CU audit alleges inappropriate spending

(Click here for the full audit report.)

In her presentation of findings Tuesday night, Montee pointed to various spending issues ranging from subsidization of other utility sectors and the city’s transit system to donations to nonprofit organizations and employee perks.

“As a result of these situations,” the report states, “utility rates may be set higher than necessary to provide the related service, and CU’s electric customers are being required to subsidize the costs of other city services and departments through the payment of their utility bills.”

Among the expenses for the fiscal year ended September 2006 that the report said are not “necessary or essential to the operation of the utility”:

• $1.2 million in payment in lieu of taxes to the city from water revenues, which are not spelled out in city charter;

• Leases on two parcels of land, worth nearly $2.7 million, to the Springfield-Greene County Park Board at no cost;

• Donations of money and services to local organizations totaling more than $259,000;

• $19,000 for CU’s 2006 Family Day Picnic; and

• $3,125 for a suite at Hammons Field for Springfield Cardinals games.

Montee said some of the payments could be in violation of the Missouri Constitution, which “prohibits the use of public money or property to benefit any private individual, association or corporations except as provided in the constitution.”

City Utilities General Manager John Twitty defended the expenses, saying the utility doesn’t feel it’s in violation of state law.

“It’s perfectly all right for reasonable people to disagree about issues,” he said. “We would never do anything to knowingly violate the constitution or any statute – we don’t operate that way.”

He added that the utility has the option to contact the Missouri Attorney General’s Office and request an official ruling on the constitutionality issue, though no decision has been made.

The CU audit came a week and a half after Montee issued results of an audit of the city.

See SBJ’s Dec. 24 issue for more on the CU audit results.