“That’s personal business.”

Dec 5th, 2020: Pelahatchie Town Meeting

“So my question to you is, where did you place the money, what bank account is it in, and what did you use to open up that bank account?”  – Mayor Beechem

“That’s personal business.” – Karl VanHorn

In that meeting and in those questions, the mayor was referencing a $21,000(ish) check that was sent to the Pelahatchie Volunteer Fire Dept, with instructions from the Rankin County Board of Supervisor to put it into a separate bank account. The BOS also sent copies of that letter to the different town officials.

The letter states, in part (as read by Karl VanHorn in the below video from the meeting):

“On August the 5th, from the board of supervisors, they had a meeting about the special fire fund. And what this letters states is, ‘Upon review of the banking information to which you have accessed demonstrated a number of questionable purchases of the special fire fund. As you know, the special fire fund was established for the express purposes of segregating and distributing these funds….

…because Rankin County has grave concerns about the continuing misuse of the restricted funds out of the town of Pelahatchie, as well as the inability of the volunteer fire department’s inability to oversee, manage, or access these restricted funds...”

Skip to around 49:40 for the full read.

Mayor Beechem points out that the only person that spends money from that account, that she knows of, is Karl VanHorn. He won’t report anything that he spends (to her), and the deputy clerk doesn’t report any expenditures, either. So, who is spending this money improperly?

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October 5th, 2020, at the meeting of the Rankin County Board of Supervisors, board attorney Craig Slay brought up the following item from the agenda:

I. Discussion of restrictions on disbursement of amount representing annual county fire protection funds to Pelahatchie Volunteer Fire Department

On the minutes, it says “No Action” because this is Mr. Slay informing the board of this situation. There is no vote required.

The summarized version is that each year, the county remits a “fire insurance rebate check” to the various fire departments throughout the county. Sometime in 2018, the chief of the Pelahatchie Volunteer Fire Department (Karl Van Horn) notified the board that he was having issues with accessing funds in a timely manner to buy necessary items for the fire department.

There were also concerns about how the town of Pelahatchie was spending their money, and that they were using fire department funds for items that were not for that department. Therefore, Mr. Slay, the state fire commissioner, Rankin County’s EOC Director, and fire coordinator “put their heads together” and came up with this solution.

They would ask the chief of the Pelahatchie Volunteer Fire Department to open up a separate bank account in its own name, and then deposit the fire insurance rebate funds into that account. The account is controlled and managed solely by the fire department, not the municipality. Mr. Slay informed the board that they were mailing a $21,000 check to the Pelahatchie Fire Department, and that’s where it would be deposited, and the expenditures reported back to the county directly.

Video starts at this item (or here is a link instead of the embed):

At the bench, from left to right: Jay Bishop (President, and District 5), Steve Gaines (District 4, which includes Pelahatchie), Daniel Cross (District 2), Jared Morrison (District 1, also Vice President), and Brad Calhoun (District 3).

A few relevant quotes:

“We had issues within a particular municipality [Pelahatchie] not providing the county’s fire insurance rebate funds in a timely manner to this department so that they can buy the things they need to do their job…because of these things, and because of some additional concerns about the use of [the county’s] funds by that municipality to purchase things that are not allowed under fire insurance rebate law, nor are they for the purpose of the fire department, because of those things, your counsel, the state fire commissioner, your EOC director, your fire coordinator have all gotten our heads together..”

“I’m holding in my hands a check that’s going, that is payable to the Pelahatchie Volunteer Fire Department. I’m making you aware that we are going to transmit this with instructions to place it into that segregated account, and to account for it just like any other fire insurance rebate funds that they would be responsible for, to account for the expenditure of this back to the county.”

“I’m fine with it, it’s the only one we’d be doing that way, is that correct?” – Jared Morrison (District 1)

“Well the only one we’re doing that way I think based on request by the fire department.” – Daniel Cross (District 2)

Around 39:21, Steve Gaines and Jay Bishop have a short interaction that raises a few questions. If you listen closely, you’ll hear “I was supposed to call Margie yesterday” and “mayor” and “Margie” once or twice more. Margie Warren is the alderwoman for Ward 3 in Pelahatchie.

 

Full transcript

[my notes and questions in brackets and italics]

Craig Slay, Rankin County, MS board attorney is speaking to the board of supervisors:

“This is a discussion on the disbursement of the amount representing annual county fire protection funds to the Pelahatchie Volunteer Fire Department.

You may or may not recall, we were notified by and through the chief of Pelahatchie Fire Department there were some issues with access to funding and some concerns about expenditures of funding that is restricted by statutes. So your county fire protection funds, which is what Rankin County controls as it relates to disbursements to your volunteer fire departments.

