Showing posts with label Millennium Square Partners. Show all posts
Showing posts with label Millennium Square Partners. Show all posts

Tuesday, May 07, 2013

May 7, 2013 Election Day in the City of Morristown

The polls are open from 8 am - 8 pm.

If you are unsure where your voting precinct is located, the Election Commission (586-7169) can help.

If you missed getting by to see the sign with Kay Senter's "accomplishments" on City Council during the past 20 years, it has been moved now, but it can still be seen here.

Moving Morristown Forward (MMF)--which lists John Stroud and George Haggard as members--has been pushing hard for the team of Senter, Garrett, and Chesney.

Stroud is listed as secretary to the Industrial Board of the City of Morristown.  The first time I saw him was at a city council meeting in 2011 where he worked himself into a frenzy as he accused the Mayor of being a "dictator." 

Haggard, in addition to being the main contributor to Moving Morristown Forward, doubles as Chesney's campaign treasurer.

Chesney has VERY carefully avoided dealing with the fact that he was just elected to the School Board nine months ago and now he has decided he wants ANOTHER ELECTED OFFICE as a City Councilman.

Chesney wasn't the first choice of Tim and David Wild, but he was willing to step in and run when the Wilds' first pick--Dr. Sid Boyd--backed out.

Garrett worked with the water department at Morristown Utilities for four decades before his election to council in 2009.  In 2011 and 2012, Garrett voted against 21 people nominated to the MUC Board by the Mayor and then supported the "McGuffin Law" that changed the MUC appointment process without letting the people vote on the changes.

For $250, Garrett, Senter, LeBel, Bivens, and Jinks could have let the people have a voice and a vote in 2012 on the controversial MUC issue, but they all said "NO." 

Wednesday, October 03, 2012

October 3, 2012 Millennium Bids Opened

Bids for the Millennium Square Project were opened this afternoon. Three bids were submitted.

The apparent low bidder was Jenkins & Styles of Knoxville with a base bid of $1,753,964. Other bidders were Denark Construction at $1,769,900 and Merit Construction at $1,770,025.

This was the third time that the project has been bid. The first time, Messer Construction was the low bidder. It was bid a second time and Southern Constructors was the only bid. Both times all bids were rejected as being too high. Click here and here for prior posts on the Millennium project.

Although the plans were not significantly changed from the second bid to today's bid, Southern Constructors did not submit a third bid although they were in attendance at the pre-bid conference. Click here for the pre-bid conference video and links to separate posts on the Millennium project.

 
 
Architect Dan Brewer of Brewer, Ingram & Fuller (BIF) opened the bids with the assistance of Lisa Hoskins of BIF.
 
Tim Wild, one of the Millennium Square Partners, attended as did Tony Cox, City Administrator, and Todd Morgan, the City's designated  manager of the Millennium project.
 
Whether the low bid or any bid is accepted will likely depend on whether the Millennium Square Partners with control of the project (David & Tim Wild, Hiram Jones, Tom Jones, James & Myra Craine) are willing to foot the project costs not covered by a taxpayer-funded TDOT Transportation Enhancement grant of approximately $1,200,000.
 
 

Tuesday, September 18, 2012

September 18, 2012 (Another) Millennium Pre-Bid Conference

There was a pre-bid conference for the Millennium Square project on Wednesday, September 12, at the City Center.

Dan Brewer with Brewer, Ingram, and Fuller (BIF) was present. Lisa Hoskins with BIF presided over the meeting and took questions from contractors.

The Millennium project has been plagued by conflicts of interest, postponed bids, changes to plans,
re-bids, changes to specifications, and on and on it goes.

The initial grant money for a greenway project for Morristown College and surrounding area ended up years later going to the Millennium group to build a retail office shell for the Millennium group on Millennium property. To get the grant money (about $1.2 Million) for their project, the Millennium partners (Tim Wild and David Wild, Sidney Boyd, Hiram Jones and Tom Jones, James and Mira Craine, and Bill Young) leased a rooftop parking deck on the top of their retail office shell to the City as a "greenway" trailhead for 25 years and then the lease ends.

The rooftop public parking consists of about 22 spaces. Of those 22 spaces, two are to be handicapped and two are to be true restricted "greenway" parking.  The rest of the parking is just general first-come, first-served public parking that can and probably will be used primarily to benefit the Millennium group, owners of the adjacent Millennium Square Building.

