LAKE CITY, S.C. (WPDE) — Some employees with the City of Lake City have expressed concerns about their retirement funds and if the city will be able to continue to make payroll.
The employees said that the city is behind on payments to the S.C. Public Employee Benefit Authority (PEBA), which is a state agency that manages retirement and insurance benefits for South Carolina’s public workforce, including state employees.
The Lake City employees said they’re also concerned about payroll because they did not receive their checks Thursday.
ABC 15 reached out to Lake City Manager Malik Whitaker with the employees’ questions and concerns.
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Whitaker said he received the same concerns and addressed the issues in a transparent way with an email to staff members.
An employee shared that email with us.
In it, Whitaker said employees: “deserve clarity, honesty, and the assurance that protecting you and the long-term stability of Lake City is my top priority.”
He said when he began as the city administrator on Oct.16, and as the Interim Finance Director discovered, they inherited a severe financial crisis.
He said the city was more than $2.5 million behind on paying its bills, despite other non-essential payments being made on time.
“It is worth noting that, interestingly, payments on city-issued credit cards never fell behind during this period, even as millions in invoices to vendors went unpaid. This specific imbalance is a central part of the ongoing forensic audit,” Whitaker explained in the email.
He went on to say the new leadership team has been working tirelessly to clean this up.
“Through deliberate, strategic actions, we have reduced that past-due amount to approximately $1.9 million, always prioritizing payroll, essential services, and our critical operational needs. This is progress, but we know there is much more to do.”
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Whitaker spoke about Lake City’s status with PEBA as a direct result of the past financial mismanagement.
“Because the city fell behind on its employer contributions starting I believe in August, PEBA is currently withholding the posting of those payments to individual retirement accounts,” he specified in the email.
Whitaker said that when employees retire, retirement accounts are safe. He also said their earned service time, eligibility and the funds already in the account aren’t being taken away.
He further clarified that the issue is that PEBA will not credit new contributions until the city’s account is brought current.
Whitaker said he traveled to Columbia on Thursday to talk with PEBA officials in effort to develop a plan on how to move forward.
He added his goal is to present an offer to make a partial payment of $206,000 and negotiate a formal payment plan to bring our account current as swiftly as possible.
He added he’s committed to working with PEBA to secure a solution that protects employees while putting the city on a path to solvency.
As far as payroll, Whitaker said employees will be paid on Friday.
Earlier this week, Whitaker explained to Lake City council members about the delay with the forensic audit.
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“The delay is not due to a lack of effort from the auditors or city staff. It is not due to anyone slowing the process. It is not due to hiding anything. The reason is straightforward. The auditors discovered that statements for six credit card accounts, spanning a three year period have had never been provided by the issuing bank.”
He said without those records, the auditors cannot complete their work to confirm the accuracy of the books, which would give council and the community a full picture of what happened.
The report is expected to be ready next month.