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Cash Resigns at Depleted Mosquito Control As Board Mixes Denial With End to “Frivolous Things”

| August 21, 2017

The East Flagler Mosquito Control District Commission met for the first time this morning since revelations of a financial crisis at the tax-supported agency. Board members sat to the right, with Florence Fruehan in the orange shirt, Commission Chairman Julius Kwiatkowski, and Barbara Sgroi. At the head of the table at the far end sat Mark Positano, named director of the agency today. At the near end was Bill Hockla, surveillance coordinator. (c FlaglerLive)

The East Flagler Mosquito Control District Commission met for the first time this morning since revelations of a financial crisis at the tax-supported agency. Board members sat to the right, with Florence Fruehan in the orange shirt, Commission Chairman Julius Kwiatkowski, and Barbara Sgroi. At the head of the table at the far end sat Mark Positano, named director of the agency today. At the near end was Bill Hockla, surveillance coordinator. (c FlaglerLive)

The eclipse came early at the Flagler East Mosquito Control District’s first board meeting since the agency acknowledged facing a $1.1 million deficit last month: the two administrators most responsible for not catching the deficit—Chief Executive Officer Joe Cash and Chief Financial Officer Rachel Knapp were absent when the elected commissioners met this morning at 10 a.m. The agency’s accounting firm, Lombardo, Spradley and Kline, also had no representative at the meeting.

Knapp has just had a child and is on maternity leave, though from the sound of at least one board member’s judgment today, her future with the agency is in doubt. Cash had apparently resigned. Apparently, because the budget submitted to board members today, which they approved, still included payment of his full $115,000 salary, plus benefits, through February 2018.

But the board soon made it clear: Cash’s resignation was accepted, and he is off the payroll as of last Friday.

That, at any rate, is what Cash wanted. “The past few weeks have taken a toll on me and my family to the extent that my health is a concern,” he’d written the commissioners Saturday. “I planned to retire in February 2018, but have since changed my mind. My retirement is effective immediately, August 18, 2017. I recommend Mark Positano as my successor. I will remain available to you and Mark as you may require.”

What Cash may get is a plaque and the board room at the agency’s new building named after him—ironically, the building at the center of the agency’s financial crisis. The $2.1 million building at the south end of the county, whose opening the bard celebrated a few month ago, is the main reason the agency’s reserves have been wiped out, in part to cover what the board has described as the “accounting error” that led to the deficit.

The person who sat at the head of the table as the agency’s executive was Mark Positano, until now the second in command, who 35 minutes into the meeting was named CEO to replace Cash. The terms of Positano’s employment and salary will be worked out later.

Also all but fired: Lombardo, Spradley and Kline, though not yet formally. “If I didn’t make the motion, I’ll be making the motion,” Florence Fruehan, one of the three district commissioners, said after the meeting.

The agency’s financial administration being effectively depleted, it was left up to Lori Bailey Brown, Flagler County government’s finance director, to sit in to give the district’s three elected commissioners a summary analysis of the deficit they faced—how it happened, and why it may not, in her estimation, be as terrible as it initially sounded. There is no relationship between county government and mosquito control, as the two agencies are independent. But as a courtesy, the county lent its financial director as a matter of mutual assistance—the way the county’s fire services lend their emergency helicopter to law enforcement in mutual-assistance operations.

“Even though there was an overbudget,” Brown said, using a lot of jargon, “it was caught and corrected” during the year and “there was not an over-expenditure of funds.” In other words: there was a deficit. There was not deficit spending. It’s a way to say that while there was a great deal of overspending—and there was, by Cash’s own reckoning—the spending didn’t go into the red. The saving grace: a more-than $2 million reserve, which has now largely been wiped out.

Brown was putting a bright face on a darker situation at an agency whose crisis its own board chairman had just outlined by reading a long list of necessary cutbacks and hoped-for revenue from a fire sale of agency assets. That list includes a 5 percent tax increase, salary reductions of $79,000 (more than double that, including Cash’s resignation), the layoff of four seasonal employees, cuts in travel, leases, office expenses, fuel, protective clothing, tools, training, and a $115,000 cut in capital spending. Positano said he has no immediate plans to replace himself as operations manager with someone else, saying he’ll take on additional duties.

And he confirmed: “There probably won’t be much of a fund balance next year.”

Remarkably, commissioners also sounded as if they were in denial of the seriousness of the financial crisis as they repeatedly echoed Fruehan’s assessment: “There’s been no damages. There’s been no monetary damages. The only damages that’s been done is possibly emotional.”

That, of course, is not accurate, whether in terms of jobs lost, careers ended, operations cut back, or, to taxpayers, an enormous sum of money that has been overspent and not accounted for beyond the general explanation that it was due to the new building. But Cash’s own characterization of “overspending,” as he put it in a memo to staff last month, has not been explained or detailed.

Rather, Commissioners this morning strained again and again to say no one person was to blame, least of all themselves. Board Chairman Julius Kwiatkowski, who appeared confused with his paperwork on one occasion, said Cash was no more to blame than any of the “seven people” who missed the error.

Commissioners Barbara Sgroi and Fruehan, on the other hand, spoke more candidly about problems at the agency. “More information should be fed to us during the month of what’s going on,” Sgroi said. “This was a shock to me. We didn’t know this until we found out. We had no idea.” She described mosquito control as “a secret, nobody knows about it.”

