County Commissioners - Public Hearings

PUBLIC HEARING - February 21, 2006



Code Home Rule 1-2006

PUBLIC HEARING

CODE HOME RULE NO. 1-2006
ABOLISHING THE POSITION OF TREASURER


A Public Hearing was held on Tuesday, February 21, 2006, at 6:30 p.m. in the County Commissioners’ Hearing Room, County Government Center, Chestertown, Maryland on Code Home Rule No. 1-2006 which is: an Act to repeal and re-enact with amendments Chapter 54 of the Code of Public Local Laws of Kent County, Maryland, for the purpose of abolishing the position of Treasurer at the conclusion of the present term of such office; and designating a Chief Finance Officer of Kent County to be and serve as the collector of taxes for Kent County.

County Commissioners Roy W. Crow, Scott D. Livie, and William W. Pickrum were in attendance as well as Susanne Hayman, County Administrator, J. Michael Connolly, CPA and County Auditor, and approximately twenty-five interested citizens, and a member of the media.

Commissioner Pickrum read into the record the Notice of the Public Hearing, explained the procedures for testifying, and then invited anyone to testify for or against the proposed plan.

County Administrator Hayman gave a Power Point presentation in order to give an historical perspective of the Treasurer position. In 1851 the Maryland Constitution changed the form of county government from County Levy Courts to County Commissioners. Local legislative powers were extremely limited; tax assessment, levy, and collection were the primary responsibilities of the County Commissioners. In 1890 a position for an appointed county treasurer was created. In 1896, the county treasurer became an elected position charged with the collection of state and county taxes levied in the county; assessment of property for taxation; depositing funds; and drawing checks on county funds. In 1914 the State Tax Commission was created redirecting assessment responsibility to a local Board of Assessors. By 1975, the State of Maryland assumed complete responsibility for assessment functions. As of today, fifteen of Maryland’s twenty-three counties have eliminated their elected Treasurer’s position in favor of a unified office of finance. If this legislation is approved, the position of elected treasurer will end upon the incumbent’s retirement, December 31, 2006. Personnel in the Treasurer’s Office and in the existing Office of Budget & Accounting would merge to form a unified Office of Finance. The director of the county’s Budget & Accounting Department (who is a CPA) will become the Chief Financial Officer. No new staff will be hired. There will be no diminution in services to the public. The County Administrator pointed out that in 1987 and again in 1991, the then auditors Wooden and Benson stated that “the present division of financial administration responsibilities does not allow for a full understanding of the accounting function by any individual…” and “The Commissioners should consider establishing a position which would oversee the entire financial administration of the County.” In 2006, the independent auditor for the county, J. Michael Connolly, CPA, stated “To have all accounting of the County in a central location makes sense since the joint personnel will be able to better communicate their responsibilities and perform their functions under [unified] supervision that was not always available previously.” Specific advantages to creating one office under one Chief Financial Officer are stronger internal controls, the ability to cross train personnel, compatible software making transactions more timely, coordination for grant compliance, cost savings in salaries and benefits, consistent accounting policies and procedures, better communications among finance personnel, and ensurance that management will be aware of all financial issues throughout the county and not just those associated with a particular office. The current structure has been identified as weak in internal controls, which in turn provides opportunities for fraud and embezzlement as occurred in the 1970s, prior to the appointment of the current Treasurer. The County Administrator closed by reiterating the salient facts. The county treasurer is a local position, governed by local law, over which the county Commissioners have authority. Other elected officials, such as State’s Attorney, Sheriff, Clerk of Court, Register of Wills and Orphans’ Court Judge, are positions within the state systems, governed by state law; an act of the General Assembly would be necessary to alter these positions. It is not possible for the Commissioners to place Code Home Rule No. 1-2006 on the ballot for a referendum vote; the law specifies only one means for placing a code home rule local law on a referendum ballot. A referendum petition by the registered voters is the only authorized procedure. The elected Treasurer does not have oversight over the Commissioners; the Treasurer’s position is vested with powers typical for tax collection and related functions. The elected Treasurer is not responsible for the county’s budget process; the Treasurer prepares and oversees his internal office budget and he reviews general fund revenues from time to time but does not participate in the larger, overall budget process.

Handouts that were provided for those in attendance included a copy of the legislative bill being addressed at this hearing and a copy of the Power Point presentation. Other information made available were copies of the County’s Management Letters for Fiscal Years 1987, 1991, 2000, 2001, and 2006 which encouraged the appointment of one person to oversee the entire financial administration of the County. In the FY 2006 Management Letter, the auditor provided a comparison of full-time employees with Kent and Queen Anne’s Counties. Both Counties have a total of eleven employees who process significantly fewer activities than Queen Anne’s County. The total Kent County expenditures for FY 2005 is $37,445,696 to which Queen Anne’s County’s expenses are $95,696,000, the management letter questioned why Queen Anne’s County can accomplish so much more with the same number of employees. It was also noted that the salary savings to be realized for the elimination of the Treasurer position would be approximately $67,000. An additional position may be eliminated through attrition for an approximate savings of $66,000.

