On a rainy Monday afternoon, the village council held a rare, hastily-called emergency council meeting. The mayor announced several unwelcome discoveries made while looking through the village books.
New Village Clerk Julie Pinson, who was hired on July 1st of this year, uncovered a laundry list of missed filings for village taxes, fees, defaulted loans, and unreconciled bank accounts.
This report includes the following:
Mountain Top Accounting CPA Julie Speer, who was contracted by the village after the annual budget retreat, continues to dig deeper into the village’s finances.
She’s already unearthed unfiled federal wage withholding taxes—and more.
Keep reading for our breakdown of the emergency meeting and statements from the former and current administrations.
The Bad, The Ugly, The Agenda
Mayor Craig Turner began the meeting on the financial discoveries, which were uncovered last week, and said, “today’s meeting is not good.”
“I promised you when I ran for mayor, good, bad, or ugly, I would always be honest with you.”
He then turned the floor to Julie Pinson and Julie Speer. On Thursday, July 18th, Speers was given access to the village’s New Mexico Taxpayer Access Point, where she made several startling findings.
What exactly was found? In this case, it was what was missing:
The Government Gross Receipts Tax has not been filed since April of 2023
The Wage Withholding Tax has not been filed since January of 2023
The Workers Compensation Fee (WC-1) has not been filed since March of 2022
The Water Conservation Fee has not been filed since July of 2022
The 940 and 941 Employment Taxes have not been filed—the last time they were filed was unknown at the time of the meeting.
The village was in default on three bank loans, and;
The last banking reconciliation was completed on January of 2023
Pinson read the agenda items, then said,
“So you kind of get an idea of how far we got to go back. On average, we have no idea how much we owe yet because we're still figuring out where we get the correct numbers to plug into these and were they even put into Abila.”
Abila, now known as MIP Fund Accounting, is the village's accounting software. Pinson noted that the village is the “only municipality in the state” that still uses the tech and that as soon as the finances are sorted, she plans to use Quickbooks.
Julie Speer elaborated on the unfiled 940 and 941 Federal Employment Taxes. She said,
“I know when the last time the taxes have been paid to the federal government for the Social Security, Medicare, and federal withholding because that's through the EFTPS website.
But the 940 ones, there's no place to log in and see when the last time that was paid.
So I am assuming that I got all the EFTPS payments caught up through current payroll and I went ahead and filed the 940 ones for third quarter of '23 all the way to this last quarter [that] we just finished.
So, a year's work because that covered the periods we were missing in EFTPS.
I can only assume that those 940 ones were filed prior. Julie has found some 940 ones in the office here, but they go back to '21. We don't know where ‘22 and ‘23 940 ones are or if they were filed.
Speer continued,
“But as soon as we start filing these, which Julie just signed for and I'll sign my part of and we'll e-file those today, we will start getting notices from the government about what's missing in fines and penalties.”
At this time no one knows how much money in total may be owed, including penalties and interest. Mayor Turner did report that “we've already wrote one check for almost a quarter of a million.”
Later, in the meeting, Pinson said,
“I have a box full of paperwork that was never entered into our system for at least a year's worth.
I found that our bank statement hasn't been reconciled since January of 2023. So I am assuming the entire year is not in our system properly. And that's one thing that we're going to just have to tackle.”
Turner, who said he’d been in talks with the Municipal League, said,
“Let's see where we stand right now and then we can go back to the two previous years. But most importantly let's get our checking account balanced the best we can this year. That's kind of my guidance right now.”
Trustee Jim Maynard, who attended the meeting via phone, said,
“To me, the New Mexico Finance Authority, I can't believe they didn't call us and say, hey, guys, you're not paying your bills.
We've been in touch with them lately over our budget issues just to file the amended budget that we did, so that's news to them as well.
But getting on top of this, there's nothing more important than knowing our cash position.”
Cloudcroft Reader (CR) asked Julie Pinson (JP) about past-due notices.
CR: Did you come across any notices from the government or the bank saying you're in default?
JP: “I got an email”
CR: But in the files, was there any evidence that Village had ever been notified that it was behind these things?
JP: “Our files are very vague.”
CR: Wouldn't these agencies or even the banks typically send out notices saying you're behind?
