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Fund mismanagement allegations arise in Lake Geneva

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Kayla Bunge
January 26, 2010
— The city personnel committee within the next few weeks will consider what, if any, actions to take against city staff responsible for alleged mismanagement of city funds in violation of state statutes.

The city council on Monday voted 6-1 to ask the personnel committee to discuss the issue at an upcoming meeting.


“This is a pressing issue. This is a serious matter,” said Alderwoman Mary Jo Fesenmaier, who proposed the item for discussion. “This needs to be taken care of.”


The council did not discuss the details of the alleged mismanagement—what money was handled inappropriately, when it was mishandled and who mishandled it. Fesenmaier declined to comment. She said it was a personnel issue but noted the answers could be found in public documents.


Comments from the public at the start of both the city council and finance committee meetings Monday night suggested the mismanagement has to do with the purchase of property from WE Energies as part of the Edwards Boulevard project.


The council on Dec. 21 approved the purchase in order to meet a Dec. 31 deadline set by the energy company. The city took more than $400,000 out of its undesignated reserve fund to buy the property. The council on Jan. 11 again approved the purchase, but a couple council members raised questions about the fact a budget resolution was not passed allowing the transfer of the money out of the reserve fund before the check was cut.


“You are not allowed by state statute to withdraw money out of the fund without a three-quarters vote of the city council in the affirmative,” former Alderman Spyro “Speedo” Condos said at the finance committee meeting Monday.


The city has depleted its reserve fund over the last several years, he said. In 2002, the fund held more than $3 million, but in 2005, it held just more than $470,000, he said.


“Money was taken out of the reserve fund without a three-quarters vote of the city council,” Condos said. “Those are felonious acts. That is misuse of city funds.


“It’s up to you as a finance committee to find out who was responsible for this, because if you don’t, then you are part of the problem and not the solution.”


The council on Monday night tried to pass a budget resolution, but again a couple council members raised questions about why it was not done before the check was cut.


“I sort of have a hard time with this,” said City Administrator Dennis Jordan. “Two-and-a-half years ago, a council made the decision to (extend) Edwards Boulevard. We went to referendum, and the community said yes. But now, we bring it here, and you say we didn’t get the votes to do this.


“Are we in this to get projects done or are we here to be divisive? … My question to you is do we get them to send the check back and give them back the property?”


The council tabled the matter until its next meeting on Monday, Feb. 8.



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