DeFUNIAK SPRINGS — A “certain culture” that blocks the flow of information within City Hall, coupled with a general lack of understanding as to how a municipality is run has created a mess in DeFuniak Springs that a grand jury found needs immediate attention.

Following a review of city management, grand jurors reported they were “shocked to learn of the lack of knowledge of government operations by those entrusted with governance.”

The report, made public Wednesday, was the handiwork of a grand jury convened in January by the First Judicial Circuit State Attorney’s Office.

Grand jurors said that while they had found no evidence of criminal or intentional wrongdoing, “We have determined that a systemic problem exists.” Their report offered a host of recommendations as solutions to a multitude of problems found within city government.

Mayor Robert Campbell said he initially had considered the grand jury as a distraction, but after reviewing the report believes the city he leads can benefit from the findings.

“I find overall the recommendations made are very valid,” Campbell said. “If we pay attention and pursue remedies, I believe the city of DeFuniak Springs will be much more fruitful as a city. I think this could be a real benefit to our city if we just follow the recommendations.” 

Lost revenue

The grand jury initially was called to look at missteps that led to almost $221,000 in state tax revenues being lost.

The losses were incurred in 2015, 2016 and 2017 when DeFuniak Springs failed to file timely audit reports for fiscal years 2013-14 and 2014-15. Grand jurors noted twice in their report that the city today is less than 30 days away from forfeiting fiscal year 2015-16 funds by failing again to meet reporting deadlines.

Grand jurors reported hearing testimony from “many witnesses” who worked for the city who “had little knowledge of the audit procedures and requirements” of the state and “perhaps more importantly, none had a correct understanding of the penalties for failure to timely submit the audits.”

“None of the city leaders were even aware that money had been forfeited until 2017,” the report said, “despite the fact that the first time money was forfeited was in December of 2015.”

The lack of awareness existed even though the state Joint Legislative Auditing Committee, the group that ultimately decides that state funds are to be forfeited for late reporting, sent three notices to inform delinquent municipalities of the need to turn in their audit reports, the report said.

Grand jurors identified current Campbell and former City Manager Sara Bowers as two of several in DeFuniak Springs who were aware that certified letters had come to the city from the JLAC but failed to respond.

“None of these letters were even discussed at a City Council meeting until early 2017,” the report said. “It became apparent during our investigation that there was a lack of a sense of urgency with regard to the certified letters and the lateness of the audits.”

“No one seemed concerned and no one understood that they were going to lose money,” Greg Anchors, the chief assistant state attorney for Walton County, told the Northwest Florida Daily News.

Campbell attributed the blundering as “the blind leading the blind.”

“At the time we learned we’d lost that money no one knew it, not the city manager or the finance director or the City Council,” he said. “And once we found out we’d lost money, everybody was squirming to point a finger. For us to act like this was a new problem ... there was too much pride.”

Grand jurors also expressed concern over $368,000 in BP oil spill funds that were deposited into the city’s general fund and spent within 45 days of their arrival on Sept. 30, 2015.

Twice, the grand jury determined, in January and February of 2016, the City Council asked whether the BP money had arrived and inquired as to its status. There was even discussion of holding off spending the money until the council could decide what to do with it.

“No one seemed to be aware that the funds had already been spent,” the report said. “It wasn’t until a budget meeting in August of 2016 that a clear pronouncement was made that the BP funds were already gone.

“It is frightening to think that over $368,000 could be received and expended without drawing the attention of anyone,” the report said. “In the future, unexpected funds should be designated for specific purposes.”

A “certain culture” has existed at City Hall for several years, the report said. It “included a lack of transparency by some upper-level city officials not keeping the City Council informed of pressing issues.” It said some employees also worried about retaliation if “certain suggestions or complaints were made.”

Campbell acknowledged infighting at City Hall. He said the time has come to set differences aside and work together.

“We will have to come to agreement as to the way our government should be set up. If we try to do so without people or recommendations from elsewhere in the state, that would be the biggest mistake we could make,” he said. “We need to make it very clear we know where we’re getting our wisdom from." 

Vague city charter

Perhaps the most fundamental issue hindering DeFuniak Springs from reaching its “great potential in the years ahead,” the grand jury said, is the way its government is organized.

“From the city manager, to the mayor and City Council, there are no defined duties, and as a result no one has a clear understanding of who is responsible for what,” Anchors said.

The grand jury reported the DeFuniak Springs charter was written in 1903 and hasn’t been updated much since. It provides no reference to the form of government (commission, council-strong mayor, council manager or hybrid) the city has adopted.

Some oddities noted in the report include certain employees reporting to the City Council and/or the city manager, the city manager reporting both to the City Council and mayor, and the finance director reporting to both the city manager and the City Council. Jurors also commented that the city manager and finance director have duties that overlap.

“First and foremost, we recommend that a revised charter be adopted for the city of DeFuniak Springs,” the grand jury said. “We believe this should be accomplished through a charter review committee comprised of residents and experts and/or with the services of a professional consultant.”

The new charter should identify a specific form of government, a provision to review the charter every five years and clearer job descriptions for both the city manager and finance director, the grand jury said.

Grand jurors also identified issues within the government that included the city maintaining too many bank accounts (19), antiquated bookkeeping techniques and a failure to maintain proper reserve account balances — in violation of DeFuniak Springs city ordinance.

“The city has violated its own laws at least three years in a row,” the grand jury said.

Campbell said he hopes the City Council will agree to seek out expert advice and the advice of residents.

“I think that would be the right direction, starting with changing the charter and establishing the foundation of our governing policy,” he said. “We need to reach out to the Florida League of Cities and other cities and get as much wisdom as we possibly can as to what will be a good change.”