Open Records request reveals expense details at City Hall

The Blackwell Journal-Tribune, in following up on key expenses for the city of Blackwell, has filed open records requests for bills from the city attorney, the city's chief financial officer, and bills by G&C Concrete for city services.

The issues uncovered happened, for the most part, under the leadership of former city manager Chip Outhier, who retired in 2018. They were in regard to payments made to the above parties. The other issue is that the city charter requires anything over $5,000 to be approved and printed in the City Council's consent agenda. The Journal-Tribune was unable to find any agenda items to approve the expenses that were over $5,000. Other information in the minutes to approve the items on the consent agenda was also unable to be found.

The city was written up in a state audit five years ago for the same violations. The city has since been notified of another audit by the Oklahoma State Auditor and Inspector General.

The Journal-Tribune has reviewed “Oklahoma Statutes- Title 11. Cities and Towns- §11-8-113. Prohibited business activities with municipality - Exceptions - Definitions - Violations - Employees of financial institutions.” This statue states as follows:

“A. Except as otherwise provided by this section, no municipal officer or employee, or any business in which the officer, employee, or spouse of the officer or employee has a proprietary interest, shall engage in:

“1. Selling, buying, or leasing property, real or personal, to or from the municipality;

“2. Contracting with the municipality; or

“3. Buying or bartering for or otherwise engaging in any manner in the acquisition of any bonds, warrants, or other evidence of indebtedness of the municipality.

“B. The provisions of this section shall not apply to any officer or employee of any municipality of this state with a population of not more than five thousand (5,000) according to the latest Federal Decennial Census, who has a proprietary interest in a business which is the only business of that type within five (5) miles of the corporate limits of the municipality. However, any activities permitted by this subsection shall not exceed Two Thousand Five Hundred Dollars ($2,500.00) for any single activity and shall not exceed Fifteen Thousand Dollars ($15,000.00) for all activities in any calendar year. Provided, however, such activity may exceed Fifteen Thousand Dollars ($15,000.00) per year if the municipality purchases items therefrom that are regularly sold to the general public in the normal course of business and the price charged to the municipality by the business does not exceed the price charged to the general public.

“C. Provisions of this section shall not apply where competitive bids were obtained consistent with municipal ordinance or state law and two or more bids were submitted for the materials, supplies, or services to be procured by the municipality regardless of the population restrictions of subsection B of this section, provided the notice of bids was made public and open to all potential bidders.

“D. All bids, both successful and unsuccessful, and all contracts and required bonds shall be placed on file and maintained in the main office of the awarding municipality for a period of five (5) years from the date of opening of bids or for a period of three (3) years from the date of completion of the contract, whichever is longer, shall be open to public inspection and shall be matters of public record.

“E. For purposes of this section, “employee” means any person who is employed by a municipality more than ten (10) hours in a week for more than thirteen (13) consecutive weeks and who enters into, recommends or participates in the decision to enter into any transaction described in subsection A of this section. Any person who receives wages, reimbursement for expenses, or emoluments of any kind from a municipality, any spouse of the person, or any business in which the person or spouse has a proprietary interest shall not buy or otherwise become interested in the transfer of any surplus property of a municipality or a public trust of which the municipality is beneficiary unless the surplus property is offered for sale to the public after notice of the sale is published.

“F. For purposes of this section, “proprietary interest” means ownership of more than twenty-five percent (25%) of the business or of the stock therein or any percentage which constitutes a controlling interest but shall not include any interest held by a blind trust.

“G. Any person convicted of violating the provisions of this section shall be guilty of a misdemeanor. Any transaction entered into in violation of the provisions of this section is void. Any member of a governing body who approves any transaction in violation of the provisions of this section shall be held personally liable for the amount of the transaction.

“H. Notwithstanding the provisions of this section, any officer, director or employee of a financial institution may serve on a board of a public body. Provided, the member shall abstain from voting on any matter relating to a transaction between or involving the financial institution in which they are associated and the public body in which they serve.”

After review of Oklahoma Statue §11-8-113, the Journal-Tribune found that the law does not apply to Blackwell, as the 2017 Federal census listed the population at 6,731.

