Roy Mayor Pro Tem Yvonne Starks said a $40,000 deficit and a number of other issues were discovered following the resignation of the city’s Mayor Rawlin “Anthony” McDaniel and City Clerk Treasurer Kelli Loudin.
At a city council meeting on Monday, March 27, Starks said McDaniel resigned from his role as mayor on March 6, while Loudin resigned from her role as city clerk treasurer on March 7.
Starks, who said the city is trying to make sure its accounts are payable at this time, was advised by legal counsel to discuss the findings publicly.
“One of the accounts we found on the computer had a deficit of over $40,000. It’s believed that the treasurer hadn’t put in a beginning balance for the new year,” Starks said. “There were duplicate checks found, so she was having some trouble balancing.”
According to Starks, the City of Roy’s account hadn’t been balanced since August 2022. She added the city's “software people” have been advised to go back to January of 2022 to reconcile every statement.
“On top of that, we have to submit an annual report by May 30,” Starks said. “It doesn’t give us a whole lot of time to get that done.”
Starks said Loduin collected pay for compensatory time, which goes against the city’s policy manual.
“The mayor, I believe, was fully aware of this. There were a number of memos found that were written to the council, but I never saw them. I don’t know if the other members saw them,” Starks said. “Some of them were dated to May of last year. This allowed them to get paid directly for unused vacation time, things of that nature. According to policy, the mayor can change policy, but every three months, he needs to take those changes to council. Those were never taken to council to get a vote.”
Starks said she wasn’t sure who wrote the memos since they were unsigned and weren’t initialed.
Starks said she also talked to McDaniel in September 2022 because she thought Loudin was being paid more than what was allowed through the city’s budget.
“I was thinking she was getting paid roughly $85,000. The budget said she couldn’t be paid more than $65,000,” Starks said. “It was actually $88,000.”
Loudin reportedly received the pay increase because she was getting paid her city clerk treasurer salary, Starks said, and half of the deputy clerk salary.
“She wasn’t doing the work of the deputy clerk, our public works people were doing that,” Starks said. “There is no taking a 50% pay increase for a step down. That’s unheard of, and our mayor was fully aware of this, because I made him aware of it. I was desperately looking for oversight because I was concerned.”
The city’s attorney told Starks if someone takes on duties “higher than the step” they’re at, they could see a 7% pay increase until the job is filled.
Upon discovering the discrepancies, Starks said she first contacted Pierce County, which said they haven’t been faced with this type of problem before. She was then referred to the Washington State Auditor’s Office.
In response to the questions she asked the state auditor’s office, Starks said she received copies of RCWs. The state auditor’s office then referred her to their fraud department, who reportedly told Starks they were not sure if the case was fraud.
“The mayor may have approved everything. There’s no way of knowing what was approved and what wasn’t,” Starks said. “I’m not sure that this is fraud, it’s not my place to say. The auditors will come in and I’m sure they’re going to find things. That is pretty obvious, but what their recommendations will be, I have no idea.”
Starks said she is trying to get things done as fast as possible in order to meet the May 30 deadline and noted she is in her position to work on behalf of the people of the city.
“I’m doing the best I can right now to serve you guys,” Starks said, later adding, “We’re here for you guys, we work for you. That’s important to me. We take an oath, and say we’re going to serve you through local government and follow our laws and policies. I’m not sure where we go from here.”
Another issue brought to light by Starks was the lack of transparency during interviews for the deputy clerk position. Starks said the Roy City Council previously agreed in 2022 that a deputy clerk needed to be hired and that McDaniel said the city would hire one at the start of this year.
“He told me he previously ran an ad for the deputy clerk position and he only interviewed a barista. We’ve since found out there were 34 applications for that job and they were all denied, except for the barista,” Starks said. “Looking through that file, I know somebody that worked for me 14 years ago had applied for that job. Her application was not in there with the applications. My assumption is that she wasn’t considered because she knows me.”
She added the City of Roy’s next audit will “be in the toilet” since they will look through Loudin’s records.
The city received “a number” of federal grants that specify how the money is supposed to be used and how it needs to be documented.
“Right now, it’s scary because everyday it seems like there’s something else that comes up,” Starks said. “There’s not enough of me and not enough (help) to fix this quickly. I’m hoping that whoever I hire will stick around. I hope they like a challenge.”
The city plans to interview around eight applications for the city treasurer position over the course of the next week or so, Starks said.
In the midst of the financial uncoverings, Starks said the city has since approved the involvement of auditors.
“I spoke to the auditors and since it’s tax time, they’re unsure when they can come out. I’m trying to go by policy,” Starks said. “I do have an attorney that is looking through all of our documents to see what we need to do.”
She added the files at city hall were not organized well.
“I’m not sure who was doing the filing, but it appears they were just dropping documents into files to get them out of the way,” Starks said.
Starks also acknowledged that on Feb. 15, a Roy police officer was injured and has been on disability through a claim with the Washington State Department of Labor and Industries (L&I).
“We have been paying him his full salary every month. According to policy, we can pay him for his vacation time and his sick time, and labor and industries will pick up the wages,” Starks said.
She added L&I typically pay 60% to 75% of wages.
“They apparently got a letter or document saying the city was going to pay his full wages and misrepresented herself as a city administrator,” Starks said. “It leaves us with another can of worms because if we continue to pay him his full salary and then labor and industries pays him, he’ll have to reimburse the city, which would create quite a hardship for him.”
Those interested in contacting Starks can email roycityhall@wa.us and indicate their email is directed for the council position two seat.
