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Flagler Mosquito Control District In Crisis as It Faces $1.1 Million Deficit in $1.8 Million Budget, Weeks After Dedicating New HQ

| August 3, 2017

Jules Kwiatkowski, chairman of the three-member, elected Mosquito Control Board, addresses officials before the ribbon-cutting at the district's $2.1 million new headquarters last June. Kwiatkowski said he was unaware of any financial problems. (© FlaglerLive)

Jules Kwiatkowski, chairman of the three-member, elected Mosquito Control Board, addresses officials before the ribbon-cutting at the district’s $2.1 million new headquarters last June. Kwiatkowski said he was unaware of any financial problems. (© FlaglerLive)

In early June, Flagler County’s Mosquito Control District officials were celebrating their new headquarters on the grounds of the Flagler County Executive Airport. They invited county commissioners and others to bask in the ribbon-cutting for a $2.1 million, 10,000-square-foot facility with its own helipad to replace its more cramped offices on Utility Drive off Old Kings Road. 


The celebration did not last. 

The 14-employee district, supported entirely by revenue on Flagler residents’ and businesses’ property taxes in the eastern end of the county, is facing a $1.1 million deficit as a result of construction of that new building and “overspending in almost all line items,” as Joe Cash, the district’s executive director, put it to staffers in a memo two weeks ago obtained by FlaglerLive, along with other documents. (See below.)

The district provides mosquito control through spraying and inspections in the Hammock, Flagler Beach, Palm Coast, Bunnell, Beverly Beach, Plantation Bay and other areas of eastern Flagler County.  The district’s operations are essential to the local quality of life and public health.

“But we’ve developed a couple of plans to resolve that,” Cash said today, noting that actual mosquito spraying and inspection services will not suffer, even though some inspections will be cut back and six of the district’s 14 employees will be laid off. 

The deficit came to light, Cash said in a July 28 letter to the mosquito control’s elected board members, only when an accounting error was discovered. “The fund balance was incorrectly stated and by the time the error was discovered the budget was overspent by $1.1 million,” he wrote. 

Joe Cash is the executive director of the mosquitgo control district. Click on the image for larger view. (© FlaglerLive)

Joe Cash is the executive director of the mosquito control district. Click on the image for larger view. (© FlaglerLive)

“I have placed a freeze on all but essential spending through this year and into the next,” he wrote, “but even that will not be enough to balance the 2017/2018 budget which as of mid-July was projected to fall $1656,000 short even with the 5% tax increase approved.” 

He calls measure to balance the books “harsh.” 

The district laid off four employees this week–its four part-timers. Two full-time employees will be laid off. Pilot training is “out,” according to a memo prepared by Knapp (the district has its own helicopter, and that helicopter’s flights will be cut back.) Cash is losing his health insurance, the district’s finance director, Rachel Knapp, is losing her dependents’ health insurance, both will not see pay increases. Employees will see a $250-per-employee increase in health insurance costs (it’s not clear if that’s per month or for the year). All remaining employees’ raises will be limited to a 3 percent cost of living increase.

The district is hoping to sell its old building on Utility Drive to the Palm Coast city government for $300,000, what would essentially be a b ail-out at city taxpayers’ expense, to make up some of the deficit. The district had been in negotiations to sell the building to Palm Coast  about a year ago but the district had backed out, Cash said in an interview Thursday evening. “We didn’t have enough time to execute the project with what we were doing with the new building,” he said. 

“We’ll make it up even if the building doesn’t get sold,” he said of the deficit. “The services to residents will not suffer. We will contract our operations and consolidate, we’ve done this before during hurricanes.” But in the wording on the agenda for the emergency meeting, he was anticipating that if Palm Coast does not buy the building, the district would need to further go into its reserves. 

He had called a special, emergency meeting for Friday morning at 10 a.m. for the three-member board to approve some of those measures. (The documentation sent board members listed the date of the meeting as Aug. 7.) He had to cancel the meeting after the public notice had been deemed improper: it had only gone up on a door at the district office. There was no mention of it on the district’s web site, and it may not have provided for the legally required minimum of 24 hours’ notice. 

