TUPELO • The commissioners of the Town Creek Master Water Management District have illegally paid themselves more than $350,000 over the past two decades, according to an investigation unveiled Monday by state Auditor Shad White.
Created by court order in 1961, the Town Creek management district was intended to help prevent flooding and has taxation authority in parts of four Northeast Mississippi counties: Lee, Pontotoc, Prentiss and Union. The auditor charges that the district’s board members have padded their pockets by paying themselves daily rates higher than the state allows when conducting business for the district.
The auditor’s office served the district’s board members notice of the allegations on Monday, with a demand for repayments. White himself discussed the charges in a Tupelo press conference.
The past and present board members identified in the audit investigation are James Robinson, Jim Bucy, Jim Long, the now-deceased John Morgan, Kenneth Oswalt, Luther Oswalt, Michael Pannell and Teressa Winters.
Including interest and investigation charges, the auditor has demanded repayments totaling more than $500,000, with some board members receiving claims for as much as nearly $100,000.
Surety bonds covering the board members – essentially, a type of insurance policy – should theoretically ensure that misspent funds are recovered, though the bonding company could fight the auditor’s demands.
“This is an example of a small, tucked-away board that very few people know about, using its power to overpay itself,” White said in a statement. “This is the danger of hidden boards and small government offices. A lack of transparency opens the door to big losses for taxpayers.”
The Lee County Chancery Court created the Town Creek water district, and the court has held the power to appoint the commissioners that govern the district. The district has sought to control flooding primarily by digging retention ponds and drainage ditches and controlling the beaver population.
Under state law, the commissioners of the management district board may only pay themselves $12.50 per day, plus reimbursement for expenses, when conducting business for the management district.
Dating as far back as 1999, however, the auditor says commissioners began to approve payments to themselves in excess of the legal limits. By 2014, the auditor says commissioners were paying themselves $600 each for board meetings.
In the mid-1990s, a Daily Journal investigation raised questions about the Town Creek water management district’s financial controls and bookkeeping practices.
The auditor has also raised questions about the property tax levy that provides funding for the Town Creek management district. That levy was approved in 1967 only to help pay off a federally-backed loan. However, as property values have risen, the revenue provided by the levy has outstripped what’s need to service the loan and the loan itself was finally paid off in 2008, over a decade ago. The tax levy remains in place, however.
Only property owners with land within the district’s boundaries pay the district’s tax levy of 12.67 mills. Most of the district’s land is in Lee County, including the Mall at Barnes Crossing.
According to White’s office, the Town Creek management district collects more than $700,000 in revenue annually and has cash reserves of $1.3 million.