Dear Russ,
Last year, because of the conflict between the mayor and the city council over the budget, I looked into the issues that seemed to bother one side or the other. Without finding fault with either side, I found that better laws providing transparency and confidentiality in the audit process and a law that would guarantee accountability in fiscal matters would help resolve the conflict between the Mayor and City Council and would provide better information to the public.
As a State Legislator, I proposed a GAAP (Generally Accepted Accounting Principles) bill and later joined with Republican State Senator Travis Holdman to advocate his bill, a better version, not only mandating GAAP, but also internal fiscal controls for government and legislated improvements in the audit process.
Why GAAP? Because through a method of having to record not only what the revenue is when it comes in and the expenses when they go out, GAAP requires the bookkeeper to record those accounts payables that add up from one time period to another and are still liable for us to pay.
GAAP would require that if a Mayor is going to claim that there is an $800,000 positive balance in the General Fund in the month of June, 2015, the Mayor would also have to note in the controller’s books that there is a liability to the General Fund of more than $3.7 million in unpaid bills to the surgeons and physicians.
These new laws could not come soon enough for Evansville.
Transparency is so lacking in the Mayor’s Administration that there is reason to worry about the future of our fiscal health.
There are questions that need to be answered.
1) How does the Mayor and the Controller explain the $800,000 balance to the good in the General Fund mentioned above?
2) This situation with the health insurance fund is aggravated by the fact that in both May and June of this year not one nickel was moved from the General Fund to the health insurance account to pay these and other health care bills. This was not the case the same time last year when $4 million was moved to the health insurance account to pay bills in the same months. We all know that health care costs are not going down. Why this year the total moved from the General Fund to the health insurance account is ZERO for May and June, when it was $4 million last year?
3) And, why at the same time would the administration charge the Utility Department for health insurance for those months of May and June of this year, 2015 and not charge the General Fund, as above? Is it because it is easier for the Utility Department to run to the IURC and request a rate increase to property owners already burdened by bills they can’t afford? Is it because the administration needed to show a positive balance in the General Fund, the supposed $800,000, a balance that now is at best misleading?
Instituting an accrual method of accounting like GAAP will tell the real story about our finances, as the accrual method requires you to enter revenue when earned and expenses when occurred and liabilities when they exist. When the City requested the advance of $2.5 million from the Water Department to make the City appear in the black the end of 2014, this would have been noted as a liability for the General Fund because it was 2015 monies advanced in 2014 and so taken from use in 2015. It should have been paid back before the end of 2014.
I am asking, Russ, that the administration respond to these simple questions. As we approach the budget hearings, without a clear understanding where this city is as relates to stability and a reversion of the downward trend in monies the start of every year, in monies available for expenses and monies in revenue that are reasonably projected, this administration is going to lead the City Council and the public down a rosy path of further reckless spending.
If you have any questions , please contact me at 812-568-9505
Respectfully,
Gail Riecken, Candidate, Mayor of Evansville
cc. Mayor Lloyd Winnecke
Evansville City Council
Evansville Press Corp.
