Rumors abound in small towns and when several city employees noticed their money had not been deposited last week, the rumors certainly flew in LaFollette.
Some of these rumors were that the city was having financial problems or possibly there was not any money in the accounts.
LaFollette Mayor Mike Stanfield and interim LaFollette City Administrator Terry Sweat dispelled these rumors, after Tuesday night’s LaFollette City Council Meeting.
“I hate that employees were late getting their checks, but it was at no fault of the city,” Stanfield said. He explained that it was actually an issue at People’s Bank of the South, which is where the city’s employee payroll is transmitted.
Sweat tried to shed some light on the incident, which had several city employees wondering why funds had not been direct deposited into their accounts.
“We transmit our payroll by direct deposit every two weeks on Tuesdays. This past week, we transmitted as we always do to People’s Bank of the South. It usually goes through by Tuesday afternoon or Wednesday morning, and then People’s transmits the direct deposit to all of the employee’s various bank accounts at other banks,” Sweat said.
He explained that after learning of employees having issues with their accounts on Thursday morning, he called the bank to find out what was going on.
“On Thursday morning, People’s Bank of the South told me they had Federal Deposit Insurance Corporation (FDIC) examiners at their bank and that they had laid the payroll aside and forgot about it,” Sweat said. Sweat said the bank transmitted the payroll on Thursday morning and allegedly sent out memos to all the employee’s banks stating what had happened.
Jack Reynolds, CEO of the bank, confirmed the glitch was not on the city’s behalf.
“The city is in real good financial condition,” Reynolds said on Wednesday. “It was our mistake, the funds were not transmitted as they should have been.”
Reynolds called the incident an “oversight.” He also said the bank regrets the episode occurred.
“They (People’s Bank of the South) also told me that the memos stated that they would pay any overdraft fees that employees garnered as a result of the mistake,” Sweat said.
“It was a bank problem, not a city problem,” Stanfield said.