Prior Letter Needs To Be Clarified



A letter to the editor on June 20 from Robert (Bob) Edwards was erroneous and needs to be corrected. The letter from former mayor Bob Edwards starts out by identifying me as a "frustrated teacher/mentor whose pupil did not meet the criteria for CFO as judged by a panel of experts ... years." His comments were very offensive to me. I was not and am not a "frustrated" teacher/mentor."

In fact, I am very proud to have been a teacher and mentor to my staff over the past 40-plus years in municipal finance and accounting. I was taught that a true leader and manager was to develop those under their supervision by teaching and mentoring them to improve their working knowledge and skills to prepare them for advancement within the organization and outside of the organization. The individual Edwards is referring to has left Payson to take a finance director (CFO) position in a larger city. It appears that my teaching and mentoring was effective. As far as whom the town appoints for either the CFO or town manager is the full "responsibility" of the hiring authority, but that does not mean that I or any other citizen has to agree with the hiring authority. In other words, I have the right to disagree with the choice of a town manager and CFO.

Now, to his other misleading comments. As usual, he prefers to go around issues and not address them. I did not make a vicious attack on the town manager. I did not say that the town's financial problem (reduction of revenues) was Debra Galbraith's fault. I did comment that it was and is her responsibility to monitor the incoming revenues and outgoing expenditures on a monthly basis to make sure that the town was not using (spending) revenues it had not received or might not receive. That was and still is her job as town manager.

The former mayor says she was sounding the alarms -- to whom? Did the council know that the town's own sales tax was under budget projections -- if so, when? Did the council and citizens know that the town was spending its cash resources faster than we were receiving current revenues to cover those expenditures?

The former mayor indicated that the town was waiting for data from the state. Was that for 2007-08 or 2008-09?

She should have known there was a problem with the state collections when the state made it public early in 2008 in addition to the reduction in actual receipts received by the town during the first 6-8 months of the fiscal year.

The town historical sales tax trend would have indicated a problem with our own sales tax receipts. Enough of an alarm to start reducing spending until a clearer picture was developed. The town should not have continued spending at the same rate as the first six months if the council knew there was a possible revenue problem. If it weren't for the general fund's $2,934,445 cash fund balance (reserve) as of June 30, 2007, we would have been further in the hole.

As for the accounting system in use part of this past fiscal year, it was recording and fully capable of reporting incoming revenues and outgoing expenditures while it was in use. That system was 5 years old and the company that owned it was phasing it out. The town needed to replace it before the vendor quit supporting it.

The vendor that the mayor and Debra chose to replace the old system with is the same vendor who developed the system we were using. I believe the new system was installed and in use before the end of the 2007-08 fiscal year. Maybe it was a reporting issue with the new system, not the old system.

Edwards stated there was an ongoing problem getting reports to the council when I was CFO. That was not a problem during my tenure until Edwards demanded a change in the formatting of reports. I spent a lot of time my last 12 months trying to get an accurate definition from him and his task force as to what he thought council and citizens needed and wanted. That definition never was finalized before I left nor did any of the town council ask for any change. I was only under his tenure for 12 months. He has no idea what reports were produced during my past 11 years of employment with the town.

The former mayor said that because I was angry over who was chosen as CFO, I did not let Debra interact and did not share information resulting in the misuse of her time and talents. That comment is an insult to my professional ethics.

I have already stated my concerns of the replacement issue in previous commentaries. I was given six weeks (April 16, 2007 to June 1, 2007) to share 11 years of financial history and to develop the 2007-2008 budget detail using my methods that had proven effective for all past elected officials since I was hired. I also spent those six weeks explaining how to use the accounting system and she was given full access rights to the system before she started working. I spent a lot of time discussing the town's debt service program and similar issues.

She spent a lot of time developing her own budget presentation based on my data, as I wanted her to present the 2007-2008 budget to the council as she would be responsible for its implementation. I call this effort a full interaction. She had full control of her time and was free to ask any questions she wanted during this time frame. She was told how I developed my revenue numbers, had copies of all budget data that the council received, plus backup data to support same. She was also shown 15-20 years worth of budget and actual revenue and expenditure history in written form and in Excel spreadsheets. At no time was she left out of the loop.

One more comment.

The "Rainy Day Fund" he refers to is just moving excess funds from one pocket to another. Edwards states "If he had put into place a "real" Rainy Day Fund (which puts dollars away during the good years for use in the bad with council only able to interact with the fund in a true emergency with the super majority vote) the town council would not be facing the problem they currently are facing."

The current council would not be facing the current problem if Edwards had not overspent the reserves available without council knowledge or approval. In his second year, he spent most of the funds we set aside in his Rainy Day Fund in the first year of his tenure. The extra $2-plus million in cash that was spent came from the general fund's cash reserve. There was $2,934,445 as of June 30, 2007 in the general fund balance (reserve).

According to the Town's Summary Schedule of Estimated Revenues and Expenditures Fiscal Year 2009, the ending Fund Balance as of June 30, 2008 for the general fund will be $815,700 or a decrease of $2,118,745 or 72.2 percent from June 30, 2007. As for setting up his definition of a "true" rainy day fund, the establishment and funding would be a council policy decision. Past councils opted to spend excess cash reserves on capital projects in lieu of debt financing, when possible. Edwards, as mayor, also put such excess funds into streets as did prior councils. If Edwards and the council had directed staff to establish a Rainy Day Fund as described, he would not have been able to spend any of it this past two year. Nor, should he have been able to spend the general fund actual reserve as he did this past fiscal year.

Glenn W. Smith

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