A review of past City Council agendas shows that there are no contracts in place for the city attorney or the chief financial officer. A review of the budgets for the last several years shows a budget for the City Council for other services and charges, but the budget directory is not specific as to what services that category covers.

The City Council spent $252,284 in fiscal year 2015 for other services and charges and had budgets of $125,550, $189,865 and $168,400 for fiscal years 2016, 2017, and 2018, respectively. The Council spent $380,429 in fiscal year 2017. The Council has a proposed budget of $145,000 for the 2019 fiscal year, which runs from July 1, 2018 to June 31, 2019.

Most City Councils in cities that have a city manager and a city charter do not have budgets of their own, as those expenses are part of the city administration's budget. While the City Council does have the ability to hire the city attorney and the auditor, most municipalities have these positions under contract with set costs or retainer contracts that are approved annually.

G&C CONCRETE

The open records request showed that Mayor T.J. Greenfield has received over $127,000 for services rendered by his concrete company, G&C Concrete, from 2015-2018. He closed the business in 2018. It is believed that G&C Concrete was a sub-contractor under Atlas Construction and was reportedly paid over $75,000 for the event center project at the county fairgrounds.

During that time, Greenfield served as either a member of the City Council or as the city’s mayor. Greenfield was first elected as the 4th Ward Councilman in April of 2015, and he was elected as the city’s mayor in April of 2016, an office he still holds.

According to records obtained by the Journal-Tribune, G&C Concrete supplied the city with concrete, rock, and other similar materials that were used in the construction of city roads, sidewalks, and structures at the county fairgrounds in Blackwell. The materials were sometimes delivered to the city’s storage yard. In other cases, they were delivered directly by G&C to the site at which the materials were to be used.

According to the city’s records, the first time the city paid G&C after Greenfield was elected, was on April 21, 2015. The city paid G&C $7,515.18 for gravel that was used in the construction of the Dan McClung walking trail, which runs along Southwest Boulevard. The materials were delivered to the city’s material storage facility on Fourth Street, according to invoices from G&C.

The last time the city paid G&C was on January 3, 2018, according to the city’s records. On that date, the city paid G&C $1,392.83 for 12.5 tons of 1 1/2 crusher run rock and 105.03 tons of fill sand, per G&C’s invoices.

According to the city’s purchase orders, G&C was sometimes paid after each time the city bought materials from the company. In other cases, G&C was paid on a monthly basis.

The payments to G&C were made with two different credit cards, with one belonging to the city’s street department and one belonging to the city’s water department, city records show.

Budgets for the street department show materials, supplies, and other services or charges for fiscal year 2017 at $62,800. Last year, the street department had a budget of $71,700 and spent $75,057. The budget for this fiscal year was set at $82,000. The water department budget for fiscal year 2018 for materials, supplies and other services was $317,334. The water department spent $683,464. The budget for fiscal year 2019 is $700,000.

CITY ATTORNEY

Blackwell City Attorney Bryce Kennedy received a total of $110,086.39 from January to December 2018. Kennedy billed the city on the first day of each month for work completed the previous month, and payments to him were approved by Outhier. Eleven of the bills were over $5,000. The highest bill was for the month of October, which totaled $13,081.25. The monthly bills were never listed on the consent agenda at regularly-scheduled meetings of the City Council as required by the city charter. In Kennedy’s bill for the month of July, he billed the city for traveling to Blackwell to “answer layoff questions” and prepare a “master layoff notice.” The layoffs came amid a city budget crisis last summer. Kennedy was paid $175 per hour for his services.

CHIEF FINANCIAL OFFICER

RS Meacham, the city’s chief financial officer, received a total of $89,450 from January to December of 2018. The biggest expense was an audit of the city, which totaled $16,500. This expense was not approved on a City Council agenda as per the city charter. The records request also showed inconsistencies as to how Meacham billed the city. Work for July of 2018 totaling $5,500 was dated for October 29, 2018 and was approved on November 20, 2018. Meacham’s invoice, however, was dated as July 31, 2018. There was no City Council approval for that invoice, either.

At a recent meeting, the City Council had bills over $5,000 on the consent agenda. But they were removed, and action was never taken on them.

The Council has a regular meeting scheduled for tomorrow night at City Hall. The Journal Tribune will have a full update next week.