Buckeye's finance director familiar with handling crises

Facing budget deficits and layoffs, Buckeye has clearly been hit hard by the economic downturn. Now, the town is looking to new financial leadership to help get the town on stable ground.

Last month, the town hired a director for the finance department, Gail Reese, 63, to help provide direction. She has nearly 30 years of experience in finances for private firms and governments, including a stint helping Albuquerque dig its way out of a $23 million shortfall. Reese makes $115,000 a year, she said.

Reese, who said the town is facing "an economic situation that doesn't parallel anything we've seen before," will be providing important advice to the Town Council and Town Manager Jeanine Guy to help deal with what some town leaders have called a "budget crisis."

Already, Buckeye has laid off 39 employees and froze or eliminated another 26 vacant positions to try and get the budget for personnel down to a more manageable number.

Reese sat down with The Arizona Republic to discuss Buckeye, budget shortfalls and her philosophies. Here are some excerpts from that conversation.

What is your background?

I initially went to college to be a psychiatrist or a socialist. I made it almost three years toward that degree and realized that probably wasn't a good plan . . . I went back to school in my late 20s, finished up my degree and got my accounting hours . . .

I went to work in public accounting and went to work for one of the big eight at that time. I stayed with them for about six or seven years. I went to a local firm. By then I was pretty much specializing in taxes, especially state and local taxes . . .

I was there in 1988, dreading the upcoming tax season because there had been such major law changes, and Gov. Garrey Carruthers in New Mexico called and said, "Would you like to run the tax department for me?" And I thought, wow, there's an idea . . . and I stayed there for 10 years.

(After returning to the private sector,) the mayor of Albuquerque called and said, "Do you want to come and be the CFO for the city?"

In my initial interview, I asked about the budget. "We're in great shape," he said. I went to work for them in January and by the end of January, I believe we were looking at a $23 million deficit. So it's not that I haven't been through this before!

I started having some physical problems. I thought, I am eligible to retire, maybe I should just do that now.

I came out here last September ... I came down to a council meeting. I introduced myself to Jeanine (Guy) . . . She said, "You know, we're looking for a director of finance."

In the fall, they were still advertising the position. And I thought, "This is my town. I like this town." I feel a real affinity for this town, maybe because I grew up in a little town in Iowa. So I filled out the application, they called, and here I am.

I asked, "How are things with the budget?" They said, "Oh, pretty good." It's déjà vu all over again.

Why did you move to Buckeye?

My daughter and son-in-law live out here. Ever since they moved out here, in 2001 I think, I'd come out three to four times a year and we'd look around . . .

I find the east side too urban for my taste. I like seeing the stars and everything. I was surprised I was in Buckeye . . . They gave me a good deal on the house and I was close to my kids . . .

What is it about Buckeye that draws people in?

Probably two main reasons. They are drawing in two distinct populations . . . There are the folks like me, who are moving from somewhere else and are retiring or semi-retiring. They enjoy the climate, the ambiance of Arizona and we tend to be a little bit older, tend to have little more in the way of assets. They enjoy the somewhat rural atmosphere of these communities.

And then I think that Buckeye is experiencing the same thing I observed in Albuquerque: that push for affordable housing. If you don't mind the commute, you, too, can afford to own a house. I think there's some of that. Those people have different needs, different interests and expect different things from the communities than the first group does.

And then, of course, altogether they need to assimilate with the Old Town, the folks who have been here and know all the stories . . .

I'm almost glad there's been an economic downturn. I wish it wasn't such a precipitous downturn, but I think it might give us a chance to catch our breath and think about how we can all meld together and move forward . . .

That's the same thing I hope to do in the finance department. Over the years, I have seen too often (something) start and grow too fast. It almost always is the kiss of death. You don't spend enough time building the foundation you need to make an organization work. And to grow from a town of 4,000 to 44,000 implies a lot of foundations that I don't think got laid properly.

I think based on the years I've spent in accounting and finance and government, I've got some solid experience to get some of those things in place, so that we'll be in good position to do things well and do things wisely.

Are there any significant changes that need to be made?

I think we need to do a lot of things differently . . . In finances you have to pay attention everyday, particularly in challenging times. We look at revenues every day, expenses every week, to see if there's something going on and if we need to do something.

I think what we are lacking the most in the finance department are good, solid accounting policy and finance policy procedures . . . I understand the council and mayor and probably the town manager are concerned they're not getting current financial information in a format that's usable to them. I'm working on a new report in that kind of format . . .

The two quintessential functions of government are public safety and public health. Everything else is nice, but extra. And so we started a discussion a month ago: What are the most fundamental services local government must provide to its citizens? To me, it's public safety and public health. That's what local government does.

Is the town staff receptive to that idea?

I think there is agreement with that particular philosophy. If I sensed massive disagreement, I don't think I would have taken this job . . . We're all pretty much of the same mind-set . . .

I think we need to do some exercises on what we want to be. We can't be Scottsdale. But there are a lot of niches out there that we can fill.

Is there something we can blame for the budget shortfalls in Buckeye?

An overabundance in enthusiasm. Some of the first stuff I picked up from the Buckeye Chamber of Commerce was about how Buckeye's going to be a town of 100,000 (people) and Buckeye's going to be a town of a quarter-million (people) . . .

Is something unique about town finances you find interesting?

This is more directly about the challenges of service provision in Buckeye that I'm finding interesting. Buckeye has grown with its 600-mile planning area and its 380 some acres of town, not all of which is contiguous . . .

What that does is constrains the choices that can be made to manage the budget. We can't close one of those fire stations.

Almost exactly 50 percent, after the modifications we're proposing, of the total general fund budget goes to police and fire. Fifty percent of the budget is off the table for all intents and purposes. That means much deeper cuts have to be taken somewhere else to bring it into balance . . .

These cuts and other maneuvers the town is making will take a nearly $7 million deficit into about a $1 million surplus. But the town also has a rainy day fund of $17 million . . .

Yes, $17.2 million. That's for a much rainier day than today.

So explain what that is for exactly.

I'm concerned that reserve is not big enough. I believe it needs to be at least double that. The likelihood that we will be in any position to do that in the near-term is slim to none . . .

What we're talking about, and why I'm trying so hard to protect that reserve is we have ongoing commitments. We have debt service we have to pay. We have police and fire we have to pay. We have other things we can't not do ... that $17 million is there if revenues drop even further and we still have to keep police and fire going, then there's still money there to do that. That's really what it's for.

Gail Reese