's recommended by the interim city manager, use this as a basis, write a generalized format containing all of the specifics that have been presented here, present this document to the council, as a draft copy for the purpose of 'notes and generalizations from the council, within a week, again call for a meeting of the council to 'review the comments, present a discussion to satisfy the council, and prepare the document in final format for issuance. This should not, I repeat, not, take over a maximum of 1 calendar month from beginning to end.
Continuation of copy: 'Red flags raised by the Daily Herald included city administrators’: frequent changes in finance director; taking money from the fund balance or savings account to pay for expenses; shifting money from funds paid by residents for specific purposes, such as trash service, sewer and water, to the general operating fund to eliminate debt or buy more; and expenses exceeding revenues for consecutive years from 2013 to 2016.'
Continuation of copy: 'The Daily Herald noted a lack of transparency when some council members said that administrators failed to provide important financial information about spending and dire financial straits.' End of copy.
Copy: 'That played a role Tuesday night when Councilman Gregory Johnson spoke out against making a choice to spend money on the spot.
“I don’t feel comfortable making financial decisions if I don’t have the information prior to ... not just this item but every item,” Johnson said.' End of copy.
Once again, this councilman is asking for the problem to be solved before this council has even asked the question. The question to be analyzed is: ' a thorough analysis of city finances, specifically to uncover any fraud, misuse or misappropriation of public funds'. From there any specific questions should and could be answered.
Now as to the question, why is this council, and select subcommittee, continuing to 'misdirect' this council. Having a 'select' subcommittee that does not want to provide any direction at all, but continues to 'equivocate' all around the problem, but fails to 'see' the direction this council should take, is, in my opinion, wrong.
Copy: 'Mayor Jose Segarra was quick to redirect the councilman to the current item. End of copy.
In my opinion, he is one of the main characters, along with the subcommittee chairman, Kilpatrick, councilman Rivera, who was a councilman that was on the original council that first 'gave' the then city manager the boot, to the tune of $750,000 dollars with no justification or rectification.
Copy: 'Ultimately, the council decided it would wait.' End of copy.
Yes, unfortunately the council decided to wait, so the story goes on, forever, as this council does not want, or fears to, 'make a decision'.
There is much to be said that 'A council that fears to make a decision, is worth their salt', meaning 'that a council that equivocates, this long, 'should be replaced'. That is my opinion. In my opinion, a 6 year span is enough to decide if there is any justification for 'extending the boundaries. But in my opinion, 'the amount of money that has been lost to the general booking crowd, borders on malfeasance and the person or persons responsible to be taken to hand.
And 'why is the council still in negotiation with the firm of Houston-based McConnell & Jones, when it is not in a position to 'ask the question' in the first place. Sounds like some 'underhanded dealings just like that that proceeded the hiring of a city manager', saying 'someone has turned down the city and without due notice of the citizenry, goes behind their backs and continues the negotiation. Is this then one more 'piece to the puzzle'???
One of the few who voted.

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