Grand Jury Finds Gross Mismanagement In Century, $1 Million Lost, Natural Gas Missing, Financial Emergency

March 6, 2019

A grand jury has found the Town of Century lost over $1 million in utility accounts in just two years, can’t account for over 40 percent of their natural gas, made loans not revealed on audits for 14 years, improperly borrowed about $3 million from accounts with a 750-year payback plan, and is a state of financial emergency.

For additional details and grand jury recommendations, click here.

The grand jury received testimony from 18 witnesses and reviewed numerous financial documents and found that criminal charges were not appropriate. The grand jury did recommend that the State Attorney’s Office, State Auditor General’s Office and Escambia County continue inquiries into town operations.

“We are continuing to review various matters to see if there is anything that should take place,” Assistant State Attorney Greg Marcille told NorthEscambia.com after the report was released. “The grand jury is still in session until June, but we do not anticipate bringing any of these matters back to the grand jury.”

If the grand jury recommendation is followed, it would leave Century has just a shell the town’s current structure, with most services provided by other agencies. Currently, the town does not provide law enforcement or other emergency response, with those services provided by the Escambia County Sheriff’s Office, Escambia County EMS and Escambia Fire Rescue. Escambia County currently provide code enforcement for the town.

The town uses a contract private attorney and CPA. “It appears that Town officials are sometimes reluctant to seek the advice of their attorney because of concerns related to expenses,” the report notes.

The grand jury recommended that Century divest its gas, water and sewage service in order to pay debt, leaving a town and council responsible for only for roads, parks and land use regulations.

“Based upon our review, we are deeply concerned with the financial status of Century….Financial audits indicate that Century’s overall financial condition demonstrates signs of deterioration which may result in a future financial emergency. The poor relationship between the Mayor and at least several members of the Town Council has hampered the ability of the Town to respond to this situation.”

GAS DEPARTMENT

The town’s gas department once had 1,000 customers, but that number has fallen to 500 to 600 customers, with the Florida Department of Corrections being the largest customers at more than 20 percent of revenues reported in various enterprise funds.

The gas fund lost $527,738 in the 2016 and 2017 fiscal years.

“The reasons for these losses are many. The system itself is antiquated and has not been adequately maintained. Employees responsible for reading the meters have failed to do so properly or have not read them at all. Between twenty five and fifty customers have received gas services without ever having been billed. The prison and other commercial customers have had either inadequate or faulty meters which have resulted in substantial under charging.

“Unaccounted gas is the amount of gas that comes into the system minus the amount that is sold to customers. All gas services will have some unaccounted gas. Industry standards puts this amount at less than two or three percent. In 2015 Century reported unaccounted gas as 14.0 percent, in 2016 12.4 percent and in 2017 as 12.9 percent. In 2018 this amount jumped to 41.9 percent. This means that of the natural gas bought and paid for by Century in 2018 only 58.1 percent was actually paid for by its customers.

Witnesses have testified that the problems with the prison have been corrected and new meters for all customers have been purchased. None of these new meters have been installed at this time because of problems with the meters as delivered. Additionally, billing errors have not yet been corrected. We do not believe that the Town has given these matters the attention that they need nor have they responded as quickly as required under these circumstances. While the current gas supervisor appears to be qualified for the position, we are concerned that previous supervisors were hired without adequate qualifications or experience. This may have contributed to these problems.

WATER AND SEWER

Financial concerns with the enterprise operations are not limited to the gas service. In 2016 and 2017, the water and sewer department lost $465,900.

FINANCIAL DIFFICULTIES

Payroll checks for employees have been written on an account that did not have sufficient funds to cover these checks. This was caused by the failure to transfer sufficient funds from other accounts to the payroll account to cover these costs. Federal withholding was not paid to the United States Treasury because sufficient funds were not available. This resulted in fines or penalties being imposed.

Routine bills such as utilities and telephone are regularly not paid timely because sufficient funds are not available.

“The Town pays 99 percent of the employee’s health insurance premium and 78 percent for the employee’s family. Five employees were under withheld resulting in a cost to the town of approximately $6,000. While these costs have been paid timely, witnesses have indicated that Century cannot afford to continue lo pay for such an expensive program.”

