Interim finance director appointment
Late on Friday, August 27, the Mayor sent an internal email appointing former Legal Director Saul Solomon to be the Interim Director of Finance effective September 7, 2021. That email was sent around 4pm on outgoing Director Kevin Crumbo’s last day in the office. The senior staff in the Finance Department learned about the appointment from the late Friday email. I like Solomon very much as a person, a lawyer, and an administrator. But there are significant questions about whether he is qualified under the Metro Charter to hold the Director of Finance position even on an interim basis.
What does the Charter require?
The Charter requires a Director of Finance to have a proven track record in public finance or a proven track record in the private sector as the controller or CFO of a large business. The language in Section 8.102 of the Charter is: “The director of finance shall have proven administrative ability and a well founded reputation in public finance, or a record of exceptional performance for at least five (5) years as a comptroller or financial head of a large business.”
The Charter creates a strong mayor. One major check on the a mayor’s power is that the Charter does not give the mayor the checkbook. Instead, the Charter sets up the Director of Finance as arguably the second most powerful position in the Metro government. The Charter does not envision that administrative and executive skills alone are sufficient to hold the checkbook. The Charter requires proven public or private finance experience.
The Charter gives the Mayor the power to appoint the Director of Finance subject to Council approval. The reason why Solomon’s appointment is said to be effective on September 7 is because that’s when the Council meets next and the administration is assuming his appointment will be approved. This week, there is no Director of Finance. There are some functions — like signing new contracts — that Metro is unable to perform this week because the position is empty.
What are the appointee’s qualifications?
You can google Solomon for more details, but his background is that he has extensive public and private sector legal experience, and he has extensive private sector executive experience. To my knowledge, he has never held a public finance position. To my knowledge, he has never held a position in the finance function of a business.
Solomon’s law firm bio does not claim any finance experience. To the Tennessean, the administration asserted that Solomon is qualified because he had “profit and loss responsibility” for a large corporate business unit. That explanation is naive or misleading. In corporate parlance, to say that someone has “profit and loss responsibility” is to say that they were the top executive of a business unit or division. Bill Gates had profit and loss responsibility for Microsoft — that doesn’t mean he should be anyone’s CFO. Mayor Cooper has profit and loss responsibility for Metro — that doesn’t mean he should be the finance director. The director of every department in Metro has profit and loss responsibility for their respective departments — that doesn’t mean that any of them are automatically qualified for a job in finance.
Solomon is an experienced lawyer, executive, and administrator. It’s not clear to me how he meets the Charter’s requirements to be Director of Finance.
Does it matter?
Aside from it generally be a good idea to follow the Charter, there are other circumstances that make it worthwhile to think hard about who will be the Interim Director of Finance.
To start, the rumor in the Courthouse is that we should expect the interim director to be in place for a while. That thinking is fueled by the administration’s recent challenges in filling open positions. For example, the recent (and still unresolved) debates over who should sit on the Fair Board started with the Mayor’s office missing a deadline to appoint a new person. As another example, multiple positions on the important Charter Revision Commission expire within a week and the Council has not been advised of any reappointments or new appointments. There is also the well-documented exit of multiple members of the administration’s leadership team this year.
On top of the difficulty filling positions, you have to wonder why they had to pick Solomon on Crumbo’s last day in the office. Was there not anyone in the finance department willing to accept the interim position? Why not? Crumbo gave his notice in the beginning of June. There is no known formal or informal search process underway, and I don’t know about any candidates for the permanent position.
If we assume that it takes six months to find a permanent director, that means that Solomon would be the finance director for a $700M water revenue bond issuance, whatever racetrack deal the administration is working on, whatever Titans deal the administration is working on, and at least the start of next year’s budget process.
Just to pick out one of these, I understand that bond rating agencies will be visiting with Metro soon to discuss the upcoming planned $700M water revenue bond issuance. It is inconceivable to me that Solomon would be able to lead Metro’s team in meeting with the bond rating agencies. That’s not a knock on Solomon — that’s just not his thing. The upshot is that whoever does lead Metro’s team for those meetings essentially will not be supervised in a meaningful way by a finance director.
A lesser concern to me — but one I have heard in the last few days — is that Solomon has done legal work adverse to Metro for some clients, including Collier Engineering. You can google to find stories about the multi-year investigations by Metro related to Collier. Since the finance director sits on the Metro Audit Committee and the Metro Procurement Standards Board, there’s an obvious conflict for Solomon being involved in making decisions about how Metro procures engineering services. Solomon would have to recuse himself for any required finance director activities related to his law clients.
Takeaways
The challenges that sprung from the Mayor’s office missing its time window to appoint someone to the Fair Board are minor in comparison to the failure to find a qualified interim or permanent Director of Finance in the 90 days after Crumbo gave notice that he was leaving.
If the position is left empty, I don’t know how Metro signs new contracts. If the position is left empty, can Metro still move forward with the planned water revenue bond issuance? There are significant problems that come from leaving the position empty. The Charter does not contemplate that the position would be vacant for any amount of time. But Solomon doesn’t seem to satisfy the technical requirements in the Charter or to have the practical experience to participate in the finance and accounting decisions required of the finance director of our $2.5 billion per year city.
I am going to have to continue to reflect on how to balance the harm of the position being empty, the knowledge that the interim appointment will likely be in place into 2022, and the practical necessity to have someone with relevant experience running the finance department.
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UPDATE (September 2, 2021): A few people have told me this post is too harsh on Saul Solomon. That’s not the intent. This appointment is a little like having a top running back go it to play quarterback. Maybe it’s going to be okay for a while, but it’s fundamentally not his position and weird stuff is going to happen. It creates risk. It’s clearly a last resort. Kudos to the running back for being willing to give it a go, but lots of questions for the coach.
What’s different here is that we don’t have to put the running back in the game. The Council could insist that the administration find an actual quarterback instead of having Solomon take on duties outside his areas of expertise.