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Open Letter Asks Ward Be Appointed to Fill Council Vacancy

SedonaEye.com J. Rick Normand, Investigative and Financial Columnist

SedonaEye.com J. Rick Normand, Investigative and Financial Columnist

Sedona AZ (February 15, 2016)The following is an Open Letter to the Sedona City Council, from J. Rick Normand, Investigative Columnist Re: City Council Appointment to Fill Council Vacancy:

Madam Mayor, Mr. Vice Mayor and Councilors,

As a result of my attendance at the Special Council Meeting of February 10, 2016 which had the purpose of considering “AB 2066 Discussion/possible action regarding a review of applications for the City Council vacancy, possible interview questions, and selection of candidates for interviews,” I am compelled to write this letter.

First, in order to qualify myself and my comments, I will remind you that my background is International, Commercial and Investment Banking with a Wall Street firm, entrepreneurship with my own commercial mortgage banking firm, and I am a published economist who also happens to understand GASB (Governmental Accounting Standards Board), GFOA (Government Finance Officer’s Association) and CAFR (Comprehensive Annual Financial Report) municipal accounting standards and practices. So, as you read on, you should know that I am qualified to make the comments you are about to read.

In the course of the remainder of this fiscal year and the first half of the next, the City of Sedona faces some very serious budgetary considerations in the face of an impending world-wide economic malaise. Our city needs all the skilled fiscal guidance it can muster during the immediate future. Meanwhile, we have recently had a sitting City Councilor resign her seat which requires the City to appoint a replacement until the next election in November. The City has six applicants for the vacant seat. Only one candidate has proven municipal budget review experience and he has unequivocally demonstrated his knowledge of municipal accounting practices in his public writings on the subject. This is a person we all know as former popular City Councilor Mike Ward.

To illustrate my point I reprint below this excerpt from an article by former Councilor Ward:

Eye on Sedona Finances with Councilor Mike Ward

Former Sedona City Councilman Mike Ward

Former Sedona City Councilman Mike Ward

sedona times / June 27, 2012 / [Highlighting by JRN]

“So, how is the average lay person supposed to make any sensible conclusion about the city’s financial health? The simple answer is that you can’t without a thorough understanding of the Governmental Accounting Standards Board (GASB) rules that governs our accounting practices, and a degree in accounting wouldn’t hurt either.

Since being elected to the City Council, I have suggested that the city publish three simple numbers at the end of each fiscal year that I believe would give the average person a pretty clear picture of our city’s financial health…

For the City of Sedona, net income are funds from tax receipts and state revenue sharing – excluded are grants for specific purchases, earmarked state funds (gasoline taxes designated for roads for example), and proceeds from bonds. Net expenses would include all operating expenses and debt service but excludes bond funded capital improvements. Net savings would be limited to unencumbered cash on hand excluding earmarked reserves from bond sales and wastewater capital improvements. ” [End]

This tells me, and it should tell you, that Mike Ward understands the City’s money management and budgeting processes and I will confirm that he understands it well… because, so do I! I can tell you that no other candidate for appointment understands the process like Mike. What Mike Ward suggested in the quote above was a method to make comprehensible what is incomprehensible to the public.

As each of you knows, budgetary control is at the department level within each City fund, and revisions to increase appropriation authority above a given department’s original adopted budget require City Council approval. Fund Transfers within like categories of the same department require a City Manager approval.

This is why so many elected City Council members are not familiar with, don’t care about, and don’t use in their jobs the complex Comprehensive Annual Financial Report (hereinafter referred to as CAFR“). They mostly function on a need to know basis!

Likewise, the City’s investment accounts do not require the City Council’s approval for “fund transfers” – only for appropriations for increases of a “department’s original adopted budget”. To get the true financial picture of Sedona, a public reader must read, comprehend, and analyze the CAFR, or have someone in the City Administration do that for him or her…but Staff won’t, leaving the reader to do the near impossible for himself/herself. Nonetheless, former Councilor Mike Ward did have a solution to help the public deal with the incomprehensible.

If the public were to do it themselves, their logical and reasonable conclusion would be to start reading the report from the top down, as would make sense with any document that has the purpose of revealing an accurate conclusion, and build upon that story until total clarity is reached by the end of that writing.

But the CAFR is intentionally not designed in this way, for the CAFR is specifically designed to discourage the public at every turn. Obviously, then, the CAFR is not intended to be read by the average citizen. Former Councilor Ward did offer, at the least, a partial solution in the public’s interest!

