Still catching up with e-mail from over the weekend, I ran into this message from Mayor Bob Coble about the city of Columbia’s finances:
I wanted to give you my perspective on the progress the City is making in getting our Finance Department in order.
The 2007 CAFRA has been given to our auditor and shows a general fund balance of $24.9 million. That is a net increase over the year before of $1.6 million. Of the $24.9 million, $11 million of that will remain as the City’s “rainy day fund.” $2 million is encumbered and about $12 million is unallocated. Some portion of the unallocated $12 million may be used in future years, if needed, to handle fund balance deficits in accounts like the risk management fund, the TN Development Corporation, the Business Improvement District, a general obligation bond debt service etc. Our accountant, Don Mobely indicated at the retreat that future revenues and transfers from other funds would handle these deficits in future years. The 2007 CAFRA showed $9 million more in revenue and $4.4 million less in expenses than was budgeted.
The City is close to correcting problems in the Finance Department. The risk management fund has been corrected for past budgets. City Council will amend the current budget on September 24, 2008 to correct the problem for 2009. Health care costs will appear in each department’s budget. City Council approved a contract in July with Sungard Bi-Tech to correct the problems with our two computer systems, IFAS and Banner that were at the core of the problems with the Finance Department. Reconciliation and financial reports will be given to City Council on a monthly basis in January. We will have income and expense statements in October. Bill Ellis has been hired as the Deputy Finance Director. Two or three more account professionals will be hired by Bill. A new permanent CFO will be hired in January. A CFO Advisory Committee of prominent local CEOs, CFOs and business men and women has been established and has met. This committee will help select the best CFO possible. The internal control weaknesses that were reported in the last management letter will show corrections in the 2009 and 2010 CAFRA. The restructured Finance Department will be responsible for risk management.
The City must reduce health care costs and budget for GASB 45, as all governmental entities must do. Towers-Perrin, a nationally recognized, health care consultant, made a presentation at our retreat last week and will make recommendations on September 3rd for changes in our health plan effective July 1, 2009. I believe those changes will bring the City’s plan more in line with other governmental plans but not be a radical departure based on the initial report from Towers-Perrin. GASB 45 will be addressed after those changes have been made because those changes will impact the future liability under GASB 45.
Clearly, these financial problems have been embarrassing. They have caused us to plan poorly and react slowly because of a lack of information. These problems are being addressed, and we look forward to having the best Finance Department possible using best practices.
For the views of council members Kirkman Finlay III and Daniel Rickenmann, stay tuned to The Pulse, I suppose…
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Here is an email from our accountant Wanda Charping with additional information:
“Mayor,
An accurate picture of the City’s financial picture regarding the governmental funds looks like this:
$ 24.8 million in General Fund
Less: $11 million designated for rainy days
$13.8 million net General fund
Plus $56.2 million in other governmental funds in surplus
Less:$9.8 million in other governmental funds in deficit
$46.4 million net Other Gov’t funds
An auditor has an obligation to disclose any fund that, taken alone, has a deficit balance. Note II c, is that required disclosure. He doesn’t have an obligation to separately disclose the funds that are in surplus. There are a lot of funds in surplus that we group in the category “other governmental funds,” and a few that have deficits. In some cases, those in deficit are valued services or programs that can be supported via transfers from other funds of the same type.
Wanda”
What classic bureaucratic “crap” from Bob Coble. Only in Columbia could someone get away with a statement like that.
1. Notice he refers to items from “a distance”. I.e. “the CAFRA ….shows a general fund…”, or “our accountant indicated”….etc. He never takes ownership of the problem that has clearly occurred on his watch. The subtext of his position is that of a well meaning bystander, not the long term mayor.
2. He lists item after item that is going to happen, is scheduled, or planned…all with the inference that when these things are done, all will be peachy clean in the bizarre world of City accounting. His implication is classic government think and speak, allowing the well meaning masses to believe all is under control and that the solution is certain, and just. Nothing could be farther from the truth.
3. And finally, the “always useful when wanting to obscure the truth” Blue Ribbon committee (the CFO Advisory Committee of prominent local CEOs, CFOs and business men and women has been established and has met.) It is the one sure way to drag the problems to the depths of incomprehensibility, and out of the pubic view.
Every single red flag that could be flown concerning the finances of the City have been flown. If there were stockholders they would insist on the kind of audit that would be comprehensible and timely…and would likely produce indictments. You simply cannot have this much mismanagement of millions of dollars without illegality involved…it is just impossible. And for there to be no indictments means that management at the highest levels has determined that there will not be any…and this is the scariest thing of all.
And look at the PS from the accountant…
Is that supposed to clarify the issue? Or to confuse? Or to say “perhaps we have the money but it is an accounting thing”… and while I am at it I will list a few accounting standards just to throw more issues into an already bewildering mix.
Confusion, lack of personal responsibility, condescension, lack of timeliness, complicating something that is basically simple…these are the hallmarks of a government that has no use for the people it serves. These are the telltale signs of a government that is hiding the essence of its character from the people.
