City Treasurer’s Parting Shot

In the Scottsdale Republic this morning, now-former City Treasurer David Smith fires his parting shot across the bow of an uncaring City Council and an uninformed electorate. Please also see an earlier ScottsdaleTrails article on the history of the office of City Treasurer.

My best advice for city? Seek independent financial advice

The most important expectation citizens have for their elected representatives is that they spend tax dollars in the wisest manner to meet citizens’ priorities. Doing this responsibly means soliciting the best independent financial and legal advice for decision-making.

Almost three years ago Scottsdale citizens approved an amendment to their City Charter establishing a new form of governance to elevate the City Council’s focus on the financial affairs of the city. Experience had shown the risks of expecting a city manager (with little or no college education in finance or law) to give an unbiased report on the financial or legal impacts of initia­tives he, his staff or public advocates might propose. To be credible, financial and legal advice must be “unfiltered” and direct.

This change in governance was the desire of the council; the recommenda­tion of the Budget Review Commission; the design of the Char­ter Review Task Force; and the mandate of the citizens, approved by the citizen voters in the Nov. 2, 2010, elec­tion.

In spite of the clar­ity of this citizen man­date, critics continue to object to the independence of the city treasurer. An outcry from the alumni club of former city managers was not surprising; their “Code of Ethics” admonishes members to “resist any encroachment on profes­sional responsibilities, believing the member should be free to carry out official policies without interference.”

What has been surprising, though, are the few citizens and community leaders who continue to challenge this change in governance. Can they argue citizens are worse off for having an independent city treasurer provide a professional opinion on the financial merits of proposals?

Do they share the belief it is “bad government” or “fool­ish” to expect a city manager work collaboratively with a financial profes­sional as a peer? Do they believe citi­zens have been harmed by a reporting structure that informs elected leaders of financial consequences — before they make a decision?

Reality has been far from the disas­ter predicted by the cries of critics. Financial missteps of the past have been corrected. Fiscal stability has been assured and AAA [bond, aka credit] ratings have been preserved, in spite of recession­ary challenges to Scottsdale’s revenue streams.

The independent city treasurer or­ganization has proven itself a good steward of the public’s financial affairs, demonstrating an ability to work col­laboratively and effectively for the benefit of citizens. Timely and trans­parent financial reports, with insightful variance analysis, have enhanced coun­cil’s fiscal understanding and allowed prompt corrective actions. Independent financial analyses have been provided for council’s consideration, along with all other advice, in their decision-mak­ing.

Scottsdale demonstrated leadership in guaranteeing the financial interests of citizens are represented in political decision-making. The champions of this change have taken a bold step and proven themselves responsive to the citizens’ vote now embodied in the City Charter.

David Smith was Scottsdale’s first independent city treasurer and chief financial officer. He resigned, effective July 5, and can now be reached at david@odyssey-financial.com.