The Senate insurance committee on Wednesday refused to back Gov. Laura Kelly’s nominee to the state retirement system’s Board of Trustees.
The committee forwarded the nomination of Kathleen VonAchen to the full Senate without a recommendation. VonAchen is the chief financial officer for the Unified Government in Kansas City, Kansas.
VonAchen faced a question about her work as a finance officer from 2008 to 2011 for Stockton, California, which declared bankruptcy in 2012 after the housing bubble burst.
Stockton’s financial troubles were blamed on decades of bad fiscal management starting in the 1990s, including decisions to offer generous employee pension plans and benefits while spending lavishly on projects to make the city an appealing Bay Area suburb.
Reuters reported in 2012 that median home prices in Stockton fell to $110,000 in 2009, wiping out a decade of rising property values, causing the city’s general fund revenues to collapse as well.
VonAchen said she joined the city of Stockton at about the same time that the housing bubble reached its zenith.
She pointed out that city leaders spent money that drained their emergency reserves, including a $47 million bond issue in 2004 to bankroll a sports arena that was built but ultimately ended up losing money.
VonAchen said she worked with the city’s chief finance officer to convey the importance of reducing the size of Stockton’s police and fire departments as well as renegotiating union contracts to save the city money.
“Stockton couldn’t handle it,” VonAchen said of the labor expenses. “It took a long time for them to realize that they were in trouble.
“There were a lot of issues at Stockton,” she said.
“Ultimately the people that I reported to and to the council, some of those decisions led them into the position they ended up being (in) once I left,” she said.
Democratic state Sen. Jeff Pittman of Leavenworth asked VonAchen what she learned from her short time in Stockton.
“It really imprinted on me the necessity to have rainy-day reserves,” she said.
“We need to have those reserves in case some catastrophic event happens that you’re not planning for,” she said.
The goal, she said, is to protect the taxpayer services that government provides.
VonAchen said the she works very closely with Wyandotte County officials in emphasizing the need to spend cautiously and set aside reserves.
“We all want to spend money now and have that gratification now for certain things, but ultimately it’s the best practice to have money set aside,” she said.
“It takes a lot of discipline to do that,” she said.
Pittman made an unsuccessful motion to send VonAchen’s nomination to the Senate with a favorable recommendation.
VonAchen started her career in the late 1980s as a budget analyst in the budget office under former Gov. Mike Hayden.
She worked as a senior public policy analyst for the state of Colorado, budget director for the city of Aspen, Colorado, finance director/treasurer for the city of Evans, Colorado, and deputy director of finance for San Mateo, California.
She’s been with the Unified Government in Kansas City, Kansas, since 2016, where she oversees a staff of more than 60 as chief finance officer.