Stanley acts on money woes, appoints new finance chief (April 8, 1999)


Mayor Woodrow Stanley, faced with stubborn financial problems, Wednesday appointed Matthew Grady III as the chief of his Finance Department, part of a new fiscal plan to resolve lingering woes.

The plan comes as city auditors push to complete an annual audit that is more than three months late to the state of Michigan, a situation that has impaired the city’s ability to borrow money.

Stanley’s plan includes:

The permanent appointment of Grady, who has been praised by the administration, auditors and City Council members since he took over the department on an interim basis two months ago.
Stanley said he will begin a search immediately to replace Grady as budget director.
Creation of a three- to five-member blue ribbon review committee composed of financial experts to review city financial policies.
The committee will be asked to review some of the most pressing financial questions facing the city. Among them: reconciling Flint’s incorrect distribution of some property taxes to other local entities dating to the 1996 tax roll and resolving a question of how much the city owes the state in industrial facility taxes for the past three years.
Retaining accounting firm Arthur Andersen to provide financial consulting and assistance to the finance department during this period of review and transition.
A recommendation to the Flint Retirement Board that it hire an independent retirement fund administrator, a move the administration had resisted for several years.

Before the February resignation of former Finance Director Marc Puckett, an internal investigation found that the department failed to transfer more than $20 million in employee and employer contributions to the city’s pension system on a timely basis.

The mistake ultimately cost city taxpayers nearly $1 million, the cost of replacing interest that should have been earned on the money.

This should send a clear signal that we are fully on top of (these issues), Stanley said.

It should help to put a number of these issues behind us.

The mayor called the financial program my personal pledge to establish adequate mechanisms to prevent similar incidences from occurring in the future.

Stanley said he was disappointed with how the former finance director handled some matters, naming the pension transfer in particular.

But he did not criticize Puckett, who had been a department head since 1992, for property tax problems that have helped to delay this year’s audit.

A number of issues, including Proposal A — the property tax-cutting measure passed by Michigan voters in 1994 — and the settlement of a General Motors property tax appeal, contributed to those problems, he said.

City Councilman Mark Horrigan of the 6th Ward, chairman of the council’s Finance Committee, said he is encouraged by what he heard.

They all sound like very good ideas, said Horrigan, but we should have never gotten in this position.

Ron Fonger covers Flint city government and Bishop Airport. He can be reached at (810) 766-6317.

Copyright Flint Journal / MLive Media Group ( Used with permission.

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