State auditor finds probable violations on worker classifications, conflicts of interest in Lakeland

A state auditor's report on Lakeland city finances has found apparent violations of state laws on worker classification and conflict of interest, among other concerns.

The findings were referred to the Attorney General's Office, the Department of Employment and Economic Development and the Washington County Attorney's Office for further review, State Auditor Julie Blaha said.

Her office also recommended changes to bookkeeping practices for the St. Croix River community of 1,800.

"A great way to rebuild trust after a report like this is to enact the changes that we suggest," she said. "It's a way to suggest to the public that you want to fix the problems and make sure they don't happen again."

The report covers a period of upheaval last spring and summer when Lakeland Mayor Richard Glasgow and the City Council fought over council vacancies, meeting notices and even the city website. Glasgow at one point locked council members out of City Hall.

The City Council eventually passed a no-confidence vote in Glasgow that stripped him of authority over city functions.

The report is not a full audit of Lakeland's finances but a "petition for engagement," a more limited review that was compelled by a petition signed by more than 300 people. Blaha said staffers from her office met with some of the petition signers to determine what the auditor's office could help them answer.

Among the findings: Lakeland's city clerk and city treasurer were functioning as independent contractors when state law requires that they be city employees, according to Blaha.

Her report mentions the state's new wage-theft law, passed just last year, and said proper classification of city workers can prevent wage theft from taking place. Because of the city clerk and treasurer's classifications and because other city workers may have been misclassified as well, Blaha referred that part of the report to the Attorney General's Wage Theft Unit, she said.

The auditor's report also found that the city didn't follow statutory requirements regarding conflict of interest laws regarding former Council Member James Stanton. Stanton worked as an independent contractor in several roles for the city while serving on the council, including city planner and zoning administrator, public works commissioner and janitor.

A sampling of some of the 230 payments sent to Stanton in 2017, 2018 and 2019 found that he was paid $30 per hour for janitorial work, even though the city could not provide an agreement covering that position. In another instance, city documents showed the amount paid to Stanton but not the rate charged or hours worked.

Stanton was reimbursed for iPhone accessories, something the state auditor said was inconsistent with contracts for independent contractors. He also was to be paid $750 a month as public works commissioner, but the City Council in 2017 appears to have approved paying him $750 for 40 hours of work plus $50 per hour for overtime.

Stanton resigned his seat on the City Council last year as infighting over him and other issues arose at City Hall.

"I think it's important that anybody in local government should look at this report and make sure they're not having these same problems," Blaha said.