City: No Merit To Former Finance Director's Allegations

Said She Was Fired For Exposing Misuse Of Funds

COLORADO SPRINGS, Colo. - COLORADO SPRINGS, Colo. -- In a statement released on Wednesday, the City of Colorado Springs announced they have completed their investigation surrounding allegations made by the City's former finance director.

According to City Attorney Chris Melcher, they investigated the facts surrounding allegations made by Terri Velasquez arising from her termination in 2011. The investigation was ordered by Mayor Bach. "Based on the investigation and a careful review of the facts, the City believes there is no merit to any of the allegations brought forward by Ms. Velasquez and that her termination in 2011 was handled appropriately," Melcher said.

In August 2011, Velasquez said she wanted $1 million, plus legal fees, because she says she was fired for exposing misuse of city funds and because of gender discrimination.

Before she was fired, Velasquez found some city employees were being overpaid and notified the city auditor. That included then Fire Chief Steve Cox, who was paid an extra $5,000. Cox has since paid the money back. Velasquez says she also found that a $2 million grant from the El Pomar foundation to the City wasn't being used appropriately. She said there were other ethical issues and financial improprieties.

Velasquez said city leaders weren't happy to hear about her concerns, and she was retaliated against and eventually fired.

Velasquez still has pending claims against the City.

"We've explained to [Velasquez and her attorney] the results of our investigation, our findings and our opinion that there is no factual basis or merit to those allegations," said Melcher. "We've also explained to them that going forward on those claims would be of any benefit."

The total external cost of the investigation to date is approximately $65,000. The City Attorney's Office does not anticipate additional outside legal costs at this time, and will be handling this matter internally going forward unless an extraordinary need for outside assistance arises.

"If they decide to go forward with the claims we are ready to defend the city's interest and we believe the city will be fully exonerated," said Melcher.

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