$4 million meant for dams spent on other items

This is part two in a special two-part investigation into the misuse of money by the City of Kingfisher. Click here for part one.

In 2009 Oklahoma lawmakers voted to pull out the state's credit card and borrow $25 million to fix a crisis threatening much of rural Oklahoma. The bond measure was meant to repair, or build new, rural dams.

Click here to read the first part of our investigation into the rural dam bond money.

"The state has more NRCS constructed flood control dams than any other state in the Union," said Mike Thralls, the Executive Director of the Oklahoma Conservation Commission.

The OCC was tasked with overseeing the dam repair project. However, Fox 25 learned that $4 million of that bond measure will never go to fix or repair rural dams. Instead it is going to buy out a large part of the city of Kingfisher.

Kingfisher has had several floods, including a massive flood in 2007 when the remnants of Hurricane Erin reformed over Oklahoma.

A buyout was never specifically spelled out in the bond legislation. A move that is upsetting to some lawmakers who were pitched a bill that promised to repair an aging infrastructure.

"Those bond issuances of the past, including this one, which on its surface was a rather meritorious proposal, have really cast some suspicion in the minds of policy makers like me," said Representative Jason Murphey, (R-Guthrie).

The OCC says the buyout program was the most cost-effective way to prevent the loss of life by moving people out of the flood zone. Thralls says the buyout was originally opposed by the city of Kingfisher, but later approved after it was learned the OCC could not gain the support of the needed number of property owners to build rural dams.

"If we built those dams, it would only provide 17% of the flood protection needed to prevent floods," Thralls told Fox 25.

However, an analysis by Fox 25 shows that the $4 million of taxpayer funded debt spending will only buyout 26% of the properties the city has deemed in the flood plain. By building no dams there will be no prevention of future floods and nothing to stop flood waters from spreading into areas that were previously not in flood zones.

In addition, while the OCC says the primary purpose of the buyout was to prevent loss of lives and homes, a majority of properties being purchased are businesses. Some of those businesses are vacant and appear abandoned. Yet the OCC has proposed tens of thousands of dollars in supplemental and relocation payments.

After Fox 25 began asking questions, the OCC said it is reviewing the legality of using bond money for these supplemental payments. "If it is indeed abandoned, then there wouldn't be any payments," Thralls told Fox 25.

A list of the buyout properties include several owned or connected to current or former Kingfisher city leaders.

"We weren't involved," said Kingfisher Mayor Jack Stuteville, "This isn't for my benefit or [former city manager] Richard's [Reynolds] benefit. This is for the community's benefit."

Though two properties owned by Stuteville are some of the most expensive properties included in the buyout. In addition those businesses, including one that appeared vacant on multiple trips to the building, are proposed to receive the biggest supplemental and relocation payments. The money will more than pay off the mortgage Stuteville took out on the property a few years ago, right around the time federal investigators shut down the bank Stuteville was in charge of.

"If you're trying to make a story that we did this for self benefit that's?|nothing could be further from the truth," Stuteville said.

The city says it will turn the buyout properties into parks or ball fields to make sure no one lives in the flood zone again. The OCC says the buyout program is the best use of bond money, but could not provide us with a list of how many rural dams the money could have constructed or repaired.