City Beat: Council considering 3 Fulnecky report options

Springfield City Council on July 11 voted to accept as fact a report from attorney Kevin O’Keefe stating Councilwoman Kristi Fulnecky was ineligible to run for office because of business taxes she owed when elected.

The report released this month by the St. Louis attorney hired by the city found Fulnecky’s construction management firm, Fulnecky Enterprises LLC, did not pay business license taxes for seven years, which should have prevented her election under state and city laws. In October, six months after she was elected, Fulnecky paid her 2015 license and three prior years, but O’Keefe said that payment did not remedy the situation.

The bill accepting the report passed after lengthy discussion by two of Fulnecky’s attorneys, Joseph Passanise and Scott Pierson of the Law Offices of Dee Wampler and Joseph Passanise PC, two other members of the public and each present member of council. Fulnecky cast the lone vote against it, and Councilman Justin Burnett abstained, citing lack of legal representation. Councilwoman Jan Fisk was absent.

Passanise argued there was never a discussion as to whether Fulnecky even needed to pay the business license tax.

“There is this argument that she capitulated or stipulated to it because she paid it,” he said. “That’s ludicrous.”

He also pointed to the difference between an individual owing a tax and an entity owing a license fee.

“This is not a tax. This is a fee,” he said, suggesting the issue should not have prohibited Fulnecky from running for office.

O’Keefe said in his report the fee counts as a tax.

According to the report, council has three options after passing the resolution: voting to remove Fulnecky, passing the decision on to voters or letting the Missouri attorney general or Greene County prosecutor weigh in. There was no discussion in the meeting as to what step council would take, and city spokeswoman Melissa Haase declined to comment afterward, citing the threat of a lawsuit by Fulnecky and her attorneys.

Just before the vote, Fulnecky said she was insulted by her personal information being released in the report.

“To let someone’s Social Security number and driver’s license number be leaked on the internet and to the media is outrageous,” said Fulnecky, who’s also planning to run for mayor next year. “I will seek full legal remedies because of the breach of my personal information.”

Dee Wampler said his firm plans to file a complaint to Missouri Attorney General Chris Koster’s office.

“The lawyer, Kevin O’Keefe from St. Louis, disclosed [personal information]. You can’t do that; that’s against the law,” Wampler said. “The law provides that an investigation can be made by the Missouri attorney general.”

The city has since pulled the report from its website and issued a new copy with personal information redacted.

RSM over BKD
Council voted 8-0 to enter into agreements with Kansas City-based RSM US LLP for professional auditing services for the city and the Police Officers’ and Fire Fighters’ Retirement System. The city is required to rebid auditing services every five years, and Springfield-based BKD LLP is the current independent auditor.

Discussion began with Springfield attorney Jim Meadows urging council to not just favor the lowest bidder.

“You need to look beyond price and look at the quality of the services,” Meadows said. “We’ve seen with BKD, they provide a quality service and have done so for a number of years.”

Councilman Ken McClure reversed his position from the June 27 meeting, during which he expressed a desire for local preference in contract decisions. Before the unanimous vote for RSM, council members asked for more detailed and timely communication from city staff on contract matters.

RSM and BKD were the only firms that responded to the city’s RFP.

The city’s police and fire pension system currently has about $322 million in assets. Kansas City-based UMB Bank serves as the custodial bank for investment transactions.

Special event insurance
After discussing an increase to the city’s insurance requirements for special events on public property, council settled on a $1 million insurance policy limit by a 7-1 vote.

Councilman Craig Hosmer voted against it, suggesting the city raise its insurance for special events to at least $2 million considering the liquor liability at certain events.

“I believe ($1 million) is substantially lower than it should be. The potential liability of the city is up to $3 million,” he said.

Council members in support of the bill said a rise in insurance costs would price organizers out of the market for future events.

“I’m on the plans and policies committee and we felt that after hearing all the data, we would lose a substantial number of activities,” Councilman Craig Fishel said. “We’re on a roll to get more and more events. Our history is superb, as far as problems with serving alcohol – virtually nothing.”