City needs to improve how it tracks expenses

By: Carol Feineman, Editor
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Asking city staff how much the current employee strike cost the city, I thought, was easy to answer. Apparently, Lincoln’s Assistant City Manager/Chief Financial Officer Anna Jatczak didn’t agree. It took exactly four weeks to get her answer on how much the city was spending. Until Oct. 12, Jatczak told us that she didn’t know how much these expenses were since public-service employees began picketing Sept. 14. For a Sept. 29 story on strike expenses, Jatczak would not answer. She said that “the city has not received any invoices yet for services performed.” A similar reply was given Oct. 12. “The reason we don’t know the cost to date is we can mentally track some of the hours we are spending but we haven’t received any invoices to date,” she said the morning of Oct. 12. That afternoon, however, she said the amount paid for contract work so far “is estimated to be “$61,000 for four weeks.” Why did it take a month for Jatczak to provide an estimate? When a government agency, business or even a household acquires a big-ticket item, the buyer usually has parameters on how much can be spent. It’s part of keeping to a budget. That Jatczak didn’t have the strike-related expenses when we asked the second and also the fourth weeks into the strike, is irresponsible. David Masche, a CPA in Lincoln and a critic of the city’s financial procedures, agreed. “I think the CFO should definitely know what it would cost the city for temporary help before they are hired,” Masche said. “The CFO should also know what has been spent to date. These are not unreasonable questions.” But California Society of Municipal Finance Officers president Scott Johnson defended the city’s non-answer. “That would take a lot of manual work to come up with. I don’t know of any accounting system or payroll system that would specifically track payroll costs related to a strike,” Johnson said. “It’s probably not something the council or administrative asked for.” On Oct. 10, Jatczak was asked if the city’s five other labor groups will be expected to make health-care cuts. Their contracts are up June 30, 2012. “It’s hard to tell because we haven’t begun speaking with the groups and haven’t set the table of what it is they are looking for or what the city is looking for,” Jatczak replied. “Nor have we received direction from the council as to what to discuss with the groups.” That’s absurd. Jatczak was given direction when Mayor Paul Joiner said at the April 5 City Council meeting, “With no signs likely for there to be revenue increases, it’s imperative the city continue to make dramatic cuts to salaries, benefits and a number of employees.” Also at the April 5 meeting, Ingrid Sheipline with auditor Richardson and Company reviewed audited financial statements for the previous fiscal year. “We concluded that the city could continue to operate for the next 12 months. We need to revisit that during the next audit,” Sheipline said. “We discussed (at a recent finance committee meeting) having to really take a hard look at it as of June 30, 2011 because of the negative cash situation.” Jatczak then commented on Sheipline’s statements. “I just want to make sure that everyone in this room is as scared as I am right now, in respect to negative cash balances,” Jatczak said. Unless new income is quickly added to the city’s coffers, Jatczak should have at least a picture on how much money needs to be cut the next few years to keep the city operating. That means considering what concessions might be needed. On Friday, Jatczak was again asked what concessions the city might want from the labor groups. She replied that “the city did not have a targeted amount that they’re trying to achieve in savings.” But, in light of the auditor’s April comments, Jatzcak should be proactive. Jatzcak didn’t cause the financial problems Lincoln faces. But her job duties include tracking and analysing all the numbers. City Council must ensure that the city’s spending patterns – what comes in as income and what goes out as expenses – is kept track of daily. That way, the city’s limited funds are spent wisely and money is still available to pay for services. Many residents hope the fiscal sustainability committee will help resuscitate Lincoln’s financial stability. Several committee members increased income and reduced expenses at their own companies. However, committee members can’t do that here without assistance from city staff. Unfortunately, that assistance hasn’t been given to some committee members. To date, some members have not received requested information from city staff. City Council must make sure the information is received. Otherwise, our city will become bankrupt. And our asking questions to city staff will be a moot point.