The Longmont Years: 2009-2011 Breaking the Bloc

In this installment, we pick up in early 2009 after apparent local political burnout – or so I thought.  The previous two years were hectic, to say the least.  Output increased in quantity and quality, both in the written and spoken word.  By the end of ’08 I had gone back to one of my first loves: aviation.  But staying away from local politics was apparently not in the cards. Continue reading

Progressive policy failures have made Longmont less affordable

It’s a good time to be selling your home in Longmont.  It’s not such a good time to be a buyer unless money is not an issue.  Thanks to progressive policies in the past, homes are less affordable for those that need affordable housing.  Even though this entry is titled “Progressive policy failures…”, it’s actually working as intended. Continue reading

Longmont and Thistle see “the light”

The Times-Call ran a story on April 22 by Tony Kindelspire with the following headline: “Thistle corrects $38 million error, Blog post brought nonprofit’s mistake to light of city”. It’s worth reading, including the comments and further questions in the comment section.

I’m glad Thistle and the City of Longmont were more responsive after my initial questions and subsequent story, but they really should’ve been right off the bat. Why does it take public pressure and an outside, non-Longmont staffer to get the story straight from them? I’ve heard second hand how Thistle reacted to these questions, and know first hand how the city reacted, and I was not impressed. What it takes to get the truth of the matter from these entities should bother citizens.

Turn of events
First, an Open Records request was made, which was denied, followed by questions of why. Then Thistles records were requested directly from them, they said they were going to use the full 30 days allowed for them to respond. When requested in person (which means they must provide them immediately or within the same day) they said they were filing an extension with the IRS, and now have until May 15th. Meanwhile, at the City level, the dodging at two different offices did not instill confidence. I asked the question if City Council could “declassify” this document (the audit) or make it non-confidential so the public could see it. The response I got was “As City Attorney, I cannot give legal advice to third parties.” City Council is a third party? I wasn’t requesting or in need of legal advice myself.

Fishy financials
But now, the negative $23 million has morphed in to a positive $15 million, that’s quite a swing, and quite a mistake. As of this writing the original document showing the negative number remains on the Secretary of State’s website, and now there is an amended one. This was filed back in September 2008 which was when their fiscal year ended. The annual financial statement is what needs to be looked in to, and with Thistle saying they filed an extension with the IRS effective April 15th makes one wonder if they’re confusing their year end report with their tax documents. Unless of course they secured $38 million in the last 6 months, which seems impossible to believe with the economy the way it is. Also, consider the information at this link from the year before when they showed a net loss of $33,514 and a fund balance of negative $31,910.

City and Thistle stumble
The Times-Call story said “The city hired its own outside accountant to review Thistle’s financial statements, according to city finance director Jim Golden.” So this was not a salaried city staff employee, which should have made this document even more open to the public.

Also in the story: “The information posted was inaccurate, and I didn’t oversee it as well as I should have,” (Thistle CEO Mary) Roosevelt said Tuesday. “And when I became aware of it, we corrected it immediately.” This “inaccurate” report was filed over 6 months ago. This is not a recent development, although Ms. Roosevelt’s knowledge of it is. That in itself should pose some questions about this organization: If you’re involved in a project that will get public scrutiny, especially the kinds of questions like “can you deliver on a project”, when you’re asking for the City of Longmont to fork over money and land exceeding $9 million – would you be totally unaware of a $38 million dollar error with the Secretary of State?

And city staff should question why when asked for information like this that they initially resorted to dodging and finding reasons not to answer the question. They knew they hired an outside source to look in to Thistle, that should have ended the Open Records debate right there. They should have known Thistle filed the same report with the city’s housing authority, also making it open to the public.

All that ends well(?)
If Thistle’s financials are sound and they can be counted on to complete the proposed project, great. I hope the situation is not as fishy as it still appears and we’re not left holding the bag if things go bad. This is not about Downtown, work-force housing, or mixed used development – although I’m sure some readers incorrectly came to that conclusion with this story. It’s about fairness (think Panattoni), transparency (Thistle and the City’s failure at it), learning from past mistakes (previous discontinued project and FasTracks situation) – and not having to have to say in a few years “how did we miss the warning signs?”

No excuses.

What is the City of Longmont hiding?

The City of Longmont is hiding something from its citizens to protect a “favored” client: Thistle Community Housing, who has proposed to partner with the Longmont Downtown Development Authority (LDDA) on a mixed-use project in downtown Longmont . The City Council needs to explain why it’s considering giving millions in taxpayer dollars to a non-profit developer with potentially serious financial problems. And the city’s financial director needs to explain why he’s keeping this developer’s financial problems a secret.

