Calabasas Council says bookkeeping procedures are vastly improved

By Michael Picarella pic@theacorn.com

Gary Lysik

City council members in Calabasas have expressed concern over the city’s financial procedures in the past, and Gary Lysik, a new chief financial officer (CFO) hired in December, has corrected the problems, officials said. The council recently gave Lysik an excellent job performance review, sources said.

When Mayor Pro Tem Barry Groveman was elected to the council in April 2003, he promised to restore confidence in the city’s financial system. Groveman had described the former policies and procedures as unacceptable.

Calabasas now operates, Groveman said, the way it should.

"In my view, the city was run more like a family bakery (rather) than a municipal government," Groveman said in a recent interview. At his first council meeting, Groveman challenged the validity of approving expenditures that had no explanation or clearly understood authorization.

"There was grossly inadequate record-keeping, and it was clear that many transactions had not been in public view nor available for public scrutiny," Groveman said. "Consulting contracts were not available and in some cases did not exist, and there was no contract administrator to assure invoices were paid according to contract requirements and that services contracted for were actually provided."

Groveman openly criticized the consent calendar procedure in which thousands of dollars were spent without comment. He refused to approve it until the system was fixed. It wasn’t until months later that Groveman okayed city expenditures.

About seven months ago, the council created the new position of chief financial officer (CFO) with the hiring of Lysik. In addition to hiring a new staff member, the city council also replaced the city manager and the city attorney.

Both were moves recommended by Groveman to help shore up perceived weaknesses in municipal bookkeeping.

Lysik has made a big impact, according to Groveman.

"Gary has eliminated waste and inefficiency, established procedures to better track costs so they can be visible and accountable, produced clear reports so diligent supervision is now possible, and has reduced the dependency on outside consultants in favor of better staff at reduced cost to the taxpayer," Groveman said. "He has also developed an accurate projection of city revenues and expenses and produced a solid budget for city management."

Lysik has also introduced new and better investment policies, according to Groveman. The CFO is expected to introduce other reforms that will slash wasteful spending, such as reducing the number of commission meetings, Groveman said.

"In summary, Gary Lysik, along with (the city manager) Tony Coroalles, have overhauled the financial management of the city and have restored confidence that the council and the public can have in the way this city conducts business," Groveman said.

Money has been saved

According to Groveman, when Lysik joined Calabasas about six months ago, he reduced unnecessary paperwork and expedited other procedures. Lysik did it, Groveman said, without a major overhaul.

"The total cost savings associated with not purchasing a new financial system is approximately $250,000 for hardware, software, training and implementation costs," Groveman said.

Lysik also increased the city’s annual interest earnings by about $15,000, according to Groveman.

"He has reduced the accounts payable backlog by implementing new processes," Groveman continued. "The annual cost savings by not incurring late fees was approximately $2,000, but the greater benefit is the improved relationship the city has with its vendors and service providers."

Groveman said Lysik found other ways to save money and maximize revenue. The estimated annual increase in income for this fiscal year is $54,000.

"The estimated savings to the city exceeds $35,000," Groveman said.

The city council reviewed Lysik’s performance last week.

"Basically, (his performance) is uniformly outstanding," said City Councilwoman Lesley Devine. "It’s as high as you can get."

The rest of the council agreed, Devine said.