Ravalli County's finances are in a troubling state of disorder. Treasurer Mary Hudson-Smith, who was elected off the Republican ticket last November, has failed to balance the county's operating accounts for nearly two months. She's failed to disperse money to various city and county agencies. She's failed to transfer operating funds into a higher-interest account as has been standard practice in the county for years. And if the county's cash doesn't start flowing smoothly soon, the consequences could be considerable.
"We don't know what our monthly balances have been," says Duby Santee, superintendent of the Hamilton School District. "Usually by mid-January we get the report for December, and we don't have that yet. Now we're going into February, so we won't have January's. And of course as a district, we report that out to the [board of trustees] every month. We've not been able to balance our books now for two months, and that's definitely an issue."
Hudson-Smith began her term as treasurer at the beginning of January, following a surprising general election victory over her former boss, Democratic incumbent JoAnne Johnson. Despite Hudson-Smith's 16-year career with the county tax office, many in the Bitterroot Valley—including outgoing and incoming commissioners—questioned her familiarity with and qualifications for a position that requires handling some $10 million of federal, state and county money per month. She repeatedly defended her ability to handle the responsibilities before and after taking office, both to county officials and the local press.
"After she was elected, before we were sworn in, I personally made her aware of several opportunities she could avail herself of to get some training, to get some advice, to try to get in front of this a little bit," says Ravalli County Commissioner Matt Kanenwisher. "She said—the message I understood was—'Don't worry about it, I've got it under control.'"
Reality has played out differently, and Hudson-Smith's inability to reconcile the county's operating accounts for December alone could have a serious trickledown effect for dozens of individual districts. As Ravalli County Chief Financial Officer Klarryse Murphy says, "Every dime that comes into the county goes through the treasurer."
"Not only are you responsible for the county in our county, we've got 70 other districts relying on us," Murphy says. "Our school districts, our irrigation districts, our fire districts, our water districts; there's a lot of people that, because of state law, have to run everything through the county, and that's...a big responsibility for a person who held the position of a tax clerk for all those years and just dealt with collecting people's checks."
The issue came to a head on Jan. 28 when Hudson-Smith appeared before the Ravalli County Board of Commissioners requesting permission to hire a candidate for tax clerk at a higher employment grade than advertised. Hudson-Smith's defense was that the candidate, if hired, could help train her and her deputy treasurer in their duties. The commission green-lighted the candidate, but not before voicing grave concern over Hudson-Smith's motives.
"I made the point that, 'Well, gosh, you increase your salary by about 70 percent when you got elected...and you're hiring somebody at half of your salary to train you and your deputy how to do your job?'" Kanenwisher says. "On its face it's unfair, and this tax clerk we're hiring has a job to do. Part of her job description isn't to train [Hudson-Smith]."
According to Kanenwisher, Hudson-Smith backpedaled on her statements during a meeting on Feb. 1, stating she felt the candidate was the most qualified to fill the position Hudson-Smith herself vacated when elected. The commissioners are now checking in with Hudson-Smith on a daily basis, Kanenwisher says, and will begin weekly public meetings with her next week.
Hudson-Smith failed to return several messages from the Independent seeking comment.
Officials have pointed to the situation as a prime example of why many counties in Montana long ago folded treasurer responsibilities into the clerk and recorder office, claiming that more requirements are called for when dealing with such an important governmental role.
"For the county attorney position, that position is required to be an attorney, so at least you know you have some education requirements that are expected to come with the job," Murphy says. "Fifty years ago a treasurer could be pretty much anyone who had a good sense for bookkeeping, but even in our small state that position has morphed into an incredibly responsible job."
Murphy adds that she can and will step in to help if asked by the commission, though her role is far different from that of the treasurer. To date she has not been asked, and says, "I've been reminded I'm not the treasurer."
For now the pressure is squarely on Hudson-Smith. If she doesn't get up to speed soon, her poor performance could reflect badly on others within the county. Santee says he hopes the Hamilton School District Board of Trustees understands why his business manager has been unable to present financial reports. But, he adds, Hudson-Smith may already have cost the district revenue it's budgeted for by failing to invest district resources in a timely fashion.
With so much on the line, the Ravalli County Commissioners remain unsure just what course of action is left should the situation persist. They can't simply remove another elected official, Kanenwisher says, but at some point they may have to intervene on behalf of the county's citizens.
"It's not clear in the law what is an unforgiveable sin," Kanenwisher says. "Where has she crossed the line? So we have to give ourselves an internal thermostat or barometer to say, 'At what point have we crossed the line where we can't allow her to continue?' And frankly, the process for that isn't completely clear either."