Q&A with Yukon Mayor Brian Pillmore: Forensic audit reveals leadership failures, financial mismanagement, and misconduct

A forensic audit of the city of Yukon has uncovered widespread leadership failures, financial mismanagement, and employee misconduct. In this exclusive Q&A, Yukon Mayor Brian Pillmore discusses the audit findings and the city’s plan to restore accountability and trust.

Q: Why did the Yukon City Council decide to move forward with a forensic audit?

A: The decision was based on three concerns: ordinances not being properly recorded, an overspent budget where spending exceeded authorized limits, and $30 million of the city’s $54 million in bank accounts earning only 0.15% interest.

Q: When was the forensic audit authorized?

A: The Yukon City Council officially authorized the forensic review on September 4, 2024.

Q: How did Mayor Pillmore react to the audit findings?

A: "It was extremely disappointing," Pillmore said. "It's definitely some of the worst compliance and governance breakdowns I've ever seen, certainly the worst leadership I've seen from the top really spanning 30 years. It wasn't just one person; it was a culture that was pervasive in the city from a leadership standpoint."

Q: What raised concerns about the city’s financial practices?

A: Mayor Pillmore said that after spending 500 hours asking questions about city administration, he was denied access to bank account balances because the treasurer had abruptly quit two months earlier. "I was told I couldn't have the bank account balances because the treasurer had quit abruptly two months earlier. That told me that something's really broken," he said.

Q: What were some of the most shocking findings in the audit?

A: "Most shocking to me is on city time and in city facilities there was a leader of the city sexually harassing and having sexual encounters with an employee, an insubordinate," Pillmore said.

Q: How did Mayor Pillmore address the argument that the relationship was between consenting adults?

A: "That doesn't matter. If it's a superior and a subordinate, it's inappropriate regardless of the nature... that shocked me," Pillmore said.

Q: What other misconduct did the audit reveal?

A: The audit found that a former city leader was sending pornography through the city’s email system and that $180,000 was improperly diverted to a nonprofit organization where the former city manager served as treasurer. "That's unacceptable," Pillmore said.

Q: Were there issues with the city’s budgeting process?

A: Yes, a budget amendment for $780,000 was approved by the council, but what was entered and acted upon was twice that amount. "1.7 million dollars. These are big numbers," Pillmore said.

Q: How did Mayor Pillmore describe the overall leadership culture?

A: "Whether it's inappropriate sexual relationships, inappropriate behavior, sending pornography through the city's email system, diverting city funds, or doubling a budget entry... those items rise to a level of materiality that tells you this was a broken leadership culture," Pillmore said.

Q: Were employees aware of the misconduct?

A: "There was something that was broken at the highest level. This was not pervasive through all 250 employees, but there were those who knew, they raised some issues, and they were told, 'Mind your own business.' That's a broken leadership culture," Pillmore said.

Q: How did the city handle employee concerns in the past?

A: The city previously shut down its ethics hotline, dismissing it as the "tattle line." "Oh, they're just reporting rumors. Well, turns out those rumors weren't just rumors," Pillmore said.

Q: What steps is the city taking to correct these issues?

A: "We poured through it. We developed a 14-section resolution that lays out 150-plus points of action, and we've authorized and directed the city manager to make changes," Pillmore said.

Q: Who is leading the city's reform efforts?

A: Mike Castro, a West Point graduate, Army veteran, and former administrator in five municipalities, has been appointed as the new city manager. "He knows how to make this happen. He knows what's acceptable, and he lives by the West Point Honor Code, which is 'I will not lie, cheat, or steal or tolerate anyone who does,'" Pillmore said.

Q: What immediate changes are being implemented?

A: The city will soon reinstate the employee hotline and hire a new financial director, a newly created position.

Q: Has law enforcement been notified about the audit findings?

A: "We as the Yukon City Council are not a law enforcement organization, but this report is public record... I will say that the necessary and appropriate state and federal officials are well aware of this report's findings, and they will have to review and assess on their own," Pillmore said.