The district is especially proud of its own helicopter, whose missions will be halved. Click on the image for larger view. (© FlaglerLive)

The district is especially proud of its own helicopter, whose missions will be halved. Click on the image for larger view. (© FlaglerLive)

But Cash’s July 28 letter to board members included a suggestion to board members that, had they complied and the actions been carried out, would have been a violation  of the state’s Sunshine law: “If you wish, we can set a special meeting to discuss this,” he had written the board members, “or you can respond to this email with your approval to release $100,000 in reserves and sell the Utility Drive property.” No such approvals by email are legal . “At the next meeting, you can retrospectively act on the approvals requested,” Cash went on. 

Elected board members meet regularly and oversee the budget. But they seemed clueless about the crisis Thursday, other than from the materials they had recently received from Cash. 

“I thought everything was going good, we had the new building up and everything,” Jules Kwiatkowski, who chairs the board, said in an interview Thursday. “I didn’t know about any problems.” He had received Cash’s and Knapp’s memos but referred all further questions to Cash, saying he’d know more after the special meeting. Less than an hour later, he acknowledged that the meeting had been cancelled or postponed. (Cash said it would take place in seven to 10 days.) 

Barbara Sgroi, another board member, who had also received the memos and outlines of proposed cuts, described the matter as “a little bit of a situation that we’re going to talk about at the meeting.” At first she referred to the “situation” as a “deficit,” but then, after her husband whispered to her nearby not to use the word, she said it wasn’t a “deficit.” (It is, in fact, a deficit, as Cash himself characterizes it.) 

Sgroi then explained, between further whispers in the background, “When we built that brand new building I think the cost was a little bit expensive but then we ran into some problems, you know with the contractor and things like that, and right now that’s what we’re going to discuss.” She added: “But it’s nothing serious, there’s nothing, ‘Oh my God.'” 

The numbers Cash and Knapp presented, however, say otherwise, considering that the deficit is 61 percent of the budget. And the words Cash used previously to alert district staff about the emergency left no doubts about the “critical” nature of the emergency (a word he used in his letter to board members).

“Due to construction activities and overspending in almost all line items, we are facing a very tight budget for the remainder of this year,” Cash had written employees, “and a deficit in 2017-2018.” Effective immediately, he commanded, every purchase of $250 or more had to have his approval, without exceptions. “If I am not in the office, text me for approval,” he wrote, ending his memo with a required “sign off” from every employee.  

Barbara Sgroi, one of the three district board member, described the financial crisis as a minor 'situation.' (© FlaglerLive)

Barbara Sgroi, one of the three district board member, described the financial crisis as a minor ‘situation.’
(© FlaglerLive)

In some counties, mosquito control is an arm of county or city government. In Flagler County, it’s an entirely independent operation, with its own elected board and taxing authority. (A $175,000 house with a $50,000 exemption ends up taxed at around $30 a year by the district, more now with the coming tax increase.) That doesn’t preclude some cooperation between the district and the county, as with the deal that provided the airport land for the district’s new building. 

But Thursday evening was the first that County Administrator Craig Coffey was hearing of the emergency at the district. “They have not reached out to us for any assistance,” he said. “We’re always willing to help where we can.” 

It remains unclear how a $1.1 million error could escape the oversight of three board members, the finance director, the executive director and even the district’s independent accountant.

That accountant, Julieann Klein of Lombardo Spradley Klein in Daytona Beach, explained it this way in a July 25 memo: “When the 2016-2017 budget was drafted the actual fund balance for the year ended September 30, 2015 was used as the amount of fund balance to be carried forward d into the 2016-2017 budget year, The amount that should have been used was the projected fund balance as of September 30 2016 The budget process occurs in June and July several months before the end of the fiscal year so this amount has to be projected usually based on the budgeted amounts for the fiscal year prior to the one being budgeted, in this situation September 30 2016 as adjusted for any unusual activity known at the time of the budget process.