JP: “There aren't physical files. Shae, the last clerk actually went electronic, and there's a huge gap for 2022, ‘23, ‘24 in her electronic files.”
CR: So it's possible notices were sent, and they just…
JP: “Ignored. Best case I can say. I actually received an email last week, I believe it was Friday, whenever I received an email on the bank loans. That's how I knew about them.”
Checks and Balances
Trustee Tabitha Foster asked about “keys,” a login system to separate power within the village office. She questioned how the system was managed:
“And isn't it true that we have one person [who] technically has one key and the other one has the other key? And towards the end of last year, she had both keys?
It was supposed to be divided between the clerk and accounting, correct? And so when she took both of those roles on, she had both sets of power.”
Pinson said,
“One thing, too, that I am working on with the mayor is: I am distributing tasks because there's segregation laws that keep you in check so that you don't have this problem and you're operating legally.
So, I am actually working on that with him and we're distributing roles differently than how it's been in the past with our staff.
We are working on that so that everybody is doing everything legally by the state, by the fed, by the New Mexico Municipality League, everything.
So going forward. And we are cross-training. Which we've never done before. That has never been done before. And I'm a firm believer in that so that you don't get in a bind.
That's what we're in right now; it's a major bind.”
Mayor Turner hoped that the proactive hiring of a third-party forensic audit would put Cloudcroft in good graces with the state.
He said,
“Yeah, so speaking with Beasley and Mitchell, this doesn't change anything about their timeline…so it's not going to affect our audits.
I think, and also according to Beasley and Mitchell, the big thing is that the state knows where we've hired them.
This active contract that we signed with them two and a half weeks ago that I went over to Las Cruces and signed, it's almost like it gives us a reprieve, if you will, because it lets the state know that we are working on this and that we're not ignoring it and that it's not getting kicked under the rug.”
At the meeting, Planning and Zoning Commission Chair Jessica Beach questioned the financial reports village committees and boards have been given for approval.
Cloudcroft Reader spoke with Beach after the meeting. She said,
“They've got in there and looked at the books now and kind of assessed their issues and problems and they seem to be open and honest and diligent about trying to correct their wrongs and fix everything.
I think in maybe our last administration, things weren't being looked at correctly and maybe the right questions weren't being asked.
And then, you know, now since we've had so much turnover, things are coming to light that haven't been taken care of.
I think the village is on the right track with hiring an accountant to help out and hiring the auditor to come in later and try to fix everything.
It was a large can of worms, and now everybody's going to be interested in what's going on in the village meetings and what's actually getting done and not getting done.”
The Administration(s) Have Their Say
Since 2022, the earliest disclosed date of missed filings, the Village office has undergone several turnovers.
At present, only Trustees McCoy and Maynard bridge both administrative periods.
Pinson said,
“All this, yes, should have been done by the existing clerk. Just FYI, there wasn't somebody else who was responsible for filing all of these. So, I just wanted to make that clear.”
After the meeting, Cloudcroft Reader reached out to former Clerk Shaela Hemphill and former Deputy Clerk Vyanca Vega.
In the midst of a slew of village office resignations, including 75% of the police force, Hemphill quit, effective immediately, in May of this year. Vega was sworn in as deputy clerk for the three weeks following, but resigned shortly after.
Here’s what they had to say on Monday.
Hemphill said,
“I’m not necessarily surprised about the meeting; however, I believe it should have been addressed a while ago. The Village had been behind on many things for over a year.
This isn’t something that was hidden or kept secret from the mayor [and] council.
Some of us (myself included) were juggling multiple positions with little to no training despite asking for assistance and training. We were just trying to keep our heads above water the majority of the time.
This has been an ongoing issue and I’m glad steps are being taken to finally resolve it so the new staff doesn’t have to bear the same burden the previous staff did.
I’m genuinely glad to see that the new staff has the support of the mayor and council that the previous staff lacked.
I honestly hate that this is the situation; I care about this community immensely and hate that I had to step away under the circumstances I did. However, I’m hopeful things are going to get better for the Village soon.”
Ms. Vega declined to comment.
In the emergency meeting, Trustee Foster said,
“Before all of the staff left, there were lots of accusations about being under-trained. As a member of the Municipal League, they have every and any training that we need, and all we have to do is pick up the phone and call.
