Commissioners hear from school districts on Treasurer’s Office crisis

Emergency meeting called later

By Michael Howell

Representatives from the county’s school districts showed up at the County Commissioners’ office on Monday morning to express their concerns about the ongoing dysfunction at the County Treasurer’s Office. Consensus amongst the districts was that, rated on a scale of 1 to 10, the situation was “9 to 10 scale emergency.” The commissioners made little to no comment following the discussion and took no action. Within a few hours, however, they decided among themselves to call an emergency meeting for 4 p.m. to make some decision as to whether to call for help from the state Department of Administration or seek other private aid in correcting the situation.

The meeting was called by the Victor School District and District Clerk Luanne Bauman told the commissioners that the district had not received any report about receipts, deposits, or taxes paid, since October.

“We would like a response in a timely manner,” said Bauman. “I want to make sure that we are going to get our taxes.”  She said the district did not have enough money to pay its bills. She said the district had been sent some money that is not theirs but is sitting in their account. She said bond payments needed to be made and that they were concerned about the interest on their investments.

County Treasurer Valerie Stamey thanked her for expressing her concerns. Stamey said that she recognizes that monthly reports are important, “but we want to make sure they are correct.” She said when she arrived on the job they were a month behind in reconciliation and she assigned a staff person to rectify the situation as quickly as possible. She said that she was very close, “within days,” to getting that done. She said that in the past money had been sent out before the receipts were reconciled and that the commissioners had said that she could do that and then correct the figures afterward.

“I am literally on the cusp of getting things turned around,” said Stamey.

Concerning bond payments, Stamey said that when she arrived there was no record in place on the scheduling of these and she was reaching out to banks to get that straightened out. Regarding investments, she said there have been no changes in the county’s investment policy since she came on board.

Commissioner Greg Chilcott said that monthly reports were very important and asked Stamey for a date when she would be able to produce them. Stamey promised to have them by the end of the week.

“For what months?” asked Chilcott.

“At this point, for October,” replied Stamey.

Bill Schiele, business manager of the Stevensville School District, said, “What about the other months? I’m not sure how to fix it, but this needs to be fixed now. We can’t do our job. How do I know if I’m getting all my money?”

Stamey said that she could not give a specific date at this point. She said she might be able to provide him one later.

Corvallis School District Superintendent Monte Silk said that his first concern was the interest that the district would be losing on it funds during the delay. He said the district made about $23,000 to $25,000 annually in interest. He said losing $1,500 or so per month was important to the district.

“We don’t want to lose a cent,” he said.

The district clerk said that she was very concerned about not receiving receipts for deposits and her inability to post warrants. She said she was showing $1 million on her books because the warrants haven’t been posted.

Stamey said that posting warrants was one of the things that got put on the back burner since she was understaffed following three resignations in her office but had hired one new employee a few weeks ago, and was going to have another on board in a few days and a third by January 27.

Darby Superintendent Loyd Rennaker said that he was in agreement with Silke that it was an emergency situation. He noted that payments to Darby had apparently been sent to the Corvallis School District instead. Clerk Kate Dugan urged the commissioners to “show some leadership” in the situation. She also expressed concern about whether the mills were being calculated accurately.

Stamey said that the commissioners had been working with her on a daily basis and taking many actions to support and assist her.

Cathy Binando, business manager for the Hamilton School District, emphasized the problem of a lack of response from the treasurer’s office. She had been submitting requests for information for months and not getting any replies. She asked for an estimated timeline for reports and some regular updates.

“We need timely responses to our e-mails and phone calls,” she said.

Stevensville Superintendent David Whitesell said he concurred with the other superintendents about all their concerns.

“It’s not rocket science,” said Whitesell. “We need reports on fund balances and expenditures.” He said that payroll was a concern as well as interest on their money. He said other school districts in the state bypass their county government and place their money straight into a bank.

“Why would we not do that when we have issues of this severity,” he said.

Lone Rock Superintendent Roger Samples said he also concurred with the other district’s concerns. District clerk Denise Grant said that not getting monthly reports had put a lot of strain on her. “I can’t do the job that I swore an oath to do,” she said.

