Pensacola, Florida
Wednesday March 20th 2019

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A Town on the Edge

By Jeremy Morrison

Tucked in the northeast corner of Escambia County sits the Town of Century. The town’s rather small—with a population below 1,700—but issues outlined in a recent grand jury report are plenty big.

After hearing testimony from 18 witnesses and diving into the town’s financials throughout the months-long investigation, the grand jurors find themselves “deeply concerned” about Century. The report stops short of declaring any criminal activity.

“There’s no evidence that anybody was engaging in any sort of criminal behavior at this time,” said State Attorney Greg Marcille, whose office requested the grand jury report. “It appears it was simply a lack of management and not having appropriate individuals in charge of various departments.”

While the grand jury report doesn’t reflect any criminal intent, it does detail a town in financial shambles, officials with little grasp on public records law and a general atmosphere of mind-boggling sloppiness. In short, it paints a portrait of a town with an uncertain future living on the edge of its existence.

Deeply Concerned
Before plowing into the grand jury report, released March 5, it’s important to know a few things about Century. The town, established in 1901, has a mayor and a town council, with the mayor acting as its executive officer. The government’s primary functions include maintaining roads and tending to parks. It also operates a natural gas utility and services water and sewer customers.

According to Marcille, multiple concerns being raised with the Office of the State Attorney about issues in Century triggered the grand jury investigation. The report verifies those concerns, finding deep levels of dysfunction and incompetence in the town.

Specifically, the report delves into the areas of operations, policies and procedures, as well as the town’s financial status. The report concludes that town officials have mismanaged town finances, at times in conflict with the law, to a point possibly beyond repair and have a utility on their hands that hemorrhages both money and natural gas. It also confirmed the town’s dismal history with public records.

Century’s operation of a natural gas utility is as good a place to start as any. At its peak, the town serviced around 1,000 customers, but that number has declined in recent years to below 600 customers. The utility’s largest customer, as well as the area’s largest employer, is the Department of Corrections, which operates a prison in the area.

Over the past few years, Century’s natural gas utility has suffered substantial losses. According to audits cited in the grand jury report, the operation lost $303,427 in 2017 and $224,311 the year before that.

“We anticipate that the loss for 2018 may be substantially greater,” the report states. “The reasons for these losses are many.”

Among the reasons listed in the report are an antiquated infrastructure and insufficient maintenance of that aging system. That’s typical. What’s not typical are the other reasons, “Employees responsible for reading the meters have failed to do so properly or have not read them at all. Between 20 and 50 customers have received gas services without ever having been billed. The prison and other commercial customers have had either inadequate or faulty meters, which have resulted in substantial undercharging.”

The grand jury points to Public Service Commission reports filed by Century, which detail the town’s percentage of unaccounted for natural gas, in other words, the amount of gas coming into the system minus the amount sold to customers. It’s normal for utilities to have a little bit of unaccounted for gas, a few percent, but Century is traditionally high, hovering between 12 and 14 percent in recent years. In 2018, however, this rate jumped to an alarming 41.9 percent.

“Which means that half the gas that went into their system was unaccounted for,” Marcille said. “There are no good answers.”

In addition to massive losses for its natural gas utility, the grand jury report found reason for concern with the town’s water and sewer fund too. Over the course of 2016 and 2017, the fund dropped nearly a half million dollars.

These losses on the utility side impact Century’s overall financial outlook. But the town’s money problems are much more expansive than that.

For starters, the grand jury report found that payroll checks were written on an account with insufficient funds, and routine bills, such as utility or phone bills, regularly go unpaid due to the funds not being available. But such sloppiness is apparently the tip of the financial iceberg for Century.

The grand jury report found that Century recently dipped into funds from gas taxes and Local Option Sales Tax revenues, which have restricted uses, to make up budgetary shortfalls. The town allegedly improperly borrowed $306,134 from such sources in 2017, which the report states must be repaid.

The report also found that Century had borrowed from these restricted funds in the past. As of 2017, the town’s Special Revenue Funds was owed about $2.7 million. In 2018, the town council approved a repayment plan of a laughable $300 a month.

“At this rate,” the report notes, “it would take 750 years to pay back these funds.”

Other factors contributing to Century’s bleak financial outlook include the town paying for health plans and the town’s failure to send out recent utility bills due to the mayor and council not agreeing on an employee to perform the mailings. The grand jury report also points to instances where Century made loans—in three cases to individuals who currently serve as town officials—that went unreported on audits.

Adherence to public records law is another subject on which the grand jury report touches. It cites an apparent “lack of understanding” of Florida Sunshine laws among town officials.

The report found the town is months behind in maintaining minutes of its public meetings and that numerous public records requests were ignored. A recording of at least one meeting has been lost, while others were recovered from an employee’s house. Paperwork concerning an economic development loan made to Councilmember Ann Brooks was also apparently lost.

The grand jury did not find criminal intent in such instances, and the state attorney has filed noncriminal violations of Sunshine Law against several council members. But, Marcille said, investigations are ongoing in this area.

“The grand jury has asked the state attorney to continue to look into Sunshine,” he said.

Purely Suggestive
The grand jury report is a pretty damning read for Century. But because it found no criminal wrongdoing, the town isn’t required to act upon it in any way.

“These recommendations are not binding. They are purely suggestive,” Marcille said. “There are no requirements that they do anything.”

The report does, however, make many pointed recommendations. Typically, Marcille said, such recommendations are taken “very serious.”

“I believe they will take some action,” he said. “They have indicated they will take some action.”

Recommendations include divesting of Century’s utilities and using that money to pay back money borrowed from restricted funds. This would leave the town responsible for only roads, parks and land use programs.

The report also recommends that the town perform an operational audit to ensure qualified individuals are employed and also engage a consulting firm to develop a set of standards and procedures. Additional public records training is also suggested, among other recommendations.

In a signal that Century’s time of scrutiny may not be over, the grand jury also recommends that the State Auditor General’s Office perform a forensic audit on the town for the past five years. Any irregularities, it states, should be referred to the appropriate agencies.

Councilmember Brooks said she agreed with much of the grand jury report, including the need for an audit and selling off the gas utility.

“The council will attempt to develop a plan to address these recommendations at our next meeting,” Brooks said in an email, pointing towards the council’s March 18 meeting.

Century Mayor Henry Hawkins, however, takes issue with the report, calling portions of it “not factual.”

“Well,” Hawkins said, “I got some mixed emotions about it.”

The mayor noted that some issues listed in the report, such as staff training, have been addressed already. And as for the rest of it—the massive loss in utilities, the unlawful borrowing from special revenues—he said the town would “rectify some things to make it right.”

Hawkins has zero appetite for the grand jury’s most significant recommendation, selling off the natural gas utility.

“Might as well dissolve the town if you’re going to do that,” he said. “That’s your income.”

In short, the mayor said he intends to help the town of Century crawl out of its current circumstances.

“I was handed this bad deck,” Mayor Hawkins said. “I was dealt a bad hand; I’ll play it, and I’ll win.”