By Joseph Lekarczyk
The Board of Trustees held a special meeting Monday afternoon, July 23, for the presentation and acceptance of the 2017 draft audit (the Town of Lyons basic financial statements – December 31 2017; and 2017 single audit report) by Adams Group, LLC. Present for the meeting were Mayor Connie Sullivan, Trustees Michael Karavas, Joycelyn Farrell, and Mark Browning, and
Mayor Pro Tem Barney Dreistadt called in and participated via a phone hook-up. Trustee Wendy Miller was not able to make the afternoon meeting because of a scheduling conflict, and Trustee Juli Waugh is on a family vacation. Sullivan reported that the Town of Lyons received a “clean opinion” with “no material findings” and added that “the Town complied with all the financial criteria.” Sullivan also felt that as a whole, Lyons fared better than most municipalities do in these types of audits. Town Administrator Victoria Simonsen added that the Adams Group did have a few recommendations going forward. She said, “They looked at 80 to 100 invoices, of which 8 to 10 had issues because of a lack of a proper sign-off signature,” and this was “most likely due to a shortage of staff,” which Simonsen said would be addressed with a recent grant for more staffing. Sullivan added that the draft audit was accepted, with a few minor changes that the auditors agreed to look into.
Also on the agenda was an executive session “for the purpose of determining positions relative to matters that may be subject to negotiations; developing strategy for negotiations; and instructing negotiators; and for receiving legal advice on specific legal questions from the Town Attorney regarding the non-payment of utility bills by Lyons Properties, LLC.”
Included in the Board's packet for the meeting, in reference to the executive session, was the following note:
“The spouse of a member of the Board of Trustees owns a business within the Town. As such the business uses the Town’s utilities of electricity, sewer, and beginning in 2017 water. The customer has not made payments since September, 2015. The customer has disputed certain charges related to the water base fee and the number of sewer taps.
During 2017, the Town refunded one of the sewer taps. As of December 31, 2017, the Town has an outstanding receivable of $43,122 or approximately 14.12% of utility receivables from this customer. No payments have been received in 2018.”
For those of you without a scorecard, “Lyons Properties, LLC” is more commonly known around town as Riverbend/Wee Casa; owned by, among others, Mike Whipp and Betsy Burton, Kenyon Waugh, Steve Beck, John Eaton, and Jerry Moore. The “spouse” is of course Trustee Juli Waugh.
A little history; prior to the 2013 flood there was a water tap at the Riverbend Mobile Home Park, and additionally, each unit had a wastewater tap (about 30).
Post flood, when Whipp realized he would no longer be able to utilize the land as a mobile home park he notified the Town that the wastewater taps were not his, were no longer needed, and he didn't want them for his new endeavor (the Riverbend wedding/event venue), and he then proceeded to go about making the needed renovations on the site. Things continued to get murky as a solution for new property lines (due to the river having changed its course post flood) was sought for an annexation request, and utility easements were negotiated.
The Town negotiated for, and received, a utility easement through the Riverbend property, essentially, from the river bank to the highway for a 12-inch water main that connects with Apple Valley.
Lyons Properties is actually three adjoining lots; the former mobile home park, a private residence near the river that is now used as a changing room for weddings, and a third lot with two houses that are rented out.
The Town and Lyons Properties, LLC apparently signed a memorandum of understanding that said Lyons Properties LLC would be liable the fee for the wastewater taps needed, as determined by the Town Engineer (then Jim Blankenship, and now Joe Kubala). Kubala said that the metric used for the needed wastewater taps is the same as the one that is used for the RVs in LaVern M. Johnson Park (4 to 1/ wastewater to water).
Mayor Connie Sullivan indicated that she had recently spoken to Trustee Waugh prior to the audit, suggesting that it would be beneficial for the Town if the issue could be resolved before the audit, so the $43K+ debt would not be on the books.
According to Sullivan, Trustee Waugh indicated that she intended to recuse herself from any proceedings that had anything to do with the Lyons Properties, LLC issue (since she was out of town for the July 23 meeting, there was no need to recuse).
Now for the “He said” portion of our tale. When Whipp was questioned about this agenda item he said he and his partners have asked the Town repeatedly over the last three and a half years to produce documents, either Town code or an ordinance, that would justify their numbers. He said his partners, Beck and Moore, have repeatedly contacted Simonsen and requested either the documents or a sit-down meeting to explain and justify the Town's numbers. No such meeting has ever taken place. According to Whipp, Beck even had a lawyer file a request for a freedom of information act without response from the Town. Apparently this request was not followed up on by Beck or his lawyer. Whipp indicated that there are three utility accounts for the properties. He says the account for the property with the two rental is paid in full and up to date. Ditto the property with the changing room. The only one that is in arrears is the Riverbend/Wee Casa property, because of the disputed numbers. Also according to Whipp, Kenyon Waugh, being a bit of a “numbers guy” did some figuring of his own, and came up with a spread sheet that had some very different numbers from the Town's. Wanting to act in good faith, before leaving on his family vacation, Kenyon stopped by Town Hall last week and dropped off a check for $5K as a down payment, until such time as the final numbers could be worked out. Whipp indicated that when he himself went down to Town Hall last week to pick up some special events liquor licenses for upcoming dinners/events at the Lyons Farmette/Riverbend Simonsen asked him into her office and wanted to know when the debt in question would finally be satisfied. Whipp says Simonsen asked him several times, “Do you want me to go public with this?”
Now for the “She said.” When asked, immediately after the adjournment of the July 23 special meeting, Simonsen flatly denied ever saying to Whipp “Do you want me to go public with this?”
She did say that she told Whipp it would be become public because it would be in the auditor's presentation, and would be listed as an executive session item on the special meeting's agenda. Later, she also said that she had many email correspondences (and provided dates/text; the most recent in April of 2018) with several different partners (Beck, Moore, and “people from Wee Casa” presumably Waugh) about various aspects of the complicated issue. She felt that part of the problem was that she was dealing with so many different partners on different aspects of the issue, that it made things more complicated than they had to be. Simonsen indicated that the wastewater taps for the property were reduced from 30, to 10, and ultimately 9. She also mentioned the boundary, annexations, and easement issues as impediments to getting things settled, and said the sewer for the property was connected sometime in 2015, the electric in June of 2016, and the water in June of 2017. When asked why the utility service wasn't simply just cut off, like it normally would be with most other customers, Simonsen said, “We were trying to act in good faith, and help a new business get off the ground.” She added, that “the Town staff gets a lot of flack about not being 'business friendly'.” On top of that, Simonsen admitted that she and her staff were aware that many of the weddings at Riverbend are “booked a year or more in advance,” and she didn't want to ruin someone's weddings plans and thus “tarnish the Town's reputation.”
As Mike Whipp admitted in a follow up call, “As I have gotten older, I have come to find, there are always two sides to a story.” Truer words have seldom been spoken.
It should be noted that this particular issue did “go public” on the Lyons Happenings page on Facebook, but Simonsen had nothing to do with the original posting, and as of 5:30 p.m., Tuesday, July 24, has not yet made a contribution to the “thread.”