Thistle wants $9 million from the city
According to a March 26 Times-Call story, LDDA wanted more financial information from Thistle before moving forward with their project. The article stated, “Under the tentative agreement, the LDDA would put up $5.5 million out of its tax increment financing fund and the city would donate the land — valued last year at about $2 million — and would waive about $800,000 in development fees.” And a “$752,000 financing gap that one side or the other must fill”. According to my math, that’s $9,052,000!

City’s Secret Audit
I received an anonymous tip that the City of Longmont did an audit of Thistle, and that the financial audit revealed serious problems. Although LDDA board members were able to see the audit, no one could keep a copy because Thistle asked the Longmont Finance Director Jim Golden to keep the document’s findings a secret.

Now the city is denying Open Records requests to release this information. Thistle is a non-profit 501(c)(3) organization. How many of you know what that is? I did a random poll of people, none were attorneys, but all knew what a 501(c)(3) was: a group that you can give contributions to and write it off on your taxes. Just about every aspect of these types of organizations is supposed to be open to public scrutiny.

IRS Code mandates Thistle disclose its financial records
When I asked the Longmont City Attorney Eugene Mei about this, his response was: “I am unaware of Thistle’s corporate status, or the law pertaining to 501(C)3 entities.” Let me help out here. At the following link there is an explanation of this part of the IRS code. Here are some relevant highlights:

26 USC 6104(d). Public Inspection of Certain Annual Returns and Applications for Exemption.
(1) In general.–In the case of an organization described in subsection (c) or (d) of section 501 —
(A) a copy of– (i) the annual return filed under section 6033 (relating to returns by exempt organizations) by such organization, and
(ii) (refers to exemptions, no exemption has been requested)
(B) upon request of an individual made at such principal office or such a regional or district office, a copy of such annual return and exempt status application materials shall be provided to such individual without charge other than a reasonable fee for any reproduction and mailing costs.
The request described in subparagraph (B) must be made in person or in writing. If such request is made in person, such copy shall be provided immediately and, if made in writing, shall be provided within 30 days.

State Records show Thistle $23.5 million in the hole
Thistle’s records, by federal law, are not confidential. Why is Longmont treating it as such? Here’s where it gets interesting, and the point of this story: Thistle did file a short preliminary report with the Colorado Secretary of State’s office, as it is required to do. The numbers are troubling, which I’d guess is why the LDDA wanted more financial information and the city did an audit on Thistle. According to this Secretary of State link, for the year ending 9/30/2008 , Thistle had expenses that outpaced revenues by over $4 million, and an End of Year balance of -$23,535,929. Those are both negative numbers. What hasn’t been released yet is the full report describing the sources of revenue, where the expenses went to, and why they were nearly triple the revenue coming in.

What is in the city audit Thistle doesn’t want the public to know?
Now maybe there is a good explanation for this and the numbers could just reveal what is happening to many non-profits during these tough financial times. But these poor numbers should make the public very curious about what the city’s independent audit revealed. The numbers published online by Thistle were bad enough. What is it that the city found that makes Thistle demand that the findings remain a secret?

If you’ll recall, 2 years ago a similar downtown project was discontinued after it was revealed there was a $9 million “financial gap”. And of course we know about the bait and switch of FasTracks and how the price continues to go up and the construction gets further and further away. Regardless of your opinion about this project and this organization, we need to make sure something similar doesn’t happen partnering up with Thistle.

Some council members are playing favorites with developers
Some members of this council stalled Panattoni’s request to move forward with the redeveloping the Twin Peaks Mall, and their emboldened city mouthpieces have smeared Panattoni, a company with a proven record. Look at Harvest Junction and the news releases featuring new stores and even a new hotel, as well as their plans for a new theater and their overall vision for the mall (no, I’m not paid or asked by anyone to say the above).

But when members of this council favor (Thistle) in an area they’d prefer to focus on (Downtown), it gets completely different treatment, even if they may not be financially sound. Something’s rotten here, and the involvement of those involved, including certain members of city council and city staff, should be held accountable. And preferably before this project even gets close to reality.

Go to the LDDA board meeting on Wednesday and ask some good questions
The LDDA will be holding a meeting this Wednesday April 22 at 528 Main Street at 4:15 p.m. If you are concerned about this issue, show up and ask questions, like: Can Thistle really come up with the money to fund this project, or not? Is the city going to be left holding the bag if Thistle goes belly up? Is Thistle using taxpayer money to get itself out of a financial jam? Ask the council members who were on the Technical Review Committee (TRC) that recommended this project if they are aware of this financial information? The council liaison is Karen Benker (303)774-7745 and the staff liaison is Finance Director Jim Golden (who originally denied the Open Records request) (303)651-8629

A dark cloud is going to remain over this project unless Longmont lives up to its promise of open and honest government.
(Picture source: City of Longmont government website)