We sometimes refer to these as fire insurance rebate funds. Your [the board’s] position that you’ve taken as espoused is that we will receive fire insurance rebate funds from the state, and we will remit to the individual departments funds that are not restricted by the fire insurance rebate law so that they can buy tires, or phones, and other things that they really need to do their job that for whatever reason, state law does not allow the use of fire insurance rebate forms.

So we take on, as the county, the responsibility, I think we use those funds primarily to buy fire trucks. So we use the funds, and we use them in accordance with state law, but we provide back to the departments funds that are not restricted under the fire insurance rebate law.

They still understand that to be their part of fire insurance rebate funds, it’s just not restricted. So you control the manner in which those funds are made available to your individual fire departments.

Whereas here, we had issues within a particular municipality [Pelahatchie] not providing the county’s fire insurance rebate funds in a timely manner to this department so that they can buy the things they need to do their job.

Because of those problems, because of some addition concerns about the use of your [the county’s] funds by that municipality to purchase things that are not allowed under fire insurance rebate law, nor are they for the purpose of the fire department, because of those things, your counsel, the state fire commissioner, your EOC director, your fire coordinator have all gotten our heads together about what we need to do here.

So what we’ve done is we’ve asked Pelahatchie Volunteer Fire Dept to go and to open up in its name and through its corporate documentation a separate bank account that is controlled solely and singularly by the fire department. So the municipality has no access to that account, and will not be involved in expenditures related to that account.

This is all done with the blessing of your state fire commissioner’s office, by the way. They suggested this would be an appropriate way of handling these funds going forward, so you don’t have this continuing issue of a conflict over the use of the funds.

So I’m holding in my hands a check that’s going, that is payable to the Pelahatchie Volunteer Fire Department. I’m making you aware that we are going to transmit this with instructions to place it into that segregated account, and to account for it just like any other fire insurance rebate funds that they would be responsible for, to account for the expenditure of this back to the county.

We’ve also asked the fire commissioner to consider doing the same thing using the same approach with this department as it relates to city fire insurance rebate funds. That’s not your deal, that’s the state fire commissioner’s deal. We’ve asked them next year, to send the money to the fire department with instructions to place it in a segregated account, so that the city portion of their rebate funds do not get caught up in a municipal problem.

Does anybody have any concerns or questions about that? I wanted to make you aware, because when we send these over to the fire department to deposit, it’s gonna be a different new day as it relates to how that municipality interacts with that fire department.

Jared Morrison (District 1): “I’m fine with it, it’s the only one we’d be doing that way, is that correct?”

Daniel Cross (District 2): “Well the only one we’re doing that way I think based on request by the fire department.”

Craig Slay: “Let me first say that it’s unique to begin with. It’s the only volunteer fire department that we have that has connections both with the county and a municipality like that. The Florence Volunteer Fire Department has an excellent working relationship with its city, that may be a common situation, Jared, so I may be speaking a little bit out of school that this is the only one. It’s the only one with a current connection to a municipality that’s having a problem.

Daniel Cross: “Yeah the only request, I think.”

Jared Morrison: “I’m fine with it, it’s a shame it’s a necessity.”

Craig Slay: “Correct. Not to put too fine a point on it, but 2 years ago, the ’19 maybe the ‘18s, the rebate funds that were provided were never deposited to the account of or for the credit of the volunteer fire department. They are still waiting to get access to monies that this board made available to that department. And since everything is going through a bottleneck called the town of Pelahatchie, they can’t get documents, they can’t get records of where it was deposited, they have a hard time getting records of how it was used.

The ’19 funds that were provided, a portion of those funds, we know because I personally have seen the bank records, about 6000 dollars’ worth of the fire department’s funds were spent by the municipality to repair a weather siren.

[NOTE: these weather sirens were brought up in the June 1st, 2020 meeting by Chief VanHorn – more on this below]

There is nothing in state law that authorizes the use of fire protection funds to fix a weather siren. Nothing. And no one can explain, no one’s bothered to explain, why did we use $6000 worth of the fire department’s money to fix a weather siren that’s inside the town? I don’t know the answer to that question. I don’t know why. It would seem to me that that’s the kind of question that ought to be asked by others in state government. [meaningful pause]

[NOTE: I assume that he’s alluding to the state auditor]

So. That’s part of what’s driving this process, it’s obvious to me that monies have been misspent as it relates to these funds. Certainly they were not statutorily authorized, we believe that’s an improper expenditure.

