Tag Archives: finances

Comptroller Justin Wilson likens Memphis to a recovering alcoholic

State Comptroller Justin Wilson has penned an op-ed piece in the Commercial Appeal that compares governments to alcoholics – and pronounces Memphis on the road to recovery. An excerpt:

The individual knows he is drinking too much and the government recognizes that its finances are precarious, but hey, it’s not that serious, I’ll change tomorrow or next year. Besides, getting drunk makes me happy and providing services and benefits we don’t pay for today keeps the voters happy.

The downward spiral progresses until the individual or the government hits bottom. That happens with the realization that the pain caused by the substance abuse or the financial irresponsibility outweighs the pleasure derived from the behavior.

For the individual this might mean the loss of a job or jail. A government might lose control of its budget, or the state intercepts tax collections. What it takes to hit bottom varies widely. Each case is different. But in the end there’s an acknowledgment that life has become unmanageable.

At this point, the individual or government can make a decision to change. If this doesn’t happen, the spiral continues. The individual may lose his life. The government can no longer deliver essential services.

If the desire to change is real, and it often is not, the individual or government begins the long tricky road to recovery. Change ain’t easy. It will take what is commonly called tough love from those who care about the person affected. There will be setbacks. Perseverance and determination are required to recover.

I believe the city of Memphis is now in recovery.

…Most alcoholics still struggle with temptation, and there is always the danger of falling off the wagon. But if Memphis continues on its road to recovery, and continues to make good financial decisions, there is no reason to compare it to Detroit. Rather, Memphis will find its rightful place among the world’s most vibrant cities.

Comptroller Warns Memphis About ‘Scoop and Toss’ Debts

The state comptroller on Monday issued a stern warning to Memphis officials about the city’s fiscal condition, reports the Commercial Appeal. He focused concerns on a debt refinance plan the city wants to undertake that defers debt to about 2025.
State Comptroller Justin P. Wilson called such fiscal moves “scoop and toss” because they defer debt years down the road.
The comptroller late Monday released copies of a letter and financial report he sent to Mayor A C Wharton and City Council members earlier in the day that reveal officials have been in discussions with the state’s chief fiscal compliance officer for several weeks about Memphis finances.
In the letter, Wilson outlined several corrective measures the city must take before he will sign off on the municipal bond refunding plan — designed to defer obligations to 2025 and free up more cash flow for current obligations — but Wilson said those steps are more technical in nature and the city needs to address its underlying fiscal problems of low fund reserves, a declining tax base and budgetary imbalance.
In the letter, the comptroller wrote that “It is critical that Memphis change its course to reverse” those trends. “Tough decisions are necessary to change that direction. Failure to make the decisions could have very serious consequences. I pledge our support.”
In a brief interview later, Wilson said that the city’s “financial reporting is good. And Mayor Wharton to his credit recognizes they have a serious problem that if not corrected, could lead to real disaster. I think they’ve recognized this can’t go on forever. Apparently this has been building up for a long period of time.

