IRS Was Sending Flatonia Lien Notices for Serious Delinquencies

Flatonia City Manager Sarah Novo revealed some alarming practices that took place within the City prior to and during her tenure, which began last March.

She detailed them in a letter presented to the mayor and City Council when she resigned last Monday. The Record obtained a copy of that letter late last week.

In the letter dated July 29, Novo wrote about ending certain “questionable” prior practices. Some of those included the City awarding employees with gift cards. She said one salaried employee was allowed to collect overtime pay while other salaried employees “who also put in considerable hours” did not receive that benefit.

She said. “roadblocks have been erected to stifle momentum or challenge staff’s guidance in trying to right the ship and get things on track administratively, financially and in terms of establishing community and organizational trust that is desperately needed.”

Some of those roadblocks, she said, included “Mayoral involvement in personnel matters, dissuading staff from placing an item on the agenda to report concerns about the City Attorney to Council, and discouraging renegotiation or creation of contracts.”

Concerning contracts, she said the City of Flatonia does not have a formal written agreement with Flatonia Fire and Rescue.

“I have also brought to the Mayor and Council’s attention that, to my knowledge, all of the fire vehicles formerly owned by the City of Flatonia and presumably purchased with city funds were signed over by the former City Secretary and gifted to the Volunteer Fire Department without formal council approval,” she wrote. “This is an unauthorized ‘gift’ of taxpayer funded equipment to a non-profit that the City has no contract with, and I would assume would rise to the level of concern with the elected leaders of this City that it caused me. It has not.”

Many of the practices Novo detailed in the July 29 letter were ones that she brought up to the Council in a report she drafted for her one-year performance evaluation on April 9. She said the Council never provided her with formal, written guidance following her six-month and one-year evaluations, even though her contract with the City requires the Council to provide her with written guidance.

The April 9 report raises additional alarms concerning City finances.

“Some bills went unpaid for years,” Novo wrote the Council at the time. “Companies threatened to stop taking city checks or doing business with the City, and the IRS was sending lien notices due to serious delinquencies. Required reporting was often not completed, and policies/procedures are non-existent. Even now (10 months after initially taking on City Secretary duties), checks (dated 2010) were recently found when organizing the former secretary’s office which were uncashed and total over $3,000. Employee healthcare payments for police officers went unpaid, resulting in discontinuation of contractual benefits.”

The Record obtained a statement from the IRS to the City confirming that the City owed the federal government more than $5,600 in unpaid payroll taxes dating back to 2016. Novo said the City was also on nonpayment lists with the Lower Colorado River Authority and Texas Municipal League.

“ There has not been another one of these notices received during my tenure, however I have concerns about the future,” Novo told the Record last Thursday.