Citizen Harry: Council-approved budget is balanced, but out of touch with reality

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By Harry Gatjens

The Edmonds City Council approved the 2012 Budget Tuesday evening. It was a balanced budget, but only because the council made unrealistic amendments to it.

The original budget was well-prepared by Mayor Cooper and his staff. It showed a $42,000 surplus at the end of 2012 but was accomplished by trimming every department as tightly as possible.

Because of the tight budget, Finance Director Shawn Hunstock had included a contingency fund of .5 percent, or $165,000. This would allow for those items that come up as the year goes along to be paid without rewriting the budget. For example, the City currently has a temporary employee working as the Mayor’s executive assistant while at the same time is paying the previous executive assistant. There is no budget for this and hence it could be paid out of a contingency balance.  Without such a line item, budget amendments will need to be made every time something comes up that wasn’t anticipated.

The budget presented Tuesday night had decision packages for additional items that took the budget from a $42,000 surplus to a deficit of $273,000. The decision packages included items like improved software for the finance and park departments, a records request system for the clerk’s office and a few other items. The council left all of these items in the budget.

So how did they balance it? They took out the $165,000 contingency fund and they eliminated the Human Resource Director from the budget. It was pointed out that currently the department is only functioning because Parks and Recreation Director Carrie Hite is spending 20 hours a week in the department and the remaining employee, interim Human Resources Manager Mary Ann Hardie is putting in 20 hours extra each week. However, the council did not think the HR Department needed a director-level person at approximately $110,000 and instead thought a lower-paid person could do the work. But they didn’t budget for anyone in the department, even while stating that they knew the department needed two full-time people. They didn’t add any money for even the lower-paid person they acknowledged was needed.

Between the two changes, the council reduced expenditures by $275,000 to make the budget balance again. It seems incredibly wrong to me, that when they keep talking about transparency and integrity, that they could approve a budget that they knew for certain wasn’t accurate. All this talk about being up front with the citizens and they just pass a budget, knowing that it can’t possibly be correct.

No contingency fund, yet how are they going to pay for the two people filling the executive assistant’s job? There is no money in the budget to pay for investigations, yet there are two going on right now, one for Kimberly Cole’s situation and one for Debi Humann’s situation. There is a certainty that these things will need to be paid for, but there is no budget for them and no contingency fund. What kind of honest and transparency is involved in a budget that does that?

For all the high-minded talk about how things are going to be different now, the same lack of financial integrity is still being performed. The other amazing things is that the Edmonds-Woodway High School student council representative asked more pointed and relevant questions than most of the councilmembers.

The budget is supposed to be a roadmap for City finances for the next year. What kind of roadmap starts out with known errors? The councilmembers should be ashamed of themselves.

Edmonds resident “Citizen Harry” Gatjens provides regular reports to My Edmonds News on the workings of the Edmonds city government.

9 COMMENTS

  1. Hi Harry,
    Sorry friend, totally disagree with the $165,000 misc. contingency “slush fund” in the general fund comment. It was put in by Mr. Tarte and Mr. Hunstock has never used this approach before as that is why municipalities have budget amendments. Since there were no restrictions in place, it would have been like giving the Mayor a blank check.

    As I stated last night, as we continue to move our financial towards municipal accounting standards, there will be more financial transparency. There is no reason why we needed to have an non-council controlled slush fund in the general fund.

    Of course, you failed to highlight that last night we also moved towards disclosing the actual general fund balance as opposed to that modified working capital approach.

    This is huge as it gives us citizen friendly financials compliant to whatever else in the industry is doing!

    Thanks for your commentary, your view on things is always thought provoking.

  2. Harry:
    I’ve now reviewed the tape of last night’s meeting and agree that, as always, your report is an accurate representation of what took place. The approved budget, for the reasons that you’ve described, does not have the integrity of the budget that was given to council to approve.

