Yukon city officials say they plan to countersue a former city manager and sue two firms that provided advice that lead to a financial crisis for the city in fiscal year 2016.
The Yukon City Council voted Tuesday to hire the law firm McAfee & Taft to defend the city against a federal lawsuit filed by former City Manager Grayson Bottom. The attorneys also will file a countersuit against Bottom.
In addition, the attorneys have been asked to seek reimbursement for financial advice and audits provided by R.S. Meacham CPAs and Advisors, and FSW&B CPAs between fiscal years 2011 and 2016.
Meacham and FSW&B provided financial advice and audits for the city. Officials have said that the audits inaccurately reflected the city’s financial health, leading officials to overspend its budget in fiscal year 2016.
The result was that the city, by December 2015, was nearly broke. City officials had been using reserve funds to cover expenditures.
A forensic audit that was released last October indicated that the city was $1.4 million in the hole at one point.
Bottom, who resigned Dec. 31, 2015, has sued the city for defamation of character, wrongful termination and is seeking back pay. Bottom has claimed that he was forced to resign by the city council.
The court complaint accuses former Mayor John Alberts and other city officials of making false and defamatory statement causing damage to Bottom’s reputation. He also claims emotional distress.
Calls to Bottom’s attorneys were not returned as of press time.
Under the contract signed Tuesday, the council agreed to pay attorney Todd A. Court a rate of $290 per hour, as well as a senior associate $235 per hour for work on the case. Additional junior associates as well as paralegals also will be subject to billing.
Yukon Mayor Mike McEachern said the city plans to seek reimbursement for monies paid to both accounting firms.
FSW&B provided auditing services and were paid more than $105,000 in fees, according to documents provided by the city of Yukon through an open records request.
RS Meacham was paid $186,950 between fiscal year 2012 and 2016, according to the city documents.
“This is an attempt to go back through and reconcile the monies that were paid out. We feel like there was culpability on both sides,” McEachern said.
The city also plans to countersue Bottom in an attempt to receive a portion of the money that was lost through his actions.
“As a city employee, Grayson was bonded as well. There would be funds available from there and from the accounting firms. We will try to recover some of those funds for all of the money we have been out,” he said.
McEachern said the city now is headed in the right direction.
“We are finally back on the right path. We are just trying to go through and take care of the details,” he said.
Bottom’s lawsuit, which is filed in the Western District Federal Court in Oklahoma City, is pending.
The city’s attorneys recently asked District Judge Vicki Miles La Grange to dismiss the case involving breach of contract and unpaid wages.
In the filing, the city argues that it does not owe back wages or a severance package because Bottom was not fired, but resigned his position.
Bottom has argued that he was “fired” by the city’s then-mayor, John Alberts, during a closed door meeting. However, the city’s attorneys have denied that actually happened.
Under the city’s charter, only the city council can terminate the city manager, and it can only occur during an open meeting.
The attorneys have stated that never occurred.
Bottom was city manager from 2011 until Dec. 31, 2015.
A forensic audit of the city’s books, released in October, showed the city was on the verge of financial collapse at the time Bottom resigned.
The audit indicated allegations of non-compliance with competitive bidding requirements, bid splitting and improper payments for some contracts, according to previously reported stories in The Yukon Review.
At the time of the audit’s presentation, Frank Crawford with Crawford and Associates, cited purchases made outside “the normal claims process and approval process for certain purchases” that could involve “individual conflict of interest in regards to a $2.4 million land purchase.”
The city’s finances were in such disarray, said Crawford, “When compared to other communities that we deal with in this type of work, this was the worst mess I’ve ever seen.”