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The Cortez City Council on April 9 authorized City Manager John Dougherty to fix the city’s financial services software, regardless of cost.

The city’s financial audits have been out of date since 2016, limiting the city’s ability to seek or receive state grants or receive property taxes.

Dougherty blamed the outdated audits on the conversion to Casselle software system in 2016 – calling it a “complete disaster” – and requested a “blank check” to pay Casselle to help update the audits.

“It (the conversion) should have been running both systems side by side until all the kinks are worked out,” Dougherty said. He added that the city apparently tried to save $10,000 by skipping that step.

“We’ve spent way more than that ($10,000), and we still haven’t gotten anything,” Dougherty said.

He also said Casselle has not been responsive to the city’s requests to address the audits since he assumed the city manager position in July.

“They’re the only ones we can get to fix this system,” said City Attorney Mike Green. “Like I said, it’s proprietary and licensed, and so I can’t go down and get an IT guy from someplace else to even be able to enter into it to work on it.”

City Council unanimously approved the request but stipulated that the money come from the council’s budget.

“I’m comfortable using whatever funds are necessary,” said Councilman Ty Keel, “but I would like to make clear that I would like those funds to come out of the City Council’s budget. “I don’t want any other department to feel the pinch on this.”

When contacted by The Journal, Casselle’s vice-president of finance, Brian Wilkins, said the problems were likely caused by “transitional learning” on a new system.

The glitches have prevented the city from receiving a proper audit for the past three years, according to Dougherty. Consequently, the state will not allow the city to apply for grants, and it has instructed the county to “withhold our property taxes until audits are caught up,” Dougherty wrote in a staff report.

According to new city Finance Director Ben Burkett, more than $169,800 in property taxes was withheld since Jan. 1, 2017.

“We’ve missed two deadlines for DOLA (Colorado Department of Local Affairs) for the south side park,” Dougherty said. “I’m just very frustrated.”

The state has said it would not disburse money from grants until the audits were updated. For example, the city expected to receive $90,985 from 2018 and $32,420 so far this year from the Conservation Trust Fund, a state lottery remittance that is distributed quarterly, Burkett said.

“This is a serious problem that I don’t know that we can nickle-and-dime to fix,” Green said.

Dougherty estimated that Casselle’s fix would cost at least $3,500, but he said the cost could rise, causing delays if he needed to return to City Council for more money.

According to Dougherty’s report, he wanted Casselle to finish preparing the 2016 audit, including “reconciling payroll liabilities, cash clearing accounts, accounts receivable and accounts payable accounts, and any checkout errors.”

Twenty hours of work was approved, although Dougherty doubted it would be sufficient. After Casselle finishes the 2016 documents, it could start reconciling 2017 documents, working on an hourly or contract basis.

Wilkins said Casselle expected to finish the 2016 documents within a week.

“We’re going through making sure the receivables and the payables and the cash balances are all correct,” he said.

Tuesday, council members appeared dissatisfied with the late notice on the audits and with granting a “blank check” for Casselle. Councilwoman Jill Carlson suggested capping Casselle’s services at $7,000.

“I think that they owe us a little bit for all of the lovely promises that have not been delivered upon,” Carlson said.

Green countered, though, that the city shares blame.

“We have some ownership in this because of the way we did the Casselle integration,” Green said. He added that a hard cap on payment could cause Casselle to stop services.

Former Finance Director Kathi Moss retired in January, but City Council approved up to $10,000 for her to complete the 2016 and 2017 audits and oversee the 2018 audit.

At the time, Dougherty stated in a memo to City Council that Moss would focus on completing the audits so Burkett could start with a “clean slate.” Dougherty also pointed out that DOLA would not provide Cortez with grants until the previous audits were complete.

Tuesday, council members unanimously approved Dougherty’s fund request, with Keel’s amendment ensuring that funds come from the council’s budget. Councilman Mike Lavey was absent.

ealvero@the-journal.com