The CAFR is split into several sections that are completely dependent upon each other for total comprehension of the subject and figures at hand, and yet are completely separate and out of order within the report. In this way, the Council can officially release for publication a statement that the City has funding problems and, therefore, must raise, excise/sales taxes, bed taxes, fees for services, standby capacity fees, etc. Therefore, Councilor Mike Ward, I believe, wanted to make budget transparency accessible to the public.

sedona jobs accounting tax dollar bill book calculatorIn the event that some of you still don’t believe that I know what I’m talking about, may I impose upon each of you to read the following email exchange between this writer and former City Manager Tim Enster:

From: J Rick Normand <jrn45biz@yahoo.com>

To: Tim Ernster <TErnster@sedonaaz.gov>

Sent: Sunday, April 7, 2013 10:42 PM

Subject: CAFR: Would you consider this to be correct?

Good Morning Tim,

I would like to know if you would consider the following statement to be correct, and, if not, would you please correct if for me (I’m thinking about an article on city finance for those who understand little about it, which is just about everybody). Here it is…

The City’s annual budget report is simply an edited and cut down version of the full/unabridged report known as the Sedona CAFR. Same books, essentially, but the budget excludes most of the investment wealth within governmental and non-governmental (enterprise/customer-based) funds. One could consider the budget as the City’s checking account for the last year, and the CAFR as the City’s combined checking and savings account for the last 24-25 years since incorporation…

Thank you Tim,

Rick

*****

From: Tim Ernster <TErnster@sedonaaz.gov>

To: jrn45biz@yahoo.com

Sent: Tuesday, April 9, 2013 10:18 AM

Subject: Re: CAFR: Would you consider this to be correct?

Hello Rick. My apologies for the delayed response. Yes, I think this is a fair depiction of the Budget vs. the CAFR, especially the part about the CAFR having a much longer view. Essentially, the Budget is a one year spending and revenue plan looking forward, and the CAFR is a comprehensive financial plan looking backwards at the previous year.

Tim

*****

So, since I served on Mayor Adams first Economic Steering Committee with the top challenger to Mike Ward for appointment to fill the vacant Councilor’s seat, I can still say with absolute certainty, that Mike Ward has far greater knowledge of the City’s budget and accounting processes than this City will be lucky enough to stumble upon again. Please don’t let this opportunity slip through your collective hands!

For the sake of a well and efficiently functioning Council, I implore you to appoint Mike Ward to fill the currently vacant City Council seat.

Most Sincerely,

/s/

J. Rick Normand

February 15, 2016

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59 Comments

  1. Get Real says:

    @Back to the Subject. Let’s get real. Several City Councilors talked to Steve Segner about withdrawing his application for the vacant Counsel seat, not vice versa. After all, Steve’s residence is not within the Sedona City limits. Oak Creek Canyon is more like it. Wonder what makes him think he’s qualified?

  2. J. Rick Normand says:

    @All Readers at The Eye,

    STEVE SEGNER, in a Letter to the Editor dated yesterday to the online community bulletin board service known as sedona.biz has officially posted the withdrawal of his application to the City of Sedona for its vacant Council seat, as follows:

    “After talking to several city councilors I have decided to withdraw my application for appointment to the city council at this time…”

    “For what it is worth, I think Mike Ward will be the logical choice to fill the council seat…”

    *****
    So, that is the end of this story!

    JRN

  3. Just Sayin' says:

    Hay JRN

    Day late and a dollar short. This time you weren’t the smartest guy in the room, those comments were already posted on 2/19

    in all reality, who gives a poop. I hope Segner runs for the seat and is elected by the electorate. He may not be able to spell but at least he does stuff and will spend his money to get stuff done around town.

    What have you done lately JRN except for bit-hing like you said, you’re tooooo busy to put your hat in the ring. It sounds more like you’re be concerned about Segner beating your butt even if he does live in the canyon.

  4. J. Rick Normand says:

    @Just Sayin’ Who In This Case is Really WSR,

    So now, West Sedona Resident LE, you’d stoop so low as to steal JS’s handle. Meanwhile, I rather clearly said SS’s withdrawal was posted yesterday. Was that too hard for you to figure out?

  5. West sedona resident says:

    @ little Ricky N

    Wrong again…..

    But I agree with Just sayin..

    Your too busy to run??!!!

    You have plenty of gym time to hold people hostage with your BS and rhetoric..
    JS is correct… Steve S actually does things around Sedona instead of , like you, spinning you wheels on a local blog..

    It’s kinda pathetic…that big brain and ego schooling us on SE
    Funny stuff

  6. Get them, they need to pay more says:

    Steve Segner is well known for showing up at City meetings and claiming the residents don’t pay enough. Although he lives in Oak Creek Canyon and not Sedona, SS wants a City property tax levied on bona fide residents.

  7. J. Rick Normand says:

    @WSR,

    Who is Ellen Betts? HaHaHa…

    JRN

  8. West sedona resident says:

    @JRN

    Got no frigging idea what your taking about but in your “over blown sense of self”

    Everything you think makes sense to you

  9. J. Rick Normand says:

    @WSR,

    I love your denials while knowing you’re actually sweating bullets. BTW, are you going to attend the Keeping Up For Hillary Campaign gathering tonight?

    JRN

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