Wednesday, December 19, 2012

Price tag for city’s inquest at least $717K

Sun Valley has paid at least $561,000 directly

Express Staff Writer

Dewayne Briscoe

Since Nov. 18, 2011, the city of Sun Valley has hemorrhaged at least $561,000 relating to the investigation of alleged misuse of public funds in 2011 by city employees. 

The above sum includes only money paid directly by the city to look into the allegations and for related expenses, including related legal fees and the payment of several city employees’ salaries during sometimes extended periods of paid administrative leave. It does not include expenses incurred by Blaine County taxpayers, Idaho taxpayers and Idaho Cities Risk Management Program (ICRMP), the city’s insurance carrier.

The following is a timeline tracing how much the city has spent since last fall to get to the bottom of the allegations:

Oct. 5, 2011: Former Finance Manager and Treasurer Michelle Frostenson tells then-Mayor Wayne Willich she suspects that then-City Administrator Sharon Hammer is violating city policy and misusing public funds.

Nov. 18, 2011: Hammer is placed on paid administrative leave by Willich.

Nov. 23, 2011: Willich signs contract with independent Boise-based attorney Patricia Ball, an investigative consultant, to look into Frostenson’s allegations about Hammer.

Dec. 2, 2011: City requests that Ball broaden the scope of her investigation to address potential violations of city policy and misuse of public funds by then-Fire Chief Jeff Carnes; his wife, Building Official Assistant Tina Carnes; and their son Nick Carnes, a paid, on-call firefighter.

Dec. 20, 2011: Ball report completed. Jeff and Tina Carnes placed on paid administrative leave by Willich. Ball suggests the city follow up with an “outside” audit and says sufficient evidence exists to “trigger” investigation of whether city employees broke Idaho law. Cost to city for Ball’s investigation: just under $29,500.

December 2011: ICRMP Attorney Kirtlan Naylor asks Blaine County Prosecuting Attorney Jim Thomas to initiate an investigation concerning allegations of misuse of public funds in the city. A Nov. 21, 2012, letter from Thomas to Mayor Dewayne Briscoe states that Naylor’s request was triggered by the results of Ball’s investigation. Cost to Sun Valley taxpayers for ICRMP legal fees: unknown.

Dec. 27, 2011: Hammer returned to active duty by Willich.

Jan. 3: Jeff and Tina Carnes returned to active duty by Willich. Briscoe sworn in as mayor.

Jan. 5: Hammer and Jeff and Tina Carnes placed on paid administrative leave by Briscoe.

Jan. 17: Thomas requests assistance from Idaho Attorney General’s Office to conduct criminal investigation of the city. In the letter, Thomas said he enlisted that help because the county prosecuting attorney is “generally precluded” from conducting his or her own investigation.

Jan. 19: Hammer’s contract with city terminated with no stated cause by City Council upon recommendation by Briscoe. Total paid by city to Hammer for administrative leave: just under $28,500. Total paid by city to Hammer upon termination: just under $60,500 severance pay plus just under $20,300 for unused vacation time.

April: Briscoe’s administration hires Boise-based law firm Moffatt, Thomas, Barrett, Rock & Fields to oversee a forensic audit of the city’s finances. Moffatt, Thomas then hires accounting firm Hagen, Streiff, Newton & Oshiro (HSNO) to conduct forensic audit.

June 11: City settles tort claim filed by then-City Clerk Kelly Ek claiming she was retaliated against for blowing the whistle against Hammer along with Frostenson. Cost to ICRMP: $72,000.

June 27: City settles tort claim filed by Frostenson claiming she was retaliated against for blowing the whistle against Hammer. Cost to ICRMP: $84,000.

Aug. 24: HSNO presents a report on forensic audit to Briscoe and City Council in executive session. Total paid by city to Moffat, Thomas: just over $121,000. Total paid by city to HSNO: just under $163,800.

Aug. 28: Thomas subpoenas forensic audit report and supporting documents from city.

Sept. 21: Jeff, Tina and Nick Carnes resign. Total paid by city to Jeff Carnes for administrative leave: about $91,000. Total paid by city to Tina Carnes for administrative leave: just under $21,400. 

Oct. 15: Attorney General’s Office investigation completed. Cost to Idaho taxpayers: unknown.

Nov. 21: Thomas sends letter to Briscoe and City Council informing them he will not file criminal charges, largely due to insufficient evidence. However, Thomas called city management “lax” during Willich’s administration. Thomas wrote that managers demonstrated “apparent conflicts of interest” and a failure to follow stated city policies and procedures. Cost to Blaine County taxpayers: unknown.

Nov. 27: Thomas releases AG's report, HSNO’s report and Thomas’ letter to Briscoe to Idaho Mountain Express.

Nov. 29: Thomas releases Ball’s report to Mountain Express.

Dec. 18: Recently hired city Finance Manager and Treasurer Angela Walls reports legal fees for special legal counsel to the city by Naylor—paid directly by the city, not by ICRMP—have reached just over $19,000 plus just under $6,200 in amounts due for the next payment cycle.

All in all, the investigations at Sun Valley have cost at least $717,000 of public money, though the city has not had to directly pay that entire sum since $156,000 was paid by its insurer.

Brennan Rego:


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