When the project started, the Wild brothers--who are partners in the Millennium group--were planning on "competitively" bidding as general contractors on the project.

TDOT was told of some of the connections between the Wilds and the Millennium group, but TDOT was not told by the City or by the architects that the Wilds were assisting the architects as estimating consultants---a fact the City knew or should have asked about when the architect submitted an architectural proposal TO THE CITY that listed Wild as a proposed "consultant" for project estimating.

The Tennessee Department of Transportation (TDOT) stopped the first planned bidding in late 2010 after Councilman Gene Brooks sent letters and provided documentation to TDOT regarding conflicts of interest and the Wilds apparent involvement as a consultant to the architect.

TDOT let the City (Todd Morgan), the architect (BIF), and the Wilds (through their attorney) present their positions.  TDOT then confirmed that conflicts existed and disqualified Wild from bidding at any point. [Several contractors also complained and refused to bid when they became aware of the conflicts.]

The project was first bid in spring 2011 and all bids were over-budget.

The project was bid a second time and there was one bidder. The one bid was over-budget.

The project is to be bid for a third time on October 3, 2012. No longer do bidders have to be TDOT pre-qualified.

Click herehere, herehere here, here, and here for background.

Sunday, August 21, 2011

August 21, 2011 Gene Brooks Exposes Bob Moore's Millennium Square Reporting. Brooks Prevented an Illegal Bidding that Could Have Cost the City $1.3+ Million

Since taking office in May 2009, Morristown Councilmember Gene Brooks has endured constant attacks from local "news"paper reporter Bob Moore. On Tuesday, August 16, Brooks apparently had had enough and decided to set the record straight on at least one matter-the Downtown Millennium Square project.

[In a nutshell, the Millennium project is where the City took Tennessee Department of Transportation (TDOT) grant funds of roughly $1.3+ Million that had been intended for street, lighting, and drainage improvements around the Morristown College area with a greenways trailhead and parking at Kyle Park and moved that money to the downtown Millennium Square Partners group for the construction of a privately-owned retail shell and storefront. To get TDOT to go along with this, the City/Millennium group decided that the roof of the retail space would be called a "greenways trailhead" and have 22 or 23 parking spaces leased to the City. Click on the label Millennium Square at right for past blog posts on this topic.]

Brooks was responding to a July "news"paper article where Bob Moore allowed David Wild, one of the principals in Wild Building Contractors and a partner in the Millennium group, to attack Brooks and all the others who saw illegalities and violations of federal law in the Millennium deal.

Moore quotes David Wild as saying: "If it had not been for the unwarranted involvement of two or three individuals, this project would have already been finished...."

Translation: "I hate those people who raised valid legal questions about our nifty sweetheart deal. Councilmembers who try to protect City grant funds and make sure that everything is done legally don't have any right to do that." 

David Wild was reacting--not too kindly--to the fact that Brooks had pointed out the core conflicts of interest in the Wild/ Millennium Square/Brewer, Ingram & Fuller connections to TDOT and the Federal Highway Administration (FHWA).

David and Tim Wild wanted to wear Millennium Square Partners hats to get the $1.3 Million taxpayer-funded TDOT grant to build their MainStreet retail storefront/rooftop "trailhead' parking. Then David and Tim Wild wanted to put on their Wild Building Contractors hats to submit a bid and collect all the money for building their own Main Street storefront/rooftop "trailhead" parking.

Brooks got the big guns riled up. Brooks was attacked and made out to be the bad guy who was messing everything up. Todd Morgan with the City wrote to TDOT. Dan Brewer with the project architects Brewer, Ingram & Fuller wrote a letter to Todd that also went to TDOT.  Knoxville attorney Robert Noell with Woolf-McClane represented Wild Building Contractors and tried to refute Brooks' allegations in a lengthy letter to TDOT, claiming that there were no conflicts.

After all the dust had settled, TDOT found that Brooks's core allegations of conflicts of interest were, in fact, correct. TDOT disqualified Wild Building Contractors (David and Tim Wild) from bidding on the Millennium Square Partners (David and Tim Wild and others) Downtown project.  

