Controversy In Lyons: FBI Checking Into Flood Recovery Funds

By Lauren DiSpirito

LYONS, Colo. (CBS4) – The Federal Bureau of Investigation and the U.S. Department of Housing and Urban Development are conducting an investigation into how the town of Lyons handled flood recovery procurement procedures, town officials said Wednesday.

Mayor Connie Sullivan told residents gathered at a special meeting to address the investigation Wednesday evening town leaders were first made aware of the probe on Monday. She and counsel for the town are communicating with federal agents, she said.

On Tuesday morning, Sullivan says federal agents searched the town’s computers and served a subpoena to obtain documents “relative to flood recovery procurement procedures.”

Lyons’ town administrator Victoria Simonsen and town clerk Deb Anthony have been placed temporary paid administrative leave. After they each were interviewed by federal agents, Sullivan said the town’s attorney’s recommended the move — one she said was not to be taken as a suspicion of wrongdoing by those employees.

Victoria Simonsen and Deb Anthony (credit: CBS)

Victoria Simonsen and Deb Anthony (credit: CBS)

Sullivan went on to tell people in attending the packed meeting at town hall that she would not take questions.

“Contents of the subpeona regarding the scope of the investigation are not being made public at this time, as the town is still in the process of responding,” she said.

Damage from flooding in Lyons in September 2013. (credit: CBS)

Damage from flooding in Lyons in September 2013. (credit: CBS)

Slightly fewer than 2,000 people live in the town of Lyons, in Boulder County. After devastating floods tore through the area in September 2013, Lyons was granted $36 million in recovery funds.

In April, an audit by the U.S Department of Homeland Security’s Office of the Inspector General revealed Lyons officials did not comply with some FEMA guidelines when contracting government-funded work, incurred costs for leased equipment that they did not use, and completed projects without FEMA approval on environmental requirements. When asked by CBS4, Sullivan would not say whether or not this investigation is related to those findings.

“With an effort this large, all the agencies the state, the county, our partner governments, we all work very closely together to help each other out,” Sullivan said, “trying to make sure we all understand the rules and are doing our best to follow those.”

Before Wednesday’s meeting, Sullivan told CBS4 the town is cooperating with investigators and is following the advice of its attorneys not to release details of the investigation.

“I think if there’s something that’s gone wrong we want to understand what it is so we can address it,” Sullivan said, “and if they find that really there was no wrongdoing, we’d be happy to hear that as well.”

Janet Orback, who was one of the first residents of the Confluence neighborhood to secure permits to raise her home three feet after the flooding, says people in the town are eager to resume normal life. Orback has lived in Lyons her entire life. At Wednesday’s meeting, she said she expected more answers but did not want to speculate as to what the investigation may be about.

“Hopefully this is something that will all be taken care of, it wont leave a mar on our town and we can all get back to being what Lyons always was,” Orback said. “We’re all a lot stronger because of it, but it has been a real struggle.”

Ashley Ahrens has lived in Lyons for 9 years. He attended Wednesday’s meeting to see how the town is responding to the federal probe.

“Frankly, it was a very short, curt meeting,” Ahrens said. “I would like to know why there wasn’t any more information divulged here.”

Ahrens says he is pleased with the town’s overall handling of flood recovery efforts.

“We have a tiny little staff that was confronted with a major catastrophe,” Ahrens said. “I personally think they did the best they could possibly do in the face of tremendous adversity.”

The town’s trustees have appointed a current employee to serve as interim town administrator. Sullivan says she was not given a timeline of how long the investigation could take. She does not expect the probe to impact ongoing recovery work, including the paving of streets in the town’s hardest hit neighborhoods expected to begin at the end of this week.

Lauren DiSpirito reports for CBS4 News at 10 p.m. She covers breaking news and feature stories along Colorado’s Front Range. Follow her on Twitter @CBS4Lauren. Share your story ideas with her here.


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