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Commissioner Scott Jamison voted against the audit by Kessler International, which is estimated to cost between $5,000 and $10,000. A recognized leader in international corporate investigation, Kessler advertises its forensic accounting company as the place “where lies go to die.”

CRA Chair Bob Barnas hopes to uncover whether money transferred has been accounted for, and that the money spent on school renovations conformed to state statute. For the school projects, the City lists the amount budgeted from the 2011-2012 fiscal year as $128,915. At the time, there were not enough funds to complete the project, and the CRA voted to obtain a line of credit from the bank to cover the difference, budgeted at $85,800, Finance Services Director Helen McIver said.

The auditors will also look into management fee transfers from the CRA to the general fund. Management Fee transfers over the past four years include $70,000 in 2009, $70,000 in 2010, $95,000 in 2011 and $95,000 in 2012, McIver said.

While Barnas is concerned that funds within the CRA, a special district, might be an illegal use on City building renovations, he is uncertain about the Florida statue detailing CRA limitations and guidelines.  He hopes the Kessler audit will clarify how CRA funds are allowed to be distributed.

“I think to not do this would be a disservice to the taxpayers in the City of High Springs, and the business owners who can benefit from improving funds and doing it the proper way,” Barnas said.

An audience member stated she felt the $10,000 price tag was steep for an audit that could be completed in a week. She questioned whether the board had received bids from any other companies.

Barnas said he had researched other companies, but felt Kessler was the best choice.

“From what I glean from the discussion so far, as Mrs. Weller stated, would not an attorney be able to answer some of these questions without a complete forensic audit,” Resident Barbara Miller asked. “It’s been done. You have the wherewithal to do differently in 2013. I don’t know why you need a $10,000 audit.”

Stating that the cost of the audit was high, Miller asked Barnas what he hoped to find that could be corrected. In response, Barnas said he wanted to understand how the City should properly handle CRA funds, and the board could “apparently not” get these answers anywhere else.

Board members Ann Carter and Sylvia Newcomb agreed with Barnas that the audit needed to be conducted.

“If there’s anyone here today that feels that they are qualified and will vouch for its correctness as to how the CRA should be managed, please step forward and save the City $10,000,” Carter said. “However, with that said, I personally, sincerely, do not feel like that will happen. So, in order for us not to throw good money to bad, we need to do this.”

Recently, the first-draft of the MAXIMUS cost allocation plan suggested the CRA transferred approximately $45,000 to $50,000 more than the City required. During the meeting, Commissioner Sue Weller made a motion that requires High Springs to pay the CRA back for any funds over the amount deemed necessary by the final draft of the study. It passed unanimously.

Kessler proposed a three-phase audit followed by an evaluation of the findings. In Phase One, Kessler establishes a working relationship with the City of High Springs, introducing its staff members to City employees. Kessler will also identify and gain access to any documentation required for the audit.

The company’s Phase Two involves a detailed review of records, such as general ledger accounts, check registers and additional records provided relative to the financial assets of the CRA.

In Phase Three, Kessler intends to identify specific areas of concern and to complete further in-depth investigation techniques, including interviews and database research.

The CRA board also voted to move the $10,000 into the professional services budget item to provide payment to Kessler International. In addition, CRA Board Member Sue Weller made a motion to create a checking account separate from the City’s finances, and the motion passed four to three.

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CRA orders $10,000 audit on past projects

By AMANDA WILLIAMSON

Today Reporter

HIGH SPRINGS – Despite protests from a small group attending the High Springs Community Redevelopment Agency (CRA) meeting on Tuesday, the CRA voted 6-1 in favor of moving forward with an audit involving money transferred from CRA funds to the City of High Springs, and funds spent on renovating the town’s old school.

Commissioner Scott Jamison voted against the audit by Kessler International, which is estimated to cost between $5,000 and $10,000. A recognized leader in international corporate investigation, Kessler advertises its forensic accounting company as the place “where lies go to die.”

