By Jan Worth-Nelson
Former Flint Mayor Karen Weaver said today that the $20 million “found” in the city’s water fund in a preliminary audit report from incoming Mayor Sheldon Neeley was well known to her administration.
Though she has been largely silent as the Neeley administration took over, Weaver agreed to a phone interview, she said, because”I don’t want it to appear that this was money that had just been found–because it’s not true.”
The Neeley administration asserted in a press release issued this week that “a preliminary assessment, previously projected to go into a deficit, has a Fiscal Year 2020 balance of more than $20 million.”
Based on an initial audit by municipal finance expert Eric Scorsone, hired by Neeley for a fiscal transition, the press release continued that “budget estimates and forecasts have been used for years when assessing the state of the Water Fund, without updating the balance based on actual revenue and expenditures.”
The Neeley administration called the discrepancy between the “actual v. reported dollars” “shocking” and evidence of “poor fiscal oversight.”
In fact, Weaver said, an increase in the balance of the water fund had prompted state officials to praise City of Flint officials in October for being “great stewards” and for beating projections about water bill collections and the results of improved metering.
Weaver said she and her team, including deputy finance director Tamar Lewis, filed a required report, called a TMF (Technical, Managerial Financial) plan Sept. 6 with the State of Michigan, in which they initially projected an increase of $8 million to $9 million.
But in an October meeting with Eric Oswald, director of the Drinking Water and Environmental Health Division of the Michigan Department of Environment, Great Lakes and Energy (EGLE) with the state having had access to the city’s financial situation, Oswald told Lewis it appeared the fund balance was higher than expected.
“We were proud of that — we were doing better than we thought,” Weaver said.
Lewis, who remains the city’s deputy finance director, took over duties after the departure of Huey Newsome in March.
Among other sources, the water fund is the depository for water bill payments. In addition, the fund balance was helped, Weaver said, by the city being relieved of a recurring $7 million bond payment.
That payment relief was negotiated as part of the city’s return to the Great Lakes Water Authority (GLWA) instead of the Flint River. The city went back on GLWA water in October, 2015, but a 30-year ongoing contract was not signed until November, 2017. The $7 million bond was to have been paid to the Karegnondi Water Authority if the city had elected to use the new KWA pipeline — which it didn’t — a decision implicated in the city’s eventual water crisis.
Weaver said she thinks the $20 million amount referred to by the Neeley administration is the same money she referenced in her November open letter to the community, in which she said, “I am proud to announce that we finally received the $23 million in water credits that we had been fighting for.”
“Of course I knew about it,” she said. “How else could I have put it in that letter?”
“That money had been there — how do you just find over $20 million,” Weaver said. “You don’t just open a drawer and find it there,” she said with a chuckle, perhaps referring to the recent brouhaha over an alleged discovery of an electronic surveillance device in a drawer in the mayor’s suite.
As to how the $20 million balance in the water fund might be used going forward, Weaver said, referring to Neeley, who defeated her Nov. 5 by 205 votes, “Well, he’s there now so let him answer questions about that.”
As for the rest of her life, Weaver said she is attempting to “rest, recuperate and rejuvenate myself for the next big thing, because the next big thing is coming.” She declined to say what that might be for now.
EVM Editor Jan Worth-Nelson can be reached at firstname.lastname@example.org.