“We don’t need excuses, we need solutions,” she said, “and we need them now.”

Tim Miller from the Bitterroot Valley Education Cooperative said his agency also had missing funds. He also complained about never having received a response from the Treasurer’s Office.

Stamey said that she had found four checks but was still looking for another two.

Miller said, “We have a responsibility to the taxpayers to account for our funds and we should expect nothing less from the county commissioners.”

Stamey said that during the tax season she worked on weekends and made 200 to 300 calls to people. She had tasks to do, “but other things jumped in.” She said things were behind when she arrived and anyone who had arrived would have faced the same challenges.

Commissioner Greg Chilcott said, “We can look in the rear view mirror forever, but we need a plan for moving forward.”

Stamey said, “My personal guarantee is a response to queries in 24 hours. That has been a challenge, but that’s my commitment. I can’t guarantee solutions, but I can guarantee responses.” She said with new staff and the training they are getting from Black Mountain Software Company and constant work that they will turn things around. She said that she aimed to give weekly reports to the commissioners.

Commissioner Jeff Burrows asked if outside consultation would help.

Stamey said that Ravalli County’s procedures were unique and it was hard to get help from other treasurers, “but if help is available I would accept it.”

Burrows asked if it was “boots on the ground” she needed or help with figuring out the procedures and Stamey answered, “both.”

Commissioner Suzy Foss reiterated a statement she had made at an earlier meeting that there was always a six to eight month lag time in these transitions.

Commissioner J.R. Iman said that what he heard was that the level of concern was high and that it involved anywhere from $10,000 to over $300,000 to $1 million for the districts.

“In your opinion, when does the commission say, ‘We need help’?” He said that the commission is not tasked by definition to solve issues in another elected official’s domain and asked, “When do we go for outside help?”

Stamey said that she was getting help from three new hires and that she could release some funds immediately if the commissioners agreed and then correct the accounts later.

County CFO Klarysse Murphy said that funds could not really be dispersed until the check register was balanced. She said that, until they were receipted and balanced in the Treasurer’s Office, funds could not be released. Although they were able to cut a few checks to the Valley Veterans Center and the Senior Citizens Center, the School Districts was another matter.

“The school districts don’t get funds from us,” said Murphy, “we are their bank.” She said district funds must be collected and balanced and reconciled in the Treasurer’s Office before being receipted to the Finance Office.

“We are trying to identify the problems,” said Chilcott. “And now we need solutions. The bottom line is that our partner agencies need revenue. We need a time frame. We need accuracy. We need a date. And we need to come up with a solution in the short term.”

Stevensville Mayor Gene Mim Mack said that the towns were different than the school districts and rely heavily on monthly income. He said the town was down to $18,000 in operating funds with about $40,000 in monthly expenses.

“I’ve got a crisis,” said Mim Mack. He said the town had a meeting to set emergency measures for expenses to make sure the municipality didn’t go broke. He said when he took office as mayor the town had an extreme problem with its own treasurer’s department. He said he had to call in the state and they assigned a full time person from the Department of Administration to help them out and it still took months before things could be put in order.`

Representatives from a few irrigation districts and a fire district made similar complaints, saying they were seriously short on funds.

In public comment, Chris Hockman urged the commissioners to seek help from the Department of Administration and to perform an audit.

Former commissioner Carlotta Grandstaff noted that the commissioners did have authority under the law to act and quoted several statute numbers for them to check out.

Earl Huffman said that the commissioners needed a forensic accountant with governmental accounting experience.

Kirk Thompson told the commissioners, “You appointed a total incompetent and are already past the point you can fix it with the current treasurer and you need to fix it now.”

Chilcott thanked everyone for coming and said, “Please stay engaged,” and closed the meeting.

A few hours later Commissioner Jeff Burrows notified the Bitterroot Star that they had consulted with the County Attorney’s office and had scheduled an emergency meeting on Monday at 4 p.m. to make a decision as to whether to ask for help from the state Department of Administration or get some outside professional help.

At the emergency meeting, the commissioners voted unanimously to seek assistance from the Department of Administration as well as a private accounting firm.