CRA Chair Bob Barnas hopes to uncover whether money transferred has been accounted for, and that the money spent on school renovations conformed to state statute. For the school projects, the City lists the amount budgeted from the 2011-2012 fiscal year as $128,915. At the time, there were not enough funds to complete the project, and the CRA voted to obtain a line of credit from the bank to cover the difference, budgeted at $85,800, Finance Services Director Helen McIver said.

The auditors will also look into management fee transfers from the CRA to the general fund. Management Fee transfers over the past four years include $70,000 in 2009, $70,000 in 2010, $95,000 in 2011 and $95,000 in 2012, McIver said.

While Barnas is concerned that funds within the CRA, a special district, might be an illegal use on City building renovations, he is uncertain about the Florida statue detailing CRA limitations and guidelines.  He hopes the Kessler audit will clarify how CRA funds are allowed to be distributed.

“I think to not do this would be a disservice to the taxpayers in the City of High Springs, and the business owners who can benefit from improving funds and doing it the proper way,” Barnas said.

An audience member stated she felt the $10,000 price tag was steep for an audit that could be completed in a week. She questioned whether the board had received bids from any other companies.

Barnas said he had researched other companies, but felt Kessler was the best choice.

“From what I glean from the discussion so far, as Mrs. Weller stated, would not an attorney be able to answer some of these questions without a complete forensic audit,” Resident Barbara Miller asked. “It’s been done. You have the wherewithal to do differently in 2013. I don’t know why you need a $10,000 audit.”

Stating that the cost of the audit was high, Miller asked Barnas what he hoped to find that could be corrected. In response, Barnas said he wanted to understand how the City should properly handle CRA funds, and the board could “apparently not” get these answers anywhere else.

Board members Ann Carter and Sylvia Newcomb agreed with Barnas that the audit needed to be conducted.

“If there’s anyone here today that feels that they are qualified and will vouch for its correctness as to how the CRA should be managed, please step forward and save the City $10,000,” Carter said. “However, with that said, I personally, sincerely, do not feel like that will happen. So, in order for us not to throw good money to bad, we need to do this.”

Recently, the first-draft of the MAXIMUS cost allocation plan suggested the CRA transferred approximately $45,000 to $50,000 more than the City required. During the meeting, Commissioner Sue Weller made a motion that requires High Springs to pay the CRA back for any funds over the amount deemed necessary by the final draft of the study. It passed unanimously.

Kessler proposed a three-phase audit followed by an evaluation of the findings. In Phase One, Kessler establishes a working relationship with the City of High Springs, introducing its staff members to City employees. Kessler will also identify and gain access to any documentation required for the audit.

The company’s Phase Two involves a detailed review of records, such as general ledger accounts, check registers and additional records provided relative to the financial assets of the CRA.

In Phase Three, Kessler intends to identify specific areas of concern and to complete further in-depth investigation techniques, including interviews and database research.

The CRA board also voted to move the $10,000 into the professional services budget item to provide payment to Kessler International. In addition, CRA Board Member Sue Weller made a motion to create a checking account separate from the City’s finances, and the motion passed four to three.

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The amendment would first require two public hearings and approval by commissioners before it could be placed on the November ballot for voter approval.

As it is currently proposed, the charter amendment would prevent the City from borrowing more than $1 million unless there is a natural disaster or four of five commissioners approve a referendum, which would then require voter approval and the debt must be paid back within five years.

Vice-Mayor Bob Barnas said the move for a charter amendment is a way to reign in borrowing by the City.

Commissioner Sue Weller said she was concerned that the $1 million was arbitrary and that the amendment would tie the hands of the City in the foreseeable future.

Weller cited a countywide transportation tax initiative, for which the City has agreed it would make certain roadway improvements totaling $3-5 million if the tax passes in November.  Those improvements would be funded by the taxes, but would potentially require upfront funding through a bond.  But, Weller said she feared the proposed charter amendment would prevent the commission from moving ahead with its promises.

