LA FERIA — Sunny K. Philip stood in the corner of a crowded La Feria City Hall taking notes as an auditor said the city was missing millions.
Philip, the former city manager who was fired in July, said he attended the meeting just like everyone else — to find out what was going on.
But Philip quickly left the room after the commission voted unanimously to take civil action against him in an effort to find out about the missing money, how it was used and who made the withdrawals.
The city was looking for a total of $6.4 million in funds linked to certificates of obligation that were for street improvements, drainage and building infrastructure.
However, it appears just less than half of that total is what is potentially missing.
La Feria City Attorney Rick Navarro said yesterday the money is unaccounted for and it’s possible it was spent inappropriately.
“What we know now is the record-keeping is very poor,” Navarro said. “It does not tell us what we need to know.”
To find an end to the means, city officials agreed to take action against Philip in civil court individually and in his official capacity with nonprofits he may be affiliated with. It’s all in an effort to find the missing city money.
“We authorize the city manager to secure the loss of unaccounted public funds,” said Olga Maldonado, La Feria mayor. “We want transparency and we want to know where these $3 million are at.”
Philip, who declined to directly comment on the unaccounted for $3 million, did have something to say.
“I was employed with the city for 33 years,” Philip said. “I have lived my life as an honorable person all my life.”
He also said he was not paid by any nonprofit while he was an employee of La Feria.
Olga Oberwetter worked for the city more than 10 years. She said she retired in 2015.
“Sunny is a very honest person,” Oberwetter said, over the phone yesterday. “I never saw anything that would be suspicious to me.”
She said what the commission has done to Sunny is an injustice.
The current City Manager Jaime Sandoval was hired a few months after Philip had been fired in July.
Sandoval said he inherited what has been described as sloppy management of city funds.
And it has led to this investigation of a multi-million dollar shortfall of city funds.
“It’s possible it got spent on legitimate things,” Navarro said. “But we just don’t know.”
On Tuesday night, Sandoval was given the authority to contact outside agencies to help find the missing funds.
That happened after hearing the report from an independent auditor who selected four of 16 projects to verify policies were followed in awarding bids to the projects.
Independent Auditor Susan Munoz reported all transfers from the “Capital Projects Funds’ to the “Pooled Cash Fund” to verify the transfer of funds were used in compliance with purpose stated in Ordinance 2015-3, and that all transfers had the appropriate backup documentation.
What she found led to more questions and appears to confirm at the least sloppy record-keeping.
From the dates of March 2015 through August 2016 more than $5.7 million was moved from the “Capital Projects Fund” and transferred to a “Pooled Cash Fund.” And the balance in August 2016 was in the red by $475,904.
“After I came in, Frank Rios found the true condition of the city finances,” Sandoval said. “Unfortunately, we inherited an unrealistic budget as well.”
He told the commission and audience at Tuesday’s meeting that sometime around December 2016 he requested a budget balance of the 2015 certificates of obligation in effort to move forward with public works projects.
He said it was Ordinance 2015-03 that was supposed to have $6.4 million available for citywide projects.
“On Dec. 30, Rios informed me the certificate of obligations bank account was showing a little more than $1,000,” Sandoval said. “Mr. Rios had verified all the city bank accounts.”
He said it was at the recommendation of Navarro to obtain an outside audit.
And on Jan. 16, Salinas Allen and Schmitt was contacted to begin an audit.
That report was given to the commission on Tuesday by Munoz.
She was not tasked to find out if any fraud had occurred or form an opinion on the financial status of the city.
“This report was to test if the bond funds were used in compliance,” Munoz said.