CEDAR CITY — The newly appointed officials of the small mountain community of Cedar Highlands were sworn in Thursday, with Iron County Sheriff Ken Carpenter administering the oath of office to Mayor Jim Byler, treasurer Beth Gaines and town clerk Jeanne Shelton.
Less than a half hour later, the town council got down to business as they met at a nearby office in Cedar City. Approximately one dozen members of the public, most of them residents of Cedar Highlands, were in attendance during the two-hour meeting.
One of the council’s first items of business was to approve the payment of bills, something the town has not been able to do since the abrupt resignation of former mayor Steven Swann on June 28.
Byler, who was officially appointed the town’s new mayor on July 17, said Swann had not been helpful during the transition period and had essentially been preventing access to the town’s account at Mountain America Credit Union.
Byler said Swann had added former town treasurer Zelpha Taylor’s name to the account more than two weeks after she was no longer the treasurer.
“Why the (former) mayor took her to the bank and put her on as the primary account holder of the town funds is beyond me,” Byler said, noting that Taylor’s position had been eliminated effective July 1 and that she’d received her final paycheck June 26.
“On July 19, the (former) mayor went to the bank and added Zelpha Taylor on as the primary account holder, thus keeping us again from having access to our finances,” Byler said as he explained the situation to those in attendance at Thursday’s meeting.
Working with officials from the credit union and the state auditor’s office, Byler said they were able to remove Taylor from the account and regain access.
“We got control of the bank accounts. We thought everything was resolved,” Byler added. “The following Thursday, I went online to access the bank account online for the first time. When I accessed our bank account, I was surprised to see that our city bank account was commingled with the mayor’s personal bank accounts, so that our balances were combined to show a combined balance of his account in our account.”
Byler said he immediately informed the state auditor’s office of the situation. Credit union officials then “took the necessary steps to unattach our accounts,” he said.
“So we did multiple log-ons to the town account to verify that our accounts were no longer commingled with (those of) the former mayor,” Byler said.
However, shortly thereafter, Byler said he noticed continued attempts being made to access the account via a mobile app.
“Our account was still being accessed and the (former) mayor was still claiming that the town officials have no right to do any transactions because we did not own the account,” Byler said, adding that he then discussed the situation at length with both Seth Oveson of the state auditor’s office and Iron County Auditor Dan Jessen.
“They both assured me that they were fully on board with what the town council had done … that the council and the mayor had the right to access and pay our bills and do what we needed to do to run town business,” Byler added. “They basically dismissed (Swann’s) allegations.”
Byler said despite what he called “absolute sloppiness of the books,” it does not appear that any money was stolen or moved from the town’s accounts.
“We had every bank statement and we reconciled everything. We verified everything,” he said.
“We’re cleaning this up, Byler added. “I may not be an expert in a whole lot of areas having to do with building codes and all that, but I sure as heck know how to manage your money and tell you what’s going on with it. This entire community was left in the dark on these issues and we have been complaining about the finances for more than a year.”
Reached for a response via telephone Friday morning, Swann told Cedar City News he was simply following the law with regard to the transfer of accounts.
“Here’s what the law is: the principal on a bank account for a municipality has to be the treasurer,” Swann said. “You can have all the signatures that the council wants to have, but the principal on the account has to be the treasurer. So, before leaving, I made sure that the treasurer was the principal on the account so that the transfer could be done according to the law. The council members kept insisting that they could just go down to the bank and just transfer the account over.”
“They were ignorant of the fact that the treasurer has to be the principal. Well, Zelpha was the only treasurer still officially appointed. She was still on the account. I was not on the account. I was taken off the account,” Swann added, saying he told the town council members how it needed to be done.
“I said, look, this is the process. First of all, you have to appoint a mayor. The mayor has to be sworn in. And then, the mayor has to, by law, select the treasurer and then the council has to approve. That’s the process. You go through that process, then you go down to the bank and then you get the whole thing transferred.”
“I think finally they did that and put the paperwork down and got things done,” Swann added. “I turned all the assets over within a week. They had everything they needed.”
Swann, who had been the mayor since the town was first incorporated in January 2018, called the situation “a continuation of the problem I’ve had from day one.”
“First of all, they think they know what the law is and they don’t. And then they just lack the discipline to do what needs to be done, and it was driving me crazy constantly. They are victims of their own ignorance and lack of discipline.”
Swann said he’s also troubled by the fact that the town council recently decided to withdraw the funds from the town account at Mountain America and open a new account at State Bank of Southern Utah. The decision to make that change had been discussed by Byler and the other council members during Thursday’s meeting.
“They wanted to go to State Bank because that’s where the HOA has their funds,” Swann said, referring to the Cedar Highlands Homeowners Association. “This again is one of the HOA meddling things where they’re still thinking they’re in the HOA. This is what keeps getting them into trouble, is that they’re trying to run things like an HOA; an HOA is kind of a chaotic organization that’s run as a party operation.”
“They’re going to get themselves in trouble because they’ve already, just in this last few weeks, they’ve probably broken the law like three or four times, by not knowing what they were doing,” Swann added.
The town’s financial account was among the numerous issues highlighted in an audit issued April 4 by the Utah Office of the State Auditor, when Swann was still mayor. According to the report, the name of the account at that time was “Mayor DBA Cedar Highlands.”
“It appears that this is inappropriate. Accounts should be owned by the Town and tied to its federal identification number with no Town official listed as a co-owner as required by Utah Code 10-5-128,” the document stated.
An electronic copy of the state auditor’s report, which also includes a response by then-Mayor Swann promising to address each of the problems, is available for download here.
Byler said Thursday he and the town council members are also currently working to restore access to the town’s state Public Treasurers’ Investment Fund (PTIF) account, along with the town’s state sales tax exemption license, both of which were suspended recently due to noncompliance.
“All of these things are issues that we have been spending hours and hours in the last two weeks dealing with,” Byler said during the meeting. “Eventually, this will settle down and we will get things running smoothly. But if anybody has any doubts about how screwed up things were, I think I’ve made it pretty clear.”
Byler promised the residents at the meeting there would be complete transparency moving forward. “It’s not my job to hide things from the community,” he said. “This is how we’re going to operate from here on out.”
Other items discussed and addressed during Thursday’s meeting included a new agreement with the homeowner’s association, snow removal issues, problems with a backhoe lease agreement, ditch drainage issues and at least one vacancy on the town’s three-member planning commission.
Right after Thursday’s meeting, an upbeat Byler called the two-hour session “constructive.”
“We worked out some issues that had been pending, that had not been resolved,” he said. “We’ve got a good cohesive council and we’re just going to continue to move forward and address our problems and our road issues as best as we can.”
“I think we made clear tonight that we’re going to continue to provide accurate financial information to the community. They have a right to know all that.”
The town’s next scheduled meeting is at 6 p.m. Aug. 22 at Cedar City’s Library in the Park. A work session is also being planned for the preceding week, although the date and time have not yet been set.
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