The spotlight was on financial transparency at the South Pasadena City Council’s Feb. 15 meeting.
Staff and finance committee members were able to show progress made in recent years, hoping to turn the corner on previous financial woes that resulted in the departure of former City Manager Stephanie DeWolfe.
“It hurts to be transparent when you’ve made mistakes and that is absolutely important that we need to do that,” Mayor Jon Primuth said. “I see that in our team and I commend you for it.”
The finance department’s status update and organizational assessment, along with a presentation of the annual financial report, were both steps toward transparency made by the city at the council meeting.
The 2018 Citygate Report conducted an audit of the finance department and included 36 findings and 44 recommendations, including a lack of staff training and lack of sufficient policies and procedures.
Since then, staff has documented the department’s progress and 98% of the findings and recommendations are completed or in progress. The Claro Report of 2020 and the Finance Ad Hoc Committee Report of 2022 helped document the progress.
Interim finance director John Downs pointed out at the meeting that there are now quarterly budget updates and monthly budget updates starting in spring, but the most notable areas of improvement are in staffing, resourcing and employee morale.
“Those are areas where we truly have made some strides,” he said.
Many members of the finance committee were in attendance for the council meeting. The group presented the audit of the 2022 financial year as part of the financial report, which was four months earlier than when the 2021 audit was completed.
The financial report also disclosed that the city’s total revenue was $34.7 million, and property taxes accounted for 52% of the general fund reserves.
Total expenditures were $34.2 million, with public safety, general government and community services like the library and senior center as the top three expenditures. This is likely because of the restrictions put in place as COVID-19 precautions were lifted, staff explained.
Because of the short amount of time it took to complete the audit and financial report, finance staff were able to work on training for the future.
“For many years, staff were not provided the opportunity to attend conferences as they were busy cleaning up and catching up with assignments,” Hsiulee Tran, deputy finance director/controller said.
The finance department is still looking for ways to improve. Downs said that the department is looking to switch from a paper-based routing system to electronic files and improved technology. For instance, the department is integrating with the public safety department’s timekeeping systems to eliminate data entry and human error.
Cross-training staff for budget development could also spread institutional knowledge to further increase the finance department’s — and the city’s — credibility.
“There was a financial reporting crisis back in 2020 and that created a huge amount of public mistrust,” Primuth said. “We’ve had interim City Manager Sean Joyce and current City Manager Armine Chaparyan working very hard to correct that.”
First published in the Feb. 24 print issue of the South Pasadena Review