Even after being ejected from the meeting last week for calling the county commission and administrator several unflattering names, former assistant chief finance officer Emory McHugh appeared back before the commission to complete — and add to — the statements he had already made.
When he was acknowledged, however, McHugh was warned by chairman Steve Brown that “there would be no name-calling. Be polite and keep it civil. I’m not even going to allow it one time.”
The county finance director from 1993 to 2005, and then again the assistant from 2012 to 2013. when he was fired.
At the last commission meeting, McHugh ranted against the commission, saying “Because of the elected leaders’ failure to do the right thing with the finances of our county and hire competent people, I can honestly say that the Finance function is one of the most dysfunctional and unprofessional ones that I have ever encountered.”
Between that meeting and the next, McHugh sent his complaints to the state auditor’s offices.
He told the commission that the effects of the real estate meltdown also represented a new trend for local governments which had relied on property values as being a stable source of tax revenues.
“While the M&O tax digest decreased by 15.36% in recent years, the millage rate was factored by only 4.54% to compensate for the decrease in tax revenues,” he said. “The end result of this over time was that the County had about $20 million less in property tax revenues to operate on.”
McHugh pointed out that former county administrator Jack Krakeel was given the impossible task of funding the current level of services with insufficient tax revenues.
He also said that new county administrator Steve Rapson was given the same “impossible task” of funding current service levels with insufficient tax revenues.
McHugh said Rapson achieved that by passing on more than one thousand dollars in deductibles to each employee, thereby reducing the county’s expenditures on health insurance and placing a large part of the budget balanced on their shoulders.
“So basically, each employee’s paycheck was in effect reduced to make up a large part of that funding deficit. In effect, each employee was directly impacted by anywhere from $1K to $4K or even more depending on their coverage and number of dependents.”
He said that, as a result, Fayette County is no longer competitive with other jurisdictions in the area of benefits and we will soon see a significant exodus of all our good, trained employees, to the county. When it is looking to attract firefighters, deputies and other professional staff it will find itself at a competitive disadvantage in terms of both pay and benefits.
“The additional costs of training new employees, the loss of critical institutional knowledge, and the additional overtime pay that will be incurred to cover the vacant positions will in the end offset the majority of those budgetary savings.
“Already, 21 percent of the county work force has had to borrow against their retirement accounts because of these difficult economic times that we have been seeing as a result of Wall Street’s greed. And for some of the lower paid workers that may become sick, they will have no option except to borrow more from their pension funds and other retirement savings. In terms of efficiency, I just want you guys to know that you are really hurting our workers financially, killing employee morale and taking away any incentive to do good job.”
More importantly, he said, as an ethical taxpayer living in the unincorporated area, all of this financial pain being inflicted on employees was entirely unnecessary.
“If the board had negotiated a fair distribution of the Local Option Sales Tax, then the county would have had another $1.75 million in revenues for the next ten years,” he said. “You haven’t even seen the $2.38 million accounting error or its potential consequences mentioned. Where exactly is the transparency that this board keeps harping on?
“But the most intriguing thing about the FY 2014 budget for me personally is the Stormwater Utility. In this case, you have commissioners Brown, [Allen] McCarty and [Randy] Ognio, who are all on record in the minutes of the Commission meeting on September 22, 2011, as being opposed to the Stormwater Utility. And yet not only is it still around after six months of the Tea Party being in total control, but the FY 2014 budget actually contains funding for an election this fall to get the voters to approve a Special Purpose Local Option Sales Tax purportedly to fix the stormwater infrastructure.
“Folks, the reason that you taxpayers were inconvenienced by attending those Stormwater Town Hall Meetings back in the Spring had nothing to do with getting your feedback on how to resolve this important issue. Instead, it had everything to do with providing the Tea Party with a forum to set the stage for this upcoming tax increase vote. Because of their tax philosophies, they have to make the citizens think that it was their idea to raise taxes in the first place.
“Unfortunately, the upcoming SPLOST vote is really just a subterfuge for the real reason that you are being asked to vote yourself a tax increase. It has everything to do with keeping the Tea Party in power. As a professional accountant that has done this for 36 years, I can tell you that a two-year SPLOST is not the financial answer for providing a service that has to be addressed for decades to come.”
Rapson, when it was his turn at bat, pointed out that the county’s own auditing firm, Nichols, Cauley & Associates, LLC, answered each of McHugh’s charges in a formal report to the board.
As far as McHugh’s charge that he had ‘found’ $2.38 million in Public Facilities Authority bond funds that had not been accounted for and would need to be, in his opinion, will need to be taken from the Capital Projects Fund and deposited into a Debt Service Fund where it can be used to pay off the outstanding bonds and save the taxpayers of the County about $3.7 million in future debt service payments. The firm said, based on bond counsel advice received, it appears the County does have options with the use of these funds.”
Additionally, McHugh’s statement that the Internal Revenue Service would need to determine if the non-taxability of the bonds had been compromised, the auditor’s said they didn’t forsee any issues.
Rapson said the county went through a long process before making the decision to call for a vote on a Special Local Option Sales Tax.
“Ultimately, it’s a ballot question. We are listening to the residents.”
Rapson also noted he had heard nothing about employee morale being low.
“I have an open door policy. If he [McHugh] had concerns, he could have come to me. We’re trying to instill public trust and this kind of stuff doesn’t do it.”