A 6th Judicial District Court judge sided with Durango resident John Simpson in an open records lawsuit filed in September against the city and ordered the city to make the requested financial documents publicly available.
In a court order filed last week, District Judge Suzanne Carlson rebutted the city’s argument that draft financial statements sought by Simpson are “work products” not subject to open records requests under the Colorado Open Records Act.
In an analysis that describes the city’s reaction to Simpson’s records request as “chilling” and “overblown,” the order says the city failed to demonstrate how releasing draft financial statements would “cause significant public harm.”
Carlson ordered the city to make the draft financial statements public and awarded court costs and attorney fees to Simpson. Simpson, who is represented by Pagosa Springs attorney Matt Roane, said he doesn’t yet know what his legal fees will be.
The city was represented by Denver lawyer Nicholas Poppe, according to 6th Judicial District Court.
“Going forward, I think this is a win for the city and a win for everybody else,” Simpson said. “... I’m glad it worked out and hopefully this is the end.”
Tom Sluis, city spokesman, said City Council may appeal the ruling. City Council is scheduled to meet in executive session Tuesday to discuss the subject.
Regardless of whether the city seeks an appeal, the legal ruling is a good thing because it provides the city with direction in moving forward, he said.
“Even if we don’t win it will help clarify what we can and cannot do, and remove those kind of unknowns,” Sluis said.
Simpson argued in his lawsuit that the city wrongly denied his request for annual comprehensive unaudited financial records. Simpson wanted information on the city’s lodgers tax collections in 2021 that are part of the annual financial records.He said in September he was seeking the draft financial statements because residents should know how much money the city has before a $1.1 million ballot question asking voters to allow the city to retain excess lodgers tax funds collected in 2021 and 2022.
City residents voted overwhelmingly in November, 68% to 32%, to allow the city to keep the excess lodgers tax funds.
The court order issued Feb. 24 says the draft financial statement sought by Simpson does not qualify as work product under the Colorado Open Records Act, which defines work product as “all intra- or inter-agency advisory or deliberative materials assembled for the benefit of elected officials.”
The unaudited financial statements requested by Simpson were not prepared as “advisory” or “deliberative” documents with intent to aid Durango City Council in reaching any decision, the court order says.
Even if the draft financial statements were found to meet the definition of work product, the drafts would need to be contained in communications between City Council members or be prepared for them in order to be excluded from the public record, according to the court.
Cynthia Sneed, city finance director, testified that draft financial statements were not sent to City Council, nor did any council members request any part of the draft financial statements, according to the court’s analysis.
“Work product assembled for unelected appointees that is never sent to elected officials are public records that are not excluded from CORA inspection requirements,” the order says.
The court also considered another argument by the city that releasing the draft financial statements would “cause significant public harm and be contrary to the public interest.”
Simpson said he was never informed of possible public harm when City Clerk Faye Harmer denied his initial requests for financial statements. His attorney argued that the city can’t propose a new argument “at the last second” but Carlson heard the argument.
Regardless, the judge concluded that although discussions between a financial director and an auditor are important, up-to-date information is also important to the public.
A draft financial report such as the one sought by Simpson could contain inaccurate information and prompt “unpleasant” questions to the city’s financial department, but even so, the city’s “chilling” argument “appears overblown,” the order says.
Sluis said in an email he hopes the court is correct and the city’s concerns about financial disinformation being spread is overblown.
He said the city is proud of the transparency it has implemented in recent years, from the city’s OpenGov portal that “offers an incredible amount of granular financial data that covers all sources of revenue and expenses incurred by the city” to monthly publications of financial records including balances for general, enterprise and internal service funds, revenue and expense analyses, and sales and use tax reports.
In a follow-up email, he said at least 27 states have laws or regulations that restrict the release of draft financial audits to the public. Some restrictions prohibit the release of any draft financial audit report while others only block the release of certain parts of reports.
Simpson said he has already seen positive changes from the city. On Tuesday, he received a response from the city containing December 2022 financial statements he requested in another open records request.
“Things already changed since this was issued,” he said. “... Hopefully, they take a look at their financials and how they’re operating their financial situation down there, because it needs help and hopefully this kind of gets them going in a positive direction.”
cburney@durangoherald.com
