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Mayor: Don't talk to auditor

New rule comes in face of questions

Published: Monday, Jan. 21, 2013 1:15 a.m. CST

MOUNT CARROLL – The mayor has a new rule: City Council members no longer can speak directly with the city's auditing firm. They must go through the mayor himself or the city clerk.

At least two council members disagree with Mayor Carl Bates' rule. And the mayors of Dixon, Rock Falls and Sterling said this week they have no such ban.

At the council's Dec. 18 meeting, Bates announced his new rule. It comes in the face of an increasing number of questions about the city's finances from two aldermen, Doris Bork and Bob Sisler.

At a meeting last week, Bork asked the council to amend the Dec. 18 minutes to include the new rule.

The mayor was fine with changing the minutes.

Alderman Mike Risko said he agreed with Bates' policy.

"It sounds reasonable," he said. "We can't have seven people talking to [the auditor]."

Bork said that although she opposed the rule, she wanted it on record.

"Anyone can talk to the auditor," she said. "If you're on the City Council, you have a right to talk to the auditor."

Bates said the auditor, Matt Schueler of Wipfli, told him his firm gets its marching orders from the mayor and the city clerk.

Bork, though, said she has received replies to her emails to the auditing firm.

Others said the firm probably was charging the city for such contacts, but Bork said she didn't believe that to be the case.

Schueler, who works in Wipfli's Sterling office, didn't return a call for comment.

'To me, that's wrong'

The Mount Carroll rule appears to be uncommon.

Dixon Mayor Jim Burke said his city never has had a prohibition against speaking with the auditor or the finance director.

"We're very open," Burke said. "I've always felt that the more that people know about what's going on, the better. We told our new finance director, Paula Meyer, that all of the council, including the mayor, will have access to her at any time."

Sterling Mayor Skip Lee said Sterling also has no such ban.

"To me, that's wrong," he said. "There are no limits to information in Sterling."

Rock Falls Mayor David Blanton said council members can speak with auditors.

"We try as hard as we can to be open with everyone," he said.

David Sinason, a certified fraud examiner and a Northern Illinois University accounting professor, called the mayor's rule "extremely inappropriate."

"If someone wants to blow the whistle, there should be nothing that prevents the person from doing that," Sinason said. "If the information is about wrongdoing that the mayor is part of, what assurances would I have that the mayor would pass along the information to the auditor?"

In Mount Carroll, Sisler, who is running against Bates in the April 9 election, and Bork have been asking questions about the city's finances, including transfers between funds and discrepancies in payroll records.

The mayor's supporters point to relatively clean audits from Wipfli as proof that the city's finances are in good shape. But the audits haven't been entirely positive. Among other things, Wipfli recommended the mayor advise the council of interfund loans beforehand.

In 2011, the city's previous auditor, Winkel, Parker & Foster, said it was concerned that the city had an accounting system that gave the city clerk control over the entire process of disbursing funds. It also noted that the mayor signed his own paycheck – "a breakdown of one of the city's most significant controls."

Last year, Bork and then-Alderwoman Nina Cooper looked at payroll records at City Hall. They publicly pointed out discrepancies between time-clock records and written time sheets. That disclosure angered the mayor, who said he would require council members to give their reasons for seeking public records. He also said they would have to review documents in his presence.

The attorney general says government agencies shouldn't ask people for the reasons behind their public records requests.

Asked about his policy on public records, Bates said it was no longer in effect. He said he was upset during the meeting when he announced his rules.

In one letter, Wipfli suggested management periodically review payroll on a "surprise basis."

'I've had enough of this stuff'

Near the end of last week's meeting, the mayor told the council that he had been advised that a forensic audit – which is much more thorough than a regular one – would cost $50,000 to $60,000.

He asked the council whether he should get a quote. The others said yes.

Alderman Risko said some are accusing the city of doing "illegal things," but they have no evidence.

Her voice shaking, City Clerk Julie Cuckler said that if the city pursues a forensic audit, "I have nothing to hide."

"There is no money gone or stolen," she said. "I've had enough of this stuff."

Cuckler said she had heard secondhand that Bork had gone around town saying the clerk had taken money.

Bork denied it.

"I haven't said it firsthand," she said.

"Yes, you have," the clerk replied.

Businessman decries negativity

MOUNT CARROLL – Shop owner Leonard Anderson says the negativity in city government is hurting businesses. He wants the City Council to end it.

He was particularly disturbed by a story that appeared Dec. 26 in Sauk Valley Media, which detailed a city-arranged loan to a nonprofit group for the renovation of a building.

Anderson, owner of Ideas n' Designs antique shop, said that businesses are "fragile" in Mount Carroll and that out-of-town customers have been asking about the city's political battles. He said he had no idea why a newspaper in Sterling was covering the city.

He said the negativity may drive him and others away.

"What incentive do I have to stay in Mount Carroll?" he asked at last week's City Council meeting.

Anderson said other area towns were suffering, but he could feel greater energy in Mount Carroll.

"Why do we want to bring that down?" he asked. "If you have a problem, fix it, but not in the newspaper."

Aldermen Doris Bork and Bob Sisler have criticized a loan from the city's revolving loan fund to the Community Development Corp., a nonprofit group, to renovate the downtown Kraft building. They contended the deal involved conflicts of interest.

Resident Lou Schau is at the center of the deal. He is the president of the CDC; the owner of Brick Street Coffee, the only business inside the building; and a member of the city's revolving loan committee.

City Attorney Ron Coplan represented both the city and the CDC in the drafting of the loan agreement, which Coplan acknowledged could be seen as a conflict of interest.

With the amount of the loan – $106,000 – the project was supposed to have created seven jobs under state requirements for the fund, which was provided by the state Department of Commerce and Economic Opportunity. The city hasn't documented the number of jobs, but by the most favorable accounting, the project created 5 1/2 jobs.

In response to Anderson, Bork said she became concerned after residents told her the CDC was dissolved. According to the secretary of state's office, the group involuntarily dissolved in July 2011 because it failed to file required paperwork to stay incorporated. The organization corrected the problem in November.

Anderson said he liked the Kraft building. Bork agreed that Schau did a good job with it.

Sisler said the city must ensure CDC meets the loan requirements.

"There were strings attached," he said.

Schau attended the meeting but did not speak.

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