LOANS

In 2003, loans were provided by the town to several business owners for economic development purposes. Three of these people went on to become elected officials, two who presently serve on the council and one who  was a previous mayor. One of these loans was not paid timely and the council in July 2018, modified the terms of that loan to extend the repayment time by an additional three years. The monthly payments were also lowered at that time. These loans do not appear to have been listed on any audit as a debt owed to the town until 2017…14 years after the first loan.

BUDGET NOT REALISTIC

“The council must adopt a budget for each fiscal year. for the fiscal year ending September 30, 2017 the original general fund budget was $679,857. This was later amended to $1,053,830 and the actual expenditures was $1,359,964. Revenues in the current year’s budget have been raised by approximately 30 percent. There does not appear to be a realistic basis for this increase. In order to make up this shortfall it was necessary for the Town to borrow from other accounts.

“According to the most recent audit, these funds were borrowed from restricted accounts made up of gas taxes and monies from the Local Option Sales Tax, Gas taxes may only be used for road improvement and LOST funds may only be used for infrastructure or purchases having an expected life expectancy of at least five years. They cannot be used for the day to day operation of the Town. Century improperly borrowed $306,134 in fiscal year 2017 from these funds which must be repaid.

“This is not the first year that Century has borrowed from these funds. As of September 30, 2017,  the Special Revenue Fund was owed approximately $2,700.000. In June 2018 the Council approved a repayment plan of $300 per month. At this rate it would take 750 years to pay back these funds.”

SUNSHINE AND PUBLIC RECORDS

The grand jury said there appears to be a lack of understanding of the requirements of both the Sunshine and Public Record Laws. Testimony we have heard indicates that numerous public record requests have not been responded to in a timely manner. Minutes of council meetings have not been prepared for months at a time. The digital recording of at least one meeting has been lost. The file containing the paperwork for the economic development loan made to one council member has been misplaced and cannot be located. The Office of the State Attorney filed charges of noncriminal violations of the Sunshine Law against three members of the town council. All pleaded no contest and were fined.

POLICIES AND PROCEDURES

The grand jury found there are no policies and procedure manuals to be used by office staff, and no adequate job descriptions when seeking new employees.

NorthEscambia.com file photo.

Comments

26 Responses to “Grand Jury Finds Gross Mismanagement In Century, $1 Million Lost, Natural Gas Missing, Financial Emergency”

  1. Timothy on March 8th, 2019 9:11 am

    Noncriminal violations… the good Ole boy system at it’s finest.

  2. IMHO on March 7th, 2019 10:48 pm

    Hey Clueless Bob, BINGO!! You hit that nail on the head!

  3. IMHO on March 7th, 2019 11:07 am

    @Kris
    Century just had an election.

  4. Stanley Beech on March 6th, 2019 11:29 pm

    Back In the early seventies when I worked in The Oilfield there were oil wells in The City Limit’s of Century. Does the City still receive money from those wells or have they been capped off.

  5. Kris on March 6th, 2019 8:32 pm

    If the people of Century are really serious about taking the power away from these people, VOTE THEM OUT!

    That is how you bring about change

  6. Clueless Bob on March 6th, 2019 8:28 pm

    Where do you start? Ann Brooks. Enough said. Also, bring on Barnes, Hammond, McCall. Can’t blame 14+ years of financial corruption on just the new folks. This is sad, but it’s looks like that group may have escaped some harsh punishments for all the shifting of millions of dollars and loans for now. Stay tuned. There are still some bread crumbs out there somewhere.

  7. Tee-bugg on March 6th, 2019 7:21 pm

    Something has got to be done this is downright insane and I wonder how long this will go on before our new governor steps in and how long till this becomes a crisis in the state of Florida and Tallahassee

  8. charlie mike on March 6th, 2019 6:50 pm

    Drain the Century Swamp. Lock em up!

  9. Williewonka on March 6th, 2019 6:30 pm

    Sounds like there are incompetent people in Century management who need to be prosecuted to the fullest extent of the law.

  10. Glad on March 6th, 2019 6:18 pm

    I’m Glad I’m a resident of McDavid and not Century!!

  11. Rational on March 6th, 2019 4:56 pm

    You cannot let a bunch of idiots run a village without supervision.

