COOS BAY - The City Council formally approved an agreement with a Tigard audit firm Tuesday night, but it was outstanding bills from the previous auditor that occupied much of the councilors' attention.

In an e-mail sent to Interim City Manager Joyce Jansen on Jan. 24, city attorney Nate McClintock suggested the council not pay all of a bill submitted by Wall & Wall P.C.

After the Coos Bay firm canceled its audit of city finances on Jan. 2, it sent the city an invoice Jan. 16 totaling $29,092.50, a substantial amount more than the original contract of $16,708.75. Auditor Rob Wall justified the bigger bill by saying his independence as a financial reviewer was compromised by an e-mail from the city's finance director. As a result, Wall argued, he needed to do more work to mitigate his concerns and perform the job thoroughly and properly.

The result: supplemental bills of $938.75 and $11,445.

The city initially paid $10,938.75 in November, leaving $18,153.75 on the balance.

The primary issue of contention, however, was whether Wall & Wall should be paid the rest.

McClintock contended the city should not feel obligated to pay the remainder of the original contract.

“Wall and Wall has not kept (its) side of the agreement, as Wall and Wall has not completed a financial audit,” he wrote. “Since it was Wall and Wall's decision to ‘disengage' from (its) obligation under the agreement, I do not see how or why the city should be responsible for anything more (than) that which has been paid.”

McClintock also argued against paying the full amount of the supplemental bills. He questioned the hours claimed by Wall & Wall for certain tasks and said the city should not be charged twice for meetings where two accountants were present.

Citing the potential for litigation over the financial matter, Councilor Roger Gould asked that the council move into executive session to talk.

“There are some legal issues stirring in the background that we all need to be cognizant about,” he said. “It's just not black and white.”

Before going into closed session, Gould noted that Wall & Wall could argue it was compelled to disengage because of the conduct of city staff, not by its own volition.

After the executive session, which lasted less than a half-hour, Mayor Jeff McKeown requested that McClintock contact Wall & Wall's attorney, review the bills and report back to the council.

Earlier, the council had approved a $27,000 contract with Pauly Rogers and Company P.C. of Tigard to complete the audit process. The company will provide the city a completed financial assessment by the end of March.

McKeown said he spoke with the firm to see if it might lower its price if work performed by Wall & Wall can be used to expedite the process.

“But the important thing is, Pauly Rogers is reviewing the numbers and we are well on our way to get a final result and get all this behind us.”

In other business Tuesday night, the council:

€ requested city staff examine the feasibility of relocating Channel 14, the government-access cable channel, from its office in Ed Lund Park. Resident Jim Loftin wants the city to consider giving his group maintenance oversight for the park. Loftin indicated his group would not be interested, however, if it were not able to supervise the building.

€ approved the purchase of two 2007 Ford Crown Victorias at a total cost of $67,448 for police patrol cars; and,

€ appointed Councilor Michele Burnette to the audit committee, joining McKeown, Gould and Councilor John Muenchrath.

To see Nate McClintock's letter and billing documents, click Here