On Gov. Haslam’s Latest Non-Disclosure

As a high-profile FBI investigation of Gov. Bill Haslam’s lucrative family business grinds on, a loophole in Tennessee law is increasing the secrecy that has long surrounded his personal wealth, reports the Commercial Appeal.
The scope and detail of Haslam’s assets are largely missing from his most recent Statement of Disclosure of Interests, an annual accounting of investments and income that elected officials are required to make public.
That’s because, much as former Gov. Phil Bredesen before him, Haslam created a blind trust that shields most of his vast financial portfolio from pubic disclosure. Haslam is acting in accordance with a state law that allows legislators, the governor and members of his cabinet to keep assets off disclosure forms when those assets are part of a blind trust.
The difference in the degree of disclosure is stark for Haslam, whose family business, Knoxville-based Pilot Flying J, is ranked by Forbes as the nation’s sixth largest privately owned company with $29.2 billion in annual sales:
As a candidate in 2010, Haslam listed 250 separate investments worth $10,000 or more.
In his latest disclosure, filed April 5, he listed only 11 such investments.
…Tennessee’s blind trust exemption to financial disclosure requirements appears much less restrictive than ones governing federal executive branch employees and public officials in Florida.
Federal law requires a member of the executive branch with a blind trust to estimate the worth of that trust by listing a range of its value.
Even more stringent, a bill signed last week by Florida Gov. Rick Scott requires public officials there to list the full value of a blind trust. In addition, Florida law requires public officials who form a blind trust to give a public accounting of individual assets placed in the trust.
Tennessee has no such requirements, said Drew Rawlins, executive director of the Bureau of Ethics and Campaign Finance.
Consequently, Haslam’s latest disclosure simply lists “Haslam Blind Trust,” as one of a handful of investments and sources of income along with Campbell’s name and address as trustee.
…In addition to the blind trust, Haslam’s April 5 disclosure lists 11 investments, including Pilot and three real estate ventures, Hasbitt II, Hasbitt III and LVL Properties. The report lists a new investment in an entity called Lost Valley Ranch Corporation. Details were unavailable.
He lists nine sources of income, including his gubernatorial salary, which he returned, Pilot, and PTC, Inc., a Pilot venture. State law requires office holders to list sources of income of $200 or more and investments worth at least $10,000 but doesn’t require a specific figure.
In contrast, Haslam’s 2010 disclosure of sources of income and investments covered 12 pages,.
…Bredesen…said he doesn’t recall the blind trust exemption being added to his bill (in 2006), but said he long considered financial disclosure requirements for the executive branch to be “extremely light.” That’s why he issued an executive order requiring the governor and top aides to disclose how much income they earn. Under that order, Haslam, who made a fortune in health care, disclosed he earned $7.8 million in 2007, for example.
However, Haslam rescinded Bredesen’s executive order when he took office in January 2011 and the rule no longer applies.

Audit Finds Fault With Polk County Practices

News release from Comptroller’s Office:
Polk County has numerous flaws in its accounting and record-keeping practices that need to be addressed, a report by the Comptroller’s Division of County Audit has revealed.
The annual audit, which was released today, has 19 findings and recommendations for improvement. Some involve basic safeguards needed to protect against fraud, waste and abuse.
The Offices of County Executive and Director of Accounts and Budgets had the highest number of findings, with a total of 14.
For example, the offices spent more money than the Polk County Commission had approved. Also, accrued vacation leave balances for employees of the offices exceeded the maximum amount of leave allowed under the county’s personnel policy.
The Office of Director of Schools also spent more than approved by the county commission.
In eight different offices within Polk County government, responsibilities for money collection, handling and record-keeping were not properly separated. Best practices dictate that those responsibilities should be assigned to different employees so no single employee controls all aspects of financial transactions and has unrestricted access to public funds.
In four different offices, multiple employees operated out of the same cash drawers. Failure to assign each employee a separate cash drawer reduces accountability if money is lost or stolen.
“As is the case in medicine, preventative practices in accounting can head off serious problems,” Comptroller Justin P. Wilson said. “When basic accounting principles are ignored or improperly applied, then it creates an environment where waste, fraud or abuse of public funds can occur. I strongly encourage Polk County officials to follow the recommendations contained in our audit so they aren’t confronted with a situation down the road where they’re unable to explain why taxpayer dollars have come up missing.”
To view the report online, go to: http://www.comptroller1.state.tn.us/ca/CountyAudits.asp?C=70

AP Interviews UT President on Athletics (‘We are not pleased’) and Academics

By Bill Poovey, Associated Press
CHATTANOOGA, Tenn. — After almost a year as president of the University of Tennessee, there is no hiding Joe DiPietro’s enthusiasm for his system-wide strategic plan, his efforts to streamline the replacement of outdated learning facilities and promote all the campuses.
In the most publicly visible part of UT, DiPietro also shares the frustrations of many Vols’ fans about the losing football season and the shake-up in men’s basketball.
He told The Associated Press those programs are rebuilding and he has confidence in the people leading them.
Asked about repercussions of basketball coach Bruce Pearl’s firing in March, DiPietro said the Knoxville chancellor manages athletics but “the key is in rebuilding the program from a low spot, you need to, one, have patience.”
After a losing season under football coach Derek Dooley and the basketball team currently 4-6 under first-year coach Cuonzo Martin, DiPietro said, “We are not pleased.”

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