Kirkwood’s electric department quietly burned through roughly $15.6 million more than it had over the last two years, a city review found, forcing the utility to raid reserves and tap other municipal funds to keep the lights on. That massive gap triggered electric rate hikes and cost longtime Kirkwood Electric director Mark Petty his job. Petty departed in October with a severance payout topping $112,000, and officials say the findings have kicked off an urgent push to tighten oversight and dig into the books.
City report points to weak financial controls
The city’s 12-page After Action Report flagged several problem areas, including overstated budget balances caused by unencumbered purchase orders, lax oversight of blanket contracts and contractor costs that were not represented accurately. The report concludes that the multimillion-dollar shortfall grew out of broken controls and sloppy systems rather than a single act of fraud. According to St. Louis Magazine, the document calls for new council approval rules for projects above $15,000 and a five-year plan to rebuild roughly $4 million in electric reserves.
Past controversies in Detroit draw renewed attention
Petty’s résumé is also getting a second look. He previously ran Detroit’s public lighting department from 1999 to 2004, a period that Detroit auditors later criticized for weak financial controls and vendor troubles. As reported by the St. Louis Post-Dispatch, that probe drew FBI interest and led to convictions for a vendor and some department employees. Court records show Petty himself was never accused or indicted.
Council demands answers, moves toward forensic audit
City council members have spent hours combing through the after-action findings and are now drafting criteria to hire a forensic accounting firm to untangle obligations and look for any potential overbilling. St. Louis Magazine reports that, so far, Petty and former chief administrative officer Russell Hawes are the only senior officials who have lost their jobs over the debacle, and that the surprise deficit already helped trigger a credit-rating downgrade earlier this year.
What residents should expect
Officials say tougher purchasing rules and more frequent audits are on the way, but warn that customers are likely to feel some fallout while the utility rebuilds reserves and absorbs the cost of recent grid work. According to the St. Louis Post-Dispatch, big-ticket upgrades such as the Sugar Creek substation make up a large share of the extra spending, and the city still has to decide whether any contractor bills can realistically be clawed back once the forensic review is complete.
