The Yukon City Council voted Tuesday to authorize attorneys from an Oklahoma City litigation firm to begin the process of suing the city’s former manager, financial advisers and auditing firm.
In a 4-0 vote that followed a 44-minute executive session, the council asked attorneys from McAfee and Tate to initiate action against former City Manager Grayson Bottom, R.S. Meacham CPAs and Advisors, and FSW&B CPAs.
The action follows the city’s financial crisis in fiscal year 2015 that led to Bottom’s resignation.
City Manager Jim Crosby said the actions Tuesday only authorized attorneys to look into the situation and determine if legal action is prudent. The attorneys are expected to return at a later date to for approval to file a lawsuit, if warranted.
Council member John Alberts, who was mayor at the time of the crisis, said the city is only taking the next, proper step.
“Based on the recommendation and information that has been given to us by counsel, we have authorized them to proceed and gather additional information to look at potential causes of action against all three parties,” Alberts said.
Once that information is brought back to the council, they will then make a definitive decision.
“Right now, this is step one of the evaluation.”
Alberts said the attorneys have indicated they could have a case against the two companies as well as Bottom.
“This is the business-part of what we do. The council has an obligation and responsibility to run the business of the city. As part of that, we’ve retained attorneys to advise us. Our attorneys have offered us advice, and based on that advice, we have authorized them to take the next step,” he said.
A forensic audit of the city’s books after Bottom resigned in December 2015 found the city was on the verge of collapse.
The audit indicated allegations of non-compliance with competitive bidding requirements, bid splitting and improper payments for some contracts.
It was also determined that the city had overspent its budget, and had paid bills from its reserve fund.
The reserve fund had been almost depleted by early 2016, forcing the city to make drastic cuts, including a decision to sell property that had been the planned site of a new city hall as well as reduce staff positions. Some layoffs were implemented, and positions that had been vacated through attrition remained unfilled.
Crosby said the city’s budget has rebounded.
The council, on Tuesday, approved a $48 million budget. While employees will not receive cost of living raises, they will receive “step” raises. In addition, a few positions left vacant are being filled.
Crosby said the city’s reserve fund, which is used in cases of emergency situations, now has about $2.4 million. He said he would like to have that number closer to $5 million. That will take a few years, he said.
“We are not spending from that fund,” Crosby said Tuesday.
The city council, during Tuesday’s meeting, approved:
· A resolution authorizing a professional service agreement for the financing of capital improvement projects. The funds will be obtained through various bond sales. The projects related to various road projects in the community;
· Approved the municipal authority’s annual budget;
· Approved an amendment to a contract for the operations, maintenance and management of the Frisco Water Tower and Booster Station. The agreement increases the fee to $1,151,263 and is with Veolia Water North America-Central;
· Approved the transfer of funds used to purchase equipment for the police department from a sales tax fund to the city’s general fund.
· Approved a contract with Hixon Construction Co. for $727,106 for the construction of the city’s new maintenance facility and storage building. The two projects must be completed before the city can begin work on its new animal shelter complex.