Karen Aceves, appointed South Pasadena Finance Director seven months ago, has resigned. Aceves, who in late August left on an indefinite family leave, sent the city a message Tuesday announcing her decision to resign was effective immediately. The resignation means the city will have to begin a search for its sixth finance director in less than three years.
It is unclear how soon the city will act. On Sept. 16, the City Council appointed Interim Assistant City Manager Elaine Aguilar to fill in for Aceves while she was on leave. The resignation also comes as the city is preparing to commence a search for a new city manager.
Aceves joined the city in January 2017 as Principal Management Analyst making just over $64,000. She survived former City Manager Stephanie DeWolfe’s 2018 restructuring of the Finance Department and on Feb. 27, 2020 was named Finance Director, making $129,000.
Her tenure as Finance Director has been tumultuous. Her controversial appointment came days after she opted to forego a similar position in South El Monte that would have paid more. DeWolfe welcomed her decision to stay, crediting her with having created the city’s first Capital Improvement Project Plan, overseeing three budgets and two audits.
But the restructuring faltered, and the Finance Department’s new smaller staff was unable to timely address a raft of “inappropriate accounting practices” the city identified in an undisclosed 2018 report by CityGate Associates.
Last June, as the delay in the posting of the city’s 2019 Comprehensive Annual Finance Report became more glaring, scrutiny from outside finance experts forced the city to release the CityGate report, and exposed its failure to generate regular finance reports and its inability to reliably state its cash position.
Aceves was criticized for submitting a proposed 2020-21 budget to the City Council that was significantly different from the one she’d gotten approval for days earlier by the Finance Commission. Aceves said the revisions were made to integrate more accurate figures whose changes had been driven in part by the fast moving COVID-19 crisis.
But delay in the production of the audit led the Council to respond to public pressure to postpone adoption of the budget, even as it implores voters next month to approve reauthorizing into perpetuity a 7.5 % utility users’ tax.
Meantime the Council demanded an explanation for the delay in the audit. On Aug. 19, a representative of the auditor told the Council a letter outlining their internal control findings was a week away. The next week, Aceves went on leave with no word on when or if she would return until today.