Depoe Bay City Hall jarred by financial disarray

DEPOE BAY — Two employees lost their jobs and morale at city hall plummeted as a result of financial turmoil that left municipal books unbalanced for months.

Unpaid vendors and others that were paid twice, unauthorized raises, payroll mistakes, lost paperwork, misfiled monies and unreconciled financial reports are part of the disarray that caused Depoe Bay to miss important state audit deadlines recently.

The Oregon Department of Revenue levied penalties against the city for failing to file payroll reports on time, and only last month the audits division of the Oregon Secretary of State notified Depoe Bay that it missed a Dec. 2018 deadline to file its annual financial report and summary of revenues and expenditures.

Depoe Bay Mayor Robert Gambino, only three months into his two-year term, acknowledged the fiscal breakdown this week, but said the city is taking steps to repair the damage. Among those measures is the hiring of a quasi-governmental agency, the Oregon Cascade West Council of Governments (OCWCOG), to handle “daily financial operations.”

In addition, a trusted former city recorder, Pery Murray, is working under a 200-hour contract to balance and correct the intricate network of ledgers, journals and accounts that affect sewer and water funds, bond payments and reports to key partners such as the Gleneden Beach Sanitary District.

“It’s taking us some time to get the books straight, but we’ve requested extensions with the state so we’re doing okay,” said Gambino, who became mayor in January as city councilors learned the full extent of the problem.

The fiscal irregularities occurred after the city council hired one of its own, Jeff Wiseman, as city recorder in Sept. 2017, according to interviews and documents obtained by the News-Times. Wiseman was later fired on Nov. 20, 2018, during an executive council meeting that concealed the nature of his dismissal and the ongoing bookkeeping fiasco.

According to Mayor Gambino, the accounting problems became acute after Wiseman hired a bookkeeping clerk who later claimed she was kept in the dark about key accounting responsibilities. In Jan. 2019, she was also dismissed.

“I would say their skill sets were not up to par for what we needed, so the errors started to compound,” Gambino remarked, crediting city office staff and “some councilors in the know” for blowing the whistle. “It took us a while to realize it was coming to a head, and when it did we acted appropriately.”

As rumors about a financial disaster rippled through town, City Councilman Jerome Grant called on the city to issue a news release explaining the situation and assuring citizens the matter was being handled. On Feb. 5, the motion passed 3-2, but was overturned on the advice of an insurance attorney at a subsequent meeting where Grant was absent.

Councilor Barbara Leff, who was mayor when the problems climaxed, said she struggled to write a news release but was constrained by the rules of executive session and employer law.

Grant, the only councilor to vote against Wiseman’s appointment as city recorder, said he is disappointed in the lack of transparency surrounding the affair and alleged that important personnel and financial “decisions are being made outside of council” by a small group of city officials.

But Gambino said there was no time to waste once the enormity of the bookkeeping mismanagement was revealed.

“We had to work fast and come up with an emergency solution to get the books on the right path,” he asserted.

Gambino said there is no suspicion of criminal wrongdoing, but concedes the effects of mismanagement are bad enough.

Batteries to run the emergency communications trailer have been delayed over missing paperwork, the city website with meetings and minutes of the city council has not been updated since last January and nearly a score of critical bookkeeping tasks remain to be completed by a March 31 deadline extension with the state.

Moreover, the person hired to repair the books may be fixing to sue the city.

On Feb. 19, former recorder Murray notified the Depoe Bay officials of her intent to file a claim against the city for “gross inequity in the handling of employee matters.”


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