Dirty Water

NOTE:  Greeley Report receives news tips from loyal readers.  You are the eyes and ears that see and hear the details.  Thank you!  The following article is gathered from news and data presented to Greeley Report from an anonymous source.

The city of Greeley has been very proud of their bond ratings, because it enables them to borrow money and float bond offerings at lower interest rates.  While this may be positive for the city, it is also questionable, due to the activities of the Greeley Water and Sewer Department, in collusion with the City Manager.  The Water and Sewer Department currently has an S&P rating of AA-, but it has come to light that they may have failed to report a huge loss of more than $1 million to regulating authorities.  This may well jeopardize the rating.

In 2008 the City of Greeley changed auditing firms, employing Clifton Gunderson (a South Denver firm), for city-related audits in 2007 and beyond.  While this may have been routine, and the decision to suspend the contract with a local auditing firm may be business as usual, the details found in the 2009 auditing report are anything but routine.

The Greeley 2009 Comprehensive Annual Financial Report (CAFR) released in June, 2010 is the most current summary of Greeley's finances.  (Link here and scroll to the bottom of the page to view a copy.)  The early pages of the report provide a glowing report of Greeley's health and financial clarity.  However buried on page 200 of the report is a problem.  The CAFR discloses the Greeley Water and Sewer Department wrote off $1.2 million owed the city of Greeley.  This decision was made by the City Manager and the Water Director, but the city Finance Manager was not informed of the write-off for an undisclosed time period.

Why is this important?  This decision to write of $1.2 million was made on March 10, 2008.  Only 15 days later, the City of Greeley issued $32 million dollars in bonds.  These were based on unaudited financials, and did not reflect the write-off.  The people that purchased those bonds were unaware of Greeley's decisions only 15 days earlier; they had not been disclosed.  Since the write-off represented 5% of gross revenues, and 25% of plant investment fees, it was a significant issue.

Were these bond holders informed later, about this significant write-off?  The City of Greeley is silent about this. The truth is that bond holders may have been completely uninformed for more than 2 years, until the 2009 CAFR report was released in June, 2010.  And even then, they would have had to dig back to page 200 to find a buried paragraph informing them of the write-off.

Other questions remain as well.

• When was the Water and Sewer board informed of the write-off?
• When did Greeley City Council receive the information?
• When did S&P, the bond-rating institution, receive the information about the write-off?  It was significant enough that it may have shifted the City of Greeley rating?
• And finally, why did the City of Greeley violate it's own write-off policy?  It has a strict policy in place, but it broke its own laws.

This may be the tip of an iceberg that is even larger in scope.  If this information has been buried, perhaps the entire Water and Sewer operation merits a thorough review.  Are their water projections for future use accurate?  Are they issuing or over-issuing bonds?  Are Greeley residents paying more so that the city water board can go ahead with a larger-than-life plan?  If they have demonstrated a pattern of lying, concealing evidence, and violating their own policies, they are not to be trusted.

Contact your Greeley City Councilperson and demand a thorough, outside investigation of the Water and Sewer department and the City Manager.  Something is dirty here, and it's in the water.  You deserve to know the truth.

Comments

[greeleygirl]

Gee, am I shocked? Not a bit...............................

[MadAsHell]

@Powerball:
Perhaps, but Otto has been in the City Manager position too long and every time a scandal is involved he is somehow "not responsible".

[Powerball]

It's probably more the doings of the water dept's arrogant manager, Monson.
Bet-Ya, Bet-Ya, Bet-Ya!

[MadAsHell]

Fire City Manager ROY OTTO!!!