Misappropriation of Funds Leads to Change in Procedures for Town of Whitehall, Town Treasurer

During the March Town Council meeting a bombshell was dropped on Council members and the attending audience; but with good news backing it.

The town of Whitehall had not paid their taxes to the IRS for years 2016, 2017, 2018, and 2019, Town Treasurer Allissa Christensen, along with independent contractor Todd Watkins, relayed to the Council. The taxes owed amounted to $27,250.41; however, the penalties of the unpaid taxes tallied to $46,618.59. The good news was that the money had not been stolen or misplaced but remained in the Town’s coffers. The unpaid taxes have now been paid, but the Town is working with the IRS to minimize the amount of penalties needing to be paid. They received a letter from the IRS at the beginning of the week stating that the case was still under review and they would be contacted within the next 60 days.

“We were blindsided; we had no idea,” said Mayor Mary Janacaro-Hensleigh in an interview the day after the revelation to the Council was made. Janacaro-Hensleigh said that a folder filled with past due notices from the IRS was found in the former Town Treasurer’s desk. “We have been trying to clean this and other messes up for several months.”

If, worst case scenario, the IRS does not work with the Town to minimize the amount of penalties that must be paid, budget cuts across the board are the only way to pay the money owed, the Janacaro-Hensleigh said. The IRS may be able to create a payment plan for the Town, should this happen, she added.

Christensen reported to the Council that the town’s bank account was not regularly reconciled from 2019 to 2020 and that W2s and quarterly reports from 2016-2019 were never filed with the IRS.

“Just to make this clear to the audience and to the town, this was at no fault of our current Town Treasurer, correct?” Councilman Bill Lanes questioned. Janacaro-Hensleigh replied that Christensen inherited the situation, but was not the cause of it. Measures have also been made to prevent such an oversight from happening again.

She noted that Christensen and clerk Brittney Martinez have been working long hours to get many things back up to par, including the cemetery books which had not been updated in years. Cory Klapan, Town Works, added that he had not yet totaled up his hours put forth to updating the cemetery books with Christensen and Martinez, but it will take “weeks” to get them updated.

Also reported by Christensen and Watkins was the fact that $60,000 in Whitehall pool money had been misappropriated and used to pay wages for 2016 and 2017; about $30,000 per year. This money had originated in a mill levy on each household for $25 that was passed in 2016. While the money for the wages was always a part of the Town’s budget, somehow the pool money was misappropriated into the wrong account and some creative accounting was done. This money, the $60,000 is no longer in the town’s coffers and will need to be reinstated to the proper account via a resolution to budget from the general fund. The Janacaro-Hensleigh said the Town will look at that with the upcoming fiscal year.

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In news unrelated to the discoveries revealed about the tax issues and the pool money, the Town also revealed possible plans to lessen the law enforcement contract from $111,000 to $60,000.

“We knew that when the mill levy did not get passed there were going to be cuts across the board,” Janacaro-Hensleigh said. “This is one of those cuts.”

Councilman Roy McBride stated that the change in the contract would most likely mean that Whitehall would go from 8 hours a day of police service time, down to 4 hours. He said that he currently doesn’t believe Whitehall is getting what they are already paying for, citing that only an average of four tickets a month are processed, and that Legion Avenue needs to be better patrolled. Councilman Bill Lanes said he hates to see the budget cuts happen, and that he does believe we have great police presence in town, but tough decisions are going to need to be made.

“We need to move from the ‘80s,” Lanes said. Janacaro-Hensleigh corrected Lanes with a laugh, saying the Town needed to move from the ‘70s because a mill levy had not been requested in fifty years. The Council agreed that the mill levy was poorly advertised and misunderstood by many and that 2020 was an overall rough year to propose a mill levy, due to COVID-19.

The Council agreed to begin negotiations with law enforcement to get the best coverage for their dollar, despite the inevitable budget cut needing to be made. Christensen also noted that the mill levy could be reissued in November if the Council decided to do so.

• Commissioner Leonard Wortman gave an update on the Montana Development Building in Boulder, noting that the Montana Highway Patrol is considering moving their offices to that location, as well as their forensic lab. Should this happen, it would bring 25-40 people to the area for jobs.

• Wortman also reported that the proposed meat processing plant at the Golden Sunlight Business Park has completed their feasibility study. The plant is talking with a company from Idaho that is looking into the area, as well as continuing discussions on making the plant a co-op with local ranches.

• The Planning Board submitted recommendation to allow the food pantry building to proceed in building plans as discussed with Cara Sacry and Konni Smith, but they would not move forward with actual building until permitted.

The next meeting of the Whitehall Town Council will be held April 12, 2021 at the Town Hall.