Concerns Rise Over Lake City Employee Salaries and Severance Pay

LAKE CITY, S.C. — Some employees in Lake City are worried about their severance pay and whether the city can maintain their salaries.

Officials indicated that the city is behind in paying the South Carolina Public Employee Benefits Administration (PEBA), which handles retirement and insurance benefits for public workers in the state.

Employees have also raised concerns about their paychecks, particularly since some didn’t receive theirs on Thursday.

Questions from ABC 15 were directed to Lake City Manager Malik Whitaker.

Whitaker mentioned he had received similar concerns and communicated with the staff to provide clarity about the situation.

One employee shared his email with us.

In it, Whitaker assured employees that it’s critical for him to focus on their well-being and to ensure Lake City remains stable in the long run.

He acknowledged the city is grappling with a serious financial crisis, which became apparent when the interim finance director assumed his role on October 16.

Whitaker revealed that the city is over $2.5 million behind on payments, although some non-essential payments have been made on time.

“Interestingly, despite millions of unpaid vendor invoices, payments on city-issued credit cards were never missed during this period. This particular imbalance is a central part of our ongoing forensic audit,” Whitaker noted in an email.

The new leadership is actively working to rectify this situation.

“Thanks to intentional and strategic actions, we’ve cut the arrearage down to about $1.9 million by focusing on payroll and essential services. While we’ve made progress, there’s still a lot more to tackle,” he stated.

Whitaker attributed the city’s issues with PEBA to past financial mismanagement.

“Because the city has been delinquent on employer contributions since August, PEBA is currently withholding posting contributions to individual retirement accounts,” he wrote.

He reassured employees that their retirement accounts will remain secure even if they leave the city. However, new contributions won’t be deposited until the city’s account is brought up to date.

He also mentioned a trip to Columbia to discuss plans with PEBA officials, aiming to propose a $206,000 partial payment and negotiate a formal repayment schedule.

Whitaker made it clear he’s dedicated to working with PEBA to safeguard employee interests while steering the city away from insolvency.

Regarding payroll, he assured employees that payments would go through on Friday.

Earlier this week, Whitaker informed the Lake City City Council about the delays with the forensic audit.

“The delay isn’t due to a lack of effort from auditors or city staff. It’s not because of any deliberate hold-up. The issue lies simply in the auditors not receiving six credit card account statements from the issuing bank over a three-year span,” he clarified.

He emphasized that without these essential records, the audit could not reach a conclusive outcome, which is necessary for ensuring transparency with the community.

The audit report is anticipated to be completed next month.