Look back: Pine Lake 2009-2011 The enclave of white privilege gets expensive.

-City Scape. 2009-2011

The Zarus administration. directed most of its energy toward managing special projects, the lake dredging, flood plain reconfiguration, sidewalk.

According to the 2010 Audit, mismanagement of bond funds, Federal State and Local, has left the City $160,000 of debt. The Administration improperly spent from bond funds $160k and must pay the money back.

Management's claim that it was unaware the money would have to be paid back lacks credibility as this is a repeat audit finding. In 2009 management was cited by the auditor for misappropriating $32,075 in bond funds. The following year 2010 management misappropriated $120,885 from bond funds. The 2010 theft was deliberate and kept the City out of default; allowing the administration and Council time to avoid default and keep the police department. The City property tax millage rate tripled over a 3 year period, soaring to 29.5 Mils. During 2011 the Council tapped an environmental fund,100K, in order to keep municipal default at bay. Successive audits reveal a financially dysfunctional City with no cash reserve, severe cash flow problems, and a three year deficit spending record; $60,000 in deficit spending in 2010. Deficit spending violates state law.

Basic and mandated accounting practices were not performed. The City does not have a ledger for each of its individual accounts, a violation of state law; management blames the problem on accounting software. The City's financial records are not adequately transparent. Financial reconciliation of all accounts should, but does not, occur on a monthly basis. If fraud occurs the City would not be able to detect the fraud in a timely manner.

The City does not have a financially sustainable configuration. In the fall of 2010 the Mayor and Council reported that the City had no cash flow and no reserve. The bank would not approve a 50k tax anticipation loan. The city was unable to pay its bills for a 3 month period.

The Auditor recommended that the city discontinue the police services in order to avoid default. The auditor reported that the Council had made unethical requests.

Update: O3/20/2025