Board wants a spotlight on off-budget reserves - Bonner County Daily Bee: Local News

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Board wants a spotlight on off-budget reserves

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Posted: Wednesday, December 19, 2012 10:00 am

SANDPOINT — An opaque cloud enshrouding a hotly-debated aspect of Bonner County’s finances could be dissipating after more than 20 years.

County commissioners Mike Nielsen and Cornel Rasor insisted on Tuesday that all off-budget reserve fund accounts be laid bare for the public to see and factored into the annual budget-setting process.

“What we’re looking to do is to make that the operational mandate for the county — that from here on forward all off-budget reserves will be on the budget,” Rasor, the commission’s chairman, said.

The extent of the general and justice fund reserves managed by Bonner County Clerk Marie Scott has never been fully divulged, although commissioners say the figures are buried within audits conducted on county finances.

But the reserves, which Nielsen currently estimates to be in the range of $8-10 million, have not been included in the budget and were not factored into the setting of property tax levies.

The reserves also were not properly disclosed to the Idaho State Tax Commission and budget carryover used to cover payroll and operating expenses before tax revenue is received was never expressly moved into the next fiscal year by commissioners as required by Idaho law, Nielsen said.

Some of the carryover could have been used to decrease the levy rate.

However, commissioners repeatedly emphasized that the off-budget reserve funds are accounted for and they are not accusing Scott of misusing them.

“It appears that there has been absolutely no misuse of those funds,” said Rasor. “No one has ever misused those funds. They’ve just been off-budget in surplus for the county’s use.”

Scott declines to go before the board without independent legal counsel, but observed part of the commission’s discussion. She did not immediately respond for a request for comment on the issue after the meeting.

The reserve funds have been used to get the county out of countless financial jams over the years, but they have also been a point of contention with taxpayers because Scott has declined to divulge their balances.

The issue came to a head earlier this month, when the county’s bond counsel in the courthouse remodeling project questioned the accuracy of cash-forward balances listed on a tax commission reporting form. They showed more cash on hand than was listed in the county budget.

Nielsen said he was unaware that the reserves were not being fully disclosed to the state and that the carryover wasn’t being properly advanced into the next fiscal year.

“These moneys were never identified, quantified or appropriated annually by this board. Instead, the money functions as a multi-million-dollar, unlimited, unrestricted slush fund,” said Nielsen.

Nielsen said the undisclosed funding essentially renders county government unaccountable in its fiduciary duty.

Commissioner Lewis Rich cast dissenting votes on procedural matters before the board on Tuesday, but otherwise said little. He also did not immediately respond to a request for comment after the meeting.

The board’s general counsel, Deputy Prosecutor Scott Bauer, urged commissioners not to draw on the reserve funding until next October, when they can be properly reported to the tax commission.

“All the moneys that were anticipated to be carried forward this year that were off-budget are unusable in my opinion,” Bauer said.

If public officials make an expenditure in excess of the budget appropriation outside of a few of narrowly-defined exceptions, everybody involved in the move could be held liable for the funds and prosecuted.

Tuesday’s meeting was attended by a number of residents affiliated with the Tea Party and conservative movements in Bonner County.

“We, the public, want more transparency and we don’t feel we’re getting it,” Danielle Ahrens told commissioners.

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  • LakeViewer posted at 9:52 am on Sat, Dec 22, 2012.

    LakeViewer Posts: 919

    To me the Clerk's actions, as northwest mentions, speak louder than word. I wonder how long it will take her to wash the dirty laundry. She needs to leave now, not later.

    What role has the Treasurer played in all of this? She is the keeper of all the county funds. She should know where every cent is at all times.

  • northwest posted at 12:58 pm on Fri, Dec 21, 2012.

    northwest Posts: 121

    This has the smell of of financial mismanagement and secrecy in government transactions all over it. I commend Commissioners Nielsen and Rasor for not backing down in asking for an accounting of county funds. Without their determined effort we would not have found out about this and it would not be examined for its legality.

    I think many of us became immediately suspicious when the County Clerk started stonewalling the Commissioners on the issue, then resorted to a "hostile work environment" charge, and then demanded a taxpayer-funded attorney before she would even comment or produce the very information she's REQUIRED to furnish. If she isn't willing to do her job, the logical course of action is to relieve her of it.

  • Easterner posted at 8:27 am on Fri, Dec 21, 2012.

    Easterner Posts: 25

    I agree with L, Nielson has been trying since before he was elected to get to the bottom of the "slush fund". I have heard him comment many times the money is there but was not being disclosed.

  • L posted at 3:40 pm on Thu, Dec 20, 2012.

    L Posts: 239

    BCresident: We know it because Nielson unearthed an Annual Financial Statement showing remaining cash reserves at the end of the 2011 fiscal year. These reserves were not applied to the 2012 budget as the law requires and they were carried over to 2012 without the required commissioner resolution. Nielson is still trying to identify the cash reserves at the end of the 2012 budget year which should have been applied to the 2013 budget.

    I don't know how Cornel can say “No one has ever misused those funds" when we don't even know the amount of the funds?

    Even if there was no misuse of funds, the unauthorized carry overs resulted in inflated tax levies and facilitated unauthorized expenditures such as the courthouse remodel project.

    Nielson's quest for, transparency, fiduciary responsibility and compliance with the law should be supported.

  • BCresident posted at 10:25 am on Thu, Dec 20, 2012.

    BCresident Posts: 78

    I would consider the possibility that this entire thing is a fabrication. Because someone makes an accusation, it does not follow that it's true.

    I urge caution until the facts are made known.

  • LakeViewer posted at 2:52 pm on Wed, Dec 19, 2012.

    LakeViewer Posts: 919

    This is absolutely unacceptable. These hidden reserves, as well as the on budget reserves that are passed on from budget year to budget year must add up to $10's of millions of dollars. I think it is time for the following:

    1. A State Attorney General investigation.

    2. An investigation of the auditing firm that must have overlooked this mess.

    3. The county Clerk needs to resign immediately.

    We cannot assume funds have not disappeared. Not until every dollar is accounted for by independent authorities.

    We taxpayers need to get involved, now, and demand action. It is time we get our heads our of the sand. We may be, and more than likely are, talking about the mishandling of millions of dollars.

    These people have been playing games with our money too long. They must be booted out, now. I am angry about this.

  • NewDawn posted at 12:14 pm on Wed, Dec 19, 2012.

    NewDawn Posts: 936

    Well, I'll be darn! Commissioner Mike Nielsen discloses (today's Bee - 12/19/12) that Bonner County
    has money reserves estimated to be in the range of $8-10 million that have not been included in the
    budget and were not factored into the setting of property tax levies. Although not misused, this money
    functions as a multli-million-dollar, unlimited, unrestricted slush fund, said Nielsen.

    Where is all the transparency we have been promised? Shouldn't it start at the "home front" and extend
    all the way to the White House?