Violations of state retirement and public bid laws were among the two dozen findings auditors noted when reviewing the town of Independence’s finances.
The report, released Monday by the Legislative Auditor’s Office, also stirred up controversy between the mayor and two aldermen whose businesses were found to have fallen behind on their sales taxes and did not have current occupational licenses.
One of the aldermen, Angelo Mannino, is challenging Mayor Mike Ragusa for the town’s top post in the March 5 elections.
The town’s failure to enroll all eligible employees in the appropriate state retirement funds for the first half of 2015, as required by law, resulted in an adverse opinion from the auditors at Durnin & James.
The town and employees owed a combined $300,000 in contributions to those retirement systems for 2013 and 2014, according to a previous audit report. By the time the most recent fiscal year ended on June 30, the total had climbed to an estimated $378,000.
Town Attorney Brett Duncan said Monday that Independence has enrolled all full-time employees in the two retirement systems. The town also has provided salary information for all current and former employees, dating back to 2008, as the retirement systems requested.
“The last step is to see, or negotiate, how much might be owed in unpaid contributions,” Duncan said. “Thus far, the retirement officials have not yet calculated nor made a demand for a specific amount.”
The auditors also cited the town for failing to comply with state public bid laws in the construction of a $300,000 building for the Police Department.
Ragusa, the mayor, said someone with the state Attorney General’s Office told him he didn’t have to bid out the project because its first phase was estimated to cost no more than $150,000 — the legal threshold for requiring bids on public works projects.
The town has had trouble attracting local bidders for recent projects, Ragusa said, noting that two of the three construction companies in town are owned by his sons and his brother. The third employs another of the mayor’s relatives.
Kelly Construction Group, of Walker, was awarded this project, Ragusa said.
The mayor added that his 51 years of experience in construction helped the town save $71,000 on the project by eliminating or reducing costs for supervision, overhead, profit and architect fees.
In another finding, auditors note that two alderman-owned businesses were among a group that had not paid for or received occupational licenses for 2015.
Mannino said the report’s singling out of the two aldermen “was politically motivated by the mayor to discredit me because I’m running against him.”
Mannino said an accounting error had led to his butcher shop’s tax delinquency — a problem he said he had been working to correct through a payment plan since February.
“I went in and paid for my license today,” Mannino said Monday. “It’s all taken care of, and if he says anything different, he’s full of you know what.”
Alderman Mike Muscarello, who has owned a glass and radiator business in town for 40 years, said every business goes through financial troubles.
“I’m working on it, and everything’s going to be alright,” Muscarello said.
Both men said the town has a lot of work to do in response to the audit findings.
“We’re still missing that $4,200 (in cash payments toward utility bills) that the legislative auditor said wasn’t deposited properly,” Mannino said. “And we still don’t have a policies and procedures manual in effect. That’s been a recurring finding, too.”
Auditors also cited the town for not giving adequate public notice during its budget adoption process last year, disposing of police department equipment and vehicles without first declaring the property surplus, poor records-keeping for ordinances and minutes, and failing to charge water and sewer rates adequate to cover both operational and debt service costs.
Follow Heidi R. Kinchen on Twitter, @HeidiRKinchen, and call her at (225) 336-6981.