As was stated at the February 19, 2013, City Council meeting, elected officials and City staff were advised to not respond on this site. In an effort to open dialogue, questions posted here will be emailed directly to the City Council members and Mayor on your behalf. They will have the opportunity to email a response back. Their responses will be posted here inline with the associated question.
You can see the original “Comment” section discussions here.
I will post this again, since this is the new comments section.
I believe we all deserve an explanation as to what happened to the lost 7 million dollar bond for City Center. There has to be more to it than what the city has told us about it being “lost”.
We want answers, and we want an independent company to do the city audit along with publishing the results to this or to the Eagle Mountain City website. We do not need the same auditors who have completed the City’s previous audits to perform this audit since they haven’t been able to find the problem, obviously they are a little incompetent in this area. I have talked to previous members of the City Council and they don’t even know what happened to that money!
When the audit is completed, and we have found the problem, then we need to hold the City administration accountable for the loss and fire the person(s) responsible for the lost bond money.
The following is a question from Justin Loera, Eagle Mountain City:
I have been getting numerous requests from citizens about the “Missing $7M Sewer Bond” from Sam’s report (see excerpt from page 47 below).
“Missing $7 Million Sewer Bond: According to David Lifferth, a former city council member and mayor pro-tem who now serves in the Utah State Legislature, the city once issued a $7 million bond to pay for improvements to its sewer treatment facilities, but the money went missing before the improvements could actually be made. Since the city couldn’t recover the money through its own investigation, it issued another bond to pay for the improvements, and subsequently forced residents in the city center area to cover the cost of both bonds. This is supposedly why the monthly sewer fee is so high for city center residents.
Since Lifferth said the city council was never able to figure out what truly happened to the money, and my investigative resources are much more limited than the council’s, I didn’t bother following up on his claims. But it would be nice if someone from law enforcement who has the authority to request bank records could discover what actually happened to the money.”
I understand this is prior to you becoming City Administrator and much of the council being elected but, could you explain how $7M goes missing? Could you also advise what actions were taken at that time to recover this money prior to the issuance of a replacement bond? What actions has the city taken since you were made aware of this either before Sam’s report or after to try to resolve this mystery? Can you and the Council share what information you do have and what will be done to resolve this issue?
All I am trying to do is get detailed answers to questions that I and other concerned residents of Eagle Mountain have. We look forward to your response and transparency and compliance on issues that arise that need the city’s attention.
Ifo Pili’s Response:
I have no idea what that missing $7 million dollar sewer bond is. I have talked to David Lifferth about it and he says he’s going to try and get me more information about it. Just from our conversation, however, it sounded like a misunderstanding. My hunch is that the facts have been passed around and morphed over the years. Because there is actually some cause for concern over the way the early bonds were used. I started my own research about six months ago and what I found so far is that out of the $20 million dollar gas and electric bond issued in 2001, only about $9 million of that actually went to true gas and electric infrastructure. The Council and Administration in the early days of the City decided to capitalize the interest and live off of the debt so that they could afford to make the payments (to the tune of about $ 5-6 Million). City Hall was also built with these proceeds (about $2 million). Apparently they could justify it to bond counsel because it housed the utility billing department. In addition, I’ve found that the cost to issue this bond was over $1 million because of the risky nature of it. The rest of it seemed to be used to pay off other debt obligations and bond notes that City accrued to operate (I’m actually sorting through that now). There were only a few thousand people living here at the time and they were banking hard on growth.
After I have completed my research on the gas and electric bond, I will dive into the water and sewer bond. I’m assuming, I will find a similar situation. I don’t think this explanation gives us much more comfort, because in some sense, millions of dollars have vanished and we are having to pay the price for it today. Again, I think that is where people are getting this idea of a missing $7 million sewer bond. Anyway, I will continue my research and wait for more information from Dave Lifferth. I will definitely let you know.
Follow Up from Justin Loera:
Here is an additional follow-up question:
1. Did the council have a public vote on re-appropriating these funds into different buckets?
2. Why did we take such large bonds out if we didn’t need them for the intended use? It seems a lack transparency has been a consistent theme throughout the city’s short history.
3. From what I have been told Dave Lifferth provided Sam Allen information that was then put in the report directly. I am concerned that people are changing their stories to suit their own needs.
4. When will you get to the Sewer Bond investigation? If this hasn’t been started, we may want to get going on it as banks are only required to hold records for about 7 yrs last I checked.
5. When do you expect to have the additional information to me?
Ifo, there are a large number of residents as you know concerned with “Transparency” and I feel that if the city is serious about clearing up the past issues, they would get a Forensic Accountant to track the money down. Then, once the report is done, publish it verbatim on the city website. Most, if not all, of the people involved with the early issues of the city are no longer elected or employed by the city, so it would behoove the city to be open and transparent despite the outcome.