In the video (above) Gene refers to Bob Moore's July 2011 article where Moore stated--falsely--that Wild had submitted the low bid on the project. MOORE:  "Wild Building Contractors submitted the low bid earlier this year, approximately $600,000 less than the second-place bidder."

Brooks points out in the video that Bob either made this up or was given false information. Wild never submitted the low bid on the project.  Wild never submitted a bid at all because Brooks was able to prevent them from illegally bidding on the project.

Brooks's remarks end by making the public and the other councilmembers aware that had Wild been allowed to submit a bid and, by chance, had Wild gotten the contract, then TDOT could have made the City pay back ALL the grant funds that had been received for allowing an illegal bid and award.

In the City's current financial mess, the City could not have absorbed a $1.3 Million dollar hit for improperly handling grant funds.

Gene Brooks was not only right, but he showed great courage in standing up to months and months of  criticism by very powerful people in order to ensure that an illegal bid was not submitted and that the City did not end up having to pay back $1.3 Million dollars of grant money.

1. The "news"paper has yet to correct Bob's front-page error on the Millennium project. [Usually, the paper runs a correction on Page 2 after incorrect statements have been made and pointed out.]

2. The "news"paper has yet to report anything about Gene Brooks's statement at the council meeting about Moore's biased--and even false--reporting on the Millennium deal.

3. The "news"paper has yet to report that Brooks's actions not only stopped an illegal bidding but saved the City $1.3 Million +.

So what did Moore do after Brooks's statement? After the meeting, Bob Moore headed straight for  Brooks. Moore did not say that he would check the article again for accuracy and correct any errors. Moore did not mention his incessant attacks on Brooks over the past 2+ years.  Moore did not apologize to Brooks for the reporting error.

Instead, Moore first asked who Brooks's lawyer is---because Brooks had said he would be glad to meet Moore to discuss Millennium but that Brooks would bring his lawyer to this meeting. Then  Moore started asking Brooks about the Hearts of Christ Ministry which Brooks supports and with which Brooks's wife and sister-in-law are involved.

Thursday, February 24, 2011

February 24, 2011 Millennium Project Bid Postponed To April 5, 2011

Bidding on the Downtown Millennium Project has been postponed to April 5, 2011.

Click herehere, and here, for background on the many conflicts within this project.

This all started with awards to the City of $1,200,000 of federal grant money for historic preservation and well as improvement and development of the Morristown College site.  Click here.

Four and one-half years later, historic preservation and improvements to Morristown College were left behind.

The City transferred the entire $1,200,000 of federal grant money to the Millennium Partners for improvements to their Main Street property--including "approximately" 22 rooftop parking spaces (atop the private retail shells below) that make the project eligible for grant funds since the City is going to consider this as parking for a "greenways trailhead."  

The lease for the parking deck allows the City, if it desires, to designate two of the parking spaces for  "greenway purposes" and two for handicapped parking. The remaining 18 or so spaces are just standard downtown public parking.

The Millennium Partners include the City auditors (Hiram Jones, son Tom Jones, daughter Mira Craine, and son-in-law James Craine) as J&C Partners; Morristown businessmen/contractors (David Wild and Tim Wild) as D&T Partners; and Dr. Sid Boyd. Businessman Bill Young may still be a partner. 

This is not the first time that the City has transferred grant funds to the Millennium Partners. 

When the first Millennium building was built downtown about 9-10 years ago, the City amended a 1988 UDAG (Urban Development Action Grant) grant in order to give the Millennium group $105,816 of unused funds from that grant. 

[The first Millennium building contains the offices of the City's auditors Craine, Thompson & Jones; of Wild Building Contractors, Inc.; and of Community National Bank).]

Monday, February 21, 2011

February 21, 2011 TDOT: Wild Building Contractors Can Not Bid on Millennium Project Due to a Conflict of Interest


Neil Hansen with TDOT (Tennessee Department of Transportation) apparently informed the City of Morristown on 1/26/11 that it is the position of TDOT's legal counsel that Wild Building Contractors (WBC) can not bid to perform the construction work on the Millennium Project because of a conflict of interest. [Click once or twice on the e-mail at left to enlarge and read]

Hansen summarizes TDOT's position: WBC can not act as a subconsultant to the City's Architect (BIF) and then turn around and bid on the construction contract for this same project. [Click on the above page from BIF's Letter of Intent to enlarge and read]

Click here for a previous article with links to prior posts.

