Mayor Chris Beutler today announced that the Lincoln Police Department found no criminal wrongdoing in the actions of a golf program employee regarding soft drink contracts. Golf Manager Dale Hardy signed contracts between the City's Ager Junior Golf Course and a national soft drink company without the proper authorization. The contracts also resulted in personal benefit to Hardy. The existence of the contracts was discovered by the City Purchasing Division, and the Mayor announced the investigation and audit July 18.
A separate "agreed upon procedures engagement" of the golf program by HBE Becker Meyer Love LLC, a local CPA firm, also found no further financial impropriety beyond the inappropriately signed contracts originally identified by City staff.
Under the contracts Hardy signed, a portion of the proceeds from sales went into a retirement account for him with the PGA of America in partnership with the soft drink company, an acceptable practice when Hardy was an independent contractor for the City. Confusion about whether the practice could continue once Hardy became a City employee led to about $800 being deposited into Hardy's retirement account from these contracts. The Police investigation found there was no intent to unlawfully receive funds.
"Despite the lack of criminal charges, this situation represents a serious violation of City policy and warrants appropriate consequences," said Parks and Recreation Director Lynn Johnson. "City employees cannot benefit personally from the terms of a City contract."
Hardy received a suspension with no pay, will pay restitution for the retirement funds designated for him, and is required to take training in the City procurement process. He has returned to work. The restitution will be paid into the Jim Ager Golf Marathon Fund in the Parks and Recreation Foundation.
Hardy was an independent contractor for the City until 2001 when he became a City employee. While an independent contractor, he had the authority to enter into contracts with vendors. The City contract approval process requires authorization by a department head or the Mayor.
Johnson said Hardy's supervisor approved signing the contracts and the private retirement fund arrangement. Personnel action was not taken with Hardy's supervisor because he recently retired from City employment.
"I apologize for my part in the situation," Hardy said. "I'm glad to put the matter to rest and get back to work supporting the City's excellent public golf program."
"I want to thank Lincoln Pepsi for their cooperation in the investigations," Johnson said. "Lincoln Pepsi is a well-respected vendor in our community and did nothing wrong in offering the contracts. Department staff should have assured that proper contracting procedures were followed. This has be a challenging time for the Ager staff and customers. Despite the recent challenges, Ager pro Scott Wiehe has done an outstanding job managing the facility. Because of his efforts, the Jim Ager Golf Course remains a well managed and popular municipal golf facility."