LOCAL NEWS

Three City Contracts Slipping Through Cracks

By Kathleen Sloan

HERALD Reporter

Truth or Consequences City Manager Juan Fuentes and Mayor John Mulcahy were asked to comment Thursday, March 22, on three contracts that are examples of lack of internal controls. As of press time, they did not respond.

The city’s audit for Fiscal Year 2010-‘11 warns of this lack of internal controls. It was recently released and is available on the city’s and Office of the State Auditor’s websites.

The most on-point of the audit’s 11 findings concerning internal controls is FS 2011-01, Page 112, “Design Deficiencies in Internal Control Over Financial Reporting.” The audit rates the city as having a “Material Weakness” in this area.

The audit, on Page 98, defines material weakness as a deficiency “in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis.”

The contract between the city and Sierra Animal Shelter is a good example of such material weakness. In 2004, the city had a valid contract, which was renewable for four years with parties’ consent. It stated Sierra Animal Shelter would be paid $2,000 a month for their services.

In February 2006, the Sierra Animal Shelter requested a fee increase, which went before the city commission. The commission tasked then-City Manager Jaime Aguilera with doing a comparative pricing exercise. The city would approve the increase only if the city could not do it at a lower price. Aguilera reported back in June 2006. The city could do it at a lower price.

In July 2006, the city commission discussed a new contract, but never approved it or an increase in fees, yet the city started paying Sierra Animal Shelter $2,500 a month.

After Margaret Salcedo was killed by four pit bulls in April 2011, then-resident Brad Grower investigated and brought to the city’s attention that they were operating without a contract since 2008, since that’s when the 2004 contract expired, and had overpaid $500 a month since 2006.

In July 2011, the city commission passed a contract, giving the Sierra Animal Shelter $2,500 a month.

The city paid $12,000 extra in fees between 2006 and 2008. The city paid $90,000 in fees with no contract between 2008 and 2011.

Another contract, which is an example of no commissioner oversight, is the Municipal Golf Course Pro contract. The city recently advertised a request for professional services for golf pro and management services. The RFP never came before the city commission.

As the audit report states on Page 12, “The City Council is charged with governance, and should provide effective oversight of the internal control and financial reporting process.”

A third contract is the recent hiring of the law firm Brennan & Sullivan of Santa Fe. City Attorney Jay Rubin was “substituted” by this firm to handle the Toomey vs. City case, which claims Inspection of Public Records Acts violations.

A city ordinance states the city attorney will handle “any and all” legal matters. Any exception must be done by resolution, and any resolution must be done in open session. This matter has never been mentioned in open session.

Discussion

One thought on “Three City Contracts Slipping Through Cracks

  1. The position of the City of Truth or Consequences is that their actions can only be determined to be illegal if someone actually sues them in court. When the City of Truth or Consequences goes to court, it usually has to pay City Attorney Jaime F. Rubin to defend them against lawsuits. So, in whose financial interest is it to give the City bad advice on legal matters, so that the City must pay them to defend those recommendations in a court of law?

    C’mon, this is really not all that difficult to figure out, is it?

    Posted by Durable Brad | March 29, 2012, 6:50 am

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