City Administrator Tony Cox did not inform council of this development during his Administrator's Report at council's 2/1/11 or 2/15/11 meeting. Todd Morgan has said nothing publicly. Nothing has been reported in the "news"paper.

The City filed a response last week, attaching a letter from Wild's Attorneys (Woolf, McClane, Bright, Allen, & Carpenter, PLLC) who in turn attached a letter from the Architects Brewer, Ingram & Fuller and other exhibits.

TDOT's position should not be surprising to potential bidders on the Millennium project. In addition to the conflict cited by TDOT, these contractors see many other conflicts of interest that unfairly tilt the bidding process in favor of the Wilds who are partners in Millennium Square Partnership and who, as MSP partners, are ultimately footing the bill for the Architect's fees.

At least two contractors who paid for plans and who initially planned to bid (Ed Hale Construction of Morristown and Inland Construction) have cited conflicts of interest involving WBC/David Wild/Tim Wild as the basis for pulling out of bidding on this Project.  I'm sure that these contractors and others who took out plans could provide a lot of additional information on conflicts of interest and appearances of impropriety in the pre-bid and post-award process.

Why is the Architect (BIF) trying to get Wild back on the bid list? Perhaps it is because the Wilds are partners in the Millennium Square group that is paying the City to cover the Architect's fees on the project.  

Now it is a waiting game to see if the City, BIF, and Wild can convince TDOT to reverse itself and decide that (1) when BIF asked Wild to prepare cost estimates, this was not a conflict of interest and (2) when BIF prepared its Letter of Intent and said that Wild was a proposed Consultant for Estimating, this was an "error," and (3) when Wild prepared estimates and/or helped with design suggestions, there was not a conflict because WBC never had a contract with BIF and never was a "paid" consultant on the project.

What could happen if Wild insists on bidding?  There are several possibilities. A prospective bidder could seek an injuction to stop or delay the bidding pending a determination by a court of the legality of Wild's participation in the bidding.  If the bidding proceeds and the construction contract is awarded to WBC, this could result in a lawsuit by an unsuccessful bidder. 

From the City's perspective, the worst possibility would be that Wild or even someone else gets the construction contract and there is a later finding of bid and/or post-award irregularities that could result in the City being required to reimburse TDOT for all state and federal funds expended on this project.

With the City's current financial mess, it certainly couldn't afford to pay back $1,400,000 + or - in grant funds. Right now, the City is not even certain that it will be able to buy a garbage truck by year's end.

A $1,400,000 + or - money trail leads to a lot of conflicts and a lot of switching money around.

The "Millennium money" was originally intended for Morristown College, not once, but TWICE!

Tomorrow, I will post on what the money was initially supposed to be used for and how financial mismanagement at City Hall prevented the money from being used at Morristown College as originally intended and led to the transfer to the Millennium group.  [UPDATE: Click here for the history of the Morristown College to Millennium money switch.]

Wednesday, December 29, 2010

December 29, 2010 Millennium Bidding Postponed Again

The Millennium Square Project Bidding has been postponed again. The new bid date is tentatively February 1, 2011. Click herehere, and here for recent posts.

The original bid date was December 14, 2010.  However, on December 10, 2010, TDOT cancelled that bid date based on questions raised by contractors and information provided to TDOT by Councilman Gene Brooks about conflicts of interest and other contract-related issues. These issues still have to be addressed.

At about the same time, the architectural firm Brewer, Ingram & Fuller set a new bid date of 1/4/11.

Now, the Architects have set yet another new bid date of February 1, 2011, ostensibly at the request of the City of Morristown in order to work out contract-related items with TDOT (Tennessee Department of Transportation) and "others."

The conflicts and webs of relationships in this project are about as extensive as they can be. The Millennium Square owners are Tim and David Wild, James and Mira Craine, Tom Jones, Hiram Jones, Sid Boyd, and Bill Young. 

In addition, the Craines and the Joneses are principals in the city's auditing firm Craine, Thompson & Jones. The Wilds are also principals in Wild Building Contractors. Millennium Square Partners/Craine Thompson & Jones/Wild Building Contractors are tightly knit.

