Denton County Emergency Services District No. 1 will receive money from the town of Argyle to help its budget following a large shortfall, but the council’s decision came after some stinging criticism from two members of council at the June 26 meeting.

Council Members Ronald Schmidt and Casey Stewart discussed their dismay with how the department’s budget had been managed, but Stewart and fellow Council Members Cythnia Hermann and Gordon Baethge approved $56,000—$10 a head for the population of Argyle, around 5,600—for the district. The money will come from the general fund.

Schmidt said he voted against because he wanted to see more numbers about the department’s finances before he gave his blessing.

The background

ESD 1 Capt. Sam Johnson told Community Impact in June that former Argyle District Chief Troy Mac Hohenberger falsified the ESD’s budget, leaving the department with an operational deficit of between $1.5 million-$1.9 million. Hohenberger pleaded guilty May 24 to federal theft of funds and theft or embezzlement from an employee benefit plan. Hohenberger was indicted in November and awaits sentencing.

Information from the Argyle council agenda from the district stated that based on the illegal activity of the former fire chief, budgeting inaccuracies and other expenditure misreporting, ESD 1 is anticipating a budget shortfall of $2 million in fiscal year 2022-23. The request for support is one of several solutions the district is pursuing to fill the funding gap, the district info stated.

The district info memo stated the fire district covers 42,000 people across 65 square miles—and the service area has increased in population by 66% over the past 10 years with the call volume increasing by 36% in the past three years.

Argyle Station No. 511, located at 511 Gibbons Road S., opened in 2013.

ESD 1 operates with a board that oversees the budget. Changes were made to the board after budget problems were discovered.

Zooming in

Johnson, ESD 1 Chief Ricky Vaughan and ESD board President Sheldon Gilbert appeared at the June 26 meeting to discuss the plea for money. Gilbert said the ESD 1 is in the process “or hopefully very close to” a $1 million line of credit and said ESD 1 has already received donations from other nearby sources: $300,000 from the Lantana Education Foundation and $100,000 from the town of Northlake. Money is needed as quickly as possible to pay firefighters, and the department has funding until August, ESD officials said.

ESD 1 is down to needing roughly $377,000 to balance the budget, and the council’s contribution will go toward shrinking that gap, Vaughan said.

The approach

Schmidt expressed concerns with the district budgets he has seen and that they were “not very in depth.” Among other issues, he asked about a forensic audit. The audit is being conducted, council learned, but Gilbert said it is on pause because of the cash flow problem contributed to by the deficit. The audit will be conducted by law enforcement as well because of the nature of the charges filed in the case, Town Administrator Erika McComis said.

Vaughan said ESD 1 pledges to be “transparent and accountable.” He said the district is “moving in a positive direction,” and council should have faith that the district is being fully transparent.

Stewart said the optics were “terrible” in this manner, adding while the district was affected by criminal abuse and fraud, he thought there was also some waste in the budget. He said he didn’t like how the district had a financial problem and that representatives’ initial response was to ask for money and then to increase taxes as he thought they should have first looked for ways to cut expenses and look for efficiencies.

Quote of note

“This a complete failure of the citizen oversight,” Stewart said. “And [it] cannot be overstated that we got this far out of whack. You’re offering to let us see your budget, [but] we’re not your oversight committee, and that shouldn’t be our responsibility. We should be able to trust you guys to be able to run it.”