“Prior to the construction of the new facility the District’s budget and actual amounts have been fairly even so the prior year’s fund balance was always close to the carryforward fund balance. When the District began construction of the new facility and began to use the funds available from prior years there was a dramatic drop in the carryforward fund balance which was not properly reflected in the 2016-2017 budget. Since the District has not utilized funds from prior years in a very long time the staff preparing and reviewing the budget did not realize the error until after the audit was completed.”

Neither Knapp nor Cash responded to–or acknowledged–public record requests Friday. Knapp provided requested documents Monday morning.

Crisis at Flagler’s East Mosquito Control District

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49 Responses for “Flagler Mosquito Control District In Crisis as It Faces $1.1 Million Deficit in $1.8 Million Budget, Weeks After Dedicating New HQ”

  1. jim lang says:

    Just take some if not all of that money ur wasting on the consulted for new roads and give it to mosquito control. At least it will be put to good use instead of wasting it…..

  2. Anonymous says:

    Can’t figure it , I was offer a job 5 years ago part time at 9$ an hour and getting up at 3:30 am to spray , what a joke that was . And they still can’t make it? Get with the 21 st century and pay descent salaries not slave wages

  3. palmcoaster says:

    Now I wonder about our mosquito spraying, but man they have a brand new facility…hello?
    My taxes are for the mosquito spraying not for palatial installations.
    Thew only one benefiting here is the developer of the facility and the pockets of the one’s that approved it.
    What a shameful situation now I bet the mosquito spraying will be more absent than ever before and the fire workers over it! Just to have some 2 plus million facility! What was so wrong sitting in the old facilities? I bet Coffey’s influence allover this misuse of our hard earned taxes.

  4. palmcoaster says:

    Also a brand new helicopter with no money to fly spraying full time? Should be punishable by law to misuse taxpayers funds for what is not intended. 1.1 million financial oversight…? Very fishy to say the least.

  5. Alphonso Zeimers says:

    [Note: There is no connection between Palm Coast government and the Mosquito District. They are two separate government agencies, each with their own elected board and taxing authority.–FL]

    Palm Coast has turned into a typical government boondoggle. I’m sure that our new illustrious mayor can save the day. All that is required is to jack up the taxes. We have plenty of room to go. Palm Coast could borrow up to 19 trillion dollars. Imagine the thousands of beautiful trees we will have. We could pave our streets with gold and thousands of street lights and miles and miles and miles of fabulous sidewalks. Oh, I forgot to mention hundreds of public golf courses and parks named after all the beautiful people that once patrolled our fantastic city.

  6. ConstantlyAmazed says:

    SIMPLE FIX

    1. Sell the new building and have the Board go back to the old building, Hey deal with it.
    2. Sell the helicopter, there so proud of and contract the work out save on payments, insurance, etc
    3. Conduct a complete and thorough audit of the books going back 5 years (independent) and see what other monies were “mistakenly” missed.

    And most importantly

    4. Constitutionally change control of the board to the county government and get rid of these incompetent fools.

    Enough is enough already.

  7. TeddyBallGame says:

    “It remains unclear how a $1.1 million error could escape the oversight of three board members, the finance director, the executive director and even the district’s independent accountant.”

    Florida; You never fail to disappoint.

  8. Flatsflyer says:

    Sounds like total incompetence, get rid of the Commissioners, the dIrector and the “out sourced” Accounting firm. Knock off the Donald J. Trump management style and phiosphy.

  9. Sw says:

    Keep spending money frivolously and count the deficits SMH unbelievable

  10. Old Lady says:

    tOver budget? Overspending? Have not heard the spraying controls warning. Along the St. Joe’s canal, there is an overabundance of mosquitos. Have not seen nor heard of any mosquito control yet. Let’s get over ourselves and control the problem.

  11. r&r says:

    Where did they think the money was coming from the tooth fairy? Where was Coffey and the rest of the councilmen and the guy that should be in control?