  12. Century Resident on March 6th, 2019 4:02 pm

    Well I think I am paying for myself and someone else to have these utilities. My bill kept going up up and up and I am not using anymore than I usually do. If they would get some of those that’s not paying a bill to pay their part we may get back on track. Why in the heck have they not realized before now that we were in a mess is beyond me. This is such an embarrassment to all of us

  13. tg on March 6th, 2019 2:31 pm

    With flag at half mast when is funeral?

  14. Resident on March 6th, 2019 1:08 pm

    Mike Hill and Doug Broxson
    You are going to have to step up to the plate.
    They won’t disband themselves.
    They pay their own insurance

  15. Randy Jernigan on March 6th, 2019 1:08 pm

    They are just imitating the federal government. At least they are paying something back on the money they wrongely used. Thats more than the feds are doing for social security. And I wonder who is gonna step in to make our other elected officials act morally and legally correct?

  16. Unbelievable on March 6th, 2019 10:28 am

    The State need to revoke the charter and send in a transition team to unincorporate.
    Are they also going to drop the ball?
    What happened with the 500K grant from DEO, Did they follow that money? Plus other state grants — What happened to those? Why is their no accountability?

    Will the TOC even follow through and ask for the audit? Will the council ask the state to come in and vote to unincorporate?
    Don’t forget the CTA and unholy alliance with Gulf Breeze and the attorney was the past mayor of Gulf Breeze. Is the attorney taking a payment? You know his name.
    How far up the chain does the incest go?
    The accountant wasn’t doing his job.
    You can’t hand this back to the people and have them handle it otherwise the grand Jury and SOA and State of Florida are also culpable.

    They aren’t even taking care of the roads and bridges.

    No confidence.

    The county commissioner won’t even have the county come in, who has standing, to take back the tornado destroyed sawmill property. They don’t follow through.

    Why doesn’t the grand jury trace back what is going on with the old alger property at One Lumber road. A defunct LLC holds the mortgage to another shell company and it is right in the middle of a new CRA a consultant paid themselves to form.
    Did the other consultant finish and file the LDC or take the 20K and run?

    http://www.northescambia.com/2017/02/20-years-overdue-for-inspection-are-the-bridges-in-century-safe

    End it once and for all.

    People know what’s going on. It doesn’t take a rocket science to see what is happening.

  17. chris on March 6th, 2019 9:54 am

    “William the flag in the picture is at half mast does that mean Century died?”
    I think it died and forgot to lay down.

  18. Alan on March 6th, 2019 9:00 am

    Here is a thought, privatize the gas, sewer, and water and then unincorporate and get rid of the city altogether. The citizens of Century are paying the county for law enforcement, code enforcement, and emergency services. They would get the same if they were just a community and not a city.

  19. tg on March 6th, 2019 8:46 am

    William the flag in the picture is at half mast does that mean Century died?

  20. Theresa on March 6th, 2019 8:01 am

    It appears the situation started way before the current mayor was elected. Actually looks like some of your elected council members who have been there years knew some things were already going on. Hope the town can work all this out. It is okay to ask for help if they can not. Does not mean you failed, know when to ask for help.

  21. Larry on March 6th, 2019 6:33 am

    What will it take to remove these people from office? They have stole, lied and shamed our community long enough.

  22. M in Bratt on March 6th, 2019 6:22 am

    William; The picture you used of city hall perfectly befits the situation; A very dark cloud hangs over city hall. I just wonder if the Honorable Mayor and Council have enough integrity left to waive accepting their pay and expense checks until this is all resolved?

  23. Gman on March 6th, 2019 6:03 am

    Shut the whole town down and start all over.

  24. Bob on March 6th, 2019 5:12 am

    “…and found that criminal charges were not appropriate.”

    So much for accountability, guess it’s business as usual. Why should the bad behavior stop if their are no consequences? The Town of Century has been given the green light to continue their corrupt ways. If I’m the Mayor or City Council then I’m laughing all the way to the bank. Why change anything now that everyone has been cleared of criminal charges??? What a joke.

  25. Resident on March 6th, 2019 3:17 am

    So no charges, they hand the packet back to the same people and just say carry on business as usual?

  26. Thomas Weaver on March 6th, 2019 2:05 am

    And, no one is charged with negligence?

    It appears there is a severe case of Counsel/Committee/Mayor and Employee incest.
    Bring those persons responsible for prior losses into the grand jury and charge them. If you don’t, same thing will be repetitive….





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