Former Baraboo finance director disputes claims of mishandling funds

The former Baraboo finance director has taken issue with comments recently made during a public forum by the city administrator about how taxes were handled, resulting in the recent need for more than $826,000 in the city budget.

Former finance director, Cynthia Haggard, who now serves as county manager and administrative coordinator of Adams County, has taken so much issue that she has sent letters to the entire city council of Beloit denouncing a portion of his answer to a question, which is where City Administrator Casey Bradley spoke in mid-January as a job interview for city manager.

Haggard wrote in a Jan. 23 letter to Beloit Council President Regina Dunkin that Bradley’s statement was “misleading” and “implies” that both Haggard and her predecessor, Cheryl Giese, mishandled tax increment finance district funds “which caused the City of Baraboo to go through a bad situation.”

“This statement is misleading because all TIF funds were handled properly,” Haggard wrote.

Bradley disagrees that they were handled correctly. He said Monday that the way the financial information was presented to the Baraboo council at the time did not properly inform council members of what was happening. That echoes what he said during the forum.

Though the public forum was recorded by the city of Beloit and posted online as a video, Bradley’s comments specific to the levy issue in Baraboo were not part of the posted recording.

According to the letter Haggard wrote, Bradley responded to a question from a city resident during the question and answer portion of the public forum Jan. 13. He referred to it as “a pretty bad situation,” noting that both Haggard and Giese dealt with TIF funds “in a way that’s not necessarily right.”

“They were levying TIF dollars for TIF debt and using those funds for general operations,” he said during the forum. “We had statutory authority to use that for debt, but it was being used for a different purpose that wasn’t really known by Council. So in that process, we ended up losing about 10{9f99fe44fce1aa3c813d0a0ce4da2fbea8a5a58e9d85c4a2927dd8140cb676b5} of our levy, because we paid off the debt this year.”

Haggard argues in both a public statement provided by her lawyer, Jeff Scott Olson of The Jeff Scott Olson Law Firm, of Waunakee, and the letter to Beloit City Council, that the use of funds collected within TIFs, which are customarily used to pay off the debt accrued by the formation of the TIF but were instead collected and used within the general fund, was a “strategy.”

Haggard notes in her letter that before she became city of Baraboo finance director, she worked for the city of Beloit. She left Baraboo in May 2021 “in great standing,” Haggard wrote.

But with the comments by Bradley, she was forced to write the letter to correct “false impressions about the quality of her service in Baraboo,” according to the statement from her attorney.

While Haggard claims the city council adopted the strategy, Bradley said council members had no knowledge that it was going on.

“If it was a strategy,” Bradley said, “Then why wasn’t the council informed?”

She wrote in her statement that she periodically updated council members and former city administrator Ed Geick. Geick admitted to Bradley that he was aware the practice was taking place. Though financing operations were not part of the former administrator’s job; those are overseen by the director of finances, Bradley said.

Haggard pointed to Ehlers Inc., a financial services advising company, as the source of the practice in her letter, providing a presentation from financial advisors which outlines debt service and levy. Bradley said after being told it was recommended by Ehlers when the city staff first discovered the issue in 2021, he contacted financial advisors. They told him it is not a strategy they would ever advise a municipality use for operations, Bradley said, but instead it could be a short-term option for capital and that it should be relayed to the city council before it is instituted.

In her letter, Haggard wrote that the city “had statutory authority to levy for general obligation debt and to allocate the debt service adjustment dollars to either Debt Service, Capital or Operating funds,” and that Baraboo “continued to allocate the debt service adjustment levy dollars to the Operating fund after I left.” She adds that the claim that Baraboo lost a portion of its levy was “false” because the 2022 levy was $8.9 million while the 2023 levy is more than $9.07 million.

Both TIFs were paid off within the last year. That is why the levy was lost, Bradley said.

“Once you pay off the debt, you don’t have that levy capacity anymore,” Bradley said.

The result was slashing into every department budget by a percentage to cut more than $826,000 in expenses to make up for the discrepancy.

Though Bradley could not recall the exact words he used during the public forum, specifically remembering that he very likely had not named either Haggard or Giese when outlining the situation to an audience of about 45 people and anyone watching the livestream, he pointed out that being in a public position means that your actions are a matter of public record.

In addition to sending out public statements and letters to various public officials and members of the media, Haggard, through her attorney, has presented the city of Baraboo with a public records request, Bradley said. They have requested any correspondence regarding city finances, TIFs or the budget, which has resulted in the production of 7,700 emails.

“In the era of the internet, a professional reputation built up over years or decades can be imploded overnight by a careless remark or a desperate attempt to shift responsibility for bad outcomes on to innocent shoulders,” reads the statement released by Haggard and Olson. “Cynthia’s letter is nothing more or less than an effort to repair, insofar as such things can be repaired, the damage to her professional reputation done in a misleading presentation.”