(EL PASO COUNTY, Colo.) — An array of organizations and individuals are raising questions about the integrity of leadership in Palmer Lake, with some alleging suppression of civic participation, mishandling of funds, and disregard for open meeting laws ahead of the Buc-ee’s annexation hearing on Thursday, May 29.

A lawsuit, from two individuals who live in Palmer Lake, alleges the town has misused public funds and falsified reports to obtain $1.3 million in state and federal dollars. The complaint also states that the town administrators allegedly diverted grant funds into the municipal water utility.

According to the lawsuit, there were various instances where funds from the American Rescue Plan Act, Fixing America’s Surface Transportation, the Colorado Department of Public Health and Environment, and more were misused. The lawsuit further alleges that Dawn Collins, the appointed Town Administrator, “did not understand the legal status of the Town’s Water Enterprise and the distinction between it and the Town’s General Fund” and had the two individuals become concerned that Collins had “fraudulently created municipal financial statements and recordings.”

“We spent nearly three years trying to help the Town recognize and correct basic financial red flags,” said Marty Brodzik, a Palmer Lake citizen and co-relator in the fraud case. “Instead of fixing the issues, they ignored us. Then the accounting firm quit, the auditor quit, the financial clerk quit—and the Town still did nothing. Our hope now is that the weight of this lawsuit will help level the field for the citizens attending the upcoming hearing.”

The lawsuit further alleges that the city only has one bank account, even though the city’s Municipal Code requires the annual budget to provide for revenues and expenditures into four separate funds for the Conservation Trust Fund, Water Enterprise Fund, the Water Enterprise Capital Improvement Fund, and the General Fund.

Collins managed both the General Fund and Water Enterprise; however, the lawsuit states the General Fund’s monthly checks register failed to identify missing checks, including those that were voided, voided and reissued, or issued and never entered. The lawsuit further alleges that the Water Enterprise fund revenues were misused.

When asked, the Town of Palmer Lake sent the following statement:

“…Now that this is a matter subject to pending litigation, the Town has no comment except to note that the assertions by the complainants appear to relate primarily to how funds received by the Town and expended for public purposes were allocated and accounted for in the Town’s financial records.  The Town’s financial records are audited each year by independent auditors.  Each year the auditors have issued the Town an audit opinion that the Town’s financial statements in all material respects were in accordance with generally accepted accounting principles.  The auditors routinely provide recommendations for improvement with which the Town has always complied.”

Dawn Collins, Town of Palmer Lake Town Administrator

Read the full lawsuit here:

Separate from the fraud case, Integrity Matters and various Palmer Lake community members have also filed a temporary restraining order looking to remove a publicly posted petition from the Town’s website that contained full names, addresses, and partially visible signatures.

According to court documents, various community members and petition circulators emailed the Town to redact or remove their personal information, and the Clerk had allegedly refused most requests. On May 21, the city refused to make any more redactions or remove the petition.

The temporary restrictions order would immediately direct the town to remove all publicly posted petition documents containing personally identifying information from its website.

Another temporary restraining order also asked the town to relocate the May 29 annexation eligibility as the current venue has allegedly excluded dozens and fails to meet the standards of the Open Meetings Law and the Municipal Annexation Act.

“Our hope,” said Integrity Matters Chief Legal Counsel, Kat Gayle, “is that these developments—including the new lawsuit—finally push the Mayor and the Trustees facing recall to confront the truth: this is not how responsible government behaves.”

FOX21 News has reached out to the Palmer Lake Mayor and is awaiting comment.