The names of Watree Construction/Homes, Tracy Acree Construction, Wyatt Builders and Whitrock Associates all appear in a report compiled by the Clerk of Court’s Inspector General’s Office following an investigation of Water and Sewer Department billing irregularities.

Four local construction companies are named in an Okaloosa County investigative report substantiating “county ordinance violations” committed by former Water and Sewer Department employee Kathy Nelson.

The names of Watree Construction/Homes, Tracy Acree Construction, Wyatt Builders and Whitrock Associates all appear in a report compiled by the Clerk of Court’s Inspector General’s Office following an investigation of Water and Sewer Department billing irregularities.

They are found in a table summarizing “errant accounts.”

Nelson, who is charged with stealing more than $200,000 from the county, was arrested Oct. 18 on six felony counts, including one that alleges she accepted “unlawful compensation.”

In a news release announcing the arrest, the Okaloosa County Sheriff’s Office said “Nelson received kickbacks” for manipulating water and sewer fees on behalf of three builders “to the tune of more than $107,000” between April 2008 and February 2017.

Keith Rockman, the manager of Whitrock Associates, said he has been interviewed by authorities and cleared of any wrongdoing.

“They came and talked to me and said I am not under investigation for anything I’ve done,” he said.

The Inspector General’s Office was called in after Water and Sewer Department managers were notified of suspected billing irregularities related to the assessment of fees tied to the hookup of water and sewer lines at residential properties.

A review of 347 accounts tied to 64 separate contractors and individuals over a nine-year period turned up billing irregularities at 83 locations involving four contractors, Inspector General Investigator Brad Embry reported.

The irregularities potentially caused the county to lose between $204,300 and $255,000, the report said.

'Rumors are flying everywhere'

The table summarizing errant accounts found by the Inspector General’s Office includes 46 tied to Watree Construction or Watree Homes. Both businesses list Thomas Watkins and Brent Acree as managers, according to state business records. Nathan Harris is listed as a manager of Watree Homes and as registered agent of Watree Construction.

Company officials could not be reached for comment Monday.

Tracy Acree Construction is listed as being associated with 16 errant accounts. Tracy and Johnnette Acree are listed as managing partners in both Tracy Acree Construction Inc. and Tracy Acree LLC, both with Brooks Street addresses in Fort Walton Beach.

Phone calls to the business were not returned Monday.

Wyatt Builders is listed in connection with eight errant accounts and Whitrock Construction is tied to five.

Derek Wyatt is the managing partner of Wyatt Builders, a Shalimar business. He acknowledged knowing Nelson and confirmed that she’d called him “once or twice” after she was fired from the Water and Sewer Department on May 4.

“Rumors are flying everywhere,” Wyatt said when asked what he’d heard about the still open criminal investigation of the Water and Sewer Department scandal. Asked if he was the subject of any of the rumors, he said, “I’d rather not say.”

Asked if he’d provided kickbacks, Wyatt responded, “Oh hell no, and I don’t know anybody that did.”

The Water and Sewer Department has been managed badly for years, Wyatt said, and Nelson is being used as a scapegoat by the county.

“I do know there have been some real screw ups in building over the years. As a contractor, I work with all the utility companies in the area … sometimes we have things done that involved utilities being moved and there’s neither rhyme nor reason,” he said. “Sometimes we get charged and sometimes we don’t.”

Wyatt said only recently he’d been on a project that required both tree cutting and setting lines, but he never received a bill.

“That’s how it’s gone since I’ve been in construction,” he said. “And I don’t ask questions.”

Irregularities uncovered

The billing irregularities uncovered by the Inspector General’s Office primarily involved the assessment of Capacity Expansion Charges or Cost of Construction fees. CEC’s, as they are known, go to “defray the cost of increased demand on water supply and/or sewer collection treatment and disposal for new connections.”

At present the county charges $800 for water expansion and $3,200 for sewer expansion.

Discrepancies attributed to Nelson were uncovered and reported by a fellow employee who noticed three new accounts had not been assessed CECs, the report said. The employee also noticed Nelson had been entering fictitious information into the Water and Sewer Department’s payment tracking system.

The table that notates the errant accounts lists 42 specifically and summarizes each.

Violations of policy or county ordinance uncovered included:

• Illegal transfer of CEC’s from one property to another.

• A single CEC fee being assessed at a property that was subdivided and used for construction of more than one structure.

• Failure to collect fees.

• Receipts entered for neighboring properties.

• Improper use of software transaction codes to make it appear as if CEC’s had been collected.

• Reuse of old/inactive location ID's to make it appear CEC’s had been paid.

• Reuse of receipt numbers.

• Altered cost of construction estimates.

The majority of the 42 errant accounts noted in the report were signed off by Nelson. Several, though, also bore the signature of former employee Turquoise Green, who left the Water and Sewer Department in January.

The Inspector General’s Office report suggested several changes the Water and Sewer Department could make to improve its monitoring of employee assignments and responsibilities.

In the department’s response to the report, the Water and Sewer Department noted “the discovery of billing irregularities related to CECs ultimately came about because of proactive changes that management began to initiate in 2013.”

Nelson pleaded not guilty Oct. 20 to the charges of aggravated white collar crime, theft of over $100,000, three counts of fraud and one count of receiving unlawful compensation in the form of a bribe. Her trial has been tentatively scheduled for Jan. 2, 2018.