Now the Craines and Joneses and Wilds not only want the city's ($890,000-$1,200,000) grant money for improvements to their Millennium property, they also want the Wilds to be able to take off their Millennium Owner hat and put on their Wild Building Contractors hat and bid to perform the actual construction work. 

[Originally Millennium Partners/Wild Building Contractors wanted Wild to be "given" the contract for the construction work without any bidding. The plan was to have Wild designated as a "sole source" provider for the  construction  work. That plan didn't go very far, however, because construction work of this kind is NOT any type of specialty work that only Wild can do.

Had the attempt to pursue a "sole source" designation  for Wild been successful, it was designed to enable the City to "select" Wild as contractor without any competitive bidding and keep the project and all the grant money in the Millennium Partners' hands.]

Apparently getting lots of free improvements of  $890,000+ or - to their property and access to public parking that the Millennium employees could use is not enough for the Craines, Joneses, and Wilds.

Friday, December 10, 2010

December 10, 2010 Downtown Millennium (Un)Square Deal

The Downtown Millennium (Un)Square Grant Deal will be coming under tighter and more intense scrutiny in the coming days.

Long ago, I posted about the obvious and multiple conflicts of interest in this set-up. Recent posts are  here and here.  As more people are becoming aware of the conflicts, hard questions are being asked and those involved and those who approved this (un)square deal are being asked to explain what's going on.

With the bid date of 12/14/10 fast approaching, the bidding may be postponed for completion of certain work by the Architect or his consultants. Since there are many other reasons to postpone the bidding and look closely at this deal, a postponement for any reason is a positive sign.

Stay tuned. Others are picking up on the conflicts and irregularities in the Millennium (Un)Square Deal.

Monday, December 06, 2010

December 6, 2010 Some Attendees at the Millennium Square Project Pre-Bid Meeting

Tim Wild (Millennium Square Partner and principal in Wild Building Contractors); James Craine (Millennium Square Partner and principal in the auditing firm Craine, Thompson & Jones that performs the City of Morristown annual audit). For a previous post listing all attendees who signed in, click here.

Clint Harrison (foreground) Engineer and City of Morristown consultant for sewer for Millennium Square project. 

Lisa Hoskins (Brewer, Ingram & Fuller, Architects) and Todd Morgan (Program Director, City of Morristown Community Development Corporation). Ed Hale (Hale Construction) is also pictured in the background looking at Millennium plans.

Friday, December 03, 2010

December 3, 2010 Millennium Project To Bid on December 14, 2010

Several months ago, the City of Morristown sought and got approval to transfer around $890,000 of former Morristown College grant money to a downtown project owned by Millennium Square partnership.

The partners in Millennium Square as of August 2010 are D&T Partners (Tim Wild, David Wild); C&J Partners (James Craine, Mira Jones Craine, Hiram Jones, Tom Jones); Sidney Boyd; and Bill Young.

Millennium Square Partners will get the $890,000+ in grant funds to build a shell for their retail building on West Main Street next to their Millennium Square Building.

What does the City get?  Some rooftop parking in downtown Morristown.  Yep. The roof of the retail shell will have 22 parking spaces that will be available for public parking for 25 years. 

A pre-bid construction meeting was held this past Tuesday at the City Center for prospective bidders.  Construction bids will be received on December 14, 2010.

Because of the economic situation and the depressed construction industry, many contractors were present  at the pre-bid meeting.  Messer Construction, Merit Construction, Southern Constructors, Inland Construction, Burwil Construction, Wild Building Contractors, Hale Construction, Joseph Construction, D&S Builders, and Trent Excavating. 

Wild Building Contractors? Yes, David and Tim Wild, who are partners in Millennium Square, are apparently planning to bid on the newest City/Millennium Square project.

Who else was present? James Craine. Craine, like David and Tim Wild, is a Millennium partner and is also a principal in the City's auditing firm Craine, Thompson & Jones.

So David and Tim Wild (Wild Building Contractors) will be bidding for the construction contract on a project where they benefit as the end owners (Millennium Square Partnership) of the finished retail shell.

Craine, Thompson & Jones, as the City's auditing firm, will audit the spending of the approimately $890,000 in grant money that benefits James & Mira Craine, Hiram Jones, and Tom Jones as end owners (Millennium Square Partnership) of the finished retail shell.

