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HomeMy WebLinkAboutminutes.council.19790829 Work Session/Special Meeting Aspen City Council August 29, 1979 Mayor Edel called the meeting to order at 11:40 p.m. with Councilmembers Van Ness, Parry, Collins, Behrend~ and Isaac present. PLUM TREE INN ACCOUNTING Pi~ Tree Inn Janet Roberts, CPA, told Council she had bee performing a special engagement at the Plum accounting Tree Inn to determine financial and lease compliance with the city. Ms. Roberts submitted a letter stating where she feels this should be going. Ms. Roberts said she has tested the first quarter of 1979; the Plum Tree employees were to get the data and Ms. Roberts tested to ~e if it complied with sales tax reports and internal financial data, and with cash records, to see if the Plum Tree is paying the proper percentage for the restaurant, bar~' and rooms. ~ork SesSion/Special Meeting Aspen City Council August 29, 1979 Ms. Roberts also submitted an internal control memorandum pointed out areas that are lacking in controls. This lack in control makes it impossible to say that the audit is absolutely right. Ms. Roberts said she feels this will be true all through the testing and she will not be able to tell Council the exact numbers. Consequently, Ms. Roberts has held up doing the testing of the room revenues. Ms. Roberts told Council her opinion is that what information she will get to reconstruct further back is not any better that what she has. Ms. Roberts said that based on informa- tion filed with the Colorado Department of Revenue whose personnel have accepted the sales tax returns as filed, and comparing with other businesses, the fluctuations of sales are right on. The Plum Tree is consistent in reporting internally. Based on the information Ms. Roberts has seen and that the Colorado Department of Revenue is accepting this data as correct, the time and effort involved, Ms. Roberts recommended using Thoreson's figure of June 1979. Councilman Van Ness asked if Ms. Roberts could determine when the last time was that they had adequate records. Ms. Roberts said in January 1977 when they had unaudited financial statement. Councilman Van Ness asked if Ms. Roberts had found any evidence that the City was in fact short changed. Ms. Roberts said no more than to the extent the city is currently discussing, which is $62,000. Ms. Butterbaugh stated they have found no evidenc that the numbers the Plum Tree Inn filed with the state sales tax people are incorrect. The figures they gave the city for their percentage were wrong; the Plum Tree did not even keep copies. Councilman Behrendt said he thought the city was out at the Plum Tree to research the situation there, not get a settlement. Councilman Behrendt said he had heard reports of mismanagement, perhaps deliberate, perhaps not. Councilman Behrendt said that Ms. Roberts could have described the management practices that were in effect. Ms. Rober s said there was an accounting system in effect; what she saw was that the system was not being followed. The Plum Tree is seriously trying to reinstate the system to where it will do some good. Councilman Van Ness said he interpreted the settlement being reached is that the monies owed be paid, not addressing the lease. Ms. Roberts agreed and said this is just an interim report to Council. Councilman Isaac asked if Ms. Roberts saw any evidence that the figures were willfully changed or withheld. Ms. Roberts told Council she was not hired to to a fraud audit; however, in her letter she stated if she saw any fraud she would report it to Council. ASPEN INSTITUTE Mayor Edel reported that he had received a note from the city attorney stating/that the Aspen Institute Institue attorneys had agreed to agree to a stipulation. Mayor Edel told Council he had contacted Joe Slater, who was amenable to a meeting. Last evening Mayor Edel had received a phone call from Mr. McKinley who said he would not and had not agreed to a stipulation. He was anxious to have a meeting with Council. Mayor Edel said he, city attorney Stock, and Councilmembers Van Ness and Michael had met, and then went over to the Institute. The Institute said they would love to have a meeting, but they could not sign a stipula- tion because it would be'non-admissable and disregarded. The Institute proposed a gentle- man's agreed wherein nothing said at the proposed meeting would be used by them or by the city in the suit. Mayor Edel told the InStitute he had to have Council's approval for this. The Institute said they would be more than willing, if Council came up with what they would allow, to entertain that proposal. Council went into executive session at 12:00 noon. SPECIAL MEETING/August 29, 1979 Mayor Edel call the special meeting to order at 1:55 p.m. with Councilmembers Parry, Collins, Behrendt, Isaac, Van Ness, and Michael present. PLUM TREE INN Councilman Isaac moved that Council direct the city attorney to deliver notification of Pl~Tree Inn intent to terminate the lease of the Plum Tree Inn to the Number Two Main Corporation for termination of failure to pay rent; issue a three-day demand notice under the forcible entry and detaine~ lease/suit act, C.R.S. 1973 13-40-106; and issue a 10-day notice for default under lease according to Section ll.8(k); seconded by Councilman Behrendt. All in favor, motion carried. ASPEN INSTITUTE Councilman Van Ness said Council has invited the Institute to meet and will present the city's concerns and present an offer of settlement. Mayor Edel said Council agreed to Aspen Institute go along with the gentleman's agreement rather than a stipulation. Mayor Edel said meet with Council Council is most anxious to do what is in their power to facilitate an agreement with the Institute and are available for a meeting with the Institute Councilman Van Ness moved to adjourn at 2:00 p.m., seconded by Councilman Behrendt. All in favor, motion carried. Kathryny.'Koch, City Cl~--rk