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Spring Lake board meets in closed session with state Auditor’s Office


SPRING LAKE - The Spring Lake Board of Aldermen met in closed session for two hours Monday with representatives from the North Carolina Office of the State Auditor and the North Carolina Local Government Commission.

No action was taken following the closed meeting, which took place during a special board meeting Monday afternoon. The board later met Monday night for its regular meeting.

State Auditor Beth Wood along with Sharon Edmundson, deputy treasurer and director of the State and Local Government Finance Division of the Department of the State Treasurer; Susan McCullen, director of the Fiscal Management Section of the Local Government Commission; Latonya Hankins, supervisor of special investigations of the N.C. Office of the State Auditor; Summer Perry, assistant state auditor in the investigative audit division; and others joined the board for the closed session.

The board cited privileged information and attorney-client privilege as the reasons for the closed session.   

The Local Government Commission voted in July 2021 to take control of Spring Lake’s finances, including impounding the books and records of the town, assuming control of the finances and overseeing and directing all financial affairs. Auditors began investigating missing money a few weeks prior to the financial takeover. Auditors have been working through the past year to piece together a full picture of the town’s financial state.

This was not the first time the town has been under financial investigation by the state Auditor’s Office. In 2016, an investigative report showed abuse of the town’s procurement cards and missing revenues.

Spring Lake missed the deadline for every mandatory annual audit report to the Local Government Commission since then despite new policies that were put in place to prevent further issues.

The Local Government Commission took control after the 2020 audit showed overspending by $2 million. The commission also said the general fund shortfall was estimated at $1.2 million with a proposed budget funding only $285,000 of that amount.

A “well thought-out FY2022 budget that is realistic in revenues and expenditure estimations” and a plan to help address the shortfalls are part of the goals that the Local Government Commission promised to help with when it assumed control of the town’s finances.

During Monday night’s meeting, the board decided unanimously to revert to the town’s former website, www.spring-lake.org, which was developed by Biz Tools in 2006.

Several members of the board cited issues with the new website. 

Alderman Raul Palacios led the discussion along with Alderwoman Sona Cooper. Palacios said he talked with four companies that specialize in developing websites for local government and the highest quote he received was $30,000, which is almost half of what the town spent on its current site, www.townofspringlake.com, developed by Vision Quest Venture LLC. The town spent more than $56,000 on the new website.

“Money was wasted that we could have fielded to the company that we were already doing business with. We can revert to our old site for $150 and be billed quarterly at $145,” Palacios said. “This would save the town $3,600 a year.” 

The board was unable to confirm that the project to redesign the website had gone out for bid when the town awarded the contract to Vision Quest Venture.

“A little background is that Alderman Fredricka Sutherland and I asked if the website went out for bid. We were told it had, but reputable local companies had not seen it. We couldn’t get a RFP (request for proposals) for it,” Cooper said.  

Cooper also told board members they needed to make sure the website was compliant with the Americans With Disabilities Act, which is required of all government websites.  

“The best thing to do is revert back to our old site,” Cooper said.  

Mayor Pro Tem Robyn Chadwick asked if the town could recoup any of the money spent on the current site with the “flaws and challenges.”  

Palacios said it might be better to cut the losses to avoid a legal battle.

Mayor Kia Anthony also mentioned some of the issues with the new website.

“The deficiencies in the website are severe,’’ she said. “There are a lot of grammatical errors, it is very hard to read with the color schemes being similar, there are missing links, broken links, missing pages, I could go on and on.”   

Palacios said the town did not sign a renewal contract for Vision Quest Venture so the town could terminate the contract and go back to the former site.  

Catherine Iwashita Bamba from the Charleston Group agreed that the town could terminate the contract, but to recoup any money would take legal action.  

Jami McLaughlin covers Spring Lake for CityView TODAY. She can be reached at jmclaughlin@cityviewnc.com. Have a news tip? Email news@CityViewTODAY.com.

Spring Lake, Board of Aldermen, state Auditor's Office, Local Government Commission, state takeover, finances