    Yes, changes can be made by budget amendments but those changes make the budgeted ending balance fictional unless revenues are exceeded. And, oh yes, Ms. Buckshnis said that they’ll be back with another levy to boost revenue. Ms. Buckshnis also said that removing the miscellaneous contingency fund will “free up $165,000.” That’s about as legitimate an expense reduction as cutting the benefits line item by one-half in order to “free up $2 million”.

    Perhaps council would not have looked so bad had the student rep not been there!

    There was an other surprising revelation during the budget discussion last night when Mr. Bernheim asked about the budgeting for the proposed 5-corners roundabout. We’ve been told all along that the current expenses related to its design are being covered by grants. Last night we learned that if council decides not to proceed with its construction the city will have to repay a significant amount. I don’t recall that ever being previously disclosed at any public meeting.

    Finally, the removal of the contingency fund and the de-funding of the HR Director position were of such significance that those proposals should have been in the council package. So much for transparency.

  3. I totally agree with you Harry. As I was there and the only citizen to speak to the budget. The council admitted that there should be two FTEs in the HR dept. but only funded one. With out a contingency fund if a dept. runs out of supplies has something break they will have to have council approval to spend the money, that is known as micro management and it doesnt work. Diane a contingency fund is not a slush fund and is an insult to the mayor and directors and managers
    There was no discussion of what would happen if the state reducess funding which is proposed by the Gov. . Plunkett praised the council for there quick ability to work together to get the budjet passed , but if you you listen to the tape you will quickly come to the conclusion our new mayor has his job cut out for him to live by a budjet that is not realistic
    Diane, If so many citizens care about finicial transparency where are they when the budjet is being discussed and voted on. Even at the public hearings almost nobody spoke.

  4. Alleging that an abundance of citizens care about financial transparency is simply a rationalization to justify micromanagement by city council. I spoke at the public hearing for the budget along with only two other citizens – Dave Page and Roger Hertrich.

  5. Diane, the more you scream “transparency” in every sentence you utter, the more dubious i become. . i think you “doth protest too much” about this supposed transparency that quite frankly i have not seen from you.

  6. Per ECC Chapter 2.10 – Confirmation and Duties of City Officers. the mayor shall appoint, subject to council confirmation, the department director positions of police chief, fire chief, community services director, administrative services director, development services director, parks and recreation director, public works director, and human resources director. The city council shall interview the top three candidates for each position prior to the mayor’s final selection. [Ord. 3279 § 1, 1999].

    ECC 2.10.020 states that the department directors shall be responsible for carrying out all directives as assigned by the mayor, including, but not limited to, planning and directing the activities and staff in their assigned department, supervising and evaluating the work processes and assigned staff, controlling the financial integrity of the assigned budget, and insuring the delivery of quality public services. All department directors shall serve at the pleasure of the mayor. [Ord. 3279 § 1, 1999].

    City Council Meeting Minutes document that Parks & Recreation Director Carrie Hite is also the Interim Human Resources Director. The position of Human Resources Director is that of a City Officer and appears to require an appointment. If a person has been appointed to perform these duties, did the City Council interview the top three candidates for the Human Resources Director position, interim or otherwise, prior to the Mayor’s final selection? Did the City Council vote to confirm the appointment?

    Was the City’s Code followed when Carrie Hite became the City’s Interim Human Resources Director?

    As a citizen, I greatly appreciate the hard work of Ms. Hite and Ms. Hardie. I’m just trying to determine if this interim solution is allowed under the City’s Code.

  7. Ordinance 2309 was passed on July 6, 1982, creating the position of personnel director. A search of the City’s entire Code results in one mention of the Personnel Director. ECC Chapter 2.35 – Vacation and Sick Leave indicates that:

    The personnel director may, but has no obligation, to approve recognition of other, significant relationships similar in nature to that of the immediate family, if the needs of the city permit.

    Does anybody know if the City has a Personnel Director or is the Human Resources Director the same position as the Personnel Director?

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