In a move to tighten town fiscal management, reduce consulting costs and address the mounting budget deficit, the Town Board on Tuesday, January 20, hired a certified public accountant, Janet Verneuille of Sag Harbor, to be the first East Hampton town comptroller.
She will oversee bookkeeping, purchasing, asset control and grant administration functions, according to town officials. Ms. Verneuille started work as town comptroller last Monday; one of her first tasks is to pore through and “fill in” bank records that have been neglected since town accountant Joe Pizzo left in July 2007, according to Councilwoman Pat Mansir.
The budget officer, Ted Hults, who reports only to Supervisor McGintee, as the town law dictates, will also report now to Ms. Verneuille because she “will be his boss,” Town Board member Julia Prince said.
Supervisor Bill McGintee said that Ms. Verneuille will be managing capital spending and internal fiscal controls as well as offering suggestions to improve the town’s finances. Mr. Hults will be working with payroll staff and with department heads to prepare and determine the budget and capital budget, he said.
“The three of us will be working together closely to come up with policies to streamline our financial policies,” Supervisor McGintee said.
The town will be paying Ms. Verneuille $130,000, although the 2009 budget slated only $100,000 for an accountant. Supervisor McGintee said the money will come from savings he hopes to gain from lower audit and accounting expenses, thanks to her presence and expertise, and from contingency funds.
In the first few months, she’ll be working with the town’s outside accounting firm, Albrecht Viggiano Zureck, to help complete the Annual Update Disclosure for 2008, an extensive balance sheet that the town is required to prepare after closing its books each year, along with the first quarter report for 2009.
“There’s a lot of accounting that needs catching up on,” Supervisor McGintee said. While the town will still be working with AVZ, he said, it will rely on the firm less. Ms. Mansir said she hopes Ms. Verneuille will tighten and organize town’s finances, as well as implement recommendations made by auditors and the state comptroller.
Ms. Mansir said that the town has 80 checking accounts. She said that Ms. Verneuille had told her “she didn’t like the sounds of that. She’s going to be looking at our records very closely.” The idea is for Ms. Verneuille to have “her finger on the pulse completely,” Ms. Mansir said, so she knows what’s “going in and out.” She hopes that the hiring of Ms. Verneuille will make the town’s finances more transparent, both for the public and for board members.
“I’d like to hear from her on a regular basis, so there are no holes,” Ms. Mansir said.
Other recommendations from previous audits done by AVZ include the need for checks and balances on money management. For example, those who receive or handle cash should not be the ones who make deposits. Also, the town should send out more requests for proposals on various projects to obtain better prices.
The Town Board has been pushing for the hiring of a financial professional to oversee the books in Town Hall for months. Supervisor McGintee, who proposed Ms. Verneuille to the board, said that he realized that the town needed someone like her because East Hampton had grown so much in the last decade. “The office personnel was way less than what we needed,” he said.
Assemblyman Fred W. Thiele Jr., who helped reorganize Southampton Town’s financial management structure in the early 1990s when he was that town’s supervisor, commented that hiring Ms. Verneuille was a great idea and long overdue. He said he went through a similar situation in Southampton. The town had grown “a tremendous amount” and there was a recession in the late 1980s, he said, that revealed poor management processes because revenues shrank.
“East Hampton has undergone tremendous growth but continued operating under the same management structure that’s been in place since the 1960s,” he said. “The problems with this model were exposed because of tough economic times.”
The Republican nominee for town supervisor, Bill Wilkinson, said adding more to the Town Hall bureaucracy isn’t necessarily a good thing.
“We are re-engineering the town’s organization simply because of bad performance,” Mr. Wilkinson said in a phone interview. “We had a budget officer, which, by the way, worked well for every previous administration, at a compensation of $90,000. Then we added the outside consulting staff of AVZ to assist in the day-to-day bookkeeping. Next we recruited Nicholas Lynn as a top-notch financial consultant. We then hired a new outside auditor, with the appointment of an outside budget advisory committee. Now we have hired a comptroller at $130,000, who I understand is competent and credentialed, but we had done all of the above at a great cost to the taxpayer simply because we were not capable of addressing performance.”
Councilwoman Julia Prince said that once Ms. Verneuille “organizes that office the way she wants, she’ll basically become the town’s chief financial officer.” She is a department head, responsible for overseeing the financial activity of the town, Ms. Prince noted.
Early last summer, board members asked Supervisor McGintee to fire Ted Hults after a state audit found that the deficit for 2008 was at least $10 million, but could be as high as $14 million. Supervisor McGintee, under town law, alone has the power to appoint or fire a budget officer.
“So we passed a no confidence vote,” Ms. Prince said. Mr. McGintee still took no action to remove Mr. Hults, which prompted Ms. Prince to contact Mr. Thiele with the idea of drafting legislation to create a publicly appointed town comptroller. She said this week that she had thought that the creation of such a position might have eliminated Mr. Hults’s position. She said she soon realized that was not possible because the supervisor, by law, has the right to have his own budget officer, so she dropped the idea for the legislation.
Mr. Thiele said the town had taken a different approach than Ms. Prince had initially proposed by hiring Ms. Verneuille in a Civil Service capacity, rather than as a public officer. “The major difference between a civil servant and public officer is the rule of appointment,” Mr. Thiele said. “If it’s a public office, the person would need to be reappointed every two years or so. With Civil Service, instead of serving at the pleasure of the board, you’re there unless removed for cause.”
He said that what East Hampton did is similar to Southampton’s hiring of Richard Blowes to be the Southampton town management services administrator in the early 1990s.