Sweet. The City gives the Wilds, Craines, and Joneses $890,000 of grant money to pay for construction of a downtown retail building for the Wilds, Craines, & Joneses. In return, the City gets some some rooftop parking for 25 years.

Oh, the City points out that it's all "grant money" and that the Millennium partners will graciously pay the city's 10% local grant match in order to get the other 90% free. That's nice. And that's a great deal for Millennium partners.

Did anyone else get offered this great deal? Did the City give any other local business people a chance to submit a proposal for building themselves a brand new store by paying just 10% and getting 90% "free"? No.

Saturday, October 23, 2010

October 23, 2010 Rockwood, TN and Morristown, TN: Illegal Loans From Utility Funds

Morristown City government is not alone in violating state law in making illegal loans from one fund to another.   

Recently, the Utility Board of the City of Rockwood--in Roane County--got busted by the State Comptroller's Office for making illegal loans from its gas department to its sewer and water departments. Click here for the news article.

Rockwood city officials have now abolished their misbehaving Utility Board and City officials will oversee these departments and pay back the illegal loans of $1.3 Million--or officials could face ouster proceedings.

Morristown City officials have done the same thing for years! Illegal loans from the sewer fund to the general fund and from the sewer fund to the stormwater fund. The difference in Morristown is that it was the CITY ITSELF that was violating the law instead of some board that City officials could ceremoniously abolish to "solve" the problem.

The Comptroller's Office found out about Morristown's shenanigans in the last year.  Morristown's violations had gone on for several years before that, however, but were NOT reported as audit "findings" until the 2009 Audit was issued by the local auditors Craine, Thompson, & Jones in early 2010.  

With citizens' reviewing audits and asking questions, the gig was up in 2009, and an audit finding appeared.  As people became aware of the illegal loans, an auditor's e-mail was sent admitting that an auditor (Tom Jones) had been in a meeting with former City Administrator Jim Crumley and Finance Director Dynise Robertson during which Crumley directed that the illegal loans/transfers be made to cover up the poor financial situation of the City.

See Auditor's e-mail here. "Mr. Crumley suggested the entry due to the general fund's cash situation looking poor. He authorized the entry in a meeting with Dynise Robertson and Tom Jones." Both Terry Winstead, who wrote the e-mail, and Tom Jones, to whom Winstead refers, are auditors with Craine, Thompson & Jones, the city's longtime auditors. Winstead's take is that Jones was in the meeting and knew that Crumley ordered the loan/transfer, but, since Jones didn't actually pick up a pencil and make the entry for the illegal loan, there is no auditing independence issue.

But what about 2007 and 2008? Craine, Thompson & Jones were aware of and reported multiple fund loans/ transfers/switcheroos in the audits for those years.  Why did CTJ fail to issue audit "findings" on illegal loans/transfers/switcheroos in the 2007 and 2008 audits?  Click here for a fuller discussion of the illegal loans and other problems with the 2009 Audit.

Of course,  members of CTJ are not only the city's auditors but they are also members of Millennium Square Partners, a lucky group that recently received an $890,000+ grant from the City of Morristown to help Millennium Square Partners build stores on Main Street where the old Gazette-Mail used to be.

But I digress. The Millennium Square deal is enough fodder for several separate posts...as the public waits to hear that two of the Millennium Square partners (David and Tim Wild/Wild Contractors) have managed to submit the low bid and win the contract to build Millennium Square Partners' new stores on Main Street and the City will pay $890,000 of the costs through a grant.  Sweet!

Monday, September 06, 2010

September 6, 2010 The State Comptroller Requests Explanations from the City and the City Auditors about Violations of State Law and Problems with 2009 Audit

The above letter to the Mayor and City Council from the State Comptroller's Office was one item briefly discussed at the Council's August 2010 "retreat" in Johnson City. Audits and cozy auditors and conflicts of interest.

I have maintained for a long time that the City of Morristown should get a fresh set of auditing eyes to perform its annual audits. This 5-page letter (click each page to enlarge, read, or print out) from the State Comptroller's Office provides more proof that new eyes are needed. In addition, the GFOA reommends that auditors be changed periodically as a "best practice."

