Apple Valley’s head of finance comes under fire (September 14, 2016)

APPLE VALLEY — A report released Tuesday by a group aligned with Liberty Utilities alleges that a key town official’s failed tenure as Flint, Michigan’s director of finance contributed to financial disaster and ultimately poisoned water in that city.

The six-page report — released by the Apple Valley Citizens for Government Accountability — also contends a financial practice instituted by Marc Puckett during his tenure in Flint, which involved charging various accounts for things the general fund had paid for previously, is the same that has been heavily criticized in the Town of Apple Valley while Puckett has served as Assistant Town Manager in charge of finance.

CGA is outspoken against the town’s eminent domain acquisition attempt of the water system owned by Liberty Utilities, Apple Valley, and CGA leadership said the report should certainly put a damper on the Town of Apple Valley’s assurances that they can handle taking over the water system.

Town Manager Frank Robinson characterized the report as a personal and mean-spirited attack made by those on the losing side of a critical public policy issue.

These character attacks have no bearing whatsoever on the exhaustive and transparent studies, legal briefs, appraisals, and other reports that have presented to the public and the Town Council regarding acquisition of the water system, Robinson said via email. We stand behind the integrity and competency of Mr. Puckett.

From 1992 to 1999, Puckett oversaw Flint’s Finance Department. He was at the helm in January of ’99 when that city forwarded $9 million to its pension system after failing to make transfers for about six months, according to the report that cites numerous articles published in the Flint Journal between 1999 and 2000.

Puckett abruptly resigned days after news of the transfer broke, and he revealed in a letter to then 6th Ward City Councilman Mark Horrigan that deposits — made up of employer and employee contributions — have not been transferred as they should have been for more than two years, one Flint Journal article noted.

Not long after, former Flint Treasurer Jim Goodwin told the Flint Journal the untransferred amount was up to $21 million at one point. At the time of his resignation, Puckett said he was considering a job offer received in December 1998.

The CGA report claims that the failed transfers, which were supposed to have been moved every two weeks from a cash account to a money market retirement system account, cost Flint $1.1 million due to lost interest that the fund would have made.

Puckett declined to comment on his time in Flint when the Daily Press contacted him in February; however, in the letter to Horrigan he stressed that all monies in question … have always been on deposit in the retirement fund, the Flint Journal reported.

He also said that the money had simply not been transferred from one retirement fund to another. Puckett blamed the failed transfers on an internal auditor in his department, but the Journal reported that a grievance chairman with the American Federation of State, County and Municipal Employees described that blame as appalling in a letter to then City Administrator David Ready.

The letter said the employee blamed for failing to make the transfer was never trained in this area because they are not authorized to do transfers to the pension fund, according to the Flint Journal. Prior to his resignation, Puckett did acknowledge he was to blame for failing to catch the employee’s error.

In the weeks after Puckett’s resignation, the Flint Journal also reported on $6 million in misdirected property tax payments, as well as millions of dollars in industrial facility taxes that hadn’t been paid to the state of Michigan since 1996.

Seven months after Puckett resigned, an audit found significant deficiencies in the city’s internal controls over financial reporting, the Flint Journal reported.

Meanwhile, some 17 years on, Citizens for Government Accountability leadership believes Puckett’s actions can be linked to the water crisis in Flint that began in 2014 after that city changed its primary water source to the Flint River, a move that resulted in lead contamination and thrust the public health danger there into the national spotlight.

Puckett’s previous employer, Flint Mayor Woodrow Stanley, was recalled two years after Puckett’s resignation, largely because of the financial mess his administration had left the City in, CGA leadership said in a statement. The same year as Stanley’s recall, the Michigan State Government appointed an Emergency Manager for Flint, which ultimately led to a switch to the Flint River as a water source, lead-filled pipes, and ultimately the #FlintWaterCrisis.

The statement added, It was actually under Puckett’s tenure as Finance Director that Flint water bills from its city-owned water utility soared, with some residents experiencing a ten-fold increase.

Robinson, however, praised Puckett’s work, which includes helping to continue the town’s 13-year streak of receiving the Distinguished Budget Presentation Award from the Government Finance Officers Association.

Under Mr. Puckett’s leadership, our financial stewardship has earned us accolades from national and international government accounting firms, Robinson said. … We have exceeded the standards set by the California Society of Municipal Finance Officers, earning the Operating Budget Excellence Award for the first time in 2015, and again this year.

CGA demanded answers in light of the report on Puckett, who has been in charge of Apple Valley’s finances since 2010. Diana Carloni, a former Hesperia mayor and member of CGA’s leadership committee, said Puckett’s behavior in Flint shows a frightening pattern that is evident today in how he handles Apple Valley residents’ tax dollars.

He demonstrates an utter lack of transparency, Carloni said, and crafts budgets that we have routinely called a ‘shell game’ for the way they obscure spending.

Source: Matthew Cabe, Daily Press