Burlingame Whitewash Won't Wash

July 29th, 2008 at 08:39pm Michael Conniff 2

The Burlingame affordable housing mess got messier this week when the City of Aspen issued a press release saying two internal inquiries, by a consulting firm and a Certified Public Accountants, exonerated Aspen City Council and City officials--an assertion the City had to retract the very next day in a clarifying press release with corrections.

The discrepancy is significant because both the Aspen Daily News and the Aspen Times ran stories based on the incorrect conclusions put forth in the press release. The Daily News headline read: "Burlingame Probe Clears City of Aspen." The Times reported "Audits Clear City In Burlingame Error."

The Burlingame project has been plagued by ongoing communications problems as the City keeps trying to get the real message out with at best mixed results as it tries to convince voters to back a bond in the $49 million range.  The misinformation continued Monday with a City press release that turned out to be flawed from the very first sentence:

"Two independent investigations focusing on the accounting, cost, and management aspects of Burlingame found no evidence of intentional misrepresentation of facts related to the project. The reports, which were commissioned by Aspen City Council in June at the request of the Citizen Budget Task Force, verify that Burlingame Phase I was delivered on budget with expenses accounted for property."

Both the McMahan and Associates LLC auditing firm and the Alvarez & Marsal consulting firm both said the blanket statement by the City did not accurately reflect their conclusions, in contrast to reports in local newspapers that all but said the matter was closed.

Paul Backes of McMahan and Associates said the phrase in the first sentence of the press release, that both firms "found no evidence of intentional misrepresentation of facts related to the project," was inaccurate because "that was not within the scope of our engagement."

As for the statement in the second sentence, that "Burlingame Phase I was delivered on budget with expenses accounted for properly," Jason Smith of Alvarez disagreed, saying: "We didn't look at the budget. We looked at expenses."

The first paragraph of the corrected City press release reads: "An independent investigation focusing on management aspects of Burlingame found no evidence of intentional misrepresentation of facts related to the project. A second report, a financial audit, found that Burlingame expenses were accounted for properly. Both reports were commissioned by Aspen City Council in June at the request of the Citizen Budget Task Force."

News reports based on the initial City of Aspen press release received front-page coverage Monday in both local newspapers. The Times lead, for example, stated unequivocally: "City officials didn’t intentionally misrepresent the costs of Burlingame Ranch and the affordable housing project is on budget with all money accounted for, according to the results of two independent audits."

The phrase "intentional misrepresentation" comes from the first sentence of the offending press release, the one that ultimately corrected by the City.

The lingering question: have City officials compounded the "communications problem" Alvarez & Marsal addressed in their report by distributing news of exoneration that was premature at best?

Entry Filed under: Aspen, Affordable Housing, Aspen City Council