In the 2009 City audit, the Comptroller points out that certain figures don't match up. Lowland Wastewater debt was taken on for 25 years without approval from the Comptroller's Division of State and Local Finance. MUS loans to the telecom fibernet system were also apparently not approved in advance by the Division of State and Local Finance.

Lots of problems with reporting requirements and reported amounts that don't agree. Improper categories. Grant reporting is questioned.

Notes to the financial statements did not include or had incomplete disclosures. And on and on.

There may be explanations for some of the questioned items and some may be the result of mistakes. But there is no doubt that the auditors knew or should have known that "loans" from one fund to another required city council AND state approval. There is no doubt that the auditors knew in recent years that the City was in poor financial shape but failed to call specific attention to this.

Apparently, the auditors thought that if the City could figure it out, OK.  And if the City didn't bother to look at the audits (which is what happened) or couldn't figure it out, then the auditors could say "No, I didn't point out that you were broke or making illegal loans/transfers, but it was in the audit." Sort of like your doctor giving you a blood test and handing you the results to figure out for yourself--even though he knows that you have a specific disease that needs immediate treatment.

Besides the quality and accuracy of the 2009 audit and the failure of the local auditors to disclose the illegal loans and transfers and switching of money, one has to consider the coziness of the auditors (Craine, Thompson & Jones) with the entity (City of Morristown) that they are auditing.

The auditors are local businessmen who have failed repeatedly in recent audits to report that the City was violating state law in swapping/loaning money from fund to fund without a vote from City Council and without obtaining the required approval of the Comptroller's Division of State and Local Finance. The state is pointing out numerous problems by just looking at the 2009 audit. There is no telling what a true detailed examination of the city's books for the year 2009 (Former City Adm. Jim Crumley's last full year) would show or what a thorough look at prior audits would show.

The current auditors (Craine, Thompson & Jones) have been the city's sole auditing firm for about three decades. The local auditors claim that they perform an "independent" audit of the City. However, the fact that the auditors are local business people who have very strong social and economic ties to the same organizations, clubs, churches, sports groups, business groups (Chamber and Industrial Board), and schools as do the individuals (City Administrator, Mayor, City  Council) who represent the City of Morristown creates an  obvious "independence" problem. It may be an "independent" audit from the auditors' technical  perspective, but ethically and in a world of common sense, it's not "independent."  The auditors are aware of "independence" questions, and but they have atempted to explain away their involvement and knowledge of illegal loans/transfers between funds, putting all blame on Crumley AFTER Crumley was fired. Click here to see a copy of the auditor's e-mail message sent to Interim Administrator Lynn Wampler many months AFTER Crumley was fired.

It's not bad that the auditors belong to the same groups and organizations as do Morristown city officials. However, true auditing "independence" is questionable when strong social and economic ties exist between auditor and auditee and when the auditors have already been shown to have failed to call attention to violations of state law by the City and dire financial problems in City government.

Another new "independence" problem has arisen recently because members of the auditing firm apparently have about a 1/3 interest in an entity (Millennium Square Partners) that is receiving $890,000 from the City through a grant. Who/what auditor is going to bite the hand that is feeding it $890,000? Who/what auditor is going to point out the poor financial status of the City or violations of state law by the very people (City officials) who have just given you $890,000? In next year's City audit (FY 2011), the auditors will be auditing their own $890,000 grant!

This potential conflict of the auditors as recipient of an $890,000 grant was discussed briefly when the City was voting on whether to hire new auditors or renew its audit contract with Craine, Thompson & Jones. One of the local auditors who was present at that meeting, Tom Jones, told the City Council that there was no conflict and that the auditors only had a very small interest in Millennium Square Partnership.  Apparently, however, members of the auditing firm have as large an interest as anyone else (David and Tim Wild) in the Millennium Partnership and have a larger interest than the other two remaining members of the Millennium Partnership--Dr. Sidney Boyd and William (Bill) Young).

I guess it all depends on what the meaning of a "small interest" is and it all depends on the meaning/ interpretation of true auditor "independence."

The City needs fresh eyes looking at its financial reports. The current auditors have contributed directly or indirectly to continual violations of state law by their failure to report violations and by their willingness to let these violations slide by.  The City needs to follow accounting best practices, hire outside auditors, and then rotate auditors at least every five years.