Henderson residents frustrated by the city’s finances have turned to a Raleigh lawyer to help them get answers.
Kenneth Haywood, a partner with the firm Boxley, Bolton & Garber and the chairman of the Raleigh Board of Adjustment, notified City Attorney John Zollicoffer in a letter Feb. 28 that he has “been retained by my clients to review the practices, policies and procedures of the City of Henderson’s finances.”
“At this time I am in the process of reviewing the recently completed audit as well as communicating with the State and Local Government Finance Division regarding their letter of February 21, 2005 to the Mayor of the City of Henderson,” Haywood wrote.
The Feb. 21 letter from the Local Government Commission concerned the drop in Henderson’s general fund balance to less than half of the LGC’s recommended minimum of 8 percent of expected spending. That drop at the end of fiscal 2004, from roughly three times as much a year earlier, was revealed in the annual audit of the city’s books.
In plain language, Henderson has burned most of its savings account over five years of economic troubles and increased spending on new buildings.
The same popular concerns about finances that sparked Monday’s public forum on the audit also led 16 Henderson residents to turn to Haywood for help, the lawyer said in a phone interview Wednesday night.
Even before the audit was released in late January, Haywood said, some Hendersonians had concerns about the city’s finances, its Embassy Square spending and a perceived lack of information from their elected officials.
“There was a feeling that having an attorney involved would permit them to have a voice that would be listened to,” Haywood said.
He said his clients looked outside Vance County to ensure they could get a lawyer without any conflicts of interest in Henderson. Haywood came to their attention because part of his practice is representation before municipal agencies and government bodies. (He represented Elissa Yount in a case against the Zoning Board of Adjustment several years ago, before she was on the City Council, but she is not one of his current clients.)
“I do think it’s interesting that somebody (one or many) would want to pay an attorney when the matter of ‘the (City’s) practices, policies and procedures’ are so accessible and looked over so thoroughly by independent auditors, the LGC, even the GFOA,” City Manager Eric Williams wrote in an e-mail message Thursday. The Government Finance Officers Association annually recognizes Henderson for excellence in its budget presentation.
Haywood said his clients’ concerns go beyond finances. They are concerned about insufficient enforcement of nuisance ordinances and minimum-housing standards, laws that affect property values.
“Each and every part of a town’s ordinances is to be followed by elected officials as well as city employees,” he said.
Haywood said he’s just gathering information now on what caused the drop in the fund balance, whether procedures were followed in all city spending, and how the city will restore its financial health. He’ll want to see the invoices that back up the expenditures as he follows the paper trail.
He said one of his top five questions is how the city managed to go almost $400,000 over budget on the Embassy Square cultural project without a budget amendment approving that spending. Williams has termed the mistake a “mechanical oversight.”
“For any sum of money, it is an issue,” Haywood said, and it’s an issue how the city will ensure such spending without council action never happens again.
If Haywood gets all of the answers and those answers satisfy his clients, that could be the end of his involvement. If his clients aren’t satisfied, “as an attorney, I have certain remedies available to get answers.”
He said that if all of the city’s spending followed state law, city ordinances and the city charter, there might not be a legal issue, but a policy issue. If the proper procedures were not followed, “then you do sometimes get into a legal question,” and citizens can take action under the law.
Williams indicated he will cooperate with Haywood’s inquiry. “I’ve had no personal contact with anyone on this matter,” Williams said, “but, if and when I do, will handle it appropriately.”
“One of the biggest things is to open up the process so that people become more involved and so that their elected representatives realize what it means to be an elected representative,” Haywood said. “They’re supposed to serve the best interests of their constituents. They’re responsible for safeguarding and safekeeping the people’s finances and people’s money. …
“We’re trying to make sure they understand and are reminded that questions need to be answered.”
Haywood said Hendersonians need to regain confidence in the budget and their elected officials. “There’s an attitude that the past is the past and what we need to look forward to is the 2005 budget,” he said. “That concerns me. We need to look at 2004 and any other years involved to really understand this.”
He said he will take as much time as is necessary to sort out what has happened in Henderson. He’s not going to set an artificial deadline. “We’re very early in this process.”