Defending the amendment, Commissioner Linda Gestrin said the changes would “give the taxpayers more say in what goes on.”

She pointed to the first three phases of the City’s sewer system, which she says has cost some $8 million.

Commissioner Scott Jamison vehemently opposed the move, saying it was a way to curtail the sewer.

Although he agreed the concern over the debt is legitimate, he said the reasoning of some commissioners didn’t pass muster.

“You make the comment if you don’t have the money you shouldn’t borrow it, and yet we just put a couple hundred thousand dollars into something we don’t have the money for,” Jamison said, referencing a proposed in-house police dispatch service that is expected to cost the City an additional $150,000 annually.

“This [amendment] handcuffs future commissions and takes even more away from them,” he said, adding that it meant “less authority for commissioners in the future and less ability to do their jobs.”

High Springs resident Joyce Hallman was in favor of the amendment saying, “I urge you to go forward with this ordinance.”  She disagreed with Commissioners Jamison and Weller, adding “The Charter gives too much power to the commission.”

Others, however, stood in opposition to Commissioner Gestrin and Vice-Mayor Barnas.  Resident and former High Springs City Attorney Thomas DePeter worried that the push for the amendment was too rushed.  He pointed to inconsistencies and contradictions within the proposed referendum, adding, “It’s not well drafted.”

DePeter also agreed with concerns raised by Commissioner Weller about the process by which the proposed charter amendment came to be, including calling an emergency meeting to push the amendment ordinance forward.

Weller urged her fellow commissioners to allow a Charter Review Committee to oversee the process and develop possible amendments, as is called for in the City’s Charter.

Mayor Dean Davis, Vice Mayor Barnas and Commissioner Gestrin voted in favor of moving ahead to get the ordinance on the November ballot.  Commissioners Weller and Jamison opposed the move.

Despite the commission’s decision to hold the first of at least two public hearings on the matter on July 19, laws regulating public notices and public hearings may have put a kink in their plans.  There appears to be a discrepancy with the earliest possible dates on which the public hearings can be held while still meeting ballot deadlines.

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Hunter Marine bought out after filing bankruptcy

Hunter Marine will have all six of its production lines running for the first time since 2009.  The Alachua production facility will produce Hunter sailboats, Mainship trawlers and Gemini catamarans

ALACHUA – After a crisis, the workers of Hunter Marine are being offered the freedom of starting over.

Like most American businesses, the Alachua-based sailboat manufacturer suffered during the economic downturn in the fall of 2008.  On April 30, Morgan Industries, the parent company of Hunter Marine and other boat manufacturers, filed for Chapter 11 bankruptcy.

On July 11, the U.S. Bankruptcy Court in the District of New Jersey approved the sale of Hunter Marine to Marlow Acquisitions, an affiliate of worldwide boat manufacturer Marlow Marine.

For John Peterson, Hunter Marine president and chief restructuring officer, the financial struggles of the past three years have provided opportunities for strategic development which he hopes to expand further under new ownership.

“We learned a lesson during the recession,” Peterson said.  “We learned a lesson on how to survive.”

Being bought out may not sound like surviving, but Peterson said the situation befell Hunter largely due to their contractual obligation to financially aid other companies in the Morgan Industries family.

According to Peterson, dealers of Hunter sailboats and other Morgan Industries products used their retail inventory as collateral for loans from General Electric and a few smaller lenders, loans to be repaid once the inventory was purchased.

This common retail practice was disrupted when the recession decreased the American demand for high-end sailboats.  Decreased sales revenue meant less money to repay the loans, and when a Morgan-owned powerboat manufacturer folded, Hunter was required to pay the General Electric bills for them.

Peterson said without this hindrance, Hunter could have made it through the recession without being bought out, citing the company’s timely repaying of its loans to Bank of America during its eight weeks of bankruptcy, as support.

