Council members are expected to hear an update from Emrich and Scroggins, LLC, a local accounting firm that is working to sort out the city’s financial records.
On March 10, Council Member Vance Williamson, who also serves as finance committee chairman, said he had reached out to Emrich and Scroggins to get the city treasurer’s office in order.
The announcement immediately followed a decision by the council to relieve former City Treasurer Trena Dean of her duties.
The vote was 6 – 2, with council members Willie McGhee and Andre Rucks voting no.
By the end of March, Stacy Scroggins reported that his firm was is in the beginning stages of nailing down the scope of the problem, which will take some time to unravel.
The starting point is to reconcile the city’s bank statements, a task that was not performed in 2020, Scroggins said March 31.
With the city’s books out of order, the council has not been able to close out the 2020 city budget or adopt a 2021 budget.
The city is still operating from the 2020 budget.
Williamson referred to the matter during a regular council meeting April 22 after Council Member Dianne Hammond proposed that the council spend approximately $4,500 to enhance security and protection of the city’s Internet system.
‘The mayor was hacked’
Hammond said Mayor Veronica Smith-Creer was the victim of a recent cyber-attack and as a result, Hammond reached out to El Dorado Printing, the city’s commercial information technology service provider, and spoke to Carey Tissue, chief information officer of El Dorado Printing, about the matter.
“I asked him what kind of security that we have here at City Hall. We’ve got security at (the El Dorado Water Utilities) and we have at the (El Dorado Police Department),” Hammond said. “As far as what we have here, it’s not adequate for what we should have.”
Smith-Creer said she did not know which of her email accounts was targeted, noting that the breach came through a Gmail account.
Gmail is a free email service that is provided by Google.
The mayor said her name and photo were used to create a new Instagram page.
She said that neither her Facebook nor Instagram pages were breached.
“I don’t have Gmail here. The email that was associated with my name was not my particular email address,” Smith-Creer said.
Tissue said he believes the mayor was a victim of spoofing, a cyber-attack in which a hacker sends an email that appears to come from a trusted or known source to spam or phish the recipient.
“That happens on occasion and we do take steps to try and prevent that through our email here,” Tissue said.
He said El Dorado Printing has proposed and presented quotes to previous mayors about stepping up cyber-security in City Hall but the matter has “really been kind of been brushed aside.”
He noted recent issues with the city’s budget and the timing of the matter.
However, Tissue said such issues have become more pressing due to an uptick in cyber-security attacks and scams, particularly during the coronavirus (COVID-19) pandemic with more people working remotely.
One way to ward off hackers, Tissue said, is to use geolocation, which helps to prevent someone from outside the U.S. from seeing the firewall protection device.
Geolocation identifies the location of a computer user or device and firewall protection blocks the spread of attacks on computer networks.
Tissue said geolocation provides an extra layer of security and is “a big deal for remote desktop” connections.
He said the EPD and South Arkansas Regional Airport at Goodwin Field have remote desktop capabilities for the city’s network but City Hall does not.
Tissue also said that while El Dorado Printing prefers not to use remote desktop, but because the access is necessary for some city business, El Dorado Printing’s IT team works to make sure the connections are secure.
Additionally, he said computer network vulnerabilities are reviewed by state and federal auditors.
If an entity is flagged for not following applicable protocols, the citations could affect an entity’s eligibility to apply for and receive IT-related grants, he said.
“We’re audited every year and we have fallen short every single year because of the firewall,” Tissue continued. “Usually, they give us time to correct things and we’ve worked around it, but now it’s getting to the point they’re asking for things with remote security that we cannot physically do it with the equipment that we have.”
He said City Hall has a basic firewall protection system but the system is not professional grade.
“It is not what you need in business,” Tissue added.
Hammond said the necessary upgrades would cost about $4,500 — $4,220, plus sales tax — and she made a motion to expend the funds.
Smith-Creer asked if the council could move forward on the expenditure since the 2021 city budget has not yet been adopted and Williamson noted that the money would have to come from the 2020 budget.
He asked which line item would be used for the expenditure and Hammond suggested capital improvements.
“I don’t know what capital improvements look like in 2020 until Mr. Scroggins is a bit further along,” Williamson said.
Smith-Creer suggested tabling the matter and Hammond later withdrew her motion.
Also on the finance committee’s agenda is a proposal from SouthArk regarding an operation and management agreement for the El Dorado Conference Center.
In 2009, the city and SouthArk entered into an O&M lease for the conference center and the Arkansas Building Authority signed off on the agreement in the spring of 2010.
The city owns the building and the land on which it sits.
The property was donated by SouthArk and is valued at $239,000.
