Basalt manager, council feud over authorization for $35,000 expenditure | AspenTimes.com

Basalt manager, council feud over authorization for $35,000 expenditure

Mike Scanlon

The Basalt Town Council and Town Manager Mike Scanlon are feuding over whether he had authorization for a $35,000 expenditure from town coffers for down payment assistance on a new home, according to documents released Wednesday in response to an open records request by The Aspen Times.

The documents show that the expenditure raised a red flag immediately with the council, but Assistant Town Manager and Finance Director Judi Tippetts maintained that it was appropriate.

The issue has sparked a community uproar, although details of the dispute weren't previously disclosed in public. The council is under fire from supporters of Scanlon who believe the board is looking for an excuse to oust him.

Scanlon was given a unanimous vote of confidence with a 7-0 vote by the board after the April election. The documents released to The Aspen Times indicate the board felt is was responsible to investigate whether the $35,000 expenditure was proper.

Scanlon and members of the council declined to comment for this story.

Red flag and response

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The council requires Tippetts to file a periodic report on "large items" in the accounts payable. Tippetts filed a report on the evening of Aug. 3, before she departed on vacation, that showed a $35,000 check was written to Stewart Title for "Scanlon housing earnest money." She noted she would send documentation of the $35,000 expenditure when she returned from vacation Aug. 15.

Councilwoman Jennifer Riffle asked Tippetts later than night for a scan of the Stewart Title transaction, but Tippetts repeated that she didn't have anything to forward yet.

The interest among the council led to Tippetts writing a formal memo while she was on vacation.

"There seems to be confusion on what, how and why a check for $35,000 was written to Stewart Title Company on behalf of Mike Scanlon, Town Manager," Tippetts wrote. "The concern seems to be that Mr. Scanlon has done something outside the scope of current Town Policy or Town laws."

Tippetts noted that the town government established a Reimbursable Employee Housing Trust Fund in 2014 to help eligible employees with down payment assistance. One person had previously used the program and is in the process of paying back the loan.

"Mr. Scanlon as an employee (has) the ability to borrow up to $60,000" through the program, Tippetts wrote. "That is where the $35,000 came from."

She sent attachments documenting the establishment of the program and the council's approval as well as the guidelines. The council voted 6-0 to approve the program. Councilman Rick Stevens, who is no longer on the board, was absent.

The guidelines say the finance director will administer the fund and they will be approved on an annual basis by the Town Council at the time of the budget adoption. "This Fund is subject to an annual appropriation and is fully under the discretion of the Town Council," the guidelines say.

Grauer, Whitsitt seek answers

Councilman Bernie Grauer followed up to Tippett's memo on Aug. 8 with an email to Scanlon asking him to clarify some issues that he and Mayor Jacque Whitsitt had about the housing deal.

He wanted to know if the house Scanlon and his wife were buying qualified as a "primary residence" since they already own property in Kansas.

Grauer's email also sought definition of the application and approval process for the down payment assistance, a copy of the application and a promissory note on the loan. He also asked when Scanlon intended to establish a lien on the property as collateral on the loan.

Scanlon sent a volume of information about the federal rules on a primary home.

In addition, Tippetts responded that the only criteria for application and approval are that a person be a full-time employee and that funds are available. Her response indicated Scanlon qualified.

Scanlon wrote to Grauer that Tippetts would have to answer the questions about the need for annual council approval of the program and when the collateral was required. The answers weren't among the documents The Aspen Times received.

Scanlon cancels purchase

Documents show that the Scanlons terminated their contract for the Basalt residence, citing "loan objection." A check from Stewart Title to the town for $35,000 was issued Aug. 5. The contract termination was dated Aug. 10.

The council held an executive session, closed to the public, with Scanlon in the room only part of the time at its regular meeting on Aug. 9. It held a special executive session, and met without Scanlon, on Aug. 11. By that time, citizen unrest was surging. A small group of people appeared first at the council meeting place and staged a sit in. They demanded the meeting be postponed and voiced support for Scanlon, according to witnesses. They left peacefully only after asked by Basalt Police Chief Greg Knott. As they left, they chanted at the council, "Shame on you."

Another council executive session was canceled Tuesday. Town Attorney Tom Smith said Scanlon had hired an attorney, so the council was giving that attorney time to get up to speed.

Smith said Wednesday he has also hired a co-counsel on the case with the Town Council's approval. Like Scanlon, the town has hired a expert in employment and municipal law.

Scanlon is still the town manager and said he hopes to remain.

scondon@aspentimes.com

BASALT BOILERMAKER

Aug. 3 at 7:44 p.m.: Assistant Town Manager and Finance Director Judi Tippetts files a standard report to the Town Council on “large items” in accounts payable. It includes a check for $35,000 to Stewart Title for “Scanlon housing earnest money.”

Aug. 3 at 8:26 p.m.: Councilwoman Jennifer Riffle asks Tippetts for additional information on the $35,000 check before Tippetts departs on vacation.

Aug 4 at 4:52 a.m.: Tippetts says she doesn’t have returned information from the title company to supply yet.

Aug 5: Stewart Title issues a check to the town for $35,000.

Aug. 6: In an undated, formal memo while she was on vacation, Tippetts write, “There seems to be confusion on what, how and why a check for $35,000 was written to Stewart Title Company on behalf of Mike Scanlon, Town Manager.” She spells out why she feels the expenditure was appropriate.

Aug. 8 at 10:18 a.m.: Councilman Bernie Grauer sends email to Scanlon with five questions Grauer said were from him and Mayor Jacque Whitsitt on the expenditure. Scanlon and Tippetts answered three immediately and submit additional documentation later.

Aug. 9 at roughly 8:30 p.m.: Council and Scanlon go into executive session, closed to the public, to discuss a “personnel” matter. Scanlon is there for part of the meeting and out of the room for another part.

Aug. 10: Scanlon’s real estate purchase is terminated by Mike and his wife for “loan objection.”

Aug. 11 at 6 p.m.: Council meets with Town Attorney Tom Smith in executive session on personnel. Scanlon isn’t there. The meeting’s start is delayed by a group of residents who stage a “sit-in” and object to the executive session. They also voice support for Scanlon.

Aug. 16: An additional executive session is canceled. Scanlon and the town hire Denver attorneys who are experts in employment and municipal law. Scanlon remains town manager.

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