Crundwell was arrested Tuesday on a single count of wire fraud. Authorities alleged she stole city funds over the last six years to finance an extravagant lifestyle that included spending huge sums on her horse farms in Dixon and Beloit, Wis. as well as jewelry and a luxury motor home.



Burke told the crowd that two independent firms audit the city and have found "no issues of non-compliance." When the city filed its audits with the state, Burke said a review also came up with "no adverse findings" and the city's main bank also did not notice anything suspicious.



As for the city not realizing $30 million had disappeared from its coffers over the past six years, he said a multitude of factors played into its financial issues including its tax cap, declining revenue, late payments from the state, rising health care costs and investments in infrastructure.



"These facts … are a plausible reason for the financial problems our community is facing," he said.

But longtime resident Doug Hoyle, 61, said the staggering losses "gives the impression city officials are grossly negligent and incompetent."



"It awakened a sleepy little town," he said.



Resident Ellie Shank, 65, said she can't help but wonder "where would we be if we had all the money we were supposed to," citing a closed city pool and the need for road improvements.



Burke said the city will retain its own independent investigator to look into the wrongdoing, but he does not believe any other city employees were involved in the thefts. The council also will appoint a panel to research additional financial controls for the city and will hire a new accounting firm to perform audits.



"This is a strong city that will recover," the mayor said.



Crundwell is a champion horse breeder.





mjenco@tribune.com