Per the agreement, the college leases the building from the city for $1 per year, retains all catering and rental revenue, splits the executive director’s salary 50/50 with the city and covers routine O&M expenses of up to $300,000 each year.
Any O&M expenses that exceed $300,000 are divided pro rata between the city and SouthArk.
The lease is up June 30.
During an El Dorado Water and Public Works Board meeting on April 14, Dr. Bentley Wallace and Cary Tucker, SouthArk president and chief financial officer, respectively, proposed a new lease option and structure.
Wallace and Tucker explained that the option would call for a public-private partnership that would promote growth opportunities for the conference center and drive economic development for the city.
New terms in the proposal from SouthArk include a three-year lease, with two one-year options, between the city and college and support from private sources to commit $150,000 per year for three years to cover the salary of a full-time marketing position to promote the conference center.
The ECC executive director’s salary will still be split 50/50 by the city and college, as well as expenses that exceed $300,000.
If expenses fall below $300,000 within a year, contributions from the city and college will be reduced by half of the difference.
Additionally, major repairs and maintenance issues will continue to be covered by a contingency fund that was established by the city council in 2012.
The fund started out at $1 million and now has a balance of approximately $600,000.
Wallace said SouthArk has bounced around several ideas to re-invent its relationship with the city and conference center in order to cut costs and find ways to better use the conference center “as the economic engine that it was designed to be.”
Wallace also said that “new energy is needed” to promote the conference center.
The multi-purpose facility includes a banquet hall with seating for 1,000 and theater seating for up to 2,500, five meeting rooms and an in-house catering service, all of which share space with SouthArk’s bookstore, student union, a bistro and several administrative/student services offices.
The conference center was the lead — and largest — project that was funded by the former El Dorado Forward economic development tax. The seven-year tax sunset in 2015, four years after the conference center opened.
The 50,000-square-foot facility was built for just under $15 million — $9.5 million came from the El Dorado Forward tax and Murphy Oil kicked in $5 million.
Tucker said the college uses approximately 21,000 square feet of the building at a market price of $9 per square foot.
Council Member Willie McGhee noted that as part of the sales pitch to the community to vote on and pass the El Dorado Forward sales tax initiative, former SouthArk officials said that building the center next to the college’s west campus and partnering with the city to operate it would help with student recruitment, retention, graduation and help improve the local workforce.
McGhee said the city bought out several businesses, some of which did not reopen, to secure the property that was needed for the conference center.
Wallace thanked McGhee for sharing that perspective and he said that with the launch of the Murphy Arts District, the conference center was placed in a prime location.
McGhee also said that he thought part of the responsibilities of the director of the conference center was to promote the facility and book events.
Wallace said that with all of the rigors that come with managing the facility, executive director Barry Bagwell does not have many opportunities to adequately market the conference center.
Such a position requires a dedicated person who is able to focus on traveling and meeting with tourism bureaus and associations in the region, Wallace said.
He said events need to be booked 12 to 18 months in advance and a marketing person would help the director coordinate the schedule to make better use of the conference center space in terms of revenue.
For instance, Wallace said many one-day, local events are held in the conference center and if the facility is booked for a one-day event, such as a wedding or prom, then requests for multi-day event, such as a professional conference, that is scheduled within the same time-frame and is likely to generate more revenue ,cannot be accepted.
Other ideas include refreshing the facility with new carpet and other such work and more signage that would help to make the conference center “that beacon on the hill.”
McGhee said the facility was also sold to taxpayers as a community building and he has received several complaints about the food service/catering for events.
Council Member Andre Rucks, who said he has hosted several events at the conference center, has heard similar complaints.
“Why can’t individuals who are renting the conference center cook their own food?” Rucks asked. “I’ve had plenty of people who say they won’t rent the conference center because they don’t like the food and if they don’t use the caterer, they can’t get the conference center.”
The in-house food vendor at the conference center must be used for events in which meals are served.
Wallace said SouthArk officials are aware of the issue and are holding ongoing discussions to address the matter, including the possibility of allowing potluck-style events.
He said the college has experienced difficulty finding vendors who are interested in locating to El Dorado and those who have shown interest have included caveats that say food service at the conference center “must go through them.”
Wallace and Tucker said the coronavirus (COVID-19) has affected bookings in the conference center.
Prior to the COVID-19 outbreak, Wallace said the facility was booked 40 to 42 weekends out of the year.
“Is it possible to be creative in marketing the conference center?” Rucks asked.
Wallace reiterated that the marketing of the facility “has not been as effective as it should have been … for us to be as successful as we could have been.”
The finance committee is expected to resume the discussion about the lease option on Wednesday.