However, Peterson also said that the added burden taught the Hunter team how to manage in sparse conditions, skills he said will come in handy with the added boost from Marlow Marine.

“Once we get some capital infusion from Marlow and we start putting out some new Hunter models, we’ll begin to see some growth again,” Peterson said.

Growth would not be a new phenomenon for Hunter Marine, which has steadily come back following the bankruptcy filing.  Hunter, which in its pre-recession years once employed 435 people, had a total payroll of 31 employees on May 1.  That number has increased to 77, and Peterson is confident that the comeback will continue.

“Everyone we furloughed has been brought back on,” Peterson said.  “We’re hoping that in the next few months, most of the people we had to let go will have jobs again.”

Peterson, who became president of Hunter Marine three years ago when the previous president resigned after the recession hit, said the company will streamline its production and integrate it with products from Marlow and Mainship, a former Morgan Industries company that Marlow partially acquired in its purchase.

The company will have all six of its production lines running for the first time since the downturn, three of them having been dormant since 2009.  The lines will produce Hunter sailboats, Mainship trawlers and Gemini catamarans, which are not sold by Hunter or any Marlow company, but which will bring increased production revenue for Hunter.

Hunter has whittled its product line down to 14 models from the previous 17.  Three Mainship trawlers will now round out the new inventory.

Peterson understands the importance of personal relationships in business and hopes to strengthen Hunter Marine’s bond with its home city in the future.

“The company has been always seemed a bit standoffish from Alachua,” Peterson said.  “That’s not my style, I’m more community oriented.”

Just as many Alachua residents have relied on Hunter Marine in past years, Peterson hopes to have the support of his employees and his community in the rebuilding months.

“We’re attempting to do the best we can for our employees,” Peterson said.  “I think they understand the predicament we’re in.  They’re good people, and they’ve just been caught in the wrong spot at the wrong time.”

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The City conducted a door-to-door survey to identify issues that might improve its grant score. It will be submitted in the next few weeks, and if approved could close the $2 million to $2.5 million funding gap.

Former Archer City Manager John Glanzer is helping the City as a temporary employee until a new city manager is hired.

“We’re really kind of in a holding pattern right now waiting to see what will happen in October with our request for an increase in grant award from the State,” Glanzer said. “Once we know that information then decisions can be made, as far as how to move forward from that point.”

After submitting a preliminary engineering report and environmental study in October 2011 to the Florida Department of Environmental Protection’s State Revolving Fund, the City was awarded a $2.7 million grant toward the project. The grant has a 120-day timeline for the City to establish the balance of funding for the project.

The total sewer project will cost approximately $11 million, according to Archer Interim City Manager John Mayberry.

“Until we close the funding gap it’s not in the best interest of the City to move forward with the Rural Development loan at this time,” Glanzer said. “We really need to finalize what is the max number of dollars we can get, grant money wise, from the State and that will more or less identify what the loan on that will be.”

Those are unknown answers that will not be answered until this fall, he said, but funding will be through the United States Department of Agriculture Rural Development agency.

Building the sewage system to replace the 50-year-old septic tanks in Archer has been a decade-long process.

Archer Mayor Frank Ogborn said they’ve had to work around the constraints of the federal budget cycles and the process is moving as fast as possible.

“We as a City commission understand that we are under a deadline. We have to be under construction or we’ll have to pay that loan back,” Ogborn said. “No one is more understanding of that than we are.”

In the door-to-door survey, there were open sewage found in backyards and septic tanks that were not properly maintained.

Ogborn said the sewage system would benefit Archer by attracting more businesses.

Glazer believes there is a cost for homeowners who use a septic system despite the nonexistence of a monthly fee.

“The reality is if you own a septic system a lot of people get the mistaken idea, ‘Well I flush the toilet and nothing happens so it must be working fine,’ ” Glazer said, “and they never really have their septic system looked at or maintained unless a problem develops that they actually see.”

“But that doesn’t mean the septic system is operating properly,” he said.

