In the wake of significant financial questions, the Bayou la Batre City Council took some extreme steps on Thursday to rein in expenditures — including a 30-day moratorium on all nonessential spending, while also stripping Mayor Brett Dungan of his ability sign checks, use city credit cards or obligate the city to any contract.
Councilwoman Annette Johnson, chairman of the city’s finance committee, has in recent weeks brought to light a $50,000 loan obtained by Dungan and City Clerk Jamie Abastoflor without prior consent of the council. Dungan claims the matter was subsequently ratified by the council during a Jan. 8 meeting, but those minutes have yet to be approved by the council and are unavailable to verify those claims.
During a March 12 meeting, Dungan acknowledged the council was unaware of the $50,000 commitment before it was pursued. Since then, council members have presented a letter they say demonstrates the mayor and his staff “mislead” Region’s Bank to assume the council had previously approved the loan.
The unsigned letter was dated Dec. 18, 2014,the same day the loan was approved by Regions. At the most recent meeting, Dungan said he had intended to put the ratification of the loan on the council’s Dec. 18, 2014 agenda, but due to an oversight had not.
Dungan further explained the loan was obtained to help “make payroll” through the end of year, when tax revenue is typically down. However, council members have expressed concern for being kept in the dark about Dungan’s financial concerns and solutions.
The discovery of the letter prompted further digging into the city’s finances, which Johnson said has revealed more than $350,000 in debt, multiple credit cards that are “maxed out,” several unauthorized financial transactions and the “unauthorized” sale of city property for $26,000 less than its appraised value.
Though Dungan hasn’t denied any of the claims on the record or in public meetings, he has openly questioned the motives behind the council’s sudden heightened interest in the city’s finances.
“My personal integrity and the integrity and livelihoods of the hard-working city employees are being threatened for no valid reason,” Dungan said. “Our citizens deserve the truth, and I’m confident that when political motivations and power struggles are removed from the equation, the record will show that this administration has worked diligently and honestly to move the city of Bayou la Batre forward.”
Dungan also called upon the Alabama Department of Examiners of Public Accounts to “audit all financial transitions of the city including the Bayou la Batre Utilities Board and the Bayou la Batre Housing Board.” The council approved his request unanimously and it was also endorsed by representatives of the housing and utility boards.
Johnson also extensively highlighted and opposed more than $50,000 previously transferred to and from from several accounts by Abastoflor without permission from the council. According to her review, Abastoflor moved $20,000 from a BP Hospitality and Tourism fund and $20,000 from a grant fund obtained for purchasing equipment for the Bayou la Batre Fire Department.
Abastoflor, who was brought in as part of a transitional team after Dungan’s election before taking the position of city clerk, openly admitted he moved the money without authorization.
Abastoflor also said he had moved an undisclosed amount of money from the city’s senior citizens account. At the time of the meeting, he said he wasn’t sure what exactly what that amount was. At the meeting, Abastoflor said the monies were all reimbursed afterwards, though as of today, no documents have been produced to substantiate those claims.
“You took it upon yourself to make these decision, to move this tremendous amount of money,” Johnson said to Abastoflor. “Were you aware of the significant consequences of not properly managing the BP money?”
Abastoflor said he wasn’t aware of any consequences. Dungan disagreed with Johnson, explaining the funds were not earmarked for a specific purpose. Lagniappe has contacted representatives of BP for clarification, but has not been successful.Another issue that has been debated recently is Dungan’s sale of piece of property deed to the city of Bayou la Batre located at 453 Norman Bridge Road in Montgomery — a parcel Dungan said he recently sold for just $10 to Elton Dean, the chairman of the Montgomery County Commission.
Both Dungan and the council agree the property, which was donated to the city, was to be listed as “surplus” and sold to avoid demolition costs from the city of Montgomery. However, they disagree about the price. While Dungan said he had approval to sell property for $10, at least four of five councilors say they have no recollection of providing it.
Abastoflor also said he wasn’t sure if the city ever received a $10 check for the property, and couldn’t produce a document for the sale. Lagniappe formally a requested a copy of the deed and all documents related the sale on Friday, but it has yet to be fulfilled.
“Do you have any agenda item listing for this council anywhere in any of your minutes, which stopped as of July 24?” Johnson asked Dungan angrily. “Can you prove this council authorized you to sell that property?”
Dungan said “he recalled” discussing the matter with the council and again brought up the $5,000 demolition charge Montgomery Mayor Todd Strange had discussed with him. Johnson said the property’s most recent assessment was valued at $27,000, and went on to say the city would have “been ahead about $22,000” by paying the demolition costs. She again asked other council members if they remembered discussing the sale with Dungan, and all responded that they had not.
Financial concerns about Dungan and his staff influenced the council to implement the moratorium and eliminate the mayor’s ability to expend city funds. However, Johnson also attempted to confiscated Dungan’s city-paid cell phone and turn it over to the chief of police.
Some in the audience had expressed concern about Johnson’s actions and demeanor towards the mayor, but when she attempted to seize his phone many vocally accused Johnson of “overstepping” her authority.
In defense, Johnson said she was only trying to protect the citizens of the city by preserving files on the phone that would be pertinent in an investigation by the Mobile County District Attorney’s Office — an investigation Johnson herself claims to have initiated Tuesday.
“I don’t dispute the legitimacy of concern, but the phone shouldn’t be removed from the mayor absent a subpoena from the District Attorney,” City Attorney Bill Wasden said.
As for the expenses, Dungan said he didn’t believe the people who elected him wanted to “take the city back 30 years.” He said the restriction was indicative of the council being “directly opposed to the citizens wanting to move Bayou la Batre forward.”
Johnson countered, saying Dungan and his staff have used Regions credit card accounts as an “extension of (their) salary.”
“Multiple charges were made for fuel, when we were also submitting reimbursement for mileage for the same trips,” Johnson said. “That’s why we removed credit cards from use in the city. It’s a very common practice when there has been misuse.”
Aside from the “double dipping” Dungan is accused of in his travels, several council members also questions meals and travel expenses charged on city credit cards for Dungan’s wife.
Wasden said if the council does have the authority to authorize expenditures for Dungan’s wife — as if often done with first ladies of governors and presidents — but only if it’s done before hand. He then said, “in this instance, I don’t know that was done.” The Council also agreed that no expenses had ever been preapproved for members of Dungan’s family.
Throughout the meeting, Councilwoman Ida Mae Coleman came to Dungan’s defense as the only member who opposed the multiple actions the council took to limit Dungan’s authority and financial access. She called the recent developments “dirty politics,” alleging they were part of plan that’s been in motion for a long time.
“What you see now is going to stop Bayou la Batre dead in it’s tracks,” Coleman said, suggesting the moratorium and limiting the mayor’s abilities would shut down the city.
Similar statements were widely reported two weeks ago after the council delayed $30,000 in regular bills for a period of two days in order to properly review them. However, despite the moratorium and delayed payments Wasden confirmed at last night’s meeting that all contractual agreements previously approved by the council, like electricity bills, insurance payments, and employee salaries wouldn’t have to voted on by the council in order to be maintained.
In one of its last motions, the council elected to reassign Dungan’s assistant Wanda Overstreet to the Bayou la Batre Welcome Center and terminate her contract with the city after 30 days. Overstreet was also part of Dungan’s transitional team, but the council later voted to extend her duties.