Citizen oversight panel exists now, mayor says
Crestwood Mayor Jim Robertson recently responded to a resident's request to establish a citizen oversight panel by saying one already exists — the Board of Aldermen.
Robertson also urged the resident, Jerry Miguel of Camelot Lane, to run for the Board of Aldermen if he wants to serve on a citizen oversight panel.
During a Board of Aldermen meeting last week, Miguel contended that a recently released forensic audit report of the city's finances "is a good first step to bring facts to the public. However, it raises as many questions as it answers.''
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, the 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.''
In October, Miguel had addressed the board, asking questions about the city's fiscal condition and a request for auditing services issued by the city — the board later that evening voted to approve an ordinance selecting Brown Smith Wallace as the city's independent auditing firm. Besides performing an audit for fiscal 2003, the firm will restate the city's financial statements for fiscal 2001 and 2002.
During his comments on Oct. 14, Miguel also made several suggestions, including restructuring the city's Ways and Means Committee so it is not dominated by senior administration, and establishing a citizen oversight panel. Miguel contended that some of the fiscal surprises encountered in recent months by the city could have been avoided if a citizen oversight panel had been in place.
On Nov. 11, Miguel again addressed elected officials, saying, "... The plague of accounting irregularities that has spread over corporate America has reached Crestwood, Mo. It appears we have our own version of lax auditing, inflated revenues, fiscal mismanagement by senior executives and a complacent board of directors. The Brown Smith Wallace audit report is a good first step to bring the facts to the public.
"However, it raises as many questions and issues as it answers. For example, why didn't the previous auditors, Hochschild, Bloom & Co., expand their audit testing? Will legal charges be brought against Leichliter and Wuebbels? When will we get the details behind the auditors' statement: 'The spending of city funds which were either improper or excessive with questionable benefits to the city.'
"And where were the Board of Aldermen and the Ways and Means Committee while all this was going on? What happened to the fiduciary oversight duties and responsibilities of these parties?'' Miguel continued. "What is the plan to get the city back to financial health? We have a cash-flow problem and sales-tax base continues to deteriorate ... We need to see an approved budget for the fiscal year even though it is half over. And now is not the time to cloud matters further by extending the fiscal year. We need to get a handle on our long-term debt and build the $1.5 (million) to $2 million cash reserve that this administration has told us that we need. And if that means putting the new police building on hold, then so be it.
"My recommendations to you on October the 14th 2003, were strikingly prescient and on the mark, namely the Ways and Means Committee needs to be restructured. It should not be dominated by senior administration. It needs financially experienced citizen representation. And second, Crestwood needs a citizen oversight committee. Credibility and trust in this administration are at a low. Assurances that controls are in place are not enough. The Ways and Means Committee must be restructured and citizen financial oversight must be established. Thank you,'' Miguel said.
Robertson said, "I'm going to address that this time. I let you get away with it the first time. There is a citizens' advisory board. They're sitting here. They had the dedication and devotion to volunteer themselves to the electoral process, go through what a campaign takes, get elected and come up here and serve you. Now if you want to be part of a citizens' advisory board, December's coming up, take your $5, go to the clerk's office, get a petition, get the signatures and expose yourself to the electoral process. It's not fun. These people work very hard out of their own time. They may make two bucks an hour doing what they do.
"The fact in the report that the audit in '01 and '02 said that there was a balanced budget or a surplus, which has turned out to be false, has been discovered by the work that we're doing up here now. I take exception to the fact that the city got burned down financially over a period of years by people who are not here and we're trying to fix it and you're coming up here confronting us about the fact that well, we discovered this and we discovered that. You didn't discover anything, we found it, we reported it, we disclosed it. The financial audit is on the Web site. If you want a hard copy, I'll make sure you get it and there's all kinds of stuff in there that answers your questions ... But I'm telling you now, if you want to be on a citizens' advisory board, run for the Board of Aldermen in Ward 3. Stand in front of the people who live in Ward 3 because that's where you live, and offer your services and see if they take you up on it. That's how it works. I've been up here after midnight, I've been up here on Saturdays. I can't tell you the number of hours this man (City Administrator Don Greer) puts in. I can't tell you how hard she's (Director of Finance Diana Madrid) worked ...