Glanzer said another issue that’s affecting the sewer project is that Congress hasn’t passed the budget for USDA.

“USDA Rural Development is restricted because there’s no budget,” he said.

“The funds that are available, not just for the City of Archer but municipalities throughout the United States, are restricted because USDA doesn’t know how much money they’re going to have.”

The U.S. House Agricultural Committee released a Farm Bill draft July 5 that plans to cut spending by $3.5 billion a year. The current Farm Bill ends Sept. 30.

“USDA is very conservative about who they loan money to and grants they give, so that hurts the small municipalities,” he said.

Glanzer is optimistic that the project will be completed in the next year or two if the grant scores are approved by the Florida Department of Environmental Protection.

“If the community does not move forward with it and you have a community that is strictly on the septic system, the ability for that City to grow is going to be severely restricted.”

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E-mail: aloguerre@alachuatoday.com

In an email to commissioners, Ivey seemed to point to the city’s scheduling of frequent meetings as a chief reason for stepping down.

“Because I am concerned about my ability to attend all of the additional meetings that are necessary to accomplish City business, as well as the volume of work (which exceeds what I anticipated) as a result of the meetings, I must regretfully resign as City Attorney,” Ivey wrote in the email.

Although the commission’s regular commission meetings are scheduled just twice monthly, the second and fourth Thursday of each month, the commission has been meeting considerably more frequently than that.  Between commission meetings, special commission meetings, emergency commission meetings, joint commission meetings, workshops and Community Redevelopment Agency (CRA) meetings, the commission has met as many as a dozen times in one month.  Many of those meetings have lasted as long as five hours or more.

Ivey is just one in a long line of officials to part ways with the City over the last several months.

Former High Springs City Attorney Thomas DePeter resigned Jan. 13 when it became apparent that the majority of the commission intended to replace him in the ensuing weeks.

When pitching his firm to the commission in January, Ivey proposed a rate of $50 per hour up to 80 hours per month with no retainer or minimum required and additional time available at a negotiated rate.  Also topping the list for attorney’s being considered earlier this year was Brent E. Baris, P.A. of High Springs.  Baris proposed a rate of $100 per hour with an effective retainer or minimum of $3,000 monthly for 30 hours of services.

Ivey said he would continue to serve until commissioners hire a new city attorney.  When that will be is not yet clear.

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HSPD Chief Steve Holley presented commissioners with an agreement for CAD software that would cost the City some $39,000 in the current fiscal year.  Those expenditures, and others required for the startup would be taken from the City’s contingency fund, which would require a budget amendment, according to City Attorney Ray Ivey and former city attorney Thomas DePeter.

Commissioner Scott Jamison, who has opposed bringing the dispatch back to HSPD due to costs, objected altogether to the City using contingency funds to restart the dispatch service.

“This isn’t an emergency.  This is a purchase of choice,” Jamison said of the dispatch center.

The City already submitted a letter in June to discontinue dispatch services with the Alachua County Sheriff’s Office Combined Communications Center (CCC).  That started a clock, which calls for the City to take over its own dispatch services on Oct 1.

By Tuesday evening, Holley said, “Time here is my enemy.”

In requesting approval of the $39,000 purchase agreement, Holley said, “Things have to start moving now, to make it.”

Whether or not the dispatch center will be up and running in time for the Oct. 1 deadline seems to be in question, especially since the commission is now moving forward with a budget amendment to make necessary adjustments allowing for the transfer of funds to make the purchases.

The first public hearing on that budget amendment has been scheduled for July 30, adding a nearly two-week delay to the timing.

There seemed to be other unanswered questions about dispatch related costs, including personnel, training, and additional equipment.  By the end of discussions Tuesday, City Manager Jeri Langman said she would be meeting with Holley to nail down all of the anticipated costs that would impact the current budget.  Preliminary estimates projected some $90,000 in costs during the current budget year to get the dispatch started by Oct. 1, the start of the next fiscal year.

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