Q&A with City of Edmonds Finance Director Lorenzo Hines

197
6

My Edmonds News sat down with City of Edmonds Finance Director Lorenzo Hines on Thursday to discuss the findings of an investigation into a complaint he made against Edmonds City Councilmembers Diane Buckshnis and Michael Plunkett. Here is a summary of that interview:

Q: Now that the report has been issued,  where do you go from here?

A: I haven’t made that determination yet. From a legal aspect, I’ve still got to sit back and figure out what my options are. From a professional aspect, I’m going to continue to serve the mayor and the council and the 40,000 folks that are in this town.  And I am very proud of the work we’ve done here, despite the limited resources, we have done a yeoman’s job – me and my staff. Right now my focus is on closing 2010 and getting the 2010 financials done because that’s paramount. That’s where my head’s at right now.

Q: You definitely feel that things have not been resolved as a result of this?

A: I respect the conclusion that the investigator came to, basically that no laws were broken, state or federal laws. But I also appreciate the fact that there was an acknowledgment that there were certain rude or uncivil behaviors. And that if the council was bound by the same code of conduct that city employees are, there would be an issue. I think this was a lesson for us all because I had no idea – even in a city this small and with us working so closely together – that we’re really not playing under the same rules. That was a lesson learned. To see that the council doesn’t have the same standards that we do – that was a surprise.

Q: There seems to be an impression by people who don’t know you and see your interactions in council meetings that you are being difficult. That you are not answering questions. Have you heard that from others, that people see that in you?

A: I haven’t heard that from others and as a matter of fact, I hear the exact opposite. That’s always what I strive to provide. There are seven members over there and the mayor that I try to make sure have the adequate and sometimes an overabundance of information. Ultimately my job is to make sure they have all the information necessary for them to make a decision. As far as the perception of me being difficult, all I can do is keep providing the information. For those who perceive me as difficult or not responsive, my door is always open. All you’ve got to do is call. And the council knows that. And any other citizens – I’ve had many meetings with citizens, privately and in groups here in my office and I’ve met with members of the levy committee as small group and to educate them on the city’s financials. So as they are putting together their plans, I want to make sure that they have the accurate information regarding the city’s status and what our forecasts are looking like.

Q: What about the perception that you are not answering questions? For example, emails have been circulating that “I’ve sent Lorenzo an email months ago and he never got back to me.”

A: We’ve had a situation here where we’ve been answering questions, and the fact that that question’s been answered and the answer has not been widely publicized. So the strategy we took with the budget, when we were going through that process, was as we answered questions from the council, we would post both the question and the answer on the (city) website. I thought that was very successful. I thought it proved to folks that we were very responsive, and we continue to be responsive. That’s my job.

Q: Councilmember Buckshnis has said many times that she needs information that you are not providing. Is there something missing?

A: I’m not clear what her requests are. As far as I’m concerned, we have responded to her requests. Now if there are still more requests out there that we haven’t responded to, she’s welcome to put all of those questions onto to 1, 2, 3, 4 or how many pages it needs and send those questions to me en masse. What I will do is answer those questions and I will post those answers and the questions on the website, and perhaps we can move on. Because we’ve got bigger issues to deal with in this city besides the constant banter about questions. But we may find that some of those questions have been answered – answers may be sitting out there in the 60 some odd questions regarding the budget. So I would ask that that cadre of questions be reviewed to make sure it hasn’t already been answered, so that way I’m not answering the question twice. Our resources here are limited, my time is tight. She’s more than welcome to send me those questions and we’ll be happy to address them. Send them through the mayor or send them directly to me.

Q: What about Councilmember Plunkett?

A: I don’t know what his motivations are. All I know is that there has been a fair amount of tension between us, particularly this year.

Q: What about your relationship with the other councilmembers?

A: The council generally knows that the door is open. For anyone who is truly interested in learning what we do, I take great joy in teaching. Once folks understand how this thing works, we become, I think, as a group more equipped to handle future issues, because we already understand the budget document and the implications of those numbers, and then we can move to the policy decisions that are affected by those numbers. In my mind – and maybe this is naïve – but we elect folks to make the policy decisions. Where are we going? What’s your vision? Where are we going to be in 10 years? That’s why I thought they were elected. We’ve got some folks who want a lot of books and try to get into the day-to-day stuff. We’ve got folks who can do that – we’ve got CPAs and MBAs sitting over here who can do that. We also have the state auditor who comes in once a year. They know what they are doing because they audit municipalities all the time. They’ll be in here at some time in late March. So everything’s handled but if anyone wants to know any thing about the financials, the door’s open. Just come talk to me.

Q: What have the auditor’s reports shown?

A: There are three tiers of auditor notes. The first tier is findings, that’s the most severe. Last year, on the last audit we had no findings. The second tier is management representation letters – basically we found something, it’s not something serious enough to be a finding but you need to fix it. We had one of those, an issue dealing with the court. The next level is exit items — these are things that need to be addressed and we’ll come back and test them next year just to make sure they’ve been addressed. They don’t rise to the level of a management rep letter at this time, but you need to address them to make sure they don’t. Our last audit report had a number of exit items, and one management rep letter and no findings. Those exit items I am addressing one by one so that when the auditors come back in March, we’ve addressed those items. The report’s available, and three ocuncilmembers were at the exit conference so they heard it all, and we continue to move toward addressing all the issues. I am a former auditor so I understand how they think and what the expectation is of the audit team.

Q: How do you fix this situation so that people don’t sit down and watch a council meeting and see that sort of stuff going on?

