St. Peters is a dirty city-Part 1

Rather than accept the spin about the audit done on St. Peters, I decided to actually read the audit before I pronounced St. Peters a clean city. I have already posted about one glaring problem that was pointed out in the audit and in this post I will take a look at some of the other findings of the audit. It should be noted that I have relied on the grossly negligent audit done by Susan Montee's office and that her credibility has been called into question by her actions in this audit. Having said that here is some of what Montee found:

1. Appraisals not done: The city is involved in a project known as Lakeside 370. As part of this project the city purchased 1552 acres of land, however, the city only obtained a formal independent appraisal on 249. 4 acres (or 16 % of the land purchased.) The audit states that "good business practices requires" an appraisal to ensure a reasonable price is paid. Montee failed to offer any evidence as to what was a reasonable price for the property.




2. Purchase from former Mayor Tom Brown's son-in-law: As I reported yesterday, Montee noted that land was purchased from "a related party" which turned out to be Brown's son-in-law who received almost 3 times per acre what the other sellers received. The city did not obtain an appraisal to support the purchase price on this land. The Government Accounting Standards (GAS) under which Montee operates consider such a transaction "abuse."




3. Bonds not competitively bid: Montee reports St. Peters failed to obtain competitive bids on short term bonds which were issued. Montee did not provide any information as to how much this cost the city but she did note competitive bidding "ensures the city receives fair value" and "helps ensure all parties are given equal opportunity to participate in the city's business."




4. No request for proposal (RFP) on Lakeside 370: Montee reports the city did not formally request proposals on Lakeside 370. Montee noted a RFP ensures the best price is obtained and all parties are given an equal opportunity to participate. In addition, a RFP may have been required by law (see Section 99.820) and Montee fails to offer any details as to why an RFP was not required.



5. Lakeside 370 does not have a Letter of Map Revision (LOMR): St. Peters has only received payment of 24.6 million dollars on the purchase price and the remaining amount due (25 million) is contingent on the LOMR. Montee estimates St. Peters will lose 15 million dollars if the LOMR is not granted. However, Montee fails to mention why the LOMR has not been granted but instead simply states the city should "continue to monitor the approval process to ensure the successful completion of the project."




6. Large severance packages for Police Chief and City Administrator (CA): Montee reports the city entered into contracts with the chief and CA in June of 2007 which run through May of 2012. If the CA is terminated before that time he still receives the entire amount due under the contract and if he stays on he will receive a lump sum payment of 1 year of his salary. The city's liability is estimated by Montee to be over $800,000.00 to the CA. The city is obligated to pay the chief $107,000.00 if he is terminated before his contract expires. The city claims these contracts are necessary because of "efforts by non-residents to discredit and undermine the leadership of our CA and Police Chief." Montee completely ignores the numerous problems of these contracts as set below.

a) The full amount of the potential liabilities on these contracts must be counted against the budget each year since they could be accrued in any given year. Montee does not mention this in her audit and that this added revenue could make the contracts a violation of the Missouri Constitution.

b) Appointed officials in fourth class cities serve "at will" which means the city cannot enter into a contract which prohibits the termination of such an official. The city's reason for these contracts (pressure from non-residents) is an attempt to take away the right of elected officials to terminate these individuals. The city is well aware that "non-residents" have absolutely no right to fire anyone in the city and that power resides in the hands of elected officials. If the residents are unhappy with the performance of the CA and chief and elect people who share their view, the current alderman and mayor have set up a financial roadblock to democracy.

I will finish the rest of my review in Part 2 in which I will point out other problems noted in the audit, violations of the law Montee failed to mention and misrepresentations by the city in an attempt to mislead its residents. When reviewing the audit one should also consider that former Mayor Tom Brown was not only guilty of "abuse" regarding the land sale but Montee completely failed to mention that Brown and the city were found to have unjustly interfered with a local business because the owner dared to speak out against Brown and the city. This could end up costing the residents over a million dollars. Couple this with the fact that Tom Brown's successor, Shawn Brown, is in federal prison for bribery and you get a picture that St. Peters is not a clean city but instead it is one of the dirtier cities in the region. Based upon the facts, I challenge anyone to claim St. Peters is a clean city. And I haven't even gotten to the rest of the audit yet.