Over a year ago, the Office of State Comptroller issued a scathing audit of Franklin County's financial condition ("Franklin County Fiscal Stress"). The audit found that the Franklin County Legislature is unable to perform its most essential responsibility: competent and prudent budgeting.
Specifically, the audit found that over a four-year period, our elected legislators failed to adopt realistic and financially sustainable budgets; routinely drained reserves to finance operations; didn't maintain reasonable levels of surplus funds; and didn't develop comprehensive, multi-year financial and capital plans. The county's cash balance was so depleted that the legislators even took out a "payday loan" of $4 million just to pay their bills on time. The audit concluded that "these declining trends could result in fiscal instability if allowed to continue" - an accounting euphemism for financial meltdown.
In a Sept. 13, 2013, letter to OSC, county manager Thomas Leitz stated: "The full Board of Legislators has not yet met to review the full findings of your audit. However, we do not principally disagree with the audit findings and acknowledge the financial problems facing Franklin County ... Following a review by the (audit findings) committee we will begin the process of creating a corrective action plan for review by the full Board of Legislators."
At the time, I must say that I was pleased the legislators recognized their financial failures and committed to developing a corrective action plan to address them. The "plan" is an essential element of OSC's procedure for resolving audits. It must address each point in the audit, as well as any proposed corrective actions. If no action is proposed, the local government must indicate the reasons why not. All this information is made available to the public.
Sadly, almost a year later, all we have gotten from Malone is silence.
As the OSC audit has made clear, the Franklin County Legislature's fiscal failings have been systemic and of long duration. Although revenue-enhancing measures such as the county bed tax are helpful, the county's budgeting and financial systems require a top-to-bottom review. Nothing short of total reform will be needed, if the county and its taxpayers are to be given any assurance that they will be spared a financial meltdown, now and in the future.
County taxpayers are not simply spectators; we have a lot of skin in the game. This year, the legislators increased the county property tax rate by more than 5 percent, more than 3 percent above the state cap. They may well propose sizable tax increases in the coming years. While such increases may be justified, they clearly place further strain on taxpayers, who already shoulder an excessive property tax burden.
Given the gravity of the county's financial condition and the financial sacrifices to be asked of county taxpayers, shouldn't the Franklin County legislators at least follow through on their commitment to produce a corrective action plan?
This plan is transparency at its best: It provides the public with the fullest information on the audit and offers the public the best opportunity to assess its accuracy, as well as the adequacy of the corrective measures that are proposed. County taxpayers deserve nothing less than a full and transparent process for addressing our financial future.
There is a second outstanding OSC audit of the county's social service programs that was issued on Dec. 13, 2013. This audit found that the county failed to seek reimbursement on more than $340,000 of program expenditures to which it was entitled. It attributed the loss of reimbursements to the county's failure to have a standardized billing process and to monitor the administrative costs of its programs.
The audit covered seven counties. Franklin was one of two that have not offered to submit a corrective action plan.
Apparently, Mr. Leitz and the county legislators chose to address this audit through a Dec. 26, 2013, article in the ADE. The article described Mr. Leitz as being "miffed" at the OSC. Bluster aside, his one-sided recitation of events and unsubstantiated conclusions do little to enlighten the public about how the county got where it is, and how we can move forward from there.
I would urge the county legislators to develop a corrective action plan on this audit as well. Again, the plan offers a transparent way to explain to the public how they propose to obtain all future reimbursements owed the county and its taxpayers.
There has been some good news out of Malone. Legislator Barb Rice recently presented a preliminary draft of a revised code of ethics for the county.
The current ethics policy is 44 years old and has never been updated, despite changes in the state's ethics laws and a heightened public demand for tighter regulation of conflict of interest requirements for government officials. A glaring weakness in the current code is that it prohibits any interest that is "in substantial conflict" with the proper discharge of official duty. We all know that "substantial" is one of those elastic terms that can be used to justify a wide range of questionable conduct. It is noteworthy that Franklin is the only one among our neighboring counties that has not produced a modern ethics code.
Kudos to you, Barb, for taking on a controversial issue in a highly transparent way. I look forward to reviewing the new code, as well as your proposal for an independent and effective Board of Ethics that has the power to provide legal advice and education to county officers and employees on ethics issues, as well as to enforce the code's requirements. As law professor Mark Davies, a noted ethics expert, stated in a 1999 article, "Empowering County Ethics Boards," "An ethics board lacking the authority to investigate complaints, to launch investigations upon its own initiative, to subpoena witnesses, and to impose civil fines is worthless. It will be ignored, berated, and dismissed, as will the elected officials who created it. Better to have no ethics board at all."
Edward Murphy lives in Vermontville.