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Editor's note: To read a statement Terri Velasquez released Wednesday afternoon, click here.

After nearly 24 years of service to the city of Colorado Springs, it's no surprise that former director of finance and administrative services Terri Velasquez was unhappy with her recent termination by mayoral Chief of Staff Steve Cox.

Her response, however, was surprising. She hired a legal team to draft a letter to the press, accusing her former boss and the city of financial improprieties, asking City Council to investigate, and saying she would fight her "wrongful termination." A few days later, Mayor Steve Bach announced that he would "proceed immediately to retain an outside independent investigator to review the allegations."

In the interim, there's a bit we can review. Velasquez says she was twice offered a severance package in exchange for her resignation, before ultimately being fired. Both offers, she says, came shortly after questionable incidents.

Accusation No. 1: In May 2010, she says, Cox was overpaid $4,913 and never reported it. Velasquez says she told the city auditor's office when she heard of the error six months later.

Accusation No. 2: In June 2011, Velasquez says, she spoke to the District Attorney's office about funds donated by the El Pomar Foundation to the city, for use in the deal to keep the United States Olympic Committee headquarters here. Velasquez says she was open with her belief that the funds were misused by LandCo Equity Partners, the initial developer in the deal. Furthermore, Velasquez suggests the city attempted to cover up the misuse; she states she had been asked previously by a city official to draft a letter to El Pomar showing that the funds had been used properly, and had declined.

While official records relating to both incidents were unavailable at press time, the Independent did contact city officials with intimate knowledge of the situations. Long story short? There appears to be a lot of truth to Velasquez's allegations, but the context may be more complicated. And it's unclear that what happened relates to her dismissal.

City Council President Scott Hente notes that Cox and Velasquez had different ideas about how to run city finances. While Hente says he wasn't happy to see Velasquez fired, he thinks Cox did it "with the right motives in mind."

Accusation No. 1

City Auditor Denny Nester tells the Independent that an overpayment to Cox did take place as Velasquez described. "Terri did make me aware of a situation that had occurred, and we did check into it and it was corrected," he says.

But Nester says Cox, who was transitioning from fire chief to interim city manager at the time of the error, wasn't the only employee to receive an overpayment. In fact, he says, there were several payment errors to fire department employees at the time. The fire department was using a different payroll system than the rest of the city, requiring several department employees to manually transfer information from the fire system to the main system; Cox's overpayment was caused by a clerical error, Nester says.

City human resources director Ann Crossey concurs, and adds that fire department pay structures are extremely complicated, with vacation buy-back options and oddball overtime rules, which also contributed to the mishap. Cox, she says, had sold back some of his vacation, but was accidentally credited too much. The error went unnoticed for six months.

Crossey says she remembers Cox saying, "'Oh, I'm so embarrassed, I never look at my pay stubs.'"

Cox himself says his paycheck had been erratic during the time of the mistake because of the vacation buy-back, as well as his position change.

"The suggestion that I did something inappropriate is hogwash," Cox says, "and as soon as it was identified, it was corrected."

Both Crossey and Nester agree Cox returned the extra money upon being made aware of the mistake. The fire department payroll system has since been merged with the main city system.

Accusation No. 2

For anyone who doesn't remember USOC deal specifics, here's what you need to know: There were tens of millions of taxpayer incentive dollars involved, it fell apart and had to be put back together, and somewhere in the middle of the mess, then-Mayor Lionel Rivera was accused of being in bed with eventually ousted developer LandCo Equity Partners. In late 2009, after the saga had more or less ended, LandCo's leaders were served with a 33-count indictment on charges that they ripped off investors in deals — the USOC deal excluded.

Velasquez's accounts in regards to the USOC appear to at least partially check out. The DA is doing interviews around town in connection with its LandCo case. El Pomar Chairman/Chief Executive Officer Bill Hybl confirms he was the subject of one such interview.

Also, Hente, one of the main USOC negotiators, says he does remember a meeting with LandCo and city officials over the misuse of funds of some sort, though he's not sure they were El Pomar funds.

"There was a general agreement that the money had been allocated inappropriately, and that the money needed to be paid back," Hente says. "And my memory is that the money was paid back."

Assuming it was returned, Hente says, the money probably was reapplied to the project. But he says his memory is fuzzy, and he's requested documents to ensure all is in order.

One thing Hente is sure of is that Velasquez never approached Council with any of her concerns.

"When I read in the paper that she wants City Council to investigate allegations, [I thought] what allegations?" he says. "She's never brought any allegations to me."

Another for-sure thing: The USOC deal was never Cox's project. He was a fire chief during most of the time the deal was negotiated and says it's ridiculous to think he would fire someone over a project he knew nothing about.

As he puts it: "I've never attended a meeting, never been copied on an e-mail, never been informed by any employee that something inappropriate was going on, and never had any connection to the USOC deal, period."

Velasquez requested that all inquiries be sent to her law firm, which did not return the Indy's calls.

stanley@csindy.com

  • When asked about Terri Velasquez's claims, city officials provide a few answers.

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