Last week, Councilman Sean Paige ruffled feathers when he called for an audit of the Colorado Springs Regional Economic Development Corp.
According to Paige, the EDC has received more than $1 million in public funds from the city government and Colorado Springs Utilities in the last six years.
After Paige called for the audit, the City Council decided to ask interim City Auditor Denny Nester to research how much it would cost and how long it would take.
Nester’s response, which can be read by clicking here, has generated some interesting reactions among some council members, according to e-mails obtained by The Gazette.
Here are excerpts of some of the e-mails:
E-mail from Paige to Nester:
“Mr. (Mike) Kazmierski or some other EDC representative at a recent meeting made a point of saying that they were going to more carefully segregate funds for such purposes (which seemed a belated acknowledgement that this hasn’t been done in the past) and I would want you to confirm that such controls are in place now. Mr. Kazmierski’s statements in today’s Gazette make it clear that the EDC has not “gotten out of politics,” as a representative also recently said, and it’s important, in my view, that controls exist to ensure that public funds are being used for job retention and creation, not political posturing.”
E-mail from Councilman Bernie Herpin to City Council:
“During our discussion for the need of an EDC audit, each member supporting a city audit of EDC remarked that they did not expect to find any ‘irregularities’, or words to that effect. Given the estimated time and cost of such an audit, I cannot justify spending city resources on an audit when there are no grounds to believe that any impropriety has occurred.
In addition, we receive an annual audit report that is directed by the EDC Board of Directors using an independent auditing firm. While this audit does not specifically detail where Colorado Springs city and utility money is spent, nor does it contain any specifics on exactly where any of the other sources of funds are spent, it does review the proper accounting of funds. Just as we don’t track how a specific taxpayer’s funds are spent (all taxes go into our general fund), I wouldn’t expect the EDC to specifically track our funds. They are used to fund the operation of the EDC.”
E-mail in which Paige responds to Herpin:
“Perhaps you are willing to lay out significant taxpayer and ratepayer funds annually, without exercising some independent oversight, blindly trusting that EDC is using these funds wisely, and that they are delivering the results they say they are. But I am not. The expenditures highlighted in Denny’s letter don’t seem excessive, given the significant amounts (more than $1 million in the last six years, by my count) that flow to the organization.
At a time when locals are nursing a deep cynicism and distrust toward City Hall, maybe a little confidence can be restored if we turn words like transparency, accountability and oversight into action.”
E-mail from Councilwoman Jan Martin to City Council:
“It was my understanding at our Monday meeting that the Mayor asked for Denny’s assessment on time and cost before moving forward with the audit. At this point, and with the additional size and scope being requested for the audit, I think it would be appropriate for us to either ask Council for another consensus vote or add it to our next agenda for a formal vote before moving forward with the audit.”
E-mail in which Paige responds to Martin:
“I don’t really believe this constitutes a major expansion of the scope of the project, just a clarification, since there was no discussion at Monday’s meeting about what time-frame this review would cover, or what constitutes an appropriate use of public funds. I just think, if we’re going to take a closer look, a year and a half isn’t adequate. And my latest e-mail to Denny simply gets a little more specific about what might be looked at, when we ask what public money is going for. Again, I think this is more of a clarification than an expansion. And it’s only one person’s opinion.
And by all means, let’s have a formal vote. I think the public should know who is interested in exercising oversight and who is not.”
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