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Spring Lake responds to concerns raised by state officials

Board needs to realize ‘how much financial trouble the town is actually in,’ the state treasurer says.


SPRING LAKE - Spring Lake officials responded Thursday to a letter from the Local Government Commission that raised concerns about several issues, including the town board’s violations of the state’s Open Meetings Law.

The letter also discussed a lack of compliance with the Local Government Budget and Fiscal Control Act and questioned the board’s willingness to work collaboratively with the Local Government Commission staff.

Part of the town’s response went into detail to address concerns raised by the commission. However, there were some issues that the town did not address, including why the interim manager was dismissed before her contract ended and why the board swore in a new interim manager without taking a public vote to hire him.

State Treasurer Dale Folwell, who is chairman of the Local Government  Commission, said he hopes the board understands the seriousness of the situation the town finds itself in.

“We do not need lengthy responses as to the why,” Folwell said Thursday of the town’s response. “If they think they can save Spring Lake without the highest levels of integrity, transparency and competence, they don’t really grasp the seriousness of the situation.”

One of the concerns raised by the Local Government Commission was the board’s violation of the state’s Open Meetings Law related to the early dismissal of former interim Town Manager Samantha Wullenwaber and the hiring of interim Town Manager Joe Durham. The decision to end Wullenwaber’s services early and the decision to hire Durham were not voted on in public. Durham was sworn in by the board on March 28 and began working for the town before he had a contract in place.

In the response to the Local Government Commission, Mayor Kia Anthony said Wullenwaber’s contract was between the commission and the Mid-Carolina Council of Governments, not the town. The response said the town was not part of the final agreement for Wullenwaber to provide interim town manager services.

The response also stated that the Board of Aldermen did not intend to take action on a proposed contract with Durham until the Local Government Commission had given its consent. The board said it gave preliminary approval to hire Durham. 

Anthony did not respond to requests for comment for this story.

Compliance with Open Meetings Law

The town’s response went into detail In addressing Wullenwaber’s early dismissal and no action being taken in public by the Board of Aldermen. Anthony stated in the response that while the Local Government Commission had taken control of the town’s finances in October, the statutory powers to appoint a town manager remained with the Spring Lake board.

Wullenwaber submitted a letter of resignation on Nov. 1. On Nov. 5, Sharon Edmundson - deputy treasurer and director of the State and Local Government Finance Division of the Department of the State Treasurer - notified the Board of Aldermen that the Local Government Commission was contracting with the Mid-Carolina Council of Governments to provide interim town management services on a part-time basis. Wullenwaber was the person providing those services.

The letter from Edmundson to the Board of Aldermen stated that the continuity of town leadership was critical at this time and that the move was necessary to complete several initiatives that were in process.

Anthony said in the response that the town was unaware that the Council of Government agreement had been executed on behalf of the town.

Anthony also stated in the town response that while the town attorney and the Local Government Commission staff exchanged comments about drafts of the agreement, the provision for the former mayor to execute the arrangement on the town’s behalf was not included in the final agreement.

The town said in its response that the board did not terminate the Council of Government agreement for Wullenwaber’s services. It said the COG did that on March 3.

The Council of Government informed the board March 3 that Wullenwaber’s services would end on April 3.

But on March 17, the day the town received the investigative report from the State Auditor’s office, Wullenwaber was dismissed by the town. The town’s response did not address why her services were ended early.

Wullenwaber also served as the deputy finance officer, the budget officer and as a secondary check signer for the town. Her early dismissal prompted the Local Government Commission to call a special meeting on March 23 in Raleigh to appoint commission staff to help with the town’s finances.

The town response also did not address why Durham was sworn in by the board on March 28 other than to say there was no final action taken at the board’s March 24 special meeting where they appointed Durham as their interim town manager.

The Local Government Commission in its letter to the town said the statutes are clear that the swearing-in of an interim town manager without a public vote by the board was a violation of Open Meetings Law.

Durham began providing interim town management services the week of March 28. The contract is still under review by the Local Government Commission, Anthony said in the town’s response dated April 12.

Fiscal concerns

The Local Government Commission also expressed concern that Durham was sworn in without a contract in place.

In the town’s response, Anthony said no payments have been made to Durham. She said he had indicated to her that any contract would be subject to the consent of the Local Government Commission and that he would not be paid unless that consent was given.

Commission members said their concern was financially based and that the hiring took place without a pre-audited contract.

“The town needs to be watching every single penny and every single paper clip,” Folwell said Thursday.

Durham said Thursday that he would not be a town employee. Instead, he said the commission and the town would be contracting with his firm, Joe Durham and Associates, similar to the arrangement that the commission had with Wullenwaber.

Durham has said that he wanted to step in to help the town address findings in the state audit report and help stabilize the town.

Willingness to work collaboratively

In its letter to the town, the Local Government Commission also questioned whether the Board of Aldermen was willing to work collaboratively with the commission staff. In the letter to the town, it cited the resignation of the town attorney on March 23 and the board voting to remove the commission’s financial presentation from the March 28 board meeting.

Jonathan Charleston of The Charleston Group has been the town attorney since June 2020.

The acceptance of Charleston’s resignation and when his services would end were not communicated to the Local Government Commission. The commission said it needed to know because it impacts the town financially. The commission also said the town attorney’s resignation was not mentioned during an open session by the board. 

“The LGC staff agree with the attorney’s recognition in his resignation letter that new legal representation for the town is appropriate,” Folwell said in the commission’s April 5 letter to the town.

In the town’s response, Anthony said the board had asked Charleston to reconsider his decision to resign, but he declined.

Durham said Thursday that the commission and the board are working with Charleston on a succession plan for the town attorney position.

“We are working on procuring legal services,” Durham said. “A focus is finding an attorney with a background in municipal law.”

Regarding the removal of the financial presentation by the commission staff at the March 28 board meeting, Anthony repeated what some aldermen have said previously: that the material was not given to the board in time to review it before the meeting.

As a result, Anthony said, “the town would have been irresponsible, not consistent with best practices and directly inconsistent with State Auditor Beth Wood’s admonition regarding the board’s oversight responsibility.”

She added that the commission was aware of the deadlines the town has in place for its meeting agenda packets.

Anthony said in the response that the board is committed to strengthening the town’s finances.

“While all of the members of the Board, except one, have only been in office since December 13, 2022, all of us pursued election to our offices pledging to strengthen the Town’s finances,’’ Anthony said in the town’s response. “We are committed to doing just that.’’ 

Anthony said she would like to meet each month in person with Folwell and the commission staff to discuss the town’s financial progress.

Durham said Thursday that he was already meeting weekly with the commission staff.

Response from the State Treasurer’s Office

Folwell said the commission had given the recipe for success to the town and although it would help in any way possible, it was up to the town board to work transparently and competently and to do everything it can to save money. 

“The board needs to come to the realization how much financial trouble the town is actually in,” Folwell said.

“I’m also deeply disappointed that in the first public meeting after this incredibly stinging audit came out that there’s no comment from the board,’’ Folwell said. ”They are predominately a new board who had nothing to do with the past, but they are not asking questions.”

The audit report released March 17 outlined six findings, including that the former finance director used more than $400,000 in town money for personal use and that town employees had spent over $100,000 in questionable credit card purchases.

Folwell said the commission staff and officials are spending tremendous amounts of energy to help the town and the board’s energy needs to be spent looking into the missing funds and whether there is sufficient evidence to pursue criminal charges.

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, Local Government Commission