On a different topic; Councilwoman Burnham mentioned at the last meeting (Feb 19th, and I will paraphrase her comments) that the city has been advised not to engage or respond to questions from 3rd party sites. Although I generally agree with this practice, I will have to disagree with this old-school methodology. Currently, businesses in the private sector are actively seeking consumer reviews on 3rd party sites in an effort to manage their public image. Without getting into a lengthy marketing and branding concepts overview, let me just say that we as a city should be going above and beyond to manage our poor public image. This would go along way in helping to repair the transparency issues and the lack of trust residents currently have with the city. Also, this will show businesses that we are a forward thinking city that goes above a beyond.
Many residents have had the same questions. Please see the answer above from Ifo Pili, City Administrator. We will post more responses from the City as they come in.
Ifo Pili’s Response:
I’ll try to address your questions in the order you listed:
1. As far as the early bonds, I am not sure if the council re-appropriated these bonds or issued them with those projects determined.
2. I think they actually took those bonds out with every intention of using them. In fact, as I mentioned, they used a lot of it to make the debt payments.
3. I don’t know what information was exchanged, but I look forward to more information from David Lifferth, whatever it may be. Feel free to contact him as well.
4. I plan on reviewing it in more depth in the next week or so. If you’re right about the 7yrs, we are way past that for sure. Hopefully, we can find the information without having to rely on old bank accounts.
5. If you are talking about the additional information from David, I can send it as soon as I get it. Again, feel free to contact him as well.
I’ve contemplated a forensic accountant before and I think that still may be a good idea. I began checking into it myself to see if there was anything amiss that would warrant the expense. I began this process about 8 months ago when I became the City Administrator. I have been able to find many of the answers to the questions I had. It became more and more apparent that much of the uncertainty was not due to impropriety, but (in my opinion) bad management decisions and I didn’t need a forensic accountant to tell me that. At this point, It may be a good idea to hire a forensic accountant anyway to put together a document that would be more accessible and transparent to the residents.
In regards to Councilwoman Burnham’s comments, I believe she was referencing the Open Public Meetings Act. If there are more than two of them responding and communicating on any site or forum, that is considered a quorum and they will be in violation. I guess they could technically respond if only one or two of them did, but how do you determine who responds and who doesn’t? As far as the City going above and beyond to improve our public image, I would welcome any suggestions you may have, even marketing and branding concepts. I really do appreciate the feedback and questions.
When is the annual budget released for a vote? I have heard that in the past that the mayor has proposed a budget within 24 hours of the required vote. I am not sure if this is accurate, if it is, then shame on her!
1. I would like to recommend a policy change on the release of the proposed annual budgets. I recommend that the proposed budget be released 30 days prior to the required vote (this should be mandatory) so that city council officials have time to review it. I also recommend that the proposed budget be released for public review, either on the website or via the news letter, 30 days prior to the required vote. This will allow the public to comment on proposed spending in the city council meeting(s) before the budget is voted on. I would also suggest a public comment section that is online, where the public can comment on the proposed budget using the internet if they can’t make it to a council meeting.
2. Regarding the asphalt plant that the city has approved; I have spoken to a few people that were in the city council meeting when this was announced, they mentioned that there wasn’t a real public vote on the matter, but that the council had voted in private, approving the asphalt plant, prior to the meeting. I would like the city officials to clarify if this project was announced to the public before the closed vote, and if we (the citizens of EM) had the opportunity for public comment before any vote was passed. I also would like to know if the city gave money to the company that owns the plant, and if the public had any opportunity to comment on it before this was approved. I am a little upset about the plant. I live in the ranches on Clubhouse Lane, I get dust from the quarry across the highway. Since I knew they were there before I moved here, I accept this as part of living here. But the plant is a different story, I doubt that since it is behind a large hill that when the wind blows south I won’t smell the asphalt. What about the impact that the large trucks will have on the highway and our traffic in EM? Did we talk about this?
I would like some clarification on the asphalt plant along with feedback to my recommendation.
Response from Council Member Burnham (received 3/5/13):
We have actually already started working on the budget. Typically the draft budget is done in May and we approve the final budget in June. Each year we work to get the information released sooner. I will push to have the draft released as soon as possible so we can get public comment. Last year we changed the date of the public hearing for the budget. The law requires that we have a public hearing the day we approve the budget and we decided to have a public hearing the meeting before so that we had time to react to any suggestions or concerns from the public, otherwise what is the point of the public hearing. Perhaps we could encourage budget comments on the city Facebook page.
Your information on the asphalt plant is incorrect. We definitely had a public meeting and a public vote and allowed public comment. John Painter and I voted against it because of health and pollution concerns. I also didn’t like that it was located at the entrance to our city, although hidden by a hill. I, like you, am worried about the smell and the possible negative impact on other economic development.
Thanks for your questions. Please feel free to contact me anytime.
I did find this on the Eagle Mountain City website, regarding the budget:
Just wondering if this is something that has been followed in the past or if this is new. If it is a policy that has been around for a while, have they been following it?
Thanks, Donna. I appreciate the response. I have some follow-up questions, but I don’t know if I want to post them just yet. I will put them together and post them later.