  12. Layla says:

    Maybe I’m the odd one here, but the first thought that came to mind upon reading this article was, “oh my God.”

    Do any of these people, including the accountant, have any experience running anything?

  13. Smarterthanmost says:

    It continually amazes me how fundamentally ignorant the management of Flagler County is.

  14. Anonymous says:

    overspending in almost all line items,” , well thats what you get when you got old timers running the show. Mr Cash its called accounting 101 . Sounds like they knew about the old method, Spend Now, Ask Forgiveness Later.

  15. Bob55 says:

    They are in the business of wasting our money! Ever wonder why a person can leave town for 3 weeks at a time and come back to the same Utility bill as the month prior even though nobody was there to use it?

    I also recall that the city was going to save money on water by planting drought resistant grass at the cost of the taxpayers and now a couple years later we have beautiful landscaping which clearly requires a lot of water.

    Shysters

  16. BOB says:

    Follow the money. It didn’t go out the door on its own.

  17. Mark says:

    If Cash and Landon were laid off how many jobs could be saved?

  18. Flyer1 says:

    This article does not explain why Joseph Cash was not fired immediately for gross incompetence. And do you see an inkling of accountability from the control board? One would think they would have the decency to resign in disgrace for their failure to provide the required oversight.

    The government officials in this area continue to embarrass themselves, their agencies, and the local community!

  19. Anonymous says:

    Funny how the accountant still has her job.

  20. Michael says:

    Laying people off is expected, but why not terminate Mr. Cash as he is the manager in charge. Why would you let any manager that has grossly failed in his P&L. My first cut would have been the one in charge, this is more than a disciplinary mark on his file, this is clearly grounds for termination.

  21. palmcoaster says:

    Maybe the FBI should be called into investigate as we pay the mosquito control tax to get the mosquito sprayed and under control and some smart a…thinking ain’t going o be caught, waste it on a palatial facility and a new chopper? Is run by republicans this mosquito control fraud! Better they spray and without tax increases! Old Lady correct where is our spraying?
    Great idea above; sell the darn new facility and the new showy copter and rehire the employees to spray after an independent audit! Nock Nock FBI!

  22. John dolan says:

    Cash has no cash. Coffey had no clue. Details at 11:00.

  23. Jack Howell says:

    Mr. Cash should do the right thing and resign. I would also suggest a forensic exam of the financials. I can think of no excuse for this blunder other than gross negligence. Oh, wait a minute. What was I thinking? Nobody gets fired here in Flagler.

  24. jersey exit 82 says:

    If I close my eyes I can feel like I’m back in Jersey. 1.1 million went missing? How do we get rid of these clowns?

  25. palmcoaster says:

    I totally agree with Jack Howell not only Cash add the whole board. Sgroi couple too long in too many GOP things around here and look what we get…past sheriff Fleming now the mosquito control, hello. I am sick and tired to pay taxes for non rendered services! Miss use of non intended purpose funds should be punishable with jail!

  26. can'tfoolme says:

    Somehow I doubt that this will be considered a “minor situation” by the 6 employees who will be laid off.

  27. Kip Durocher says:

    Well, I guess if the defense department can loose 4 billion the trickle down effect
    of economics to a county level would’ve come close to 1 mil +\- a few thousand.

  28. woody says:

    I’m sure there is many phat pay checks at the top.Is Landon’s twin brother have a position there?

  29. RayD says:

    Is there no state over sight? The foxes are in charge of the hen house locally.

  30. JasonB says:

    Palm Coast is run like one of Trump’s casinos … so glad I live in Bunnell.

  31. Concerned Citizen says:

    I understand that Mosquito Control is a ” separate agency” but how could they come up with a 1.1 million dollar facility and no county commissioners raised an eye brow? This is the first Coffey is hearing of it? I call BS on that one.

    As a matter of fact I’m calling shenanigans on this whole thing. They got the land and permits somehow. And don’t tell me 3 people missed a 1.1 million dollar oversight.

    This whole thing is shadier than a sales person at a lamp store..