Only in Columbia could this be so brazenly accomplished…only in Columbia
If the city can have 100% cost overruns into the tens of millions of dollars, and spend that money that was not in the budget, it means ….
* they have a hidden budget off the books they show the public.
* they have excess tax revenues funding these slush funds
* their cries of “being unable to fund” new Christmas decorations or whatever are just part of a Big Lie campaign to make the voters think city GovCo is working so hard to stretch every dollar.
We can’t afford all of this excessive consulting, CEO’s, CFO’s to cover up what’s been done fiscally to the citizens of Columbia. Of course, being one of the few that voted in the past mayoral election, I’m shocked there are any negative comments at all. Sounds like the city is broke.
Lynn,
You hit the nail on the head. As long as Mayor Bob and company keep the elections buried in the off season we will always have this type of government.
It is reasonable, and honorable to shift the elections to November…so the masses can and will participate. Coble, a liberal democrat, will do anything in his power to ensure that “his” people vote…all the while ignoring that only a small % of Columbians vote in these off elestions.
City of Columbia is a photo perfect vision of corrupt government that serves the needs of a few.
A proper media enviroment would send people to jail…and make this sham government impossible. And, I might add, would sell a hell of a lot of newspapers.
Brad,
Can you ask Mayor Coble to provide us with the actual names of the people responsible for this situation? It has to start with a specific person or persons. And are any of those people still employed? If so, why?
Let’s see some accountability in addition to the accounting ability.
How did they let their health insurance premiums increase over 80% without noticing it and taking some immediate action to correct it so that it did not exceed the original budget?
Who lied about the tax revenues, and who all knew about the slush funds and off-book bank accounts?
I heard something very interesting at breakfaast this morning. That a VERY senior member of State government had this City of Columbia thing on his radar screen and that research was being done to see what actions the state had open to it.
This could get very interesting.
Officials won’t know until ’09 how much money is actually on hand.
Read the article in today’s State Newspaper. It keeps getting deeper and deeper.
I’m not sure I quite understand the breakdown of 24.8 million dollars the way the City reports it, which, by the way was the reason for the retreat.(MORE MONEY)!!!!!!
How can you place money in a “Rainy Day” fund and have only $2 million dollars after all is said and done? You have no idea how much money you have on hand, if any. Who operates like this?
Yet Mayor Bob and City Manager Austin still think “the plan” (WHATEVER THAT IS) will work. Are you stupid or just plain ignorant?
I’m a little fuzzy on that part myself!!!!
My question to Mayor Bob and City Manager Austin is “Do you know how much money you personally have available or do you just expect it to automatically and magically appear whenever you want it?”
My thanks to Mr. Beam, who continues to keep taxpayers informed regarding their city. Also, to the two city council members that seem to give a ****, Kirkman Finlay and Rickenmann. Keep on questioning the mayor and city manager. Is it possible that there could be misconduct in office and misappropriation of funds?
Let me respond to two points Will made. First, the Retreat was held at the Eau Claire Print Building in the City. The meeting did not cost any more than a regular meeting.
Secondly, Will asks the question “How can you place money in a “Rainy Day” fund and have only $2 million dollars after all is said and done?” The State article leaves that impression with Will in two ways. First, The State article says the surplus has “disappeared” and “doesn’t exist.” Of course the $11 million in the “Rainy Day” fund has not and will not be spent. Secondly, The State article subtracts $9.8 million from the surplus. The City has many accounts and some of them have deficits that total $9.8 million. Other City accounts have surpluses that total $56.2 million. The State article never mentions the accountants with surpluses.
I hope that you didn’t think I was that stupid. I understand the specifics of accountanting and accountability for which their seems to be none.
I would like you to address the issue at hand on a personal level, the question directed specifically to you and Austin.
By the way, it is definitely not necessary to post your name as you have a distinct lingo of the same person I knew in High School. You have not changed at all.
What bothers me the most is the vagueness of your responses and the inability to lead people surrounding you.
So the city has lots of other bank accounts with $56,200,000 of surplus money, but it can’t afford $140,000 to put up Christmas lights…
And wouldn’t that surplus be $65,000,000 if the City had not totally lost control of medical insurance spending?
Why was the City Council trying to ram through a sale tax increase to fund the bankrupt bus system, with all these millions stashed away in secret accounts?
Will-Dreher 1971?
Ok, Mayor Coble, you read the blog.
Give us the name of one person responsible for this situation please. And is that person still working for the city.
Accountability, Mr. Mayor.
Bob Coble and City Manager Charles Austin. Those that headed the Finance Department are not working at the City now.
Thank you for answering the question. I appreciate you stepping up.
Thank you for answering the question. I appreciate you stepping up.
Thank you for answering the question. I appreciate you stepping up.
Is Mayor Coble saying these nameless former employees are solely to blame for spending over $8,000,000 without authorization?
How could Mr. Coble and Mr. Austin and others not know about such huge expenditures? Aren’t there any controls on approvals of checks?