Frantic scramble by
CCA to avoid blame for $3 million budget “oopsie”
By Will Collette
Charlestown Planning Commissar and de facto CCA chief Ruth Platner has stepped to the forefront of the Charlestown Citizens
Alliance’s defense against charges of financial ineptitude.
Platner usually tries to stay in the background, so her
taking command of the CCA's damage control effort is a sign of how badly the CCA messed up.
The big issue: how did $3 million in Charlestown’s surplus
funds get “misplaced” between 2020 to 2022 leading the town to spend $3 million
we didn’t have?
Platner is now saying the money was never missing and used
this hypothetical to try to make her point:
If you move your car
from the driveway to the garage, the car is not missing, stolen or lost. It has
simply been moved. In the garage your car is still available to drive to work
and it has the same value. Your total assets are unchanged. Reporting the car
stolen would be a false police report, and making accusations against
particular neighbors would be even more damaging and irresponsible, especially
when you know right where the car is.
Same car, different place, no big deal, right?
But for Ruthie’s fable to line up with what actually happened,
you’d have to move that car, then forget where you put it and buy a new
car with money you don’t have. Aesop she’s not.
That, in a nutshell, is what happened in Charlestown. We
thought we had $3 million more in loose change than we actually had - so we
spent it.
And by the way, $3 million is a really big deal for a small town like Charlestown. It's equivalent to 10% of our total budget.
Never admit, never apologize
Now, the CCA could just say, “we made a mistake. We’re sorry. We’ll make sure it doesn’t happen
again” but they can’t because the CCA’s code is to “never admit, never apologize and always attack.”
Platner also “explains” how Charlestown has more surplus
money “parked in different locations,”
a practice that is part of Charlestown's money management problem.
We not only have the “Unassigned Fund Balance” but funds set
up for various purposes including some of Platner’s pet projects. She calls this "savings;" I call them slush funds.
She points to one of them, Charlestown’s $500,000 cash fund for lawsuits, even though Charlestown already has legal insurance through the RI
Interlocal Risk Management Trust and could buy more coverage if we needed
it.
Indeed, we could buy insurance for most of the emergencies
we might face – and we do, budgeting $311,815 to pay for it. There’s a whole
branch of the insurance industry that specializes in insuring municipal risk.
Dollar Store Parable of incompetence
To justify the town’s multiple pots of surplus money including the $500,000 legal fund,
Platner points to her campaign to prevent the Dollar Store from coming into
Charlestown.
Town zoning office Joe Warner was under pressure to come up with a
way to block the store and the best angle he could find was to designate the Dollar
Store as a “department store,” a business type banned in the "Traditional Village
District" along Route 1a.
Dollar Stores are many things, including bad employers with
a serious rap sheet, but department stores they are not. In 2017,
State
Superior Court threw out that reasoning and ordered the Charlestown Zoning
Board of Review to take another look at the Dollar Store appeal.
At that time, the ZBR was also CCA-controlled, so naturally they
denied Dollar Store’s appeal. It looked like the case was going back to court
where it would have cost Charlestown even more money to defend a really shaky zoning
decision and almost certainly lose.
Fortunately for Charlestown, the Dollar Store decided Charlestown just wasn't worth it as a potential site. Platner’s take-away was that we need to
squirrel away a lot more money to defend flaky town decisions rather than stop making those stupid decisions.
We need a Bad Actor law
There has been another approach that Charlestown could use to block bad businesses,
one I have urged the town to consider for more than ten years. Charlestown needs to adopt a “Bad Actor” ordinance and policy that would restrict the kind
of businesses Charlestown would give permits or licenses, contracts or sales
orders. CLICK
HERE for a recent example of where we needed a Bad Actor law.
Bad Actor laws often contain a broad mix of offenses such as
corporate crime (fraud, tax evasion, bribery, price-fixing, bid-rigging, etc.),
environmental violations, labor law violations, wage theft, and of course
performance issues such as defective, late or overpriced work.
Most – maybe all – of the businesses the town has battled
would be barred from Charlestown with a well-crafted Bad Actor ordinance.
No, no, no. No forensic audit
 |
| Like a colonoscopy, we may not like it, but it's still a good idea |
Platner then turns her outrage against the idea that Charlestown should
commission an outside forensic audit to
find out what really happened and why. As it is, all the CCA-controlled town
government has done is investigate itself, and of course found itself
blameless.
