City agrees to inquiry into utility finances

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By David Giuliani

The city’s auditor told the City Council on Wednesday that he has discovered “anomalies” in the utilities department’s finances. As such, he asked for authority to conduct a more thorough investigation.

The council had no objections to the auditor’s request, and City Manager Timothy Dodge said he would approve the inquiry.

Jeffrey McWhorter of Albuquerque-based Accounting and Consulting Group said he had concerns about discrepancies in billing in the water, wastewater and natural gas utilities. He said he would be looking closely at the utilities’ finances from November 2007 to February 2009. That was the time that George DuFour served as the city’s utilities director, although no one mentioned that fact at the council meeting.

On Thursday, McWhorter said he misspoke and should have said November 2008. That was when DuFour approved some billing credits that were later criticized by Mayor Tony Marquez.

Indeed, McWhorter told the council that one of his concerns was the issuance of credits and waivers for charges on bills.

In early February, at the urging of Mayor Tony Marquez, a City Council majority voted to fire DuFour. At the time, the mayor said his recommendation to fire was based on questionable credits and waivers.

DuFour has said his department followed city procedures in giving credits for bills in cases when the city overcharged or computer errors were discovered.

At the mayor’s request, City Attorney Carlos Quiñones in February asked the attorney general to investigate the utilities credits, but the AG declined, suggesting the city ask the local district attorney to look into the matter. The city next went to the state auditor’s office for help.

McWhorter said he became concerned with the utilities department’s finances after conducting the city’s annual audit for the fiscal year from July 1, 2007, to June 30, 2008. He said the city had challenges during the audited year because it was without a finance director for a number of months, which caused problems in recordkeeping.

McWhorter said he had good things to say about the city’s current finance director, Abran Romero, who came in during the tail end of DuFour’s time with the city. McWhorter said he could only speak in generalities about the annual audit because State Auditor Hector Balderas had yet to release it.

He suggested that the problems in the utilities department’s finances may mean that the city will get a low ranking in its audit, a far cry from recent years.

One of the major issues in the department may be internal financial controls, which prevent problems from happening in the first place, McWhorter said. Last spring, the accountant in the utilities department was let go after she was caught embezzling, a crime to which she was found guilty. The department has been without an accountant for much of that time since.

McWhorter said outside the meeting that he wants to make sure no one is “falsely accused.”

“We’re not on a witch hunt. There’s nobody we’re specifically interested in,” he said.

The investigation is expected to last three to five weeks, McWhorter said.

DuFour said Thursday that his biggest focus after taking the utilities director’s job was to fix a “disjointed” department. Few billing adjustments occurred until near the end of 2008 when the billing department was short people, he said. Some customers’ utilities were cut off, even though they had paid their bills. The city hadn’t opened its mail and recorded the customers’ payments. In such cases, the utilities department waived disconnection fees.

“That’s where a lot of billing adjustments occurred,” he said.