Those who signed the Testimony Log were invited to speak.

Alex Rasin, Attorney and former County Commissioner (1982 – 1990), stated that during his tenure as a Commissioner, the Treasurer took part in voting on annual budgets but his participation was phased out during Mr. Rasin’s second term. He cited two examples of “mischief” made by the Treasurer where information or special privileges were inappropriately granted, thereby misrepresenting his position. He stated that when most elected officials (such as the Treasurer) are elected for a second term, generally they go on to be reelected term after term and sometimes this pattern invites a certain amount of abuse. Mr. Rasin also referred to the FY 1987 Management Letter submitted by Wooden & Benson recommending the establishment of a position which would oversee the entire financial administration of the County (under the direction of the Commissioners). This recommendation was not addressed by eliminating the Treasurer position at that time due to the incumbent’s desire to stay in his elected position. Now that Mr. Williams plans to retire, it is the opportune time to abolish the position. Mr. Rasin urged the Commissioners to pass CHR 1-2006. If the bill goes to referendum, the voters can so choose.

Roger Williams, the current Treasurer who will be retiring on December 31, 2006, made a lengthy presentation. He stated that in his opinion, it is not appropriate for the County’s auditor to be making recommendations with respect to governance. He went on to say that the Treasurer position was established so that no one office would run the county. He stated that the Treasurer should be independent of the Commissioners and to take away the position of Treasurer will separate government out of the hands of the voters. Mr. Williams objects to the fact that the auditor made the recommendation to dissolve the Treasurer position. He stated that independent oversight is lost when the Treasurer position is combined with that of the Director of the Office of Budget & Accounting. He stated that debt is the ruin of most governments. He added that he feels perfectly confident that he will get all of the signatures needed to put this as a referendum on the ballot. It is incumbent upon the Board to think carefully about restructuring. Finally, he thanked the Commissioners for their consideration and for listening to his point of view. He urged the Commissioners to pass the legislation as soon as possible so he can proceed with obtaining required signatures for referendum so the voters can decide. He stated that he would not be criticizing the Commissioners when he seeks to obtain signatures.

Robert Myers, of Chestertown, questioned when the office of Budget & Accounting was established and what the current director’s salary is. The answers were in the late 1980s and around $80,000 respectively. He stated that he saw no reason to do away with the treasurer’s position because it works. He said, “If it ain’t broke, don’t fix it.”

George Kastendike stated that he has lived in Chestertown for twelve plus years and he thanked Roger Williams for doing a good job. He stated that presently there is a duplication of effort by having both a treasurer and a director of Budget & Accounting. He expressed the thought that since anybody over the age of eighteen can run for the treasurer’s position, it might be best to do away with the position because treasury matters and financial matters have become so complicated and a treasurer should have certain qualifications. He stated that the current director of Budget & Accounting is a CPA. He stated that if the current director did not do a good job, she could be terminated, whereas it would be difficult to terminate an elected official. He therefore supports the idea of dissolving the treasurer position.

Randy Cooper, CPA, who resides and has an accounting practice in Kent County, countered Mr. Williams’ assertion that an auditor should not tell an entity how to run its business. On the contrary, he said, nothing could be further from the truth. That is exactly what an auditor should do. In fact, it is the auditor’s duty to make such recommendations. He stated that this is an opportunity that should not be overlooked.

Mark Mumford, Clerk of the Circuit Court, spoke as a private citizen who had been in banking for sixteen years prior to becoming the Clerk. He stated that auditors work at the discretion of their employers and that taking away any elected official diminishes the populace who vote. He stated that the Commissioners are elected to manage county affairs, not to eliminate elected positions and that if Code Home Rule No. 1-2006 is passed, he will work diligently to bring it to a referendum.

Commissioner Crow stated that this movement of eliminating the Treasurer’s position has nothing whatever to do with Mr. Williams personally. He stated that the Commissioners have thought long and seriously about this and feel that it is the right thing to do. Commissioner Livie echoed Commissioner Crow’s message and added that this is a question of moving the county forward. He stated that the treasurer’s job is a sophisticated one, requiring a background in accounting. The job description does not require an accounting background and the County may be faced in the near future with a treasurer who is not up to the job. This is an appropriate time, with Mr. Williams’ retirement, to look carefully at the situation.

Commissioner Pickrum thanked everyone for their remarks and stated that this proposed legislation is about efficiency.

Commissioner Pickrum thanked Mr. Williams for his service and counsel.

This hearing was recorded for reference and adjourned at 7:35 p.m.

THE COUNTY COMMISSIONERS
OF KENT COUNTY, MARYLAND

Janice F. Fletcher
Executive Assistant

Approved:

William W. Pickrum, President

Please contact the County Commissioner's Office at (410) 778-4600 or by e-mail with any questions or comments.