"Now it is kind of incongruous that for years what was taking place went undiscovered. We're telling everybody everything that we find, we're as open as we can be. I spent three-and-a-half hours up here Saturday the first of November, at the request of the media, giving an interview about this stuff and I'm a little tired — pardon me, I'm also a little sick and a little cranky — but I'm a little tired of being accosted about the fact that this information is coming out. Where do you think it's coming from?
"There has been no CBS investigative report on this. We're putting it out as broadly as we can. We're concerned about all of you. We're doing the best job that we can. We're the ones that found this. We're the ones that are going to fix it. I believe it's going to take about three years to get it done. The problem is in the General Fund, the Capital Improvement Fund and the Park and Stormwater Fund, we've got to restore those balances. We've deferred projects. We've cut expenses, the aggregate is what, about 2 million bucks?'' he asked Greer.
Greer indicated that estimate was accurate.
Robertson continued, "We're doing everything we can. Now why you're beating us up because we're trying to straighten this mess out, I don't understand.
"But it's real simple. Run for office,'' the mayor said to a round of applause.
Ward 3 Alderman "Bernie'' Alexander said, "... I have to respond to something that Mr. Miguel said. We as a board can only govern the city and represent our constituents based upon the information that we are given.
"And trust me, this board made every effort to question the information and the financial numbers that were given to us. And we did question it ... When there is a number in black and white and you say is that number correct? And the answer is yes, you go forward. What else are you supposed to do?
"We are governing as citizen representatives. We are not the people making the journal entries. So I felt that I had to stand up for the integrity of the people sitting up here because we do ask questions,'' Alexander said.
The audit report states, "In reviewing minutes of board meetings, we noted that there were questions posed to Leichliter to explain his budgets in further detail. The answers provided were designed to misdirect the questions with either vague or non-responsive answers.''
Referring to the forensic audit, Ward 1 Alderman Richard Breeding said, "... In the report there are some direct quotes that aldermen asked questions and one question asked by someone on the board was are we operating at a deficit? And the answer was no, we are not. Well, when you are lied to, you are lied to. That's all, thank you.''
Robertson said, "Let me share one more thing with you, Mr. Miguel. I also asked questions. I also got answers that I had concerns about, but the audits said we were operating with a $45,000 in round numbers surplus in the (fiscal) year ending '01, some kind of surplus in the (fiscal) year ending '02.
"All right. That's fine. We're still making money ... I had a deep and abiding concern about how the place was being operated even if it were in the black. That is the primary reason why I ran for mayor. This job is not fun, especially when you find that the kinds of things that we've found and you have to try and correct them,'' he said.
Another resident, David Brophy of Lodge Drive, later addressed the board, saying, "I would like to point out what's been pointed out once before in the newspapers, for one thing. The budget which was the report which was just issued, was for 2001 and for 2002. I do not believe the mayor or the city administrator or the current financial officer had anything to do with that budget in terms of what went on.
"I would also like to point out that the mayor has been mayor for 19 months approximately. Mr. Leichliter left, maybe with a little help into his new position about eight or nine months after the mayor became mayor. And at that time the police chief agreed to take dual duty for the citizens of Crestwood and become the acting city administrator,'' he continued.
"One of his first duties was to fire Mr. Wuebbels, the financial officer who is involved in these problems. And at the same time, the Ways and Means Committee, together with the mayor, the city administrator and the new financial officer, began to look at the finances of this city in detail.
"It is they who discovered the corruption. It is they who found it out. They are to be praised. And the board, I've observed them for five years, I have come and listened to all of the meetings pertaining to the budget, pertaining to the Ways and Means Committee, the board has done its job. Because there were some rotten apples, don't blame them. Thank you,'' Brophy said to a round of applause.
In a related matter, the Board of Aldermen later voted unanimously to accept the forensic audit report prepared by Brown Smith Wallace.