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Wednesday evening’s City Council meeting saw yet another update on the City of Santa Fe’s seven-month-late FY21 audit—making this the fourth year in a row that the city hasn’t reconciled its books on time.
Ricky Bejarano, interim assistant finance director, told the governing body that the Minneapolis-based firm CliftonLarsonAllen will not return as the city’s external auditor. The firm resigned in late April after finding the city had failed to account for about $4.6 million in cash balances, but indicated it would be willing to return if city officials addressed a list of 27 issues.
Bejarano said CLA “didn’t give a real specific reason” why the firm chose not to return, but offered a guess: “I think it’s public knowledge that they will be doing the [audit for the] City of Albuquerque, which is a huge undertaking. So I believe time just crunched up, but that’s just my speculation.”
Bejarano said the Finance Department is on track to hit a July 15 target to get those 27 items to the State Auditor’s Office, which has described Santa Fe’s finances as “broken” and announced its intention to intervene. Bejarano said two of those items are now moot because they pertained to an agreement stating that if CLA did return, it would be under a new contract, and that if the firm performed a “readiness for audit assessment,” the city would pay them for it. It will be up to the State Auditor’s Office to determine whether the submitted items pass muster.
The city will have a new external auditor for fiscal years 2021, 2022 and 2023. Bids are due July 21, and from there, Bejarano said city officials will move as quickly as possible to contract with another audit firm.
“I don’t anticipate it dragging on for very long,” Bejarano said, adding that the award will be made within 10 days of the July 21 due date.
The Finance Department has also issued a request for proposals for preparatory work for fiscal year 2022. The city’s Finance Committee will evaluate the RFPs, and Bejarano said they should have an award within a week (or so).
Councilor Carol Romero-Wirth brought up “one of the biggest issues for the city—” the $4.6 million that the city had in the bank that was not on its chart of accounts.
She said the city was not missing that money, but that it hadn’t been recorded correctly.
“I think it’s very important that the public know that we weren’t missing $4.6 million,” Romero-Wirth said.
Bejarano agreed, saying the city had $4.6 million in the bank “above and beyond what had been recorded in the general ledger under the cash account.”
He cited a lack of resources and confusion due to the COVID-19 pandemic as reasons for the discrepancy.
“It appeared that the goal was to get the money to the bank within the statutory requirement of next business day,” he said, “and between COVID and resources those deposits just stacked up and just did not get recorded…”
He said that REDW, the financial advisement firm, has been going through “deposit by deposit, item by item,” and comparing what’s in the bank to the general ledger to amend and verify the records of those deposits.
Romero-Wirth urged “creating the systems and processes so that doesn’t happen again.”
In Other News
Councilors also saw a progress report on Midtown redevelopment plans by Richard Brown, director of economic development; Daniel Hernandez of California-based firm Proyecto; and Redevelopment Project Manager Lee Logston of the Office of Economic Development.
As plans stand, there will be about 1,100 total housing units at the site, of which roughly 20% —225 units— will be affordable.
Councilors pushed back against those numbers, saying the proposal isn’t enough.
“I think the community would like to see a lot more given the astronomical price of housing in this city,” said Councilor Michael J. Garcia. “If we are going to be leaders, we need to develop that space with a leadership mentality and have a lot more than 20%. I would urge that we double that.”
He asked planners to explore the possibility of waiving “in-lieu fees,” a loophole that allows developers to avoid building affordable units.
Presenters said 20% is already on the high end of housing proportions in cities across the country. Councilors Garcia, Renee Villarreal and Jamie Cassutt pushed Santa Fe to do more.
