PITTSBURG, Kan. — During Pittsburg’s city commission meeting Tuesday night, the commissioners engaged in a lively debate about renewing their partnership with Pittsburg State’s Kelce College of Business to continue publishing the quarterly economic report.

The topic was broached by Commissioner DJ Perry who said during his election campaign he spoke with several small business owners about the report. He said he was told they don’t use it, leading Perry to question whether the city should continue to fund it.

The report has been published quarterly for the past 12 years with the City of Pittsburg picking up part of the tab. The university pays the balance. This year, the city was asked to increase its contribution from $32,500 to $35,000. The university will pay the remaining $55,000.

The report is mailed to nearly 1,400 businesses in the area. Perry said he spoke with 50 people.

Historically, the report is used as a recruiting tool to draw new investors to the area and provide current investors and business owners with a snapshot of the local economy. Chamber of Commerce President Blake Benson said having this data readily available is useful when the city applies for grants or when outside investors, particularly banks, ask for the information. By not having it, Benson said, the city could risk losing those outside investments.

Perry said most of the information contained in the report is already publicly accessible; that the report itself is simply a consolidation of that information. If business owners want the information, they can get it fairly easily on their own, he argued.

Of the business owners Perry spoke with, he said they appreciate the effort put into the report, but they do not consider it a need. Perry suggested maybe it was time to step away and let the university cover all the costs.

“This has been great,” Perry said, “but I’m not sure it’s something we need to continue.”

Commissioner Ron Seglie defended the report, saying, “It’s been a great effort for the past few years and I’ve used it on any number of days.”

Also coming to the report’s defense was Commissioner Stu Hite. He asked Benson what the total economic development has been over the past year. Benson said he wasn’t sure about the past year, but since 2013, the city has seen $900 million in outside investments.

Perry asked Hite if he was tying the $900 million to the report. “Absolutely,” Hite responded.

“Anything we do in the secret sauce for economic development we bring into our community,’ Hite continued, “I’m not one to want to mess with the recipe.”

Mayor Chuck Munsell offered his thoughts on the matter, citing that the commissioners all agreed to reduce expenses as much as possible because of overcharging property taxpayers by $200,000 last year.

“How do we come up with that money?” Munsull asked. “There’s got to be money somewhere that we’re going to have to look at reducing.”

Munsell suggested the report be published twice a year instead of four times, asking how much can change in three months.

Perry agreed a biannual report would be more cost effective, adding, “I haven’t got a gigantic ‘I have to have it every quarter’ kind of response.”

Hite suggested the commission put it to a vote and see if they want to continue with what’s been working or change direction and made a motion for a vote.

Munsell quickly cut him off with “We’re not done discussing it yet.” He went on to reiterate his suggestion of a biannual publication, saying the city could try it for a year and if it doesn’t work, go back to the quarterly publication.

Commissioner Cheryl Brooks asked Benson directly for evidence that the report brought someone to Pittsburg. Benson said the report isn’t the only reason investors come, but it does give Pittsburg a level of sophistication that similar sized communities do not have and reassures current investors that Pittsburg knows what it is doing.

City Manager Daron Hall added that showing a potential investor a report that is seven months old sends a very different message than having one that is three months old.

“I can’t judge the value of 50 out of 1,400 business owners who don’t think it’s worth anything versus the people who come into my office and always ask for more copies,” Hall said

Hall pointed out that the $200,000 tax mistake was property taxes. The econ report is paid by a quarter-cent sales tax specifically designated for economic development with a current account balance of more than $2 million.

“You’re correct in a lot of what you just said,” Perry acknowledged, “but it does fall back on taxpayers paying taxes and people spending their money and how we use it. The burden the commission has is to listen to the people.”

“It’s a sales tax,” Hite chimed in. “The people voted for that sales tax to do things like this. They spoke. They specifically voted to support economic development and to dedicate a quarter-cent sales tax to do things just like this.”

“Leaving $35,000 in a fund that has $2 million in it for economic development incentives just because we want to give some tax relief probably isn’t the best option for giving tax relief,” Hall added.

Perry responded with, “No one is saying it needs to go away entirely. It has a lot of value. Does the city still need to pay for a portion of it with taxes whether or not there is $2 million. Is it fiscally responsible and is it effective to have it as annual report, or semi-annual?”

