| Loveland's Unaccounted For Debt Now $13 Million? |
The CFAC (Citizens Finance Advisory Committee) meeting on July 11, 2007 convened absent the two Councilmen Dave Clark
and Walt Skowron who serve as the Council liaisons to the committee. It was the first time in the memory of some on the
committee that both City Councilmen failed to attend the meeting. At issue, why the City of Loveland is carrying significant
debt not reported in the audited annual financial statements and whether this violates state law since there are specific limits
on how much debt the City Council may authorize without first obtaining voter approval.
Amy Parsons, the Committee Chair, attempted to get to the bottom of the $8 million in "contingent liabilities" (see story) but
the city staff finance director failed to give any specific numbers as he said he didn't have the data with him at the meeting.
The Ft. Collins weekly, Rocky Mountain Chronicle, has also reported on this recent discovery of debt after the City of
Loveland pretended to be a debt free city. .
The city staff failed to produce the specific "oversizing agreements" at CFAC's July 11 meeting as was requested by the
oversight committee at their previous meeting. Keith Reester, Public Works Director, first brought the debt to the attention
of CFAC during a joint meeting with the transportation advisory committee. Members of CFAC were surprised to learn of the
debt.
As the committee struggled to get answers from Loveland's Finance Director, the Assistant City Manager, Renee Wheeler,
answered questions by referring to a page in her hand while sitting in the area provided for the public to sit. Finally, the CFAC
Chairwoman Amy Parsons requested Wheeler join the other staff members and committee at the table and share the
information.
Wheeler did finally pass around the one page chart that apparently showed the debt totals which is not reported in the
"contingent liabilities." Instead, the annual financial statement only discloses how much was paid to "contingent liabilities."
Renee Wheeler, Assistant City Manager, brought only 1 copy of the list of how much was owed to different developers and
passed the one sheet around to each committee member. She collected the paper after the committee members peered at it
but didn't provide any copies. Electronic copies or any other sort of timely response to the CFAC via email appears to have
been eliminated as an option by city staff for dissiminating information therefore only raising concerns of those serving on the
CFAC.
Below is a list of concerns by members of the CFAC provided to LovelandPolitics.com
1. It appears as though the City of Loveland owes $5 million in past oversizing agreements and $8 million for current and
future oversizing projects not yet completed. According to the CFAC members who did take down information from the sheet,
the City of Loveland has a total of $13 million to $15 million of unreported debt. .
2. Even when listed as a "contingent liability" by the city finance director, the only amount provided for the year is what has
been paid but no balance appears in the city's financial statements. This appears to be a violation of GAAP (Generally
Accepted Accounting Principles).
3. The "paid" category appeared to include mostly Loveland Commercial (Don Marostica's company) and McWhinney
Enterprises. The concern of some CFAC committee members is whether any preferential treatment is being shown some
developers over others in how and when these payments are being made. Staff was unable to provide any specific answer to
questions regarding the different terms of these various agreements and whether any objective criteria is being used by the
City of Loveland in determining which "oversizing" agreements are paid and on what terms. In addition, it appears as though
improved sidewalks and other infrastructure may have also been subsidized via "oversizing" agreements thus adding value
and return for the developer at taxpayer's expense without any public process to see if the community supported such
subsidies.
4. The simple request by the committee to receive this information via email by Renee Wheeler hasn't been honored. The
committee is still waiting and the level of discomfort among its members grows as the City of Loveland staff fail to cooperate
with a citizen committee that is supposed to serve in an oversight capacity.
The CFAC committee will meet again in early August. Wheeler has agreed to provide the data requested by committee plus
bring the Public Works Director, Reester, who is more familiar with the agreements to the meeting. In addition, the two
councilman who were conspicuously absent from the last CFAC meeting will be asked to attend and answer the many
questions of the committee members on this disturbing revelation.
and Walt Skowron who serve as the Council liaisons to the committee. It was the first time in the memory of some on the
committee that both City Councilmen failed to attend the meeting. At issue, why the City of Loveland is carrying significant
debt not reported in the audited annual financial statements and whether this violates state law since there are specific limits
on how much debt the City Council may authorize without first obtaining voter approval.
