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City emails shine light on secrets

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BY LINDELL JOHN KAY
Staff Writer

Sunday, April 14, 2019

Rocky Mount officials are mum on city manager emails about withholding information from the press, secret money, replacing federal paperwork, relief that auditors didn't find certain files and more.

"The Auditor pulled that file and thankfully he did not pull others!! It probably would have been worse!!!" City Manager Rochelle Small-Toney states in an Aug. 12 email to a city staff member.

That email is a sampling of hundreds of electronic communications the Telegram has compiled over the past several weeks. The emails were obtained via public record requests with inquires about the subject matter made last week.

City officials declined to answer any of the questions, with Tameka Kenan-Norman, the city's chief communications officer, citing an ongoing investigation as to the reason why no answers were provided.

"A majority of your questions address those areas currently being investigated. We will not provide comment while the investigation is underway," Kenan-Norman said via email Friday afternoon.

She didn't specify which investigation to which she is referring.

Mayor David Combs called for a law firm to conduct an independent investigation into alleged malfeasance at City Hall. Simultaneously, the Office of the State Auditor is probing the same areas by serving subpoenas and interviewing past and present city employees.

The Telegram published a series of articles in January about alleged malfeasance at City Hall. Those reports included information about the city having to repay funds to the U.S. Department of Housing and Urban Development and HUD loosing faith in Rocky Mount's government.

The issue arose months earlier when the Nash County Board of Commissioners voted to withdraw from the Downeast HOME Consortium, the city agency that administers HUD funds. However, the recently obtained emails show city staff deliberately hid information about HUD from the Telegram last summer.

"As we have previously discussed, repeat compliance violations in the administration of grant programs, inadequate staffing, poor recordkeeping and filing, and an overall lack of written and well-communicated internal policies and procedures has resulted in an on-going series of challenges in Community Development over the past few years," Landis Faulcon, the city's director of Community and Business Development, states in a Sept. 7 memorandum to Small-Toney and Assistant City Manager Natasha Hampton-Clayton.

Faulcon states that in February 2018 she met with Matthew King, director of HUD's Greensboro field office.

"According to our HUD colleagues, the City of Rocky Mount is considered a high-risk locality due to high turnover among staff, frequently missed reporting deadlines, and regulatory violations," Faulcon states. "Community Development was audited in August, and we are currently awaiting a written report of the audit findings."

Using terms like "major problem" and "red flag issue," Faulcon details paperwork snafus that could mean the city might have to repay thousands of dollars in HUD funds.

In the previously mentioned Aug. 12 email, Small-Toney told City Finance Director Amy Staton things would be worse if HUD auditors would have dug deeper.

When withdrawing from the Consortium last year, Nash commissioners said they were concerned about how federal funds were being handled by Rocky Mount officials. This prompted the Telegram to ask City Hall whether the city was under any form of review or investigation by HUD.

The city's initial planned response was: "Not to our knowledge. Please note that HUD does request periodic reviews of the program. The latest desk monitoring, or routine audit by HUD, was of the 2015 program year. We are awaiting a response from that audit."

Kenan-Norman sent the planned response for review to Small-Toney, Hampton-Clayton and the entire City Council.

In a response from Hampton-Clayton copied to Faulcon and Small-Toney, Hampton-Clayton questioned Kenan-Norman's including information about the audit.

"I have concerns with our not responding to, 'Commissioners said they are concerned about how the federal funds are being handled by Rocky Mount officials,'" Hampton-Clayton states. "I also think the second question should end after first sentence unless there is a reason why mentioning the last audit being in 2015 is critical."

Kenan-Norman then sent a revised answer to Hampton-Clayton, Small-Toney and the council for review.

The answer to the Telegram's Sept. 21 question about whether HUD was reviewing the city was shortened to: "We are not aware of an investigation or review."

The city's original answer didn't say the last audit was conducted in 2015; it said the latest review was of the 2015 program year. Moreover, Faulcon was aware HUD had just completed an audit of her department, which has oversight of the Consortium.

Last week the Telegram asked city officials why the audit information was left out of the September response when other emails clearly show the city was being reviewed by HUD, resulting in the payback of $182,000 for the Haywood Court project. No answer was provided.

The Telegram made a public request for the past six months worth of emails to, from or copied to Small-Toney. Hundreds of emails covering July, August and September have been received in batches over the past few weeks. More batches are on their way, according to city officials.

The emails were reviewed by City Attorney Jep Rose. He said per N.C. General Statute 132, he removed any email that contained personnel or personal information. The email PDFs are numbered in chronological order with as many as a dozen emails in a row having been removed.

Information revealed in the emails include:

■ On July 13, Small-Toney asked Faulcon: "When will we receive the appropriation action for Council of the secret money that is being kept outside the general ledger?"

■ A July 13 email to Small-Toney provides information about files Faulcon needs to be replace. Those files are titled CDBG 2017-2018 and Holly Street Duplexes #3, 2017-2018.

■ A mid-July email details meetings between Small-Toney and two council members at a time in order to discuss the Implementation Strategies Plan, which the city has been slow to act on since approving it nearly two years ago.

Meeting with only a couple of council members at a time prevents a quorum from being formed, which would have meant press notification and public attendance.

■ In an Aug. 22 email to Assistant City Manager Chris Beschler with a subject line "Parking Presentation and Memo," Small-Toney states: "Again Chris, This information is to be distributed to Council at the meeting. Again, if it is given to Pam (Casey, clerk to City Council) to distribute to Council, it would be distributed to the media and end up in the paper before the Monday meeting. My earlier direction was for this information to be taken off the share drive and that it will be distributed on Monday as well. If you feel that we need to discuss this again, please call. Best regards, Rochelle D. Small-Toney."

■ An Aug. 1 email to Small-Toney from Kenan-Norman indicates Small-Toney's column published in the Telegram is ghostwritten by Kenan-Norman.

■ As part of the city's annual audit, Martin Starnes & Associates sent an inquiry for Small-Toney to fill out. In a Sept. 18 email, Amy Staton, the city's director of finance, told Small-Toney that since the inquiry is the same as the previous year, she entered the same answers as the previous year.

"For your convenience, I have entered the responses from last year," Staton states. "The last 2 questions are different but I attempted to answer them. Of course it should be your responses so please adjust answers accordingly."

The questionnaire asks whether Small-Toney is aware of any inappropriate or unusual activities.

■ In a Sept. 7 email, Nicki Gurganus, the city's accounting manager, questioned Faulcon about travel reimbursement for a summertime trip to Miami to attend a hotel development conference.

"Since the conference ended on 7/29 in the morning, please provide justification for the extra night's hotel stay," Gurganus states. "If there is no business purpose, please deduct that amount from the reimbursement."

Faulcon's response: "After the conference ended, we had an opportunity to visit neighboring areas including business and entertainment districts, mixed-use developments, housing and retail/tourism. The city manager handled the hotel and airport parking on her credit card."

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