FERRELVIEW, Mo. — An internal financial review shows the Village of Ferrelview faces serious financial trouble due to municipal court collections.
During a Tuesday, June 13 meeting, the board of trustees provided documentation showing the village owes the state of Missouri more than $30,000 due to an overcollection of traffic fine revenue and court fees from last year. Mickey Vulgamott — Ferrelview’s treasurer who also serves as municipal court clerk — gave the board a grave financial report.
Former village treasurer Dora Morgan resigned in July of 2016 with several people filling in until Vulgamott’s appointment this past April.
Vulgamott said the village recently received a letter from the Missouri Auditor’s Office, stating the village must submit its financial reports to the state by June 30. She is working to compile the required documentation, but the larger problem is the funds collected in 2016 from the municipal court.
A Missouri state statute commonly known as Macks Creek Law went into place in 1995 and regulated revenue collected from traffic fines and court fees. In 2015, Senate Bill 5 replacedMacks Creek Law, further limiting the allowable collection.
Macks Creek Law — named for a small Lake of the Ozarks area municipality known for a controversial speed trap — limited the amount of money collected from traffic fines to 45 percent of the city’s general operating revenue. In 2015, that number decreased to 30 percent. Senate Bill 5 lowered allowable collections to 20 percent for most Missouri municipalities outside of the St. Louis area, starting with the 2016 fiscal year.
In the June 29, 2016 issue, The Citizen reported that Ferrelview appeared to be in danger of violating the law regarding its court collections after a review of its financials. The investigation arose last year due to allegations of citizen harassment and an uptick in ticketing from Ferrelview Police Department chief Daniel Clayton.
However, village officials in limited responses to inquiries from this newspaper stated the excess money would simply be remitted to stay in compliance.
In the past year, the village voted in three new trustees with another board member recently resigning. Theresa Wilson, recently elected and now the board chair, also spearheaded a citizens’ petition to have the state auditor’s office conduct an audit in an effort to give citizens of the small village of about 450 more transparency into how their local government operates.
Vulgamott said the village now owes $30,201.17 to the state due to overcollection from the municipal court. Since the village can’t pay, the bill will be sent to the Missouri Department of Revenue, and the village’s sales tax revenues will be withheld to recoup the money.
Additionally, the village has already collected its allowable limit from the municipal court for 2017. Vulgamott suggested the trustees create an account to set aside future collections so they can be remitted to the state as required.
Macks Creek was unincorporated in 2012 by a vote of its residents, after that village found itself in financial hot water and declared bankruptcy.
Such a fate is not far-fetched for Ferrelview. According to research, Senate Bill 5 includes a provision that allows citizens to dissolve their municipality if they can’t pay the state what it is owed.
According to The Citizen’s research, any municipality found in violation of the law faces a mandatory vote with 60 percent of the vote needed for dissolution. According to RSMO 479.368.1, “ … any such city, town or village that fails to remit the required excess revenue as required by section 479.359 shall have an election upon the question of disincorporation.”
While the board did not address any question of disincorporation, Vulgamott did express concern that the village would lose its municipal court with the Platte County Circuit Court taking over operations. Presiding circuit court judge James Van Amburg would be involved in any such process, she said.
Ferrelview village attorney Scott Campbell, who the board rehired in April after his resignation last summer, noted municipalities across the state, and in Platte County, are wrestling with the new law. In Platte County, Houston Lake and Camden Point have recently dissolved their municipal courts and even Platte City has toyed with the idea.
Vulgamott agreed that Ferrelview was facing the same future.
“I think once the audit is over our court is going to Platte County,” Vulgamott said referring to the impending state audit.
Last year, Wilson gathered enough signatures to launch an investigation by the Missouri State Auditor’s office into the city’s current financial processes and the last fiscal year. That audit has yet to begin, with Vulgamott reporting that state auditors will announce their arrival and hold a public meeting prior to the investigation.
The audit is estimated to cost around $30,000 with the village responsible for paying. With a state audit looming and a bill for excess court revenues currently awaiting payment, the financial situation in Ferrelview is “not pretty,” according to Vulgamott.
“Our expenses are way over our revenues, so you guys have some decisions to make,” Vulgamott told the board. “I think you need to sit down and have a budget meeting because there’s just nothing there.”
Even a way to raise a bit of revenue comes with its own costs.
Clayton suggested at least one of the two aging police cars sitting at Ferrelview City Hall could be sold. However, the emergency equipment would need to be removed before sale to a private citizen. The village would need to pay for those removal costs, although some equipment could then be reused in another vehicle. The trustees agreed to move forward with the sale of one of the vehicles, which currently sits in front of city hall with flat tires and faded paint.
Clayton, who started work in July 2015, has been at the center of several of Ferrelview’s recent controversies.
After citizen claims of misconduct arose last year, the Platte County Sheriff’s Office and Federal Bureau of Investigation investigated Clayton’s conduct, but no charges were filed. A civil lawsuit against Clayton over his allegedly aggressive ticketing practices is pending, filed by Derrick Hayes, Olathe, Kan., and Tara Borron of Kansas City.
Clayton’s tenure has been marked by increased filings of municipal citations, according to research The Citizen did last year. This increased volume led to an increase in court income, triggering the potential Macks Creek Law violation and the current need to remit revenue back to the state.
Ticket filings took a marked increase in 2015 with the village more than doubling its revenue from fines and court fees in 2016.
Despite complaints made against him in Ferrelview, Clayton has said he’s just doing his job and is making an effort to clean up the small village. In April, a jury awarded Clayton more than $300,000 in damages in a wrongful termination suit he filed against the City of Mosby. He claimed he was fired on the basis of his race in his job previous to joining the Ferrelview department.
The village’s municipal court also appears to in violation of reporting requirements, with the last financial statement filed with the Missouri Auditor’s Office dated to 2015 for the fiscal year ending in 2014. In that filing, the section pertaining to operating revenue obtained from fines and court costs was left blank.
The next filing with the state auditor is dated October 2016, when the municipal court certified that it “has adopted the procedures required by RSMO 479.360 and substantially complied with the procedures as of Sept. 26, 2016.” The form sets out compliance for an entire fiscal year, but on the form the fiscal year is crossed out with the “as of” date handwritten onto the form.
Dan Weedman, the village’s internal auditor, reported at the June 13 meeting that the village appears to be slowly putting its financial records in order, which will benefit the village during the upcoming state audit.
“If I were to give it a grade before, it would have been an F,” Weedman said. “Now, things are up to around a C-plus.”
At the May board of trustees meeting, a laundry list of problems with the village budget and financial reporting was aired. When Vulgamott started on the books, she said it appeared the city was in the red by $40,000. That initial impression was incorrect, mainly because deposits had not been entered into the system, but the situation is still bleak.
Vulgamott issued a public profit and loss document through June 13 with the village’s total gross profit listed as $33,530.48. Total expenses were at $44,904.41, putting the village in the hole by $11,374.41.