City must take care of fi­nances

Santa Fe New Mexican - - OPINIONS -

Poor city of Santa Fe. If it isn’t one fi­nan­cial upset, it’s another. Whether em­bez­zle­ment scan­dals in the park­ing di­vi­sion, ques­tion­able han­dling of parks bonds dol­lars, cash spend­ing is­sues at the Gen­oveva Chavez Com­mu­nity Cen­ter, skim­ming thou­sands from cash paid to the Util­ity Billing Di­vi­sion, and now, con­cern over the city’s over­all abil­ity to track how money is be­ing spent, the city’s fi­nan­cial deal­ings have raised eye­brows for years.

Now, an ex­ter­nal re­view has stated plainly that the city is at high risk of both fraud and abuse — in other words, Santa Fe is mak­ing it easy to frit­ter away tax­payer dol­lars. Two city em­ploy­ees are on leave, and an in­ves­ti­ga­tion into au­dit find­ings is on­go­ing. Even be­fore that is com­pleted, Mayor Javier Gon­za­les is mov­ing ahead with pos­si­ble re­forms.

First up, get­ting rid of the in­ter­nal au­dit de­part­ment in fa­vor of out­side over­seers. The city’s five-mem­ber Au­dit Com­mit­tee would man­age a con­tract for an in­de­pen­dent au­di­tor to do the work cur­rently done by a city em­ployee. That’s a rec­om­men­da­tion from the re­cent au­dit find­ings. Bring­ing in an im­par­tial over­seer is sen­si­ble, es­pe­cially if that re­duces the num­ber of city em­ploy­ees. Spend­ing for a con­tract should mean a re­duc­tion in pay­roll at the city.

On Wed­nes­day, Coun­cilor Signe Lin­dell in­tro­duced the re­forms (the mayor was ill), which will go to com­mit­tee next month. While mov­ing ahead with re­form is nec­es­sary, the city needs to make sure it un­der­stands ex­actly what hap­pened first.

Coun­cilor Carmichael Dominguez is think­ing of call­ing the Fi­nance Com­mit­tee to­gether for a spe­cial meet­ing to dis­cuss the re­view and plan the city’s next steps. He would bring to­gether the en­tire coun­cil, and that’s the right ap­proach. It will do no good to at­tempt re­form with­out un­der­stand­ing what has gone wrong.

At this point, there is no ev­i­dence that any fraud has oc­curred, just that the city is ripe for pluck­ing. Tax­pay­ers do not know how the sloppy sys­tems de­vel­oped. They do not know why staffers weren’t com­pletely trained in sys­tems or why pro­ce­dures are not stan­dard­ized across the city.

Coun­cilors — es­pe­cially those who have served for years — have to ask them­selves how they missed the warn­ing signs, or whether past au­dits caught those signs. The mayor and coun­cil have to ques­tion top city staffers on what has been over­looked and why. They should ex­am­ine pre­vi­ous au­dits, too. Fi­nally, they should take a deep dive into the most re­cent au­dit, done by McHard Ac­count­ing Con­sult­ing, to ab­sorb re­sults and put sys­tems in place to safe­guard tax­payer dol­lars.

The bot­tom line is that, for what­ever rea­son, the city of Santa Fe has a con­sis­tent prob­lem deal­ing with its fi­nances. That raises con­cerns, not just for to­day but for the fu­ture. For sev­eral years, a not-so-covert cam­paign has been con­ducted to have Santa Fe char­ter its own pub­lic bank.

The logic be­ing — and it is se­duc­tive rea­son­ing — that Santa Fe could save money through such a bank. Owned and op­er­ated by the city with pub­lic funds, such a bank might be able charge lower in­ter­est rates on loans and pay more on sav­ings. A bank op­er­ated in the pub­lic in­ter­est, the rea­son­ing goes, will be good for the city and the econ­omy.

While we can’t ar­gue with such rea­son­ing, we can say this: Un­til and un­less the city of Santa Fe can show that its fis­cal house is in or­der, the no­tion of a pub­lic bank should re­main just that — a no­tion, a dream with lit­tle chance of be­com­ing re­al­ity. For too many years, and through dif­fer­ent ad­min­is­tra­tions and city staffers, the fi­nan­cial busi­ness of the city has faced is­sues. All of those must be sorted out be­fore any grand ini­tia­tives are started. Ci­ti­zens must be able to trust that their hard-earned dol­lars are be­ing spent well and wisely.

Re­mem­ber, a lack of trust in the city’s abil­ity to op­er­ate pro­grams is one rea­son vot­ers did not ap­prove a tax on sug­ary drinks; they liked early ed­u­ca­tion, but they did not be­lieve that city bu­reau­crats could put to­gether an ef­fec­tive op­er­a­tion. We would wa­ger that vot­ers are just as skep­ti­cal about the city be­ing able to run a bank.

Af­ter all, city lead­ers still are try­ing to fig­ure out whether ac­tual fraud oc­curred. They are try­ing to sort through an au­dit with 62 sep­a­rate is­sues across city gov­ern­ment. Fi­nance Di­rec­tor Adam John­son, on the job for sev­eral months, asked for the ex­ter­nal au­dit be­cause he iden­ti­fied “sig­nif­i­cant red flags.” He de­serves credit for rais­ing the alarm, and we are sure he will be part of im­prove­ments.

And that’s where the city’s fo­cus needs to be — on fix­ing the is­sues raised by the au­dit. For now, that’s more than enough of a chal­lenge.

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