Fruehan was far more critical. “The way we were fed information, that was wrong,”he said, describing methods as “inappropriate.”

“It’s going to be run as an efficient organization, it’s going to be run as a business,” Fruehan said, stressing that the agency must “get rid of frivolous things.” He placed Cash and “the way we report our finances” in the same breath, and referred to what amounted to slipshod practices: “Cash did not have an employment contract, did not have a buy-out agreement, did not have a severance package.” He said in the near future “there’s some salaries here that can be reduced, there’s people that can be let go.”

He was not referring to line employees, who sat against a wall in the room, apparently summoned there at Fruehan’s request to be reassured that their future is assured. He was referring to the administration. Positano having been just appointed director, and Cash essentially let go in the literal sense of the tern—he resigned, the board accepted his resignation and refused to offer him a salaried extension–that left few other names.

“There has to be some type of restructuring or reorganization of how we do business here,” Fruehan said.

The commission unanimously approved one other key measure today: it tabled the pending sale of its old property at Utility Drive to Palm Coast government, pending a new appraisal. Palm Coast appeared ready to buy the property for $293,000. But that purchased, hurried through between Cash and Richard Adams, Palm Coast’s utilities director, without a single input from either agencies’ governing bodies until today, was based on a 2014 appraisal. Commissioners say they could probably get more money for the property.

“They’re very anxious to get that property,” Fruehan, who is not opposed to the sale, said. His agency needs the revenue. “That would tie into their whole system there. So I think we should be fair but we should not be submissive to their offer.”

Palm Coast had scheduled a presentation to the city council on the proposed sale on Aug. 29.

Cash had also negotiated a sale of Mosquito Control’s hangar at the northern end of the county airport, for $100,000–the money would be paid in the form of leasing credits for the district’s current use of airport property at the south end–but that proposal was not on today’s agenda. And Fruehan wants it, too, renegotiated, though a re-appraisal of that property may cost more than whatever additional dollars the district hopes to get from it.

Positano, 40, has been with the district since 2015, working for a decade with the departments of health in Citrus and Jefferson counties before that. He has a young family–a 2 ear old an another on the way–and extended family locally and in the region. He is originally from South Florida.

The mosquito board will meet again on Sept. 18. In the interim, it will hold three budget hearings between Sept. 11 and Sept. 18.

7 Responses for “Cash Resigns at Depleted Mosquito Control As Board Mixes Denial With End to “Frivolous Things””

  1. Mary Lynn Crosby says:

    How amusing, the board room will be named after Cash??? As in “where did all the cash go”???

  2. Ken Dodge says:

    “The agency’s accounting firm, Lombardo, Spradley and Kline, also had no representative at the meeting.” Why not?

  3. Anonymous says:

    A forensic audit needs to be done on Flagler County and now! There is no way this should be happening with checks and balances and with the Clerk of Court being the comptroller-when the clerk did the same thing in 2007. Maybe this is why the late commissioner Meeker was attacking our former SEE so things like this could be covered up until they were over and the public would be turning get their heads looking the wrong direction. Revels and Hanns have some explaining to do, this happened on their clock.

  4. Mary Meyers says:

    What happened with proper accounting approach here? Where is an audit? As a taxpayer I request an audit to be done and presented to public. Smells like a total fraud to me. People are mad at federal government but look we cannot have local government to act honestly.

  5. Concerned Citizen says:

    The Mosquito Control never needed a new hanger. Certainly not a 1.1 million dollar one at the airport. And they certainly knew they were over spending and were in the hole.

    They only act surprised because they got caught and are now in the public eye. I hope further investigations are done as to where the money went. Perhaps the State Attorney should be involved? I’d like to know where my taxes went to.

    And that includes these commissioners who are acting like they don’t know what is going on and are blaming Mosquito Control Employees. Don’t just let them fix their problem then walk away from it.

    While you are reassuring current employees what did you do to try and save the ones laid off?

  6. palmcoaster says:

    There should be an in depth investigation regarding this deficit. This whole board needs to be changed I guess in the next election as to me there is a cover up. Then what is going to happen now to our mosquito spraying, if they lay off the workers and no money to spray by air? Sell the helicopter and rehire the workers and spray by land the good old fashion way…as the unincorporated county areas don’t have mosquito control district correct..? Who doesn’t pay mosquito control don’t get it. So why do we need a helicopter? The district is not that large that can’t be covered by land..? That is all they have to 365 days a years,do spray the East Flagler County District that goes from the beach west to Rte 1 North to Marineland and South to Flagler Beach we all in this map, pay for it and have to be served. I have “heard” from residents west of Bunnell and not in the mosquito district, that were sprayed by air and that CC McLaughing knew about it. Can this be confirmed?And if so why areas not in the district that we all pay are served taking away from us in the district? Would be very deceiving if true.
    These whole East Mosquito Control board and administrators remind me of individuals buying a Cadillac with no money for gas! Well they had 2 millions of our hard earned taxes in reserves too hot to keep in the bank, if true.

  7. Lou says:

    I hardly ever paid much attention to the Mosquito Board at election time. These people had been running under the radar for a long time and now we have to come make up the missing money, among other things with reduced services. Yes, services had been reduced in the past 10 years.
    The $1 million deficit can’t be “accounting error”, it is nothing but gross miss management and lack of proper oversite.
    I do feel responsible because I didn’t pay attention to this independent government operation.

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