The Daily News has confirmed Kathy J. Nelson as the focus of a criminal investigation by the Okaloosa County Sheriff’s Office, and a separate inquiry involving the county’s inspector general, through public records.
TOM McLAUGHLIN @TomMnwfdn
Okaloosa County Water and Sewer Department Lead Customer Service Representative Kathy J. Nelson enjoyed a career in public water systems for close to 40 years before being terminated “effective immediately” May 4.
Her personnel file indicates that Nelson had been disciplined at least three times since joining the county team in 1990 for actions she’d taken, or failed to take, involving money.
It was this year’s failure to collect $12,000 from a builder that ultimately cost Nelson her job.
The Northwest Florida Daily News has confirmed Nelson as the focus of a criminal investigation by the Okaloosa County Sheriff’s Office, and a separate inquiry involving the county’s inspector general, through public records. She is the only Water and Sewer Department employee listed as being placed on administrative leave in 2017.
Her termination date corresponded with an “early May” firing of the employee being criminally investigated that was corroborated by County Commission Chairwoman Carolyn Ketchel. Ketchel also identified the suspect employee as a female.
County Clerk of Court J.D. Peacock said Monday the inspector general’s investigation of Water and Sewer Department billing irregularities are the office’s “top priority” and the agency is looking at transactions “going back to 2000.”
The Sheriff’s Office confirmed May 16 it was investigating activity within the Water and Sewer Department, but declined comment Monday other than to say its investigation remains active.
County officials also offered no new information about the case.
Though reluctant to say much, Nelson is confident she’s the subject of the ongoing investigations. She also said she has not been contacted by any investigative agency.
In a letter to her former employers found in Nelson’s personnel file, though, she expresses outrage at being accused of “intentionally” making what she terms errors.
“An error is an error as in a mistake,” Nelson states in the letter. “I do not agree with the facts of my termination.”
Nelson told the Daily News the $12,000 she was accused of failing to collect was paid to the county by Watree Homes prior to her termination. The construction company did not return a Monday phone call.
In its Disciplinary Action Form, Nelson’s supervisors assert that in March and April this year, she not only failed to collect fees from a builder, but also attempted to cover up her actions.
The document states Nelson was placed on paid suspension April 17 while her bosses “investigated concerns on how some accounts were being processed.”
“During the investigation it was determined there were three new accounts with a total of $12,000 of Capacity Expansion Charges that had not been collected from a builder,” the Disciplinary Action Form states.
“During the investigation, you were asked several questions regarding these accounts and were given the opportunity to review your office and computer files in an effort to help you remember. You repeatedly responded to the questions with ‘I do not remember’ or ‘I do not know’ and you were unable to provide any documentation to adequately explain why the CEC’s were not collected,” the form said.
The Disciplinary Action Form goes on to state that “upon a review of the IT records it was discovered that you recently made entries into the system in an attempt to cover up the fact that the money was not collected.”
The form is signed by Nelson’s immediate supervisor, Mark Wise, as well as Water and Sewer Department Director Jeff Littrell and Human Resources Director GinNeal McVay.
Nelson, a Mary Esther resident, joined the Water and Sewer Department in 1990 when the county absorbed the Seashore Village Water System in Mary Esther, according to McVay. She “retained her original date of employment with Seashore” of Oct. 10, 1978.
Her personnel file indicates Nelson received promotions within the Water and Sewer Department and was making just over $54,000 a year at the time she was fired. In December 2014, Littrell sent her a letter citing Nelson for “exceptional service.”
But Nelson was reprimanded in February 2016 for violations involving errors in Capacity Expansion Charges said to have occurred in November/December 2015 and another offense in the month the reprimand was issued.
Three “incidents” were noted in the 2016 Disciplinary Action Form, which resulted in the county admonishing Nelson to “have more attention to detail when setting up new commercial accounts, especially on the fire line portion” of an account.
The first incident occurred when Nelson was training staff how to charge customers for CEC’s, the Action Form states. Nelson, it said, “failed to review the transaction to ensure the account was properly charged.”
The mistake resulted in a failure to notify a customer that fees were owed “and those fees were not charged until a week before the construction was completed.”
A second incident involved the County Administration Building, according to the Action Form. “When the fire line was established, not all of the services were reviewed for accuracy resulting in the account not having the fire line set up,” the report said.
The third incident occurred when Nelson provided incorrect information to a Utility Financial Services specialist, the report said.
It appears disciplinary action was ultimately taken against Nelson in early 2016 when “it was discovered that Kathy set up an account with 34 fire line units, instead of one, resulting in the customer being over billed by $12,353.88,” the report said.
“Another fire line was incorrectly set up for the same customer but at a different location,” the report continued. “This error caused another incorrect billing to the customer.”
In September 2014, Nelson was reprimanded when her follow-up review of an account failed to detect a $107 over-collection.