City's decision shocks See Lancaster officials

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By Johnathan Ryan

See Lancaster officials expressed shock Thursday after Lancaster City Council voted to yank away $198,000 in funding for the promotions and tourism group.

After a closed-door session, council voted:

• To fund See Lancaster $27,829 of its $36,829 shortfall to pay staff salaries through the end of the month

• To initiate an independent audit of the group at the city's expense

• To cut the group's $198,000 from the city's proposed 2008-09 budget

All the votes were unanimous, with Councilman Audrey Curry and Preston Blackmon not present.

At two meetings last week – one Tuesday and the other of Thursday – See Lancaster Executive Director Frank Keel appeared before council.

See Lancaster receives most of its funding from the city's hospitality tax revenue, which is generated from the 2-cents-per-dollar tax on food and beverages sold at restaurants in the city.

On Tuesday, Keel told council about the group's shortfall, which was then estimated at $34,544. Complete figures weren't available, so council asked Keel to work with See Lancaster's board treasurer Brown Crenshaw to have complete and accurate figures by Thursday.

Also Tuesday, Councilman John Howard raised questions about differences in balances on one See Lancaster financial sheet printed in the morning and one printed later that afternoon.

Keel couldn't explain the discrepancies, so he was asked to talk to Crenshaw and have an answer come Thursday.

Crenshaw and Keel on Thursday pledged that tighter controls on spending would occur in the future and regular financial reports provided to council if council members wanted them.

The discrepancy on printed financial reports were not addressed Thursday.

But Crenshaw told The Lancaster News that the discrepancies were due to differences in one computer accounting software program used for one financial statement and a different one used for another. Just because one program didn't indicate a balance in one instance, for example, didn't mean the money wasn't there, he said.

Shaw praised See Lancaster during the Thursday meeting for "overall doing a good job," and Councilman Gonze Mackey praised the group's progressive work.

Council then went into closed session to receive legal advice from City Attorney Mitch Norrell. At one point, Crenshaw and See Lancaster board chairwoman Debbie Jaillette were asked to come inside the closed session.

After about 20 minutes, council emerged and voted on the three See Lancaster budget issues, as well as first reading of the city $20.8 million budget for 2008-09.

The meeting was then adjourned.

Asked after the meeting why he made a motion to slash See Lancaster's budget, Councilman John Howard said, "You've seen everything that's been going on there."

When asked if the decision might be reversed by second and final reading of the city's budget, Howard answered, "Anything is possible."

See Lancaster officials at the meeting said they were surprised by City Council's action.

"Right now, we have to go on the assumption that council won't change its mind and we'll have to seek funding elsewhere," she said Thursday. "We're very disappointed."

Jaillette said Friday that she was still in shock over what council did.

City's position

The mayor said Friday morning that questions remain about See Lancaster's finances that need to be answered before more money is given to the group.

A press released issued by the city Friday explains council's position.

It read: "Accounting irregularities have arisen that See Lancaster admits. The city, therefore, chose to remove their funding from the upcoming budget and conduct an independent audit."

The release said the city takes seriously its obligation to be good stewards of the taxpayers' money.

The release said the city has "plenty of time to make final decisions about the funding."

Contact reporter Johnathan Ryan at jryan@thelancasternews.com or at 416-8416