So what this process does is it eliminates the possibility that the town could do that with these monies going forward.

So I think this check is about $20,000 worth, right at $20,000. We can rest confidently now that as it relates to going forward, that they will have monies available for department purposes.”

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Now let’s roll it back for context:

 

June 1st, 2020: Tornado Sirens and Fire Insurance Funds

39 minutes into the below video, Chief VanHorn brings up two weather sirens that need to be replaced for $3005 each. The board makes a motion and then votes to replace the sirens.

At 42 minutes in, the fire insurance rebate funds come up. Both Karl and Margie attempt to blame the mayor for the delay in receiving those funds, due to her not filling out the form that Karl sent over 5 month after the due date.

The form was due Dec 31, 2019 and he sent it to the mayor in May 2020.

That form is supposed to be completed by “the municipal clerk, financial officer, or CPA of the municipality.”  That’s not the mayor’s job.

This is the full 2016 version of that form, as filled out by Bettye Massey, the town clerk at that time.

And the relevant part:

 

Video of meeting:

Transcript (to the best of my ability) of excerpt regarding the fire insurance rebate:

Margie: “Did you hear from the fire rebate, the insurance from the fire department?” (didn’t catch her words perfectly)

Karl: “No ma’am. The paperwork has been sent to the town attorney and the mayor. As of the 27th, the state fire coordinator said if we want our insurance rebate money, he needs the paperwork immediately.”

Margie: “And we don’t have it. That is, the amount is anywhere from 20 to 25,000 dollars. This is the amount of money that the fire department operates off of that takes care of the fire trucks and all the fire equipment stuff. This is something that we NEED to get in, and mayor, I understand that it was sent to you, and you sent it back blank or something, I don’t know.”

Mayor: “I didn’t send it back at all, we have a deputy clerk. That’s her job, to fill it out. And when we received it, it was already late…(she goes on to explain that they need more time to fill things out)…it needs to be filled out. Send it to the deputy clerk.”

There’s a pause.

Margie asks Karl to check something. I can’t quite hear if she says “check with Barbara” or “check tomorrow” so, moving on to Karl’s response.

Karl: “I’m going to ask the board to allow me to assist Mrs. Harper in going through and getting the invoices that I’ve got to have for this form. I’m just going to put it out there like this: if we don’t get that insurance rebate money, we’ll have to turn the lights off.””

Michael Adams makes a motion to do that, they vote on it and move on.

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Emails and Unanswered Questions

Dec 14, 2020 Email to the Rankin County Board of Supervisors:

“Regarding Pelahatchie: I watched the board meeting on Oct 5th, and Craig Slay’s explanation of the additional bank account for the fire department. I believe the issues happening in Pelahatchie (and all municipalities) reflect on our county, and I’m baffled that there hasn’t been any communication from the county, including Mr. Gaines or Mr. Slay, with Mayor Beechem and the board of aldermen regarding issues with accessing records, funding for items, etc. ”

I did receive three responses. Two general acknowledgments from Daniel Cross (district 2) and Jared Morrison (district 3), and a phone call from Brad Calhoun. No answers, but still worth noting.

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Dec 28, 2020: Email to the Town of Pelahatchie for public records

“Under the Mississippi Public Records Act § 25-61-1 et seq, I am requesting an opportunity to inspect or obtain copies of the following public records:

1) The contract in place between the Town of Pelahatchie and Karl VanHorn (fire chief and inspector).

2) Any invoice(s), receipt(s), contract(s), or other documentation related to the approx $6000 spent to repair the weather siren in 2019.

3) Front and back copy of any check(s) that were written for the above-referenced repair of the weather siren in 2019.”  (this was before I discovered it was actually in 2020)

Dec 29th, 2020 email to the Town of Pelahatchie:

“I would also like to request a copy of the most recent signed contract between the Town of Pelahatchie and the Pelahatchie Volunteer Fire Department.”

As of the date of this post (Jan 17, 2021), there has been no response from Pelahatchie in any form. I sent two reminders (one for each email).

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Jan 4, 2021: Email to the Rankin County BOS and Board Attorney Craig Slay

“Good evening Mr. Slay,

I emailed the board of supervisors last month with a concern about the communication and financial issues going on regarding the fire department in Pelahatchie and the town, as well as the county. I’d like to ask a few questions (and request a few records) on this that I hope you can help with:

UPDATE 2/3/20:
Preliminary costs are $41.50 (got a mailed response at the end of January). Money order or cashier’s check, only. Money order has been sent, so now just waiting on that too.
I also sent the following requests for public records to the Town of Pelahatchie:

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