The Union Recorder

June 7, 2014

Council caught on tape

Audio recording raises bank retaliation question

Kyle Collins
The Union-Recorder

MILLEDGEVILLE — Audio recordings of a Milledgeville City Council meeting have disclosed that $5.1 million in city funds were withdrawn from Century Bank & Trust following a discussion of whether it would be seen as retaliation after the bank president wrote a letter to the editor sharply criticizing the council.  

The meeting occurred at City Hall on March 3 following a two-hour closed session to discuss legal matters. The money was withdrawn from savings accounts and transferred to Wells Fargo Advisors on March 13.

Chat Daniel, president of Century Bank & Trust, declined to comment on the transaction even though his Jan. 22 letter, published in The Union-Recorder, taking issue with the city council position on proposed city-council consolidation was the subject of concern. His bank is also the repository for millions of dollars in city pension funds. They were not affected.

Copies of the letter were distributed to the six councilors after the letter was published. Discussions about the letter continued at the March 3rd meeting, which may have violated the state's open meeting law. No members of the public or press were present. But an audio recording obtained by the newspaper captured the discussion.

A document was circulated asking councilors to authorize City Manager Barry Jarrett to withdraw the city's money market funds from Century Bank & Trust.

The document touched off a lively exchange among councilors and Jarrett regarding the possible public perception of council retribution for Daniel's critical comments.

Some councilors signed the document nonetheless, but it was shredded after City Attorney Jimmy Jordan advised that Jarrett could move the money from one bank to another without council authorization.

Councilor Walter Reynolds said several council members were offended by the Daniel letter because they felt “it called them idiots” for their opposition to a referendum on consolidating the governments of Milledgeville and Baldwin County.

“They simply oppose it because they arrogantly think they know better than their constituents,” wrote Daniel.

Reynolds took exception to the council's sentiment to withdraw the money from Daniel's bank and put it with other banks.

“You all can lay it out anyway you want to, but the reason I have an issue with this is because of the way it was presented to us,” he is quoted on the audio recording. “At the same time that we were all handed a Xerox copy of an editorial of a private citizen critiquing the city council, we were also asked if we wanted to move funds. Now, I don't see any other way that can be sliced except for retaliation.”

City Manager Jarrett then asked Reynolds, “What's wrong with retaliation?”

“Yeah,” joined in Councilor Denese Shinholster.

Prompting Jarrett to add, “It's the way you do business. If you go to the Chevrolet place and you don't like the way the salesman handles business, you go to the Ford place. You might even go to Macon and go to the Chevrolet place over there.”

Reynolds replied, “Well, sir, you as a private individual have every right to do that, but I think we as a public institution don't have the right to do that. We are lashing out for him exercising the highest form of protected speech, and that is to critique one's government. You can criticize your government, and you shouldn't have to face retaliation from that.”

Shinholster and Councilor Boo Mullins pointed to the federal government's closing of military bases and the shutdown of Central State Hospital in Milledgeville as examples of government retaliation.

Council Steve Chambers expressed concern over the public perception of withdrawing city funds from Daniel's bank, but Shinholster assured him “the public is only going to perceive what you tell them.”

Chambers replied, “I don't tell them anything.”

Shinholster answered, “They won't know why we are moving our money.”

Shinholster then questions why Chambers is “singling out this as retaliation.”

Chambers responds, “Because it's written all over it.”

Mullins addresses the six council members present about shopping or moving the investments from Century Bank. Reynolds abstained from answering the question.

“We've got four votes. Excuse me no votes, but you can count,” Mullins said.

Mullins mentioned moving that money at the Georgia Municipal Association Conference Jan. 24-27 shortly after the letter to the editor ran.

“You can put it on me. I mentioned moving it up at GMA. I'm the one that did it,” he said.

Councilor Jeanette Walden had no problem with moving the $5.1 million out of Daniel's bank, shopping it around to other banks for a higher interest return. She did not, however, want city pension fund money removed from Century Bank & Trust. She said the bank has handled pension funds well and “I don't want us to do anything with that because they are real good, and you know that.”

Pension funds are administered separately by a pension board of which Walden is a member. Jarrett said members of the board were coming up for reappointment, and several other banks have been given information on the pension fund.

At this point of the discussion, City Attorney Jordan restated that the city manager can move city operating funds from one bank to another without council approval. He said councilor signatures on a document would only create a “smoke and mirror” appearance.

Walden then recommended the city manager shred the signature document, and Jarrett assured her he would do just that.

When asked about how the $5.1 million moved from Daniel's bank to Wells Fargo was faring, Jarrett said the new interest rate is 2.1 percent compared with only .5 percent the city was getting at Century Bank & Trust.

He also said he periodically checks on what banks are paying for interest on savings accounts that hold the city's operating funds, and if he finds it is beneficial to move money from one to another, he does so.

“This was not retaliation,” said Jarrett.