City employees pay the price for financial woes, Crestwood officials say
Crestwood employees are paying the price for the alleged mismanagement of the city's finances by two former city employees, according to Mayor Jim Robertson and City Administrator Don Greer.
Former City Administrator Kent Leichliter and former Finance Officer Robert Wuebbels violated the City Charter, numerous ordinances and their duties as fiduciary officers in their handling of the city's finances, a forensic audit alleges.
The forensic audit of fiscal 2001 and fiscal 2002, performed by Brown Smith Wallace, was initiated after current city officials began an internal investigation into the accounting practices used by Leichliter and Wuebbels.
Among the audit report's allegations is that many journal entries made by Wuebbels "were questionable and there was little or no supporting documentation ... We have established that the preparation of these journal entries represented a serious manipulation of the true accounting results on a fund-by-fund basis and these actions represent mismanagement of city funds and improper financial reporting to the board.
"The inter-fund activity recorded by Wuebbels, and approved by Leichliter, covered up the true financial results of the General Fund, which created a large deficit position,'' the report states.
In an executive summary of the forensic audit report, Greer notes that on a budget basis, the city operated at a nearly $2.5 million deficit in fiscal 2002, though aldermen were led to believe the city was operating in the black.
The prior fiscal year, the summary states, "The reported fund balance of $45,928 at the end of fiscal year 2001 is more correctly stated as a deficit of $204,072.''
Neither Leichliter's attorney nor Wuebbels were available for comment before the Call's press time.
Greer notes in his executive summary, "We have identified and reduced our annual operating costs by more than $650,000, delayed or adjusted capital expenditures totaling more than $1 million, established revenue projections based upon realistic expectations that do not include receipts from sources not yet available, and developed internal controls to prevent the unauthorized transfers of monies not approved by the board.''
Among those reductions were the elimination of a dozen jobs, something city officials say is "devastating.''
Robertson said, "... Material things can be fixed; just throw money at them. You can find a way to repair, to patch, to do whatever. But people losing their jobs, people with spouses and children and aspirations and plans, losing their jobs, that is serious stuff and it could have been avoided. But for the fact that by the time that we got into the game, we had no option ... I had a hunch that something wasn't right, but never in my wildest dreams imagined that people were actively hiding reality and 12 people went away. That's the painful part. You know, you drop a brick, you blow a tire, you bend a fender, that's fixable. Twelve people lost their jobs. That's the part of this that is unforgivable.
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"The monetary side, yeah, what the hell you know, you can fix it. But the personal destruction that's left in the wake of the mismanagement of this place is over the top for me ... You're talking about people's lives. You're talking about their homes. You're talking about their kids. You're talking about their aspirations, their dreams, their hopes. That is devastating. That's the kind of wreckage that really bothers me. I am personally sick over this. So is he (Greer) and so is she (Director of Finance Diana Madrid),'' the mayor said.
Greer said he particularly is upset because city employees are the ones who truly have been affected by the situation.
"... Do you know who's paying for this? The employees of the city of Crestwood,'' he said. "They're paying for it. They're paying for it today. I have employees who are concerned about their jobs and I have attitudes that say people ought feel lucky to have a job. That's incorrect. I don't feel lucky to have a job. These people don't feel lucky to have a job. These people come to work every day and they bust their ass. We're here on a Saturday. I've got half a dozen employees (here). They're not getting paid for that. That's the quality of people that have that work for the city of Crestwood.
"And I had to tell people that they didn't have jobs anymore and I shouldn't have had to do that. I'm angered that people worry about having a job. I believe, I truly believe today that I've made enough adjustments that they don't need to worry about that. These people work hard. These are dedicated people. Come down here at night or on weekends. People don't get paid for this. They want to do it and they want to do it right. They have pride in what they do.''
Madrid said the "new culture'' at City Hall involves "integrity and ownership.''
Greer said, "I don't know that life gets any better than that. These people have ownership, that's right. I'm damn proud to be associated with them and everything that's going on has a direct effect on them and I feel for them. I want to give them the comfort that knows their families and their lives are secure. I spent the better part of my life here in Crestwood fighting for a compensation package that rewarded the kind of employees that I'm talking about. Thank God for this man (Robertson), who came along and helped clean it (the compensation package) up so we could make it happen. We have a compensation package not everybody likes or agrees (with) or maybe even understands, but it's unheard of in government because it does recognize people based upon the quality of work and commitment and effort that they put into what they do. And that's the way it ought to be.''
Robertson said, "Don't let him kid you. We did it. It wasn't me. We got it done.''
The Board of Aldermen voted unanimously in October 2002 to adopt an ordinance approving the new employee pay plan that is designed to compensate employees based on their performance and the value of their job as determined by the marketplace.