Former trustee offers own audit viewpoints
By Tamie Meck
Published Thursday, October 22, 2015 10:30 am
A former Paonia trustee is at odds with the town and board of trustees over issues related to the 2014 audit, and more specifically, a document of viewpoints authored by the town's auditors, RubinBrown LLP. Viewpoints documents are typically not released to the public, but trustees elected to do so with the 2014 audit viewpoints in order to be more transparent.
At the Oct. 22 trustee meeting, Bill Brunner was on the agenda after appearing in the last two meetings to express concerns over the budget, and specifically the viewpoints document which he says the town is using to guide it toward rate increases for sewer and water and other changes related to town finances. Brunner was granted a place on the agenda after criticizing the audit and viewpoints. He is also among a group of pilots who are against the town selling its 75 percent share of the North Fork Valley Airport. Neither that issue, nor discussions related to it, have yet to appear as an agenda item.
Mayor pro tem Charles Stewart, who chaired the meeting in the absence of Mayor Neal Schwieterman, allowed Brunner 10 minutes to state his case, and allowed equal time for both board members and the public response.
This particular document is not part of the public audit, said Brunner. "I'm frankly kind of critical of the way this thing is put together." He also is critical of the document's influence on trustees and notes that Page 1 states that information is intended solely for use by town staff, the mayor, and trustees, and the last page states the information is for additional analysis and not part of the audit. That makes it "a viewpoint ... presented to the town council to influence the way they see it." In an Oct. 14 letter to the editor in the DCI, Brunner accuses the "Paonia management team" of campaigning to convince town residents that the town needs more of their money.
Brunner says he doesn't dispute the fact that the town has financial issues or how they got there, "but I wonder if we're really quite in the ditch as bad as the audit ... might make us think we are in the way it's being presented."
Brunner suggested poor accounting practices that reflect that "it's all in the red." He found it hard to believe that the town is "flat broke."
Stewart responded that no one said the town is "flat broke. What I've told people is that we have a cash crunch," because the cash on hand is allocated.
Some of that allocated money is for the Samuel Wade Bridge and Road. Through a 2011 intergovernmental agreement with Delta County, the town received $800,000 to cover future maintenance costs of the road. Brunner and the board disagree on what, how, and if the remaining $640,000 can be spent and should be accounted for, and said he can find no indication that the money is restricted to just that stretch of road.
Reading from the contract with the county, Stewart said the money is to be used to repair the road from the town limits to Highway 133, and for bridge maintenance. Prior to 2014, that money was inappropriately used for sewer and road repairs within town, and to balance the general fund, said Stewart, and the town still has a liability of $640,000 to the county.
Brunner challenged the profits and losses graphs for the water and sewer accounts, which, along with rate comparisons from other municipalities, are being used in discussions regarding future rate increases. He argues that the graphs are accurate, and that the two funds together are profitable. Brunner said he sees in the graphs that "the town is doing a wonderful job providing water at a very reasonable price. You guys should be proud.... Why would you want to raise rates just because you can?"
"The reality is we have to continually put money into water systems," said Stewart, and that money needs go toward depreciation. In addition, said Stewart, $387,888 in loan payments that must be made from water and sanitation funds, and the viewpoints state "a very significant projected shortfall of $461,000. That is a hard reality that we have to deal with."
Brunner and others have also been highly critical that the audit itself has cost an additional $17,000 above the original contract. Brunner stated that any contract changes to the audit should have been in writing and agreed to by both parties. Brunner said he filed for information under the Freedom of Information Act for those pages of the contract, and was told there are none. Brunner said he believes that puts the town in violation of the contract. Approving a payment disbursement isn't the same as calling for a vote by the board.
"Yes, there were additional services by the auditors," said Stewart. The contract allowed for additional services to be performed, and the board requested that RubinBrown look into them. "Those were vital services to this community," said Stewart. "My view is that this is money well-spent."
Trustee Suzanne Watson argued that the board did not handle things correctly by not re-negotiating the contract, despite her approval of the disbursement and the fact they were brought up at the Aug. 27 public meeting with the auditors. "It wasn't an open process," said Watson.
Stewart said Brunner's concerns over the board using the viewpoints are unfounded. The board voted to make the viewpoints public in order to be as transparent as possible, said Stewart As for those viewpoints, they are recommendations of the auditors, whom he called highly experienced and who took 450 hours to review the town's finances. "It would be foolish of this board not to look seriously at their recommendations."
Brunner said he appreciated being placed on the agenda and the invitation to join in the budget talks. "I just want it to be known that there are other ways to see it, and people see it other ways," said Brunner.
Trustee David Bradford noted that in recent years all of the audits were filed late, including in 2012 when the town discovered an embezzlement scheme. "Since then, when few were paying attention, we have come a long way," said Bradford.
Trustee Ross King, who serves with Stewart on the town finance committee, stated that the board collectively made the decision to adhere to the recommendations of the auditors. "All of your points, we understand. I do not dispute any of them," King told Brunner. "Your interpretation is your opinion. This board collectively expressed their opinion."
King also invited Brunner to sit in on upcoming budget discussions, "Because that's the kind of input we need from our residents."