Ex-East Mountain officer says council, former mayor to blame for city's financial woes

Matthew Graham gives his case for being named interim police chief during an East Mountain City Council meeting, on Monday March 13, 2016, at East Mountain City Hall. (Michael Cavazos/News-Journal Photo)

East Mountain's now former police officer/interim chief says he believes mismanagement of finances has led to the city's demise, but he believes it will bounce back with new leaders in place.

"The City of East Mountain, like any other city, has its ups and downs, but this small town will bounce back under its current administration," Matt Graham said Tuesday.

Graham, a five-year officer for East Mountain, resigned from the city effective June 1. The town now is without its own law enforcement, and the Upshur County Sheriff's Office is monitoring the city. East Mountain is considering a contract with the sheriff's office for more services.

In mid-March, Graham was named interim police chief after former Chief Betty Davis resigned as part of a settlement in lawsuits against the city.

Graham said Tuesday that he resigned because the city was unable to continue to pay him and added that Mayor Marc Covington told him he wasn't sure how much longer the city could afford his salary.

The city had for months been paying for operations, including salaries for its police, secretaries and city manager, out of its water fund — which is illegal in Texas.

Former City Secretary Tammy Hazel, who has been helping the city for about three weeks as it tries to regain stability, told Graham that it was illegal to continue paying him through the fund as the city had been, he said.

According to the Texas Municipal League, cities that operate utilities (such as water or electric) must have fees for such services that closely offset the cost of providing the service. However, cities are permitted to retain a "reasonable return," which can be transferred to the general fund, usually through a budget amendment and transfer approved by the City Council. Cities cannot simply pay for non-utility related services from the fund without a budget transfer as East Mountain had been doing.

In his resignation letter, which is dated May 15, Graham wrote that it was "with great displeasure" that he was resigning as interim police chief.

"I have served the citizens of East Mountain within the best of my ability for the last five years faithfully. The City of East Mountain has gone through some difficult times resulting in several legal actions and previous administration woes that has brought the city to its knees," Graham wrote.

"The city has not been able to compensate me for the new roles and responsibilities as interim chief of police. I am expected to perform police chief duties while only receiving patrol officer duty pay with no relief in sight. After five years of service, compensation for my services has not increased. In 2014, I did receive a small raise in lieu of increased responsibilities under previous administration."

Graham wrote that though the city has a new City Council after a turnover in May and new office staff, he still believes the city is not able to adequately compensate him.

"I took an oath to the citizens of this community to look out for their best interest, and I feel now, I could not adequately serve them under the current conditions in place," he wrote in his resignation letter. "I also must look out for what is best for my family and their well-being and pursue other employment opportunities."

Graham said he believes the former City Council and mayor are to blame for what has happened in the city.

"In my opinion, former council as a whole chose to be uninformed about the city finances and became complacent about city spending for several years until it was too late to correct the issue," he said.

That spending largely happened under Davis' tenure, when she was the city's police chief and city manager. But Graham said it is largely the former council, not Davis, that is to blame for the city's problems.

"To be honest, I never knew what was spent. I knew we as the PD had nice equipment to effectively do our job. We had probably the best equipment in the county," he said. "As a boss, (Davis) was fair and easy to work for. I don't have anything negative to to say about Betty. From my point of view, the former mayor and City Council let her do what she thought was best for the city."

While many in East Mountain blame lawsuits for the city's financial state, Graham said that is somewhat inaccurate. A lawsuit filed by Ken Miller in 2014 reached a $145,000 settlement in 2015; that settlement was paid by the Texas Municipal League — not the city of East Mountain, Graham noted.

More recent lawsuits collectively reached a $58,000 settlement that the city did have to pay as well as attorney fees to represent the city. The Texas Municipal League did not represent the city in those lawsuits because they pertained to public information that should have been released, according to a letter the league sent to the city.

As to how the city will regain financial stability, Graham said the best place to start is at square one. He believes the city could operate with two full-time employees — an office clerk to take care of its water and court billing and payments and a police chief.

"They will have to be frugal in what they spend and count every penny that comes in and goes out," he said.

And if the city does bounce back and regains stability, don't count Graham out.

"If I was in a position to return and serve the citizens of East Mountain again, I would do so," Graham said. "East Mountain is home."