Nowthen to ask state auditor to review city records and get house in order

Nowthen in northwestern Anoka County will ask a state auditor to help get its house in order after its interim city administrator found a series of a "dereliction of responsibilities" by past administrative staff.

The City Council Feb. 8 also extended the contract of interim city administrator Frank Boyles through July 1 as it seeks a permanent replacement. Boyles, who served as Prior Lake's city administrator for 26 years, was brought in after three employees of the city's administrative staff resigned in October, alleging they were bullied, harassed and intimidated by Mayor Jeff Pilon and a City Council member.

In the ensuing months, Boyles discovered 17 inconsistencies ranging from haphazard filing and missing files to issuing pay raises and benefits without City Council approval and failing to properly close the books on previous years. The findings, outlined in a four-page memo, also found the city missed state tax and unemployment filings, didn't inform employees about personnel policy changes and failed to deduct some pension contributions from employee paychecks.

"I take no joy in preparing this report which identifies multiple serious examples of dereliction of responsibilities by previous administrative city staff," Boyles wrote in the memo. "And I fear our discoveries are not over."

The findings were surprising because the departed employees said they would leave things "in perfect order," Pilon said in a phone interview.

Boyles and his team have corrected some of the issues and are working through others, Pilon said. "We are trying to get things rectified."

The city with a population of about 5,000 did not miss a beat despite the upheaval, Pilon said. Under Boyles' leadership, the city in the last quarter even added equipment for its recycling program, he said.

But large issues still remain. Former City Clerk and Treasurer Lori Streich and Deputy Clerk Ellen Lendt filed unemployment claims even though they voluntarily resigned their positions alleging harassment and a hostile work environment. An unemployment judge denied Lendt's claim for $12,000 and she has appealed.

Streich was approved for $20,000 in unemployment benefits. The city has appealed and her case continues.

Boyles' report also found that Lendt used dental insurance benefits after she left the city, costing Nowthen $170. The report also said Streich did not notify two employees about a policy change that capped year-end vacation balances at 200 hours, down from 240. The City Council approved a one-time change to the policy so two employees would not lose up to 80 hours each.

"Part of Ms. Streich's duties were to administer and communicate the personnel policy to affected employees," the memo said.

Boyles' memo says the city continues to learn about new issues weekly.

"It makes me question what else could be out there that we should know about," Council Member Mary Rainville said at last week's meeting.

The council approved a motion allowing the city to contact the state auditor's office to look over the 17 items on Boyles' list and ask for an auditor to review and provide direction on correcting any errors. The city also hopes an auditor could help put checks and balances in place to prevent recurrence of the issues, as well as recommend which issues would need to be referred to other agencies for remediation. It was not clear if that had happened yet, Pilon said Monday.

Pilon said with the help of Boyles and another part-timer the city has made a lot of progress, including creating scripts documenting for the next staff how specific tasks must be carried out.

That's key as the city begins the process of searching for its next administrative staff and which jobs — clerk, treasurer, administrator — and skill sets the city seeks. The council is hoping to begin looking for candidates by early spring.

"We need to get our house in order first," Pilon said. "They are going to ask, how is the city operating? Is that something I want to jump into? He [Boyles] is trying to make the city appealing to somebody. It's tremendous what his team has done. We are moving forward in positive areas."