King Harris disqualifies PCMD Board Treasurer
On Monday this week I received an email from Kevin Marchman informing me that my contract with SDC had been terminated, at the direction of the PCMD board chair (and SDC board member), King Harris. (It did not appear as though a meeting or a vote of the SDC board was held.) Mr. Harris made the decision because I had earlier emailed him about forming audit and budget committees of the board, as provided in the By-Laws. He and I had a brief conversation before Mr. Harris announced that he was traveling and would call me later. Instead of calling me he had me disqualified from serving on the Park Creek Metropolitan District board.
I accept the chair’s decision. However, I must underscore that it raises an ethical question for the board to consider: why stand in the way of the board and district’s auditor from meeting? In many organizations it is customary for the board, or an audit committee made up of board members, to have the opportunity to confer with the auditor at the conclusion of the reporting period. In June PCMD’s auditor, Lucious Ashby, sent an email to the board through Tammi Holloway; the letter stated in part, “We would appreciate the opportunity to meet with you.” I responded that I would be interested in speaking with him about the audit also, but never received a phone call or email. Mr. Harris later made clear to me that a meeting with the auditor would not be happening. He and Mr. Ashby are acquainted and so the chair was comfortable with all communication going through him alone.
The board’s approval of the 2025 audit report at its July 31 emergency meeting also poses an ethical question, because board members were given little to no opportunity to either review or hold a substantive discussion about the report and its conclusions. I was excused from attending for personal reasons, but I did review the report that counsel sent the day before the special meeting (did anyone else?). That document received was only the auditor’s opinion letter – no financial statements were included. The complete report was sent less than three hours before the scheduled meeting time.
My particullar interest in speaking to the auditor regards why Note 3 of the financial statements shows that there have been no additions to capital assets retained by the district since 12/31/2020 (at least – I could not find a report prior to 2021). Since then, not a single building or improvement, landscaping, alley, storm sewer or piece of equipment has been placed in service by the district, according to the audited financial reports over the last half decade. Depreciation expense of $1,686,545 has been constant from 2021 – 2025. In my review of the report with the district’s management consultants, I requested an asset listing or depreciation expense report, but none was provided. I believe the auditor did not request or review any transaction details, payments or contracts, pertaining to capital assets. To my knowledge the district has no listing or report of assets placed in service, at any time.
In the process of reviewing the audit report I raised concerns to Mr. Harris that the amounts reported for revenue from WCMD and payments to WCMD were incorrect, and inconsistent with the method with which those items were reported in prior years. The final report had not been updated to correct for errors that were identified and recorded in the district’s internal accounting system (after the initial report draft - my expectation was that the basic financial statements would be updated by the district’s accountant). No schedule was provided to show how the balances shown in the district’s general ledger, which I believe to be accurate, correspond to amounts reported in the audit report, which I believe were misstated.
Blatant disregard for complete and accurate financial statements does a disservice to all the district’s stakeholders, from the bondholders to the taxpayers, and construction managers, contractors, residents, and visitors who use and benefit from the assets built and maintained by PCMD. The board should require a clear accounting of the actual cost of those assets and the basis for their treatment in the audit report.
PCMD is a public entity whose sole purpose isn’t to borrow money and satisfy investors - it is to provide the facilities and services for the use and benefit of the taxpayers and service users within the service area. The board functions as if its highest priority is debt service, placing greater importance on meeting self-imposed deadlines than on the contents of the report that it approved after the scantest of reviews.
Sincerely,
Matt Blackburn
