He is reassigned to the new position of budget manager, at a lower salary.

After 12 years as head of the city’s finance department, Ralph Eells stepped down this week to take the new position of budget manager.

The move was announced by Mayor Darlene Kordonowy at Wednesday’s City Council meeting. After an hour-long closed-door session for personnel matters, the council without comment unanimously approved creation of the budget manager post, and accepted Eells’ reassignment.

The council also authorized the hiring of Art “A.J.” Housler of Mountlake Terrace as interim finance director, at a salary of $62,000, and an executive search for a permanent replacement was launched.

Acknowledging that Eells had asked several weeks ago to be considered for the new position, Kordonowy was frank in saying Thursday that his tenure as finance director was about to end with or without his agreement.

“There would have been a change made anyway,” she said.

Said Eells: “To the question of did I jump or was I pushed, the answer is: both.”

Eells, who came to the city after two decades in banking and held a vice president title, was the last survivor among the four senior administration officials hired after all-island annexation in 1991.

Longtime city administrator Lynn Nordby retired last year under pressure from the council, while beleaguered planning director Stephanie Warren stepped down in April 2002 and now serves as a consultant to the city on land use issues. The city’s first public works director, Bill Bryan, was fired by Dwight Sutton during his mayoral administration.

During his 12-year tenure as director, Eells shaped the city budget into a document that won multiple awards for clarity and excellence of presentation.

Yet his department was chronically unable to provide timely or accurate financial information to the state auditor during the annual review of the city’s books; the city was criticized by the auditor almost annually for its poor performance.

Kordonowy said she was unhappy with Eells for those failures – more so when, after particularly egregious audit results were released in 2002, she vowed that information for the next audit would be filed on time. The mayor then was blindsided this past fall, when she and interim city Administrator Lee Walton learned from the state that audit information again had been submitted several months late.

Kordonowy was also concerned about the city’s ongoing conversion to new financial management software; the council Wednesday approved a $30,000 contract with consultant Project Corps. to assist with that project.

As budget manager, Eells will be responsible for financial planning and analysis – areas in which Kordonowy and Walton said he excels – while his successor will take over general management of the department.

Eells said he looks forward to escaping the “ton of pressure” that came with the finance director post, while continuing to serve the public.

“I think the lower salary will be more than made up for by having less stress,” he said.

Eells will be paid $56,000 per year, a 33 percent cut from his current salary.

While he is eligible for retirement in about three and a half years, Kordonowy said Eells was not given a contract for a specific term of employment.

But the mayor said she believes he will continue to show his mettle in budgeting, and in assisting other public agencies as they look at taxation issues.

“We do have someone who has skills and institutional knowledge, who can help the city in a very specific area improve its performance,” Kordonowy said. “That’s maybe the reason he’s survived all this time. He’s been an asset, maybe in a narrower way than as finance director.”

Interim man

In A.J. Housler, who takes over Monday as interim finance director, the city gets an experienced administrator who nonetheless was the subject of some controversy at the end of his recent tenure on the Mountlake Terrace City Council.

From 1978-98, he worked for the City of Edmonds, as finance director and then administrative services director. Over the past four years, Housler has filled in for cities with vacancies, as interim finance director for Lake Forest Park, Puyallup, Bothell and Marysville.

He served on the Mountlake Terrace City Council from 2000-04, losing a re-election bid last November by a single vote out of 3,249 votes cast.

Housler made provocative comments on his way out the door, reportedly saying the council was being taken over by an

ad-hoc citizen activist group led by the man to whom he lost the election.

In a Dec. 12 story in the Enterprise newspaper serving Mountlake Terrace, Housler cautioned that the group was using “deception, hate and fear” to advance its agenda.

A month earlier, he had unflattering words for the voters themselves; he was quoted by the same newspaper as saying, “To those citizens who didn’t vote and to those citizens who voted for my opponent, they can kiss my (behind).”

For his comments, he was berated in the newspaper’s letters columns. One writer accused him of arrogance and showing “distaste” for his own constituents.

Housler was identified for the Bainbridge interim finance director job by the Prothman Company, the firm that will conduct the search for Eells’ permanent replacement.