Discussions about a recently released legislative audit of city finances got contentious among council members at the Eureka Springs City Council’s regular meeting on Monday, May 23.
While some council members felt the audit results reflected minor issues, others were more disappointed with the findings. Council member Nick Roberts was the most vocal, even saying that finance director Lonnie Clark wasn’t doing his job.
“These things just bother me a lot,” Roberts said. “And I don’t want excuses, I want solutions. And I think we need to demand them. And I think we need to start asking for all of these things to be proven that they’ve been resolved, because I’m not going to rely on you saying, ‘Yeah, it’s fine,’ because you obviously haven’t been doing your job. “So, it’s time that you do it.”
Roberts and council member Autumn Slane peppered Clark with questions about the report from the Arkansas Legislative Audit division that was presented to the Legislative Joint Auditing Committee Standing Committees on Counties and Municipalities, Educational Institutions and State Agencies on Thursday, May 12. The report covered the year ending Dec. 31, 2020.
Clark and Mayor Butch Berry explained that staffing turnover and shortages in the finance department and multiyear delays from an outside auditing firm hired to take care of the water and sewer audits were the main reasons for the more serious findings reported by the legislative audit committee.
“We’re looking at it in a positive approach and we are taking measures to correct some of these things,” Berry said.
Clark agreed.
“We did have a considerable amount of personnel turnover during that period of time [in 2020] and we lost a lot of institutional knowledge by that turnover,” Clark said. “It was difficult to replace people, and the legislative audit, thank goodness, reflects those issues with nothing missing, nothing inappropriate.
“Some things were not classified properly or were not documented properly, but there were reasons for that, and that was inexperienced people and a shortage of staff as well.”
Clark said the audit committee asked no questions about the city’s audit.
“[The audit] went through the review committee at the state and then it went before the legislative audit committee and they voted on it, and they voted to file it for the record with no changes made to it or no questions asked,” he said. “I wasn’t called to Little Rock to testify. Neither was any anyone else from the city of Eureka Springs. “These were errors that were made. They
“These were errors that were made. They were corrected. And we’re putting in processes now, and people, and training them where this hopefully will not happen in the future.”
Most of the discussion centered around the legislative audit report that the city had not submitted yearly audits for the city’s water and sewer department for the years 2020, 2019, 2018 and 2017, as required by state law.
“I mean, this is kind of negligent, in my opinion,” Slane said. “Like four years of no audits and none of us knew about it.”
Clark told the council that BKD LLC, an accounting firm with an office in Rogers, is hired by the city to conduct the water and sewer audits each year. However, that company has a backlog of work and hasn’t conducted a complete audit in Eureka Springs since 2016, he said.
“BKD, the CPA firm, has always been about two to three years behind the legislative audit, just because of, I guess, the volume or workload or whatever they were,” Clark said.
Larger audits are likely getting priority, Berry said.
“We’re small potatoes compared to other clients,” Berry said. “They handle clients with $100 million budgets, annual budgets.”
Council member Bill Ott said he’s not alarmed because he feels the city is doing all it can regarding the water and sewer audits.
“They know we’re making an effort and therefore aren’t hitting us over the head with the hammer,” Ott said. “So, I guess it’s just, you know, there’s a hairball in the sewer line. It’s eventually going to have to be cleaned out. And it sounds like we’re doing all of our due diligence and trying to get them to move along.
“If the state audit people aren’t upset with this, I don’t understand why we should be upset with this. If we feel like, and by [Clark’s] explanation, I know I do, that we’re doing everything we can to move this puppy along … it’s just it’s them, not us.”
Another issue addressed was the report that the city council did not review in 2021 the report of the 2019 audit in a timely fashion, something Berry and Clark said was an oversight.
“We approved it late because as Mr. Clark said, we had a lot of other issues going on and I forgot to bring it to the council’s attention,” Berry said. “All the council members received the audit, we just didn’t approve it in a timely manner, and that’s what that’s referring to.”
Other questions from council members focused on findings regarding the cemetery and parks and recreation commissions. It was requested to have representatives from both attend the next city council meeting.
Council member Melissa Greene said the audit results were actually better than she expected.
“I’ve seen other [audits] over the years of 20 years here, and this one is pretty tame compared to some of the other ones where people did go to Little Rock,” Greene said. “To my knowledge, after reading and looking over it, there was no misappropriation, no misspending. Yes, the state does ding us when we’re not doing something right, but that doesn’t mean it’s our fault.
“We’ve had Lonnie these years, and I’ve watched Lonnie help us budget out of bankruptcy basically, and to where we are now. And to call him a bad employee. He’s not and I am really sorry that was said to you tonight. And I’m really hurt and upset about that.”
Roberts said he was not as accepting of the audit report as others.
“So, people say ‘I’m OK with it,’ but I’m not OK with it,” Roberts said. “People are not OK with it. This has to be fixed. These things have to be done right. It’s not excuses. It’s got to be done. We have 365 days a year to do it.”
Later in the meeting, during the time devoted to final comments by council members, the level of combative words increased between Roberts, council member Harry Meyer and Berry.
“I just want to thank everybody in the city for their support,” Roberts said during his comments. “It’s not always an easy job up here to do the right thing, especially when the majority of people up here might not like what you’re doing. But I’m doing what’s best for the city, and I thank you for your support, truly and genuinely.”
Meyer responded – specifically to Roberts about earlier comments made directed at Clark – and began a back-and-forth between the pair that got heated.
“I believe there’s 27 separate accounts in the city ledger, 27 of them,” Meyer said. “I think one or two of them hadn’t been balanced, reconciled properly and probably showed up in this, but no money disappeared.
“Mr. Clark’s done a good job. I think he explained fully what the problems were, Nick.”
Roberts responded, “Quit pointing me out.”
“Please,” Berry said.
“I think [Clark] pointed out everything,” Meyer continued to Roberts. “I don’t think you needed to jump him.”
“Stop talking to me,” Roberts responded. “You don’t talk direct at me.”
“Please, please,” Berry again said.
“I know you’re his friend, Butch, but go ahead,” Roberts said to the mayor. “What are you going to do? Stomp your
“What are you going to do? Stomp your feet or hold your breath?” Meyer responded to Roberts.
“You do this all the time, so why can’t I?” Roberts said to Meyer. “Please. You’re the worst offender at breaking up the meeting.”
“Nick, that’s enough,” Berry said.
“I don’t care,” Roberts said before things calmed down.
RESIDENCY ISSUE REMOVED FROM AGENDA
The only other agenda item was withdrawn before it was discussed on the advice of city attorney Forrest Jacobi.
The agenda item was to discuss whether mayor and city council candidates were required to live in Eureka Springs city limits, but during the public open forum session of the meeting, resident Linda McBride reminded the council that it’s state law that candidates must live within the city.
Jacobi agreed.
“There’s no point in the city wasting their time discussing state law when we have no control of it,” he said.
McBride told the council she came to the meeting to discuss the topic after hearing of people planning to run for council or mayor who do not live in the city limits but were planning to use the address of their city business as their residential address.
“Doing so is a lie and it is against the law,” McBride said.
“We have already witnessed this unlawful address-switching to gain office and try to get on a city commission. Let me be very, very clear, it is against the law.”
