Parkers Prairie City Council holds special meeting
Monday, February 1 the Parkers Prairie City Council met for a special meeting. All members of the Council were present, along with Kristi Hastings of Pemberton Law Firm.
The first item on the agenda was a request by USAquatics concerning the swimming pool construction start and completion dates. Following a meeting between USAquatics and local contractors held in late January, it was recommended the start date, when requesting bids, be determined by when the ground can be broken by the excavating company, with the completion date set four months from that day. While this winter has been mild so far, ground frost will affect when construction may begin. At the regular council meeting held last month, the start date and end date were set for March 1, 2016 and July 1, 2016 respectively. Pool contractors agreed a more flexible start date is better.
Larson and Mesker motioned to make the recommended change to the bid requests. Voting for were Froemming, Larson, Mesker and Myers. Opposed was Koehn.
Next was an update by Hastings regarding the forensic audit. Hastings spoke with the auditing firm Eide Bailly prior to the meeting. Four options were given to the Council to consider.
The first option was to complete the work done as it stands today and issue a written report. The work completed to-date is auditing November and December books of the Municipal Liquor Store (MLS) at a cost of over $13,000. At the December 21st meeting of the Council, the motion to audit the MLS and City books, starting with the year 2015 and back if needed, carried unanimously.
Option two was to have Eide Bailly review bar on and off-sale and the Event Center financials before November first. If so, how far? The cost to do so would be $2,000 per month. It was estimated it would take approximately two weeks to audit a couple of months. Eide Bailly indicated in its conversation with Hastings they felt that records prior to November 1, after some preliminary looking, were well maintained and would be fairly easy to review.
Later in the meeting, questions arose about past procedures and bookkeeping before the hiring of a new liquor manager. MLS Manager Michelle Diedrich presented the Council with “Guest Check” receipts containing cross hatch marks, a past procedure tracking items sold at the PEC, brought to Diedrich with the money from liquor sales. ATM transactions at both locations were also not reconciled. One ATM was over by $2,100 and the other $5,680, which should lessen the loss at each location. In addition, Myers recently assisted staff in closing out PEC cash registers, one of which had more than $15,000 in sales on it from “a long time ago”; there was no transfer of that information.
“Many pieces are still missing,” commented Larson.
The third option was to review current processes at the MLS and PEC so that moving forward they are based on sound accounting practice and procedure. The cost for this option would be $2,500.
The final option is for an Eide Bailly staff person in Minneapolis to take sworn statements, signed and notarized, from employees to understand how things played out in November and December. The cost for this would be $5,000-6,000.
Koehn stated, “There’s been enough spent already.”
“How about the State? Will they be satisfied,” asked Larson.
Froemming also asked if the Otter Tail County investigator will also be satisfied with the findings.
“They want the written report,” said Koehn.
Hastings suggested getting the written report and presenting to the State Auditor and law enforcement for feedback as to whether more should be done.
“I am really not happy with what Eide Bailly did,” said Myers. “It was almost as shallow as the other reports done (through the annual audits). I don’t think we really wanted the last two months, but before November 1.”
Froemming responded, “They did say they had to address the investigation first.” It was her understanding that is why they started with November and December.
“I am with Tom’s convictions,” said Larson. “I had hoped that before the chaos happened with the changes, we could have looked at that period, because those are the periods that caused us to raise an eye because we were losing money. Not during the period where we had the big change, but prior to that.”
Froemming questioned option four regarding interviewing staff, as the audit firm didn’t interview all the council members, as indicated early on. According to billing statements from Eide Bailly, the firm interviewed Bartender Kim Moske and the City Clerk/Treasurer Kim Schroeder in Fargo on January 8, a meeting set by Council Member Brian Koehn. The cost to the City just for Koehn’s call? $66, according to the statement.
“We were told originally all council members would be interviewed,” said Mesker. “So that is a huge question mark.”
“Do you want me to tell Eide Bailly that is something you want done now?” asked Hastings.
“Well, without cost,” said Mesker. Froemming stated the same. She also noted $4,000 has already been spent interviewing people, other than the council, who weren’t even directed to go for an interview, by the Auditor or Council.
Because Eide Bailly was not present to answer the Council’s questions, Hastings recommended the firm issue a report, and present it to the Council so the members can ask questions. Hastings sought Council direction; which option(s) it wanted to pursue.
A motion was made by Koehn, seconded by Myers to complete the work done as it stands, the audit of MLS books from November and December, and issue a report. After receiving that report, the Council will decide how to proceed forward. The motion carried unanimously.
Following this action, the Council closed the meeting, pursuant to MN Statute 13D.05 Subd. 2(b) for preliminary consideration of allegations or charges against an individual subject to the Council’s authority. The subject to be discussed was City Clerk/Treasurer Kim Schroeder. The closed portion lasted for one hour and fifteen minutes.
After reopening the meeting, Koehn made a motion to end the paid administrative leave for City Clerk/Treasurer Kim Schroeder and reinstate her. The motion failed for lack of a second.
The meeting adjourned at 11:37 a.m.
© The Parkers Prairie Independent, LLC 2016