Taxpayers’ Asstn. Reasserts Need for Second Financial Opinion
Posted by scta | Filed under SMART
April 19, 2010
Debora Fudge, Chair and the SMART Board
Re: Your letter of April 5
Dear Chairwoman Fudge and Board:
Thank you for taking the time to read and respond to my letter containing our Association’s recommendation for an independent second opinion of SMART’s Strategic Plan. Based on your response, it appears you have misunderstood the nature of our suggestion and its benefits. We are not just suggesting more experts. We are well aware that SMART has engaged a number of “experts” in the preparation of the Strategic Plan that is now discredited.
What we are recommending is SMART have a completely independent review/second opinion of the revised plan, by a professional firm that would put its reputation on the line by issuing a “comfort letter”. This letter would provide some assurance that the plan was viable and would withstand future events.
In spite of the experts employed and the reviews conducted so far, the financial plan remains in disarray. This suggests that there is room for improvement. Based on the present circumstances it would seem reasonable to conclude that what is not needed is more of the same.
In your letter you lay the blame for the present funding gap on the recession. Recessions and business cycles happen. Their timing and magnitude cannot be forecast with any reliability, but a plan that covers a 20-year period should make some preparations for recessions. From what we can see the original Strategic Plan made no allowance whatsoever for any ups and downs of the business cycle. A good strategy when devising financial plans is to “stress test” them to see if they can withstand recessions of various magnitudes and timing. Knowing what we know now, it would be a shame to repeat that oversight and to fail to anticipate the impact of business cycles on the Plan.
Your suggestion that the Citizens Oversight Committee (COC) provides an independent review and a check and balance on the District’s activities is unpersuasive. This is because COC members are appointed by District board members. This puts them in a position of being beholden to those they are to oversee for their very appointments. It’s also unlikely that these members have the professional background to provide the kind of independent review of the financial plans that would guard against the kind of financial fiasco now facing the District. As a matter of fact the existence of the COC did not prevent the present situation. To suggest that the COC provides any meaningful accountability is simply not credible.
Taxpayers’ confidence in the leadership of the SMART District to provide the benefits represented in the Measure Q tax measure has been shaken. Our recommendation for an independent second opinion was made to help raise the confidence of the taxpayers and to try to prevent further spending of taxpayers’ funds without being able to produce the promised results.
Sincerely,
Jack Atkin
President