Analysis and Opinion by Dean Silver
Alison Chan’s last day as Finance Director of the City of Ashland was June 15. She had served in that position on a temporary, part time basis since last August, when previous FD Melanie Purcell left her position.
Her tenure was marked by a significant shift in the way the city’s finances were handled. She insisted that the department follow best accounting practices by the book. She insisted that anticipated grants never be placed in the budget until received, and then added via a supplemental budget. She insisted that unrestricted funds be placed in the general fund. She restored public access to Opengov, which had been severely restricted last year before the Citizen’s Budget Committee meetings. She made a point of posting links to all of the current and historic financial documents on the city website.
In short, she helped to restore transparency and accountability to the finance department.
We all owe her a sincere thanks for her work.
Her Statement to Council
It’s worth considering her final comments to the City Council. When discussing the supplemental budget she stated:
“What we have a habit of doing here is taking a restricted revenue or an unrestricted revenue and giving it…. From an accounting standpoint, I want all unrestricted revenue to go to the general fund. If we then as a council say we want to put $200,000 in the Housing fund, fine, it’s a transfer. It may seem small to you, but for me it’s a big deal as the finance director. All unrestricted revenue needs to be recorded in the general fund. So that therefore in the future, if you’re in a changing situation, and you need to know where your revenue is, if you’ve already put that money in the housing fund, and you’ve forgotten that is unrestricted revenue, we’ve lost track of it. So unrestricted revenue needs to be recorded in the general fund, and we can transfer it where we want…. (it may seem like) splitting hairs to a non-accountant, but to an accountant, that is very different…. I’m equally passionate, if we receive restricted revenue, it goes to a restricted fund and it is spent there. You don’t transfer it somewhere else. I want it spent there so we can clearly show, ten years down the road, what it was spent on. And we have a habit of kind of muddying the waters that way. And I’ve had multiple discussions within the finance department—cannot do that in the future.”
This is just common sense, basic accounting. And yet, this is not the way the City of Ashland has been handling its finances.
Shaun Moran’s Response
“I am so happy you said that. I’ve been saying that for the last six years, ok, and we haven’t had a finance director that sat up here and was willing to say that. Kudos to you. Thank you for that. I think if anything, that message needs to resonate because it’s been incredibly frustrating when somebody’s looked at the budget and seen the shell game, moving money over here, bridge this and bridge that, it doesn’t make sense and it’s not sustainable. And I am thrilled to hear you say that. Thank you. “
Alison, who had been nodding her head throughout Moran’s statement, chimed in, “and it’s confusing.”
Moran: “It’s confusing as hell, even for people who have a moderate understanding of budget. To the average layman in Ashland, trying to figure it out, they can’t figure it out, and I think that was the reason it was done that way. So I really want to say thank you. Thank you for saying that.
Gina DuQuenne’s Response
“I just want to ask Alison if this is a prerequisite for your person coming in, that they know that. I appreciate that.”
Moran says, “Yes, Joe.” And everyone chuckles
Tonya Graham’s Response
“Given that we’re making a significant budget shift here, I think it’s appropriate to also remind ourselves that we are as a body, and as a staff, not in possession of the full information that the staff and council had when they made decisions in the past. And I think people may look back on the work that we do, and not having full information that was in front of us when we made the decision, not always understand that either. And I think it’s appropriate in this community that we leave a little bit of space for the fact that we don’t know exactly why people made the decisions that they’ve made. What we do know is that, you know, nobody was, we didn’t have any, any breeches. We’ve been getting clean audits, we’ve been, you know, that that system has not, while it may not exactly be the way any single person wants it, it functioned. And we got an incredible town that people love to live in out of that system.”
Chan’s Response to Graham
“I would posit there’s nothing inappropriate, nefarious, nothing of that nature at all. It’s just cleaner, I guess is a better way, and I like to set things up so that historically you can understand what happened in the moment you’re in. And the accounting message should stand alone in that.”
Stephen Jensen’s Response
“Very quickly, to bandy around the idea that there is some kind of a shell game I think is inappropriate and I push back on it. Thank you.”
Ashland’s Dysfunction on Full Display
So here we see in full, obvious display, the dynamic that has led the City of Ashland’s general fund on a path to insolvency.
Alison Chan’s remarks were basic accounting 101. And yet, it is not the way things have been done in Ashland for at least the past decade. Arriving on staff as an outsider, i.e., not hired from within, she could see how blatantly improper the city’s accounting practices have been. She made it very clear how things were done incorrectly, and why doing thing that way were improper.
Moran and DuQuenne, saw the appropriateness of her remarks. They supported them whole heartedly. They are the “reformers”. Sadly, they’ve been unable to make much headway faced with a reliable four vote majority opposing them on the Council in regard to almost every attempt to understand and rein in the spending that has gotten us to this point.
Graham and Jensen, representing the “status quo” on the other hand, felt the need to push back. They, after all, represent the previous administration of Mayor Stromberg, when all of these practices were employed, and perhaps encouraged. We can only speculate why things were done that way.
Graham’s argument was totally irrelevant, as if she didn’t understand the purpose of keeping financial transactions transparent and traceable. She was simply making excuses for the ways the finance department has been run, which she seems to feel the need to justify. Her implication was that Ashland is a town that people “love to live in” as a result of the shoddy accounting practices. But that, of course, is her normal mode of twisting logic and distracting from the issues at hand. Ashland is indeed a place that people love to live in, but it is despite the way City Hall has mangled our finances.
Jensen’s comment was to simply take offense and express his umbrage. That seems to be just about all he is capable of as a legislator. If he has made a constructive contribution to solving the problems facing the city, or if he has even acknowledged those problems, it has not been at any of the City council meetings for the past 15 months. I’ve watched them all. But he certainly has been prolific calling points of order, attempting to stifle the other councilors and especially the Mayor, for whom he displayed unconscionable enmity. Thankfully, that hasn’t been as frequent lately. Perhaps he is winding down, getting ready to step down so that someone else will deal with Ashland’s financial issues.
The Bottom Line
There can be no doubt that the accounting practices in City Hall must be changed in exactly the manner that Alison Chan has stated. We, the taxpayers, must not be left to wonder where the money is going, and why it’s going there. Financial transactions must be transparent and reproducible. Any interested citizen should be able to back through city records, financial documents, meeting minutes, and meeting agenda packets, and be able to understand what was done, and why it was done. All of those sources must be readily available to anyone who seeks them. And finally those documents must be consistent between platforms, namely the budget, the CAFR (comprehensive annual financial report), and the annual and monthly financial reports.
Unfortunately, this policy was not codified at this meeting. The supplemental budget, Resolution 2022-17, was approved 6-0, but there was no verbiage regarding this specific policy. Given the fact that the Mayor, the City Manager, and two of the Councilors agreed, there is every reason to hope that the next finance director will follow best practices as outlined here, and that it may be added to the financial management policies in the future.
Next January we will have at least one, and perhaps as many as three, new Councilors. Let us fervently hope that the next Council will see fit to make this the codified policy of the city, and break the logjam in the Council that Ashland has suffered this past eighteen months. There is no time left to delay.
You can view the video at https://videoplayer.telvue.com/player/w9sPsSE7vna3XTN_39bs1rEXjVWF0kfP/videos?autostart=true&showtabssearch=true#
The remarks begin at 3:37:57