Letter: ‘Who’s Watching Derby’s Financial Storehouse?’

Now that the mill rate has been established and taxpayers have been given the heavy burden of paying for the financial mismanagement that has occurred in our city, by a 2.5 mill increase with additional increases to come next year, the question becomes Who’s Watching Derby’s Financial Storehouse?” 

The apparent answer to the question is no one! 

Sadly not a single individual has stepped forward and taken responsibility for the gross negligence of duty that has occurred.

Those charged by charter and ordinance with overseeing Derby’s Financial Storehouse are the Treasurer, members of the Board of Apportionment and Taxation (all elected officials) and the Finance Director, who is appointed by the Mayor. 

The Mayor must also be included as ultimately the buck should always stop at the city’s highest ranking elected official for what takes place on their watch and they are the one who appoints the Finance Director.

How could income be overstated in the two fiscal years without anyone noticing until now? 

How could the city choose self-insurance as an option and fail to set up appropriate reserves and procedures so as to wind up incurring a deficit of a million dollars? 

These are the two main areas of mismanagement leading up to the 2.5 mill tax increase. To have this happen is mind boggling to the general public and even more so to myself having served three terms on the tax board.

When I served on the tax board monthly we received reports of income (budgeted and received), as well as expenses (budgeted and actual). Based on those reports and an excellent City Treasurer who kept on top of things, we knew when certain income revenue was due and when it was received. 

It would have been a matter of months, not years, before missing income would have been noticed, the reasons for it known and corrective action taken. Not only did the City Treasurer keep a watchful eye on such things, so did the City Clerk, who back then had the role of the current Finance Director. 

They were on hand for every meeting to answer the tough questions Tax Board members asked and provide explanations regarding any and every aspect of the city’s finances. 

When it comes to self-insurance, it is mind boggling to find out now we are a million dollars in the hole. One would expect in a self-insurance situation that appropriate reserves are set up to handle the claims that would be paid by the city. 

All involved should know monthly what the total amount of claims paid was and if reserves were in jeopardy of being exhausted. It’s common practice when self- insuring to have stop-loss insurance. 

Stop-loss insurance is insurance that sets limits on the exposure of the self-insuring entity. It can limit the amount of a single claim paid out. It can also limit the aggregate (total) amount paid out so that reserves are not exceeded. It appears the city does not have stop-loss insurance. Why?

The first installment concerning the mismanagement of Derby’s finances has been levied and when the tax bills arrive next month every taxpayer will begin to feel the burden of our elected officials and appointed government employees failing to carry out their responsibilities. 

None deserve to be re-nominated, never mind re-elected. 

Walt Mayhew
Derby

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