County seeks probe over TABOR numbers

Allegations of improper accounting by the current Mesa County finance director regarding millions of dollars in Taxpayer’s Bill of Rights exemptions taken by the county in 2007 have led county leaders to turn the matter over to law enforcement for an investigation.

A few vocal citizens and former county finance officials have for months raised issues with the way Finance Director Marcia Arnhold — apparently at the direction of county leadership — significantly reduced the amount of money in 2007 that was obligated to be returned to citizens based on TABOR.

County officials told The Daily Sentinel last week that specific allegations lodged about accounting related to the county’s establishment of its Building Department as an “enterprise” — something specifically mentioned in TABOR as an exemption to revenue limit calculations — led them to contact Mesa County Sheriff Hilkey, who then turned the case over to the Colorado Bureau of Investigation.

Specifically, the allegations center on the county establishing the Building Department as an enterprise in December 2006 and creating a TABOR-exempt fund applicable to 2007 calculations.

But accounting data from the time period apparently shows Arnhold retroactively counted money collected from building services all the way back to 2005.

According to a 2006 county memo, that reduced the county’s TABOR liability for 2005 —paid back to residents in 2007 — from more than $1.69 million to just $152,784.

Similar adjustments, according to the memo, reduced the county’s TABOR liability by about $1.6 million in 2006 and $1.7 million in 2007.

County Administrator Tom Fisher told the Sentinel he doesn’t believe current or former county employees have done anything illegal. But given the nature of the allegations, he thought requesting an investigation would be appropriate.

“My view of the evidence here is the county acted in their financial dealings above board and treated everything regarding this enterprise correctly,” he said. “At the same time, I feel like I have a responsibility if accusations are being made publicly that we did something wrong or individuals within the organization did things criminally, that I am 
going to take that seriously and make sure the county’s financial integrity is upheld through this.”

Fisher said he decided to request an investigation after former county Budget Director Hal Mason met with Commissioner Rose Pugliese and him on June 7. He contacted Hilkey on Wednesday, and Hilkey, in order to avoid a conflict of interest of one county department investigating another, brokered a meeting with CBI on Thursday.

 “I believe in our financial recording,” Fisher said. “We have to rely on that and so does the public. But I also have to balance that with some very strong allegations. Whether those allegations are true or not, my feeling is that it causes some questions that need to be answered.”

Arnhold and then-County Administrator Jon Peacock are central to those questions being sufficiently answered.

In a previous interview, Arnhold recalled how Peacock, her then-boss, “challenged” her department to creatively reassess how they were calculating the county’s TABOR revenue limits — at a time when an economic boom meant record revenues were coming into the county.

Peacock, reached by phone Friday, noted that there were two resolutions passed in December 2006, one establishing the enterprise and the other qualifying the revenue back to 2005.

Critics have cited the minutes from the public meeting in December 2006, in which then-County Commissioner Craig Meis, according to the meeting summary, asked “whether those dollars would be considered an enterprise from 2005 on.”

“Jon Peacock stated the revenues have qualified since 2005, but it would be from January 1, 2007,” the minutes read.

“When Craig was asking about the second resolution, the creating of the fund, I was responding to that — saying that won’t happen until 2007,” Peacock said. “I think maybe there’s some confusion about the difference, of when the revenues qualified for enterprise status versus when we were creating the fund for clarity.”

Peacock leaned on the 2006 memo, which outlines the “accounting changes” surrounding the newly formed enterprise fund, and what that meant in terms of rewriting past years’ TABOR calculations.

Peacock said that, after reading the memo, “I don’t really understand what the controversy is, unless it’s just mere confusion.”

The county’s 2006 Comprehensive Annual Financial Report, though, does appear confusing. It cites a TABOR refund for 2005 of $151,000 — clearly adjusted with revenue from Building Department funds. But it later reads: “Beginning in 2007 Building Inspection operations will also become an Enterprise Fund and qualify for the exclusion.”

Former county Finance Director Bill Voss has taken an extensive look at the situation, requesting many of the key financial documents and essentially building a case against the accounting related to the building services enterprise.

In a lengthy and detailed analysis sent to county officials as well as members of the media, Voss wrote: “The provision to make (the Building Inspection Fund) retroactive for two years is legally indefensible.”

Voss, along with fellow accountant and TABOR watchdog Dennis Simpson, have exchanged countless emails with county officials at all levels, including Arnhold.

Fisher claimed Voss has been sending “accusatory, harassing” emails to Arnhold. Fisher also said he and county attorney Lyle Dechant have told Voss to stop communicating with her, and they also advised Arnhold that she needs to retain a private attorney if she wants to pursue a case against Voss.

Dechant said that he believed one email in particular, sent by Voss to Arnhold on June 11, “crossed the line.”

CBI spokeswoman Susan Medina on Friday did not confirm whether an active investigation had been opened by the agency into the Mesa County Finance Department.



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