“I think it’s the most fiscally responsible things we do,” Hite responded. “Go back and look at the return on investment.” Hite added that with a $3 million dollar investment from the city in 2024, the city reaped $95 million in new outside investments. “I would take that ROI any day of the week,” Hite said.

Benson said he is confident that any $35,000 investment by the city would be made back easily.

Brooks broke it down further, pointing out it’s less than $3,000 a month, and if one new business comes in, it’s paid for itself.

“We are the hub for numerous counties,” Hall argued, saying that people from all over southeast Kansas work here, shop here, and are educated here. Funding economic development through a sales tax distributes the burden across the region. “This report doesn’t just help Pittsburg; it helps the region.”

Perry suggested tabling the discussion to gather more information and to look into possible modifications, including adding data that small business owners would find useful.

Hite, instead, motioned for a roll call vote, seconded by Seglie. The measure passed, three-to-two, with Perry and Munsell voting against.

Fraud rehash

Near the end of the meeting, a second issue was brought up for discussion when Mayor Munsell asked Hall to recount the events of the recent bank fraud incident.

Hall simply explained that a sizable bank transfer was made to who was thought at the time to be a legitimate vendor. When the actual vendor inquired about the transfer, it was soon discovered that the bank information used to make the transfer was fraudulent. City administration was immediately notified along with the FBI and insurance provider.

The quick action taken by city employees resulted in the fraudulent accounts being frozen and 97% of the funds returned. The remaining funds were covered by insurance, meaning the city recovered 100% of the transferred money within 30 to 40 days of the incident.

As a result, Finance Director Missy Scott said new internal policies have been enacted to help prevent another such incident. First, no transfers over $100,000; second, new vendors and current vendors who change their banking information must provide a valid phone number that can be authenticated through a website or invoice; third, a new positive pay file was created listing all of the city’s active vendors. Before a transfer is cleared for payment, the vendor’s banking details are checked against the file.

While Munsell praised the city’s quick response in recouping the city’s money, he did mention that in emails with the vendor, there is a line that states it will never change the bank or routing number for transfers.

“We overlooked that,” Munsell said.

Scott said no one in her department saw that disclaimer as they do not communicate directly with the vendor through email.

Munsell began questioning Scott.

“When I asked about who approved this, you said you did,” Munsell said. “Come to find out, you didn’t but you said you did.”

“No,” was Scott’s reply.

“Yes, you told me that,” Munsell said. “You didn’t know where it went until Crossland called you and told you they didn’t have the money. You said also that you hadn’t talked to Crossland on the phone. You don’t do that. You just send the money. Now you’re going to call vendors on the phone to make sure they are the true vendor.”

“We will only call those that make a change to the record, not every time we send a payment,” Scott confirmed.

“So, somebody made a change,” Munsell continued, “but you didn’t call Crosslands to see if they made a change.”

“They did call,” Scott said, “but we didn’t have a number on record.”

“You didn’t have Crossland’s number on record?” Munsell asked.

“Not in the accounts payable office,” replied Scott.

“That’s kind of interesting,” Munsell said. “I would think you would’ve had that since they’re doing the wastewater treatment plant.”

Scott replied that Matt Bacon, director of public works, would have that number, but she didn’t.

“But they didn’t send the money. You did,” Munsell retorted. “That’s my point. There were mistakes made.”

Hall interjected, reminding the commission that every dollar was recovered.

“Every dollar?” asked Perry. “I was understanding, based on what you told me, that there was still a $14,000 difference.”

Hall said that after sending Munsell the final accounting, he received a call from the insurance company saying they would recoup the entire amount and write it off.

“That’s another thing,” Munsell said. “I requested you send that information to all the commissioners. I don’t care who the mayor is. That’s a temporary position. We should all have the same information.”

“I spoke to each commissioner at least three times,” Hall said, “updating them.”

“I asked you to send copies of the emails,” Munsell said.

“I sent everyone everything I was required to send, Chuck,” Hall responded. “I realize you want to be unhappy about this, and no one is more unhappy than Missy and the finance team, but beating them up over it is ridiculous.”

All of the money was recovered.

This reporting is made possible, in part, by the Support Local Journalism Project Fund. Learn more at: southeastkansas.org/Localnews