Amy Parsons, the Committee Chair, attempted to get to the bottom of the $8 million in "contingent liabilities" (see story) but
the city staff finance director failed to give any specific numbers as he said he didn't have the data with him at the meeting.
The Ft. Collins weekly, Rocky Mountain Chronicle, has also reported on this recent discovery of debt after the City of
Loveland pretended to be a debt free city. .
The city staff failed to produce the specific "oversizing agreements" at CFAC's July 11 meeting as was requested by the
oversight committee at their previous meeting. Keith Reester, Public Works Director, first brought the debt to the attention
of CFAC during a joint meeting with the transportation advisory committee. Members of CFAC were surprised to learn of the
debt.
As the committee struggled to get answers from Loveland's Finance Director, the Assistant City Manager, Renee Wheeler,
answered questions by referring to a page in her hand while sitting in the area provided for the public to sit. Finally, the CFAC
Chairwoman Amy Parsons requested Wheeler join the other staff members and committee at the table and share the
information.
Wheeler did finally pass around the one page chart that apparently showed the debt totals which is not reported in the
"contingent liabilities." Instead, the annual financial statement only discloses how much was paid to "contingent liabilities."
Renee Wheeler, Assistant City Manager, brought only 1 copy of the list of how much was owed to different developers and
passed the one sheet around to each committee member. She collected the paper after the committee members peered at it
but didn't provide any copies. Electronic copies or any other sort of timely response to the CFAC via email appears to have
been eliminated as an option by city staff for dissiminating information therefore only raising concerns of those serving on the
CFAC.
Below is a list of concerns by members of the CFAC provided to LovelandPolitics.com
1. It appears as though the City of Loveland owes $5 million in past oversizing agreements and $8 million for current and
future oversizing projects not yet completed. According to the CFAC members who did take down information from the sheet,
the City of Loveland has a total of $13 million to $15 million of unreported debt. .
2. Even when listed as a "contingent liability" by the city finance director, the only amount provided for the year is what has
been paid but no balance appears in the city's financial statements. This appears to be a violation of GAAP (Generally
Accepted Accounting Principles).
3. The "paid" category appeared to include mostly Loveland Commercial (Don Marostica's company) and McWhinney
Enterprises. The concern of some CFAC committee members is whether any preferential treatment is being shown some
developers over others in how and when these payments are being made. Staff was unable to provide any specific answer to
questions regarding the different terms of these various agreements and whether any objective criteria is being used by the
City of Loveland in determining which "oversizing" agreements are paid and on what terms. In addition, it appears as though
improved sidewalks and other infrastructure may have also been subsidized via "oversizing" agreements thus adding value
and return for the developer at taxpayer's expense without any public process to see if the community supported such
subsidies.
4. The simple request by the committee to receive this information via email by Renee Wheeler hasn't been honored. The
committee is still waiting and the level of discomfort among its members grows as the City of Loveland staff fail to cooperate
with a citizen committee that is supposed to serve in an oversight capacity.
The CFAC committee will meet again in early August. Wheeler has agreed to provide the data requested by committee plus
bring the Public Works Director, Reester, who is more familiar with the agreements to the meeting. In addition, the two
councilman who were conspicuously absent from the last CFAC meeting will be asked to attend and answer the many
questions of the committee members on this disturbing revelation.
LovelandPolitics.com
| Above: Loveland's Finance Director (second from the right) watches slide presentation with members of CFAC (Citizens Financial Advisory Committee) at their July 11, 2007 meeting |
| The City of Loveland is a Home Rule City. Title 31, Article 12-101 of the Colorado Revised Statutes provides that General Obligation indebtedness, for all purposes, shall not at any time exceed three percent of actual value (all property in the city), as determined by the assessor. This includes bond debt and failure to properly record and report debt may impact the City of Loveland's bond ratings or credit worthiness. |
| See previous story on the CFAC's Inquiry Into Unreported Debt Click Here |
| Loveland's Citizens' Finance Advisory Committee Amy Parsons -- Chair Andrew Moore - Vice-Chair Tony Adams Elton Bingham Gene Culbertson Michael Hesse Kevan McNaught Jodi Radke Susan Sutherland |