For example, Town Administrator Stankiewicz claims the whole thing
was “miscommunication/non-disclosure
between the auditor and the Town Treasurer.” [Page 483 of the 2/14/22 Town
Council agenda packet].
But outside the CCA, people like Town Council President Deb
Carney kept up the call for an independent investigation, even though it might discover someone really did do something wrong – but as we know, the CCA cannot
possibly do anything wrong, right?
So Platner dismisses Carney’s call for a forensic audit,
claiming that a forensic audit “would cost hundreds of thousands of dollars and implying
that crimes have been committed.”
Let’s start with what a
forensic audit is:
A forensic audit, also known as a forensic examination,
is a search of financial records for evidence of illegal financial conduct. The
phrase forensic is defined as belonging to, employed in, or appropriate for
courts of justice or public discussion and debate. A financial audit, often
known as a financial statement audit, is described as an independent auditor’s
assessment of an entity’s financial statements and related documentation. So,
the outcomes of this assessment include an auditor’s report attesting to the
fairness of the financial statements and relevant disclosures.
The term “illegal
financial conduct” has a fairly broad meaning though the first thing that
often comes to mind is fraud. But there are other types of "illegal financial activity."
For example, it could include deliberately overpaying for property as we did
at Tucker Estates, paying $900,000 when
our tax assessor pegged its value at $333,600. We even had the Town Planner get
several appraisals using a mix of false assumptions until the town got an
appraisal that met the seller’s price. Since
when is it Charlestown’s responsibility to do that?
Or submitting – and being awarded – a DEM grant to pay $426,000 for land owned by the CCA ally
the Sachem Passage Association that the town planner and tax assessor knew was worth only
$61,900.
Or using town money to fight a fictitious issue, the imaginary revival
of the Old Saybrook-Kenyon bypass, the “Charlestown Choo-choo hoax” created
by Ruth Platner herself.
Then there are inconsistencies and potential favoritism in
the award of overtime and comp time.
And there is the ethically questionable practice of our
supposedly outside auditors actually writing town financial statements rather
than sticking to the review of the statements produced by the town. The Securities and Exchange Commission
forbids such activity as The
CPA Journal reported:
“An accounting firm cannot be deemed independent
with regard to auditing financial statements of a client if it has participated
closely, either manually or through its computer services, in …
preparation of the financial statements” [SEC Codification of Financial
Reporting Policies section 602.02.c(i)
Those are all possible instances of “illegal financial
conduct” that either an independent forensic audit or a state grand jury could investigate. By the way, we've been using the same auditor for many, many years when financial best practices call for changing auditors every 5 years to prevent excess familiarity that could compromise their objectivity.
There is also the cover-up of all these issues by Town
Administrator Mark Stankiewicz (right) who is denying the public, the media and even
the Town Council President access to town records on these subjects.
By a 3-2 party line vote, the CCA Council members gave its blessing to Stankiewicz's practice of denying the Council President the right to see town documents she needs to do her job.
Finally, Ruth’s claim that a forensic audit would
cost hundreds of thousands of dollars is wrong. A cool website on
the cost of things had probably the most direct and clear answer:
“An article on Rushmore Forensic claims
that a forensic accountant could vary anywhere from a few thousand dollars
to more than $20,000 once everything is said and done.”
But that’s classic Ruth who is renowned for just making
stuff up,
If you are a Charlestown taxpayer, the $3 million oopsie is
going to cost you. Budget Commission Chair Richard Sartor wants the town to
accumulate an unassigned fund balance far in excess of what we need to handle
emergencies. No longer having that $3 million at his disposal throws a monkeywrench into his plans.
His target is between 23-33% of the town’s $30 million budget requiring
somewhere between $6.9 and $9.9 million [2/14/22 Town Council Agenda Packet,
page 486].
We don’t have that much in our unassigned fund balance because
it is $3 million less than what the town thought it had at the end of December. We have $5 million and change.
This isn’t the end of this discussion, but only the
beginning. We’ve learned a lot about the creeping rot within Charlestown town
government. Despite the Stankiewicz cover-up, we’re going
to keep fighting to shine a light on it.