  32. Layla says:

    Strong words from some. This most definitely is misuse of taxpayer funds, but this is an elected body, completely independent of the County. The voters have themselves to blame. Each of these people were elected to office. File a lawsuit against the accounting firm for gross mismanagement of funds and Mr. Cash should most definitely resign.

  33. jim says:

    hey Jack….I got fired!!!

  34. Concerned Citizen says:

    @ Layla

    I did not vote for any of the incumbents. As a matter of fact I voted for all fresh faces. Alas the majority spoke so we have what we have now.

    Did you vote? Just wondering since that was a mighty critical statement.

  35. Buzz says:

    This really ” BUGS” me !

  36. Donna Heiss says:

    The chairman has no clue there was a money problem? Priceless. (Pun intended)

  37. Jack Howell says:

    Donna, Ken should do the audit!

  38. Outsider says:

    Selling the new facility sounds like a great quick fix, but there is a minor problem. They built a huge hangar with NO taxiway access. It’s pretty much useless for any corporate fixed wing operator. Maybe it could be used as a self storage facility? Zero forethought utilized here.

  39. Anonymous says:

    Sure fire the workers who did nothing wrong>>> How about getting rid of those who were in charge of all this????

  40. Dave says:

    The good people of Flagler County continue to get robbed by the very people they put in power,it’s a shame

  41. woody says:

    Are WE still looking for the million plus dollars from the the Flagler court complex? This is like O.J. still looking for the murders.

  42. Lou says:

    Just remeber YOU ELECTED the incompetent people.Solution:Declare bankruptcy and start with e new name all over. That is how private business operate with great success.

  43. Robert Lewis says:

    Flagler County Government had $9M shortfall. Flagler Mosquito has oversight of $1M. Does anyone else see a theme here? Flagler County government has zero oversight and exercises zero fiscal best practices. This is not the first time we are hearing about a bailout. Back in the early years we had construction and government run a muck with the Taj Mahal and Court House.

    For once I don’t blame the elected officials. I place blame on the unelected, unaccountable, government bureaucrats that caused this fiscal crisis. It is time that county stop acting like this is Mayberry and hiring each others family members for the job. It’s time we stop nepotism and back woods deals that goes on.

    Say what you will about Palm Coast, at least it’s a professional organization. The county should learn s thing or two. It starts with Mr. Cash and ends with Mr. Coffee

  44. Layla says:

    Yep, I vote.

  45. Layla says:

    @ concerned citizen, did not mean to be overly critical, just point out the facts. This is an independent body which for some reason everyone in Florida seems interested in running for….is the salary the reason? And unfortunately, I’ll bet most voting never thought about this kind of thing happening. I never gave it much thought, and I’ve never seen this happen before. Who do they report to? It is not the County, I checked.

    Guess we’d better find out and quick. Certainly don’t want to see this happen again. I’m not convinced they/we are taking this as seriously as all should be, including that board.

  46. Ken Dodge says:

    Client: “How much is two plus two?”
    Accountant: “What did you have in mind?”

  47. B Stone says:

    Being a half mile out of the Flagler Mosquito District, I neither voted for the board members, nor do I receive the mosquito protection they provide. I still have an opinion, though. How on earth did such a mistake happen. Did they not think that maybe buying a new chopper AND building thet exceeded their annual budget might be problematic. This is not just a little accounting error. Somebody’s head needs to roll. I suggest the state needs to get involved, and the Mosquito District should be moved to County control. Obviously, the District is incapable of managing its budget. And if the tax burden for members of the District is only $30 per year, I would gladly pay that for regular spraying. I live between 2 swamps and the mosquitos are carrying us away.

  48. Jack Howell says:

    Pretty good! Here is another thought. If the accounting firm is culpable, then they should be a party to a law suit. I sure they have insurance. We must recoup the 1.1 million. However, Mr. Cash must be removed for lack gross negligence and maleficence. The voters need to remove these elected Mosquito Control District politicians for the same reason.

  49. By the way, says:

    Where does say anything about a new helicopter?

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