DOJ orders Bay to restore forfeiture funds; city may be able to use funds for police department
By Cassandra Favre, Staff Writer
Feb 10, 2017, 18:12
The Bay St. Louis City Council on Tuesday unanimously approved a motion to restore improperly-used Department of Justice funds by transferring $299,968 from the municipal general fund to the Bay St. Louis Department of Justice account for the sole benefit of the Bay St. Louis Police Department.
According to that same motion, the council will also continue to pursue the bonds of the responsible parties with the assistance of the Mississippi State Auditor's Office and or outside legal counsel to recover funds.
Councilmen first suggesting pursuing the bonding company of Mayor Les Fillingame in February of last year, when the council authorized then city attorney Donald Rafferty to do so.
At a special council meeting in July 2016, the council asked Rafferty if he had notified the bonding companies of a potential claim, to which he answered no. During that same meeting, the council authorized council clerk Lisa Tilley to notify the bonding companies about a potential claim against Fillingame, former city clerk David Kolf and Katherine Smith, pending the final DOJ review.
Current city attorney Trent Favre on Friday said the council will either use the State Auditor's Office or outside counsel, because he said he feels it would be a conflict for him to pursue the bonds.
It could cause potential problems and-in order to properly represent all parties and the city- it would be best for the council to utilize an outside resource, Favre said.
The council on Tuesday approved another motion instructing that the funds be transferred from the Bay St. Louis general fund to the city's DOJ account by Feb. 28, 2017.
The decision came after an executive session held at the end of Tuesday's regular council meeting.
Council President Mike Favre opened up the meeting with a discussion about the DOJ's investigation.
The initial findings from the DOJ's November 2015 report have not changed, Favre said. The city must pay back the $321,000. Since the city's DOJ account has a balance of $21,000, the city must pay back $299,968, he said.
Councilman Lonnie Falgout read into the minutes the findings and corrective actions from the DOJ's "Do Not Spend Letter - Corrective Actions."
A copy of the report can be obtained on the city of Bay St. Louis' website under the tab "Financial Transparency."
The findings include: DOJ equitable sharing funds were not reported in the schedule of expenditures in the audits supplied; the impermissible commingling of DOJ equitable sharing funds; the city did not consistently follow proper procedures relating to documenting proper approval for expenditures; expenditures spent with DOJ funds were not in accordance with the guide which states DOJ funds must be used by law enforcement agencies for law enforcement purposes only; and the city was unable to provide sufficient supporting documentation for several expenditures.
The council unanimously approved a motion to accept the report.
Favre said when city officials met with DOJ representatives in Jackson, everyone in that meeting "felt that we had to repay this money and we wouldn't get to spend it in Bay St. Louis, that they would take the money back."
Favre said Falgout made a presentation to DOJ representatives about the "deplorable" condition of the Bay St. Louis Police Department building.
"They seemed to buy into it," Favre said. "They went back to Washington with that information, that we would spend the money on the building and other things for the police department if we put the money back and they allowed us to keep it. Evidently, they came back in January, when we had that meeting a week or so ago and said we would be able to keep the money here and spend it on the police department."
City Attorney Trent Favre said if the city is allowed to spend on its police department, the city will have to enter into a spending plan, "which would delineate how the money is used, how the money is spent, what requirements would be placed on us to spend the funds, so we'll be under very strict requirements as far as an agreement with the DOJ."
Back in December, Favre stated during a council meeting that the city could not "do a tax levy, there's no way to tax for it (the DOJ funds)."
Favre reiterated that statement Friday.
Since the money will be transferred from the general fund, Favre said the administration will have to find a way to manage within the budget. If not, they would have to ask the council to transfer money from the reserve funds, Favre said.
The council on Tuesday also instructed Trent Favre to inform the DOJ of its decision and Boudin said he wanted Favre to ask Brian Boykin, DOJ's Equitable Sharing Program Manager, what his position is regarding false affidavits.