By Anya Kaats.
After years of providing volunteer services to the town of Crestone, Elaine Johnson sent a letter to the board in July explaining that she will no longer be providing assistance and guidance to the town on financial matters.
The last straw for Johnson concerned a “non-existent sales tax number” inserted into the town’s financial information, prior to the Town actually receiving that sales tax check from the state. “The town operates on a cash basis and there should never be imputed numbers in the business records. This could, under certain circumstances, be considered falsifying business records.” Johnson claims that despite her “strenuous objection,” the town allowed [Town of Crestone Treasurer Kim] Gossen to input an estimated number for an unreceived sales tax check into the books. “You all have a duty to the citizens. The staff needs to understand that what they’re doing is for the community. It’s not for the board, and not for themselves, it’s for the broader community. You’re dealing with [the community’s] money,” said Johnson.
“After almost three years and spending hundreds of hours trying to stabilize the financial situation of the town, I cannot continue when the advice and recommendations that I provide are complete and repeatedly disregarded,” Johnson explained.
Prior to her resignation, at the May Board of Trustees meeting, Johnson made an impassioned case that the town’s financial situation was in dire shape, explaining that she was “beside herself” that the town’s chart of accounts was still not reflecting accurate information.
Johnson expressed concern about a myriad of issues, including 2.5 million dollars missing from the balance sheet, no fixed assets listed, and claimed the current bookkeeper has “refused” to create a chart of accounts consistent with the 2024 budget created by the Town Finance Committee. “My frustration is off the charts. The financial situation is as bad if not worse than it was at the end of last year,” said Johnson.
Kim Gossen, who was hired as the town’s bookkeeper five months ago, was surprised by Johnson’s comments, and explained that she hadn’t made any predictions as to when everything would be “cleaned up and perfect.”
According to Johnson, “There was a chance in late 2023 that the town could recover from two years of incredible financial mismanagement, [but] that opportunity is slipping by. To sit here and have the same problem after six months is unacceptable.” While Gossen agrees that the finances were off track in late 2023, she feels “the mess is getting more manageable.” In a statement to The Crestone Eagle, Mayor Benjamin Byer defended Gossen. “We have to remember that Kim is attempting to pull together two years of mess,” he explained.
Without accurate books, Johnson feels that the town is unable to make informed financial decisions. “You still do not have reliable or accurate information as you are approaching funding a cemetery expansion and Living Wisdom [Village]. You’re looking at hundreds of thousands of dollars going out, and I can’t tell you whether you’re following your budget or not.”
In her letter of resignation, Johnson explained that current spending is exceeding the 2024 budget, which is of particular concern given that certain online retailers are no longer (incorrectly) collecting sales tax from Baca residents and remitting this revenue to the town. This could cause a substantial decrease in the town’s most significant revenue stream. Sales tax income is down 22% from last year. “The ultimate impact is still unknown and careful monitoring of the sales tax revenue as well as expenses is required,” said Johnson.
Gossen defended her decision to input the tax figure. “In order to make a realistic one-time comparison of mid-year numbers, budgeted versus actual, I inserted a well-notated projected sales tax deposit into the books to present to the board, knowing that I would take it right back out to be replaced by the actual deposit just a few days later. I got the approval of the mayor and one other trustee on the Finance Committee to provide this projection. There was no possible harm to come from that entry, unless of course someone wants to make a big deal about nothing.” Mayor Byer told The Eagle that the board has no further comment on this matter.
Beyond the town’s financial employees, Johnson expressed concern that, as a whole, town staff do not have proper oversight. “The board has a right to set high expectations, and ensure that the staff is meeting those expectations. At this time I don’t believe this is what’s happening. I advise you to scrutinize their background and experience and analyze whether the current staff is fully able to meet the town’s needs. The board needs more direct oversight of the staff,” said Johnson.
Johnson submitted a seventeen-page attachment along with her resignation letter to the Board, which she asked to have included in the board packet for the August 12 regular meeting.