A: I’m open to any dialogue with those two (Buckshnis and Plunkett) at any point in time. Frankly, I think it’s probably overdue. If they are willing to sit down with me, I am more than happy to sit down with them. But I’ve got 40,900 folks that I’ve got to take care of, and I’ve got to manage their money and I’ve got to be able to report to them how their money is being spent. They’re my priority. I work for the mayor and I work for the council, but those 40,900 folks – ultimately, they’re my bosses so I’m ultimately worried about what they think. We’ve got some folks that care deeply about what they are doing, and we just need to sit down and figure out how we need to work together.

I am concerned about the perception. Even though I am just a director here, I am part of the City of Edmonds, and I am a little concerned about the perception that folks are having on the other side of  the camera. Because they elect us, they pay us to do a yeoman’s job and I hope that they maintain that perception even through the banter that goes on at the council. I’m worried about that and when I do respond to questions, I’m not only responding to the council, I’m responding to folks on the other side of the camera. And if anyone needs clarification, come see me. The door’s always open.

6 COMMENTS

  1. Yep, it’s time for these councilmembers to stop their antics and get back to business. In the last several years the city’s budget process has been studied, in depth, by numerouse citizens and groups, and as Ron Wambolt noted, the problem lies with insufficient revenues, not mismanagement. The fact that neither councilmember has discovered anything, after all the bluster and effort, is reason to stop with the nonsense and move on. What issues need addressing, as Mr. Hines notes, will be resolved and reviewed through the normal processes set by the State.

  2. Ron B – I have not been following this whole fight very closely so I do not feel I can comment on the merits of either sides issues.

    I do want to point out though, that contrary to your assertions, we did not elect Ms Buckshnis & the public did not put her in office. She was appointed by 4 of the other council members. That does not an election make.

  3. I attend most city council and finance committee meetings. I have experienced little problem with the quality of Mr.Hines’ work, but the timeliness of his reports has been totally unacceptable. The reports that are suppose to be included with council materials on Fridays are virtually always not available until Tuesdays, when the meetings are held. There is no apparent evidence that he has ever been held accountable for this serious short coming.

  4. In spite of the Council’s attempts to move forward, it appears Mr. Hines likes to look back and drudge up drama so let me provide you some factual issues. I am quite surprised T, you didn’t contact either myself or Mr. Plunkett.

    Last year, I was unable to reconcile the ending general fund balance with the beginning general fund balance. Three examples were provided where I could reconcile these two numbers from Cities that use Governmental Finance Officers Associations (GFOA) Methodology and proved that I was “not wrong” in supporting this type of citizen friendly and transparent accounting practices.

    When appointed, I worked on policies to codify those methods used by other cities and sanctioned by the GFOA and put in requirements for timeliness and proper labeling. In April 2010, the City Council unanimously passed an ordinance and resolution that follows the cash flow method or “budget to actual of revenue and expenditures of the general fund” following guidance from Section 11.2 of the GFOA Budget Handbook. This was the crux of the investigation since these policies have yet to be followed and we are not receiving financial information in a timely manner.

    In only two of the last twelve months financial reports were obtained on time. The June Quarterly had a $735K embedded amendments that had not been approved by the City Council and the Finance Director had no right inflating the General Fund with that transfer. The September Quarterly stated that the amendment was approved by the City Council in October, so the significant “embedded amendment” inflating the General Fund, was still reported without even a foot note. I asked the question about Haines Wharf and the cost overruns. Ms. Petso asked a similar question in open session about the REET money and why it was so low. Mr. Hines responded that it was a timing issue when in fact; it was not a timing issue at all, but cost overruns. We have yet to get the final numbers and the answers to our question have now had to come from Mr. Williams and Ms. Hite.

    Edmonds is still using the “working capital approach” (current assets minus current liabilities) which is also called a “quick ratio and used by shareholders to look at liquidity. I have asked Mr. Hines to provide me any example of a city that utilizes this type of methodology as it is not transparent since the same number derived at the end of the year is used throughout the year in all reports. Municipalities’ stakeholders deserve better as our forecasting scenarios are used to develop labor strategy and levy decisions.

    So, why spend so much time on this one disagreement in methodology? In the 2009-2010 budget, Mayor Haakenson projected we would be out of money in 2012. The 2011 budget recently approved by Council shows our city will not be running into the red until 2014. As an average citizen, why should I support a levy? The sky isn’t falling this year, despite being told it was falling last year. Yes it’s true that Edmonds has had clean audits. But there’s a difference between an acceptable audit and reporting financials that average citizens can easily understand without investing large amounts of time. This brings us full circle back to having accurate and complete general fund balances that identifies actual revenue and expenditure numbers on a monthly basis compared with our budget.

    I understand that this may require changes to our financial reporting processes and that change is never easy. But I believe Edmonds’ citizen deserve and expect this financial reporting clarity. It will build the trust necessary to PASS a levy. This is why I continue to be meticulous and ask questions that may challenge the way we track and report our financial information and if a levy is to be passed, it will have to be a specialized levy such as streets. I hate to be the naysayer, but I am a realist.

  5. The idea that an employee of the city is intimidating an appointed official with “threats of lawsuits” because they feel harassed and followed proper procedures to remedy the situation is somewhere between laughable and cringe-worthy. Perhaps we should also send in some Pinkerton’s with ax handles to break up the union workers at QFC next.

  6. Didn’t Edmonds receive King TV’s “Friendliest Town on the Puget Sound” many years running? Must have been before the current regime was appointed.

LEAVE A REPLY