SMU finance manager won’t be shared with city this year

Joint duties dropped amid budget constraints

Plans to have the new financial manager at Shawano Municipal Utilities split her duties between SMU and City Hall have been dropped, at least for this year.

Kay Magyar, former finance director for the village of Mount Pleasant, began her tenure at SMU on Oct. 16 at a salary of $94,000, making her the second-highest paid employee in the city. Her salary is covered by SMU ratepayers.

The job was advertised as eventually becoming a joint SMU/city finance manager post, contingent on creating a new accounting position at SMU and the city that would assist the finance manager in both positions.

City Administrator and SMU General Manager Brian Knapp said the accounting position never made it into the 2018 city budget.

“There weren’t the finances available for that extra position, which would be required for someone like the finance manager at SMU to participate in finances at the city as well,” he said.

Knapp said the finance manager is already a full-time job at SMU.

“Without sharing those duties with an accountant or someone, they wouldn’t be able to spend half of their time with city finances and the city budget,” he said.

The ability to perform finance duties at both the utility and the city was one of the requirements that went into posting for the position last year, Knapp said, but that wasn’t the deciding factor in offering a $94,000 salary.

“I don’t know that it would have changed the applicant pool if it had just been SMU,” he said. “That’s not how we recruited.”

Knapp also said that competitive salaries for utility finance managers actually puts $94,000 at the low end of the pay range.

Magyar was hired in Mount Pleasant at a salary of $105,000, according to a news story last year in the Journal Times of Racine.

Her salary in Shawano is second only to Knapp’s, which was $133,307 in 2017. His salary is split between SMU and the city.

Knapp said it’s still the intent to have Magyar take on both the utility and city finance roles at some point in the future, but it won’t happen in 2018.

“It wasn’t brought up in the budget and that extra position wasn’t even brought up for discussion because of the constraints of the 2018 budget,” Knapp said.

Magyar replaced former financial manager Nancy Schauer, who retired in October just ahead of Magyar’s start date.

It was initially intended that Magyar would initially work with and under Schauer until Schauer’s retirement, which was expected to happen early this year.

However, Schauer, whose annual salary was just under $80,000, left sooner than expected after objecting to the amount of money Magyar was to be paid.

Knapp said that has caused a few problems, leaving Magyar to learn on her own how to navigate a software program that was set up and apparently understood only by Schauer.

As a result, there has been no rate of return calculated for the utility since Schauer’s departure, and the utility’s exact financial status was uncertain going into 2018.

Alderman Bob Kurkiewicz, who sits on the SMU Commission, confirmed that some commissioners had expressed concerns about the situation, but Knapp downplayed its importance.

“We haven’t had updated financials,” he said, “and that’s really the result of still learning how the former finance manager would put those financials together.”

Knapp said the system is broken down into different rates and different coding for each township outside of the city served by SMU, as well as separate rates for each customer class in those towns.

“I’ve seen the report. The report is a disaster,” Knapp said. “I don’t know how you pick these individual items out, combine them together and get them into the right pews.”

In theory, he said, it should be an easy task, except that the billing and rate codes were set up in the system in a “convoluted” manner back in 2005.

“It is a chore and I don’t fault our new finance manager in trying to figure out how that works, because it is pretty complicated,” Knapp said.

Knapp said the uncertainty over the rate of return has no impact on day-to-day operations or on customer billing.

“We know we’re going to have little or possibly no rate of return for this year,” he said. “We’re controlling expenditures as we would under any other circumstances. And we haven’t seen any significant increase or decrease in volumes that would cause us to say, ‘oh, the rate of return is going to be better than expected or worse than expected.’”

Knapp said he is focused instead on the utility’s cash flow.

“I pay attention to cash. Cash is king,” he said. “So we’re making sure that cash makes sense, and it does. So it’s a matter of getting caught up on the financial statements.”

Knapp said Magyar was close to mastering how the system was set up to function and he expected the issue to be resolved within a few days.

“We could have financials this week, or certainly next week,” he said.