Delavan council approves Lake Lawn records audit

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Tuesday, September 14, 2010
— The Delavan City Council voted unanimously on seven agenda items related to Lake Lawn Resort on Monday.

Well, six. One was a duplicate.

Most of the first three hours of Monday’s meeting was devoted to legal and financial issues associated with the resort. The discussion was so long that toward the end, council members started getting confused about what agenda item they were talking about.

But the council did make several unanimous decisions, including authorizing Baker Tilly to conduct an audit of Lake Lawn Resort’s cost-recovery bills. This rescinded a decision to pay back the resort $13,000 in cost recovery, assessing the resort for a water main that crosses the property, and meeting with the auditor and Lake Lawn when the audit is finished.

In a public hearing before the hours-long Lake Lawn discussion, many residents spoke passionately to the council. Most encouraged the city to collect money from the resort.

“I know they’re going through a lot,” said Lauren Pohn. “As a citizen taxpayer, we are owed these monies. These are not things we are trying to get from them illegally or wrongly.”

Pohn said the city could put the money toward improvements such as roads and green spaces downtown.

Residents weren’t the only ones who were mad.

“I’m embarrassed as an elected representative. I’m angry,” said Councilman Ron Siedelmann, referring to a set of invoices recently discovered by city staff.

The invoices—totaling about $97,000—should have been paid by Lake Lawn but haven’t been, according to a memo from Administrator Joe Salitros.

The council voted unanimously to pay up to $15,000 for a cost-recovery audit to make sure no other such mistakes were in the books. Cost recovery refers to charges the city accrues when working on Lake Lawn matters. The city then turns the bills over to Lake Lawn for repayment.

While Baker Tilly will conduct its audit, the company’s decision won’t be final. Nor will the decision be an easy one, Siedelmann said.

Siedelmann earlier this summer advocated for the city to repay Lake Lawn for cost-recovery bills the resort had paid but argued against. At the time, Siedelmann went through each invoice line by line to come up with a compromise of $13,000.

Baker Tilly will likely have to use the same method, said Siedelmann, who expects things to get quite confusing.

Part of the confusion could come from the council’s decision Monday to rescind an amendment to the city’s developers agreement with the resort. The amendment, approved in 2008, deals with Lake Lawn’s expansion plans, said Councilman David Kilkenny said. The original agreement was for the renovation of some rooms into “condotels,” he said.

Now that the city has rescinded both amendments intended to clarify the original agreement, it greatly broadens the guidelines that determine what is cost recovery and what isn’t, Salitros said.

The resort was supposed to have been sold last week at sheriff’s auction as part of a $51.9 million foreclosure filed by Anchor Bank of Madison. The sale has been rescheduled until Oct. 7, according to Walworth County Sheriff’s Office records.

Last updated: 2:58 pm Thursday, December 13, 2012

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