Holyoke City Council Special Meeting April 3, 2018

SPECIAL MEETING OF THE CITY COUNCIL
April 3,2018

The meeting was called to order by President McGee at 06:30 PM.

The Clerk called the roll. Absent members: 2 (Bartley, Bresnahan).

The name of Councilor Lebron-Martinez was drawn to head the roll call voting.

ORDERS AND TRANSFERS

VACON Ordered, that the City Council receive an update on the investigation re: the wire transfer from the Treasurer’s Office made in response to an email, In City Council March 6, 2018, Received and adopted. Referred to Law Department and request an executive session
UNDER DISCUSSION: Councilor McGee read the order into the record. It was noted by Councilor Vacon that information received after the order was filed it was revealed that the order would not need to be addressed in executive session but can be addressed in regular open session.

HPD Chief Neiswanger addressed the Council and stated that the scam that took place was referred to as spoofing. It was noted that these kinds of scams are carried out by counterfeiting information from some entity or City Department and then requesting funds or a financial transfer and then stealing the money. Chief Neiswanger noted that a suspect was in custody and that he was arrested out of Brentwood New York. It was noted that the person was arrested and found guilty and his name is Marshal Godfrey. It was further noted that the suspect is awaiting sentencing. Councilors discussed ways trainings could occur City-wide for employees to be able to recognize these scams and avoid them. Chief Nieswanger agreed that this would be a good course going forward and that the Gas and Electric should be involved with the trainings.

City Treasurer Sandy Smith spoke at the microphone to the Council. It was noted that Sandy Smith had realized the day after the money was wired that there was a problem and that as soon as the Dept. Head from HG&E had expressed confusion as to the transfer she realized that it was likely a scam that took place and notified IT and the HPD. It was further noted that in this case someone from Gas and Electric had been spoofed and requested the financial transfer. Sandy Smith stated that she tends to wire money to the Gas and Electric about every other week. It was also noted that the Gas and Electric representative she usually does business with is the HG&E Comptroller. It was noted that for Gas and Electric payroll the Mayor does not oversee financial transfers because the Gas and Electric is a separate body in the City and not under the purview of the Mayor. Sandy Smith proceeded to give procedure of how Gas and Electric wires are typically implemented. Sandy Smith stated that this situation was an isolated incident. It was noted that once it was realized that something was amiss she had reported the problem to the current City Auditor Josh Pueschel and to the Mayor. Councilor Leahy asked why the City Council was not notified of the problem after it had been identified. Sandy Smith stated that she felt that proper procedure had been followed and that she notified everyone whom she should notify. It was noted that there are several procedures that are now in place for doing wires and that notifying the City Council would be added to the procedures. Sandy Smith stated on multiple occasions that she did not feel this situation would ever happen again but stated that if it were to happen she would notify the City Council. It was also noted that Sandy Smith would provide the new procedures to the City Council. Sandy Smith stated that she feels irritated that she is an elected official and she has been chastised at times by members of the City Council.
Sandy Smith stated that she is bonded and therefore insured if restitution is not received from the responsible individual than the City would be reimbursed through the bond. Councilors expressed relief that the Treasurer is bonded and that the City would likely be able to recoup the money stolen in the transfer. It was also noted that a City Treasurer cannot take the oath and carry out the duties of the office without being bonded. Councilor McGee asked if all the Dept. Heads have gotten together for a meeting to talk about steps to take going forward to ensure against having this kind of thing happen again. It was noted that there would likely be these meetings in the future. Councilor McGee stated that he would like to see Dept. Heads be proactive in getting together and communicating to get more education and prevent future risk.
Councilors expressed that mistakes happen and that these kind of attacks are relatively new and are becoming more advanced. The City Council implored the financial heads of the City to do anything within their power to learn from previous mistakes and ensure that the City’s finances are protected. Motion was made and seconded that the order has been complied with: Motion passed by voice vote.

—> Order has been complied with

Adjourn at 07:20 PM.
A true record
ATTEST:

______________________________
City Clerk