Montpelier to ask state auditor for review
Toolbox
By SUSAN ALLEN STAFF WRITER - Published: November 6, 2009
MONTPELIER – The Montpelier City Council voted Wednesday to contact the state Auditor of Account's office, as well as private auditing firms, about reviewing the city's financial management systems and the 2004 overpayment to Scott Construction Inc. for water line work.
"Such a review will go a long way to address any lack of confidence which may exist and can potentially offer advice about even more improvements that we might make," City Manager William Fraser wrote in an e-mail to the council before the meeting. He urged the council to move swiftly on the review.
Fraser said the city should hire an independent consultant "to perform a review of the city's financial management systems and the payment of the Scott check."
At a special council meeting Wednesday night, resident Jack Lindley suggested they use the State Auditor's office rather than spend taxpayer money for such a review.
Resident Gary Schy agreed, and also urged the council to appoint a citizen committee to be part of the process. "I would like to see that happen," he said.
In the end, the council voted unanimously to first contact the State Auditor's office to discuss how to proceed with such a review – including asking whether that office conducts such reviews, and if not, whether it could help the city find qualified firms and outline the issues that should be addressed.
At the same time, Fraser will seek bids from private auditing firms. The council did not consider Schy's call for a citizen panel, however.
The overpayment was fully disclosed last month when Mayor Mary Hooper and Fraser explained that the city had mistakenly cut a check from the water fund for $548,111 to Scott Construction on Dec. 22, 2004. The amount should have been $85,775.
The $462,336 overpayment was subsequently cashed by Scott Construction and the mistake wasn't discovered by the city until 2006. The city has been able to collect $114,688 of that overpayment from Scott Construction over the years, but recently Chittenden Bank called in its $4.8 million loan to the company and foreclosed on Scott.
The city recently released most correspondence on the situation, withholding two e-mails and redacting a portion of a third on attorney's advice that disclosure could jeopardize any recovery of the funds through insurance coverage.
A second opinion was obtained on that question, with attorney Glenn Howland suggesting the city talk to the insurance company about the impact of releasing the documents, or perhaps releasing some of the material but redacting portions that he, too, believed could jeopardize the funds.
Fraser said he had contacted the insurance company, but an answer wasn't immediately available.
The council voted 6-1 to withhold the documents until that decision was received.
Councilor Jim Sheridan was the lone vote to release all the material. "I don't care if you line up 10 attorneys," Sheridan told the council. "I have seen what we have for documents. I'm ready to release them tonight."
On a related matter, Lindley asked council members to check their home computer servers for any e-mails that concerned Scott Construction, as well as those of former council members who served at that time. Some councilors, including Tom Golonka, indicated they would take that step. Others sounded skeptical that old e-mails would be retrievable.
The council also invited three experts on the executive session provision of the state's open meeting law to discuss the law, following public concern about the council's use of closed door meetings from 2006 to 2009 to discuss the water fund shortfall. Appearing were Allen Gilbert, executive director of the American Civil Liberties Union of Vermont, former Deputy Secretary of State Paul Gillies, and Jim Barlow from the Vermont League of Cities and Towns.
"Executive session is an extraordinary action," said Gilbert. And even if the session is proper and warranted, "closing out the public is one of the most risky things that public officials do. You've created a perception that you're doing something behind closed doors and therefore something is suspect."
Gillies agreed, adding, "The more you can avoid that, the better off you are."
"I don't think it's perfect. I don't think it's easy. I don't think it's meant to be easy," said Barlow of executive session. "But I think by and large people do pretty well at it."
"The law favors transparency," he added.
Gillies warned the council about e-mailing, telephoning and conversing about issues to the point the majority form a consensus.
"Use e-mail to disseminate, but not to discuss," agreed Barlow.
Schy questioned whether the city has used executive session properly in the Scott Construction case. Hooper said the speakers had not been asked to study the specifics to make such a decision. "Wouldn't it be nice to know? I guess we're not going to find it out tonight," Schy said.
40