So I'm going to say shame on those people that said that they knew how to do their job and they could have had a chance to stand up and say, Hey, I don't know what I'm doing. I need some further help.
It would have been free to us. I mean, the Municipal League would have come down and helped. There's tons of online training.
So in my opinion, there's no reason why this should be the way it is because we have literally unlimited resources as a municipality.”
Turner said,
“Folks, I always told you if I made a mistake, I'd tell you I made a mistake. I probably should have been checking our previous clerk more diligently and the work that was being done.
But I was not verifying; I was trusting.”
Turner addressed village employees’ possible concerns at the meeting and said,
“For everybody's knowledge, and in particular and most importantly our employees, we are completely caught up with all of our employees.
As far as our employees, they are covered, they have health insurance benefits, they have their retirement and everything.”
After the council’s emergency meeting, The Cloudcroft Reader called former Mayor Bill Denney for his reaction to the revelation that various forms and payments were not filed or paid in the years 2022 and 2023.
Here is the conversation, edited for clarity and length.
Reader: Were you aware that some forms, such as the Wage Withholding Tax, Water Conservation Fee, 940s and 941s, and gross tax receipts, were not filed or paid last year?
Denney: I was having some employee problems last year. I had one person doing three jobs.
Reader: That was Shae, right?
Denney: She was behind, but she didn't get any help. She was a little bit behind, but she was working on it.
And she was supposed to get some new help as soon as the new administration started.
I don't know if she got any or not. I have been staying away from it.
Reader: Shae, at one point, was the deputy clerk and in accounting, too, right?
Denney: Correct.
Reader: In today's meeting, they discussed as a way of keeping tabs on what was happening, there were two ‘keys’ (two logins required to access the finance authority), sort of a fail-safe system. One was held by the deputy clerk and the other by the accountant.
But when she had those two roles, she had both ‘keys’, didn't she?
Denney: Correct.
Reader: Apparently the withholding tax and workers' comps weren't paid, is that news to you?
Denney: Yes, it is.
Reader: Are you disappointed to hear it?
Denney: I am not going to say that because I don't know what the details are.
Reader: Has anybody from the Village Administration reached out to you at all to ask you questions about any of this?
Denney: No. You're the first person.
Reader: They've recorded today’s meeting on Facebook Live. You can see a video of it.
Denney: I'm probably not going to watch it.
Reader: Why don't you want to watch it?
Denney: I donated many, many years of my life to this office and to this town. You know, people don't seem to care about everything that I really got attacked on anymore. There's all sorts of stuff that I am not going to get into.
I support the town. I support Mayor Turner.
I am proud of what I accomplished as mayor.
And I really hope the best for Mayor Turner.
I wish they had immediately provided help for poor Shae because I know she was behind.
Reader: Part of it is that she got behind when she was under you, too.
Denney: Yes, I know that because I was one employee short. For six months.
I had interviews set up for the first of January to hire an accountant immediately.
And I don't know what happened to that because that was after my reign. But I know we did have interviews set up that were under Mayor Turner's.
So I don't know if they were bad or bad applicants or if he decided not to hire them, or if he couldn't find any more.
But I know we desperately needed to get some help in there because she was behind.
I couldn't hire any additional employees because of the council would not allow that.
Reader: During the last year of your term, did the council not support your hiring of the positions you needed?
Denney: Correct. The council would not allow the creation of a new job.
She was doing multiple jobs, trying to keep up. I was trying to get her some help, but for budgetary reasons, I could not.
Six months later, she had to walk out the door because, I think, she never could catch up.
Reader: Did you feel confident in the reporting and financial information you received when you were mayor?
Denney: Yes. And I knew she was running behind. The entire council knew she was running behind because she was doing multiple jobs.
The stuff she did, she did correctly. She did everything she knew how to do. She had little training. She was the accountant who was shoved into a clerk's position.
She was a great employee. She did a great job.
I think right now they're trying to they're trying to really blame everything on her. But I think she was just put in a really bad situation.
Reader: Were there any particular trustees who resisted when you were trying to get that help for her?
Denney: All of them because of the budget. They just wouldn't do it because it would have created a brand-new job.
The New Mexico Attorney General approved the short-notice emergency council meeting in compliance with the Open Meetings Act.
To read the time-stamped transcript of the meeting, click on the ‘Transcript’ button at the top of the article.
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