Montpelier's goal after Scott case is trust
Toolbox
By SUSAN ALLEN STAFF WRITER - Published: November 18, 2009
MONTPELIER — A group of about 10 concerned citizens joined state Auditor of Accounts Thomas Salmon in Montpelier City Council chambers Monday night and outlined some of the key questions the city needs to address following a 2004 overpayment to Scott Construction Inc. of Newport of $462,000.
On the list: How did the overpayment error occur? What management practices have already changed and what needs to change in the future to ensure such an error never happens again? Essentially, are the city's cash management practices, accounting systems and financial safeguards effective and appropriate?
Those questions will be hammered out and clarified in the coming weeks by either all 10 of those present Monday night or possibly a smaller group, then turned over to a certified public accounting firm to answer.
That's the easy part.
Harder still will be the committee's most important charge, as expressed by virtually every member present: Restoring public confidence in Montpelier government.
"This committee needs to help the city get the trust back," said Montpelier resident Danny Coane. "There definitely was a problem there. They (the public) feel that."
"I think trust is the underlying issue," agreed resident Nick Marro. "It all folds around trust in government."
Otto Kinzel said communication is vital to restore that trust, noting that the council met in executive session to discuss the Scott problem.
"To not give them anything is not fair to the people who elected them," said Kinzel, who moved back to Montpelier from Berlin just a week ago.
With the input of the group, Salmon plans to go before the City Council and seek official approval for the creation of a financial review committee, supervised by him, to outline a review of the city's financial transactions, controls and policies.
In addition, he will ask for up to $6,500 for the committee to hire a certified public accounting firm to conduct a review of the specific areas outlined, issuing a public report by Jan. 11, 2010.
"You're starting a process of controlled review," Salmon told the group. He said the key will be keeping sustained attention focused on the issues raised by the Scott overpayment error to avoid the public thinking that, "nobody's doing anything really. They're kicking the can around."
The meeting sprang from the disclosure last month of the 2004 overpayment. In October, Mayor Mary Hooper and City Manager William 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. As a result, the city's water fund has a hole of $400,000 related to this case, although efforts to recover the funds are ongoing.
Montpelier resident Jack Lindley had asked the City Council to bring Salmon's office in to review the situation. Lindley, who attended Monday's meeting and volunteered to serve on the committee when membership is finalized, said he was pleased with the initial discussion.
"I'm feeling good," he said after the 90-minute meeting. "We've got the can moving along. Citizens are involved. We had a breakdown in government. I feel comfortable government will not break down again."
Salmon stressed that the process would not be looking for scapegoats in the Scott case.
"This is not a 'gotcha' process," he said.
Some residents wanted the CPA's work to look into broader financial and legal issues related to the case. However, Salmon urged the panel to keep the scope of this review narrow, with the option of then moving forward in the future to look at broader concerns.
Hooper and council member Sarah Jarvis, who attended the meeting with fellow councilman Alan Weiss, said it was important for the report to be thorough and issued fairly quickly to ensure public trust as the city's budget work for next year gets under way.
"We want people to have confidence in our financial systems," Hooper said.
Fraser said the city could help the committee in any way needed, adding, "We have nothing to hide. We're happy to open our books."
"For me the success of this project is a stronger Montpelier," Salmon said. He said the key is local involvement in the solution. "A stronger Montpelier is really up to Montpelier. It's not up to the auditor's office.
"The difficult part is to regain the public trust."
20