Crestwood state audit results to be released today — March 10
March 09, 2005 - By MIKE ANTHONY
The results of a state petition audit of the city of Crest-wood will be released today — March 10 — at a meeting conducted by the State Auditor's Office.
Thomas Kremer, director of audits for the State Auditor's Office, will present the audit results at 7 p.m. in the Board of Aldermen Chambers at the Crestwood Government Center, 1 Detjen Drive, Crestwood Director of Finance Di-ana Madrid wrote in a March 4 internal memorandum to City Administrator Don Greer.
Members of the State Auditor's Office will discuss the findings and recommendations contained in the audit and answer questions about the audit.
"I'm thrilled that the state audit is finally going to be released,'' Mayor Tom Fagan told the Call Friday. "This has been a long and arduous process for our residents, the board and especially our staff. And our staff, I believe, deserves great credit for all the work that they have had to put in and endure the difficulties that they've had in order to respond to the state auditor's request.
"Not only is it the end of the process, but I think it's going to be beneficial to all our residents to know what the results are. The Board of Aldermen and I met with representatives of the state auditor several months ago, so we know what the findings are and I'm confident that after the state audit is released, the residents are going to decide for themselves whether it was beneficial or not,'' he said.
"I would ask people when they look at the state auditor's results to ask themselves whether any changes were made by the city as to how we conduct our business even prior to the state auditor performing the in-vestigation. I think you will find the city had made several changes to ensure that the situation does not occur again,'' Fagan said.
Representatives of the State Auditor's Office told aldermen in January 2004 that the audit would take three to six months to complete.
Kelley Isherwood of the Crestwood Smart Growth Alliance told the Board of Aldermen in October 2003 that the alli-ance was seeking signatures for a state petition audit of the city. Crestwood officials should restrain themselves from spending "any more of the people's scarce resources on internal audits,'' Isherwood told aldermen Oct. 28, 2003.
"... We suggest that the city restrain itself from spending any more of the people's scarce resources on internal audits. The state's audit will take its place,'' he said, later adding, "You have questioned the existence of our organization and choose to ignore its political significance. I can assure you that I represent a considerable force in your com-munity consisting of Crestwood residents and business owners.''
Less than a week later, city officials released the results of a forensic audit of fiscal 2001 and fiscal 2002 performed by Brown Smith Wallace that alleged 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.
"As a result of our forensic investigative procedures, we have concluded that there have been a staggering amount of disbursements, improper journal entries and misrepresentations to the Board (of Aldermen) of the city's financial position, authorized by Leichliter and performed by both Leich-liter and Wuebbels, representing mismanagement of city funds and financial reporting errors,'' states the forensic audit report prepared Brown Smith Wallace.
"Although the board has ultimate authority and oversight responsibilities, it is our opinion that they could not make the appropriate and necessary fiscal decisions for the city because they were misled by Leichliter and Wuebbels as to the true financial condition of the city,'' the report states. "Leich-liter and Wuebbels' actions, as evidenced by the multitude of documents we reviewed, were in violation of numerous ordinances, the city of Crestwood's charter, possible state statutes, good financial practices, and, most importantly, their duties as fiduciary officers of the city of Crestwood.''
On Nov. 19, 2003, the city filed a lawsuit against Leichliter and Wuebbels.
The lawsuit alleges that Leichliter and Wuebbels breached their fiduciary duties by manipulating financial records to misrepresent the city's true financial condition to then-Mayor Jim Robertson and the Board of Aldermen. The suit is pending.
Leichliter later filed a counterclaim, which also is pending.
In November 2003, the city received a letter from the State Auditor's Office that stated a petition containing 1,129 signatures had been submitted requesting a state audit, and 739 signatures were needed to trigger such an audit. Of the 1,129 signatures submitted, 1,020 were signatures of registered Crestwood voters, the letter stated.
However, as the Call reported in early 2004, two-thirds of the signatures on the petition were collected by non-residents and more than half were collected by members of a family who have been at odds with city officials over previous efforts to redevelop property that included a shopping center they own.
During a presentation to the Board of Aldermen last summer, Madrid noted that non-residents collected 766 signatures or 67.85 percent of the total number collected.
Four members of the Boegeman family, who own the Creston Center at the southeast corner of Watson and Grant roads, collected 584 signatures on the petition calling for a state audit.
Non-residents Ken Boegeman, Ken Boegeman Jr., Timothy Boegeman and Harry M. Boegeman Jr. — collected 584 signatures, while Isherwood collected 167 signatures. Another non-resident, Carolyn Dobbs, collected 15 signatures.
Members of the Boegeman family have been at odds with city officials since early 2002 when a request for proposals was issued to redevelop 18.79 acres comprised of two parcels at Watson and Grant roads.
The larger of the two parcels contains Value City and is owned by Joe Grasso, while the smaller parcel contains the Cres-ton Center.
The Boegemans repeatedly have told aldermen they will not sell their property and have vowed to fight any efforts to ac-quire their property through eminent do-main. The RFP later was withdrawn.
Of the residents collecting signatures for the petition, Jesus J. Miguel, also known as Jerry Miguel, obtained the most — 68. Miguel of Ward 3 was elected to the Board of Aldermen last April, defeating Alder-man Bernadine "Bernie'' Alexander.
Roger Anderson, the resident who has identified himself as the "chief petitioner'' for the state audit, collected a total of 20 signatures. The Call previously reported that Anderson told the Board of Aldermen Jan. 28, 2003, that a state audit was needed of the city's finances.