compass

If you haven’t already heard, I’ve been working with a great team of people in the past few months to form a new online newspaper called the Mohawk Valley Compass. I’ll be working mostly behind the scenes – maintaining the web site, handling advertising and other administrative tasks. But I will also be writing a weekly “column.” It made sense to me keep the “Pars Nova” name as it still has meaning to me and sets the tone for what I intend to continue to write about – New ideas for new direction in Amsterdam NY. All future Pars Nova posts will be on The Compass rather than on this site.

I realize I have spent alot of energy lately criticizing the established mainstream media. I believe that if you see a problem, and that problem is important enough, at some point you have to do more than just complain, you’ve got to step up and help fix the problem. I’ve always advocated that idea in regards to the problems we face as a city, and  for me, helping to start The Compass is my own way of being true to that principal.

So please take a look at my latest Pars Nova piece on The Compass titled “Amsterdam’s future:city or suburb?”  While you are there – check out the other two well written opinion pieces that were posted today. Sign up for email updates, like the FB page or follow on Twitter.  Leave your brilliant and expertly written comments as you would here. I’m looking forward to discussing the important issues with all of you in 2014 on the Mohawk Valley Compass!

uturnWhile the cities of Johnstown, Gloversville and Amsterdam struggle to maintain their housing stock and downtown areas, Dustin Swanger, president of FMCC announced on Thursday a 12 million dollar plan to essentially build a new “downtown” on campus consisting of new housing construction and retail space.

As a graduate of FMCC, I am thrilled that the college is growing. The need for more student housing is obvious and I appreciate Swanger’s initiative, but I believe his vision is mis-guided. If he is willing to borrow $12 million dollars on behalf of the public to provide housing and amenities to students, he should invest that money into the surrounding cities that need the influx of resources to remain viable.

The location of FMCC is problematic of course. In other college areas such as Schenectady and Albany, college campuses (such as Union and Saint Rose) are integrated into the fabric of the community. However the short commute between any of the cities to the FMCC campus could easily be alleviated with a well thought out shuttle system.

I would submit that students, especially those coming from other countries, would have a much more meaningful and authentic experience living in a real local community with history and culture rather than an artificially created one such as proposed by Swanger. Our region needs our best and brightest students to return to the area once they’ve graduated. I believe that students who form friendships and bonds with the people in their community are more likely to do that. But if students are essentially isolated on campus, how likely is that to happen?

I would propose this – build three smaller housing and retail developments each in the cities of Johnstown, Gloversville and Amsterdam. Remodel existing downtown buildings to suit student housing requirements and to accommodate new shops and stores that cater to student’s needs. This would be a much needed boost for our downtowns and would give students a better experience than living in an isolated development out in the middle of nowhere.

I would also remind readers that you do have a say in this. The college is funded by the public and the public has the right and responsibility to ensure that how the college operates is beneficial to the students and the region. Don’t let anyone tell you differently. You can have a voice via your elected officials or by emailing Dustin Swanger directly at dustin.swanger@fmcc.suny.edu. In fact, if you agree with this position, why not use the “email” button below and forward this to him right now 🙂

controlpanel

I recently ran across an article from the NY Post, published last year that was interesting to me given the idea that’s been floating around in the news and in discussions lately of bringing in a state control board to sort out Amsterdam’s finances.

The Post reports that legislation is currently under review by state lawmakers to create one centralized “super control board” to handle a large number of cities, towns and counties in NY who are facing severe fiscal problems.

According to the Post, the key factor that control boards have is this…

[The control board] wouldn’t completely replace the locally elected officials. But it would provide them with the political “cover’’ many privately say they need to stand up to the powerful unions, which have consistently resisted spending cuts.

So in the context of the traditional battle between labor vs management, it’s not hard to see why Republicans (and Republican leaning pundits) might favor this type of intervention. According to the Post, control boards have proven to be an effective union-busting method.

Personally, I am neutral as far as unions go. I think they are beneficial in balancing the power of big business, however big unions can also make it difficult for small cities like Amsterdam to cut costs when it needs to. And I think right now, the city needs to cut costs in order to stay healthy long-term.

However, I believe that calling for a control board at this point is premature. Deputy Controller David Mitchell has – in fact – made good progress in correcting the city’s finances in the nine months that he has been at the job so far. He’s reconciled nearly half the accounts and has succeeded in finally getting our AUD report out the door. Additional accountants were also hired in October to work on the project.

I agree with the critics who say that both the Mayor and Common Council should have started a lot sooner on tackling this problem. But you’d have to have blinders on (or maybe have an agenda?) to not acknowledge the progress that has been made this past year. 

Furthermore, I believe the current Controller-elect and Aldermen-elect have a clear mandate to fix things, not throw up their hands and give up. Obviously, if a control board turns out to be the best option, then they have to do what’s right. But if they don’t even to try to fix the problems they’ve been tasked to solve, then I think they will have failed the voters who elected them. I think the current plan of action, along with the new council and controller, need at least another year before a decision is made on asking for a control board.

Also worth checking out is a widely circulated AP story on the reactions of some NY state mayors to the idea of a “super control board.” The article reveals some bleak statistics quoted from State Controller DiNapoli on the state of NY municipalities. In short, Amsterdam is by no means alone in our financial plight. This doesn’t absolve any of our leaders of their responsibility, but for me, it puts the problem into a larger perspective;  our economic troubles are intrinsically tied to the performance of NY State.

Crunching the numbers: take two

Posted: November 18, 2013 in Government
Tags: ,

I received some very good feedback from former Alderman Bill Wills and Flippin on my previous post that attempted to show a “balance sheet” of sorts for the city finances. Wills pointed out that any money spent from borrowed funds was included in the reported expenditures. Being that the debt service (ie money spent paying back the borrowed funds) is also included in the expenditure figures, my math showed a greater imbalance than there really was.

So with that in mind, I’ve created another table which simply takes the debt service figures out. This method is essentially how I create my own profit and loss figures for my business. If I borrow money to pay for something, I record the expense. However I do not record the payments on that debt, otherwise I would essentially be doubling that expense. I certainly record the payment in my checkbook, just not on my profit and loss statement.

Year 2000 2001 2002 2003 2004 2005
Revenue $20,108,331 $19,233,815 $18,409,146 $20,033,367 $21,733,043 $21,554,052
Expenditure* $21,640,008 $23,740,494 $20,139,283 $21,452,114 $22,292,403 $22,311,288
Debt Service $1,385,506 $2,816,708 $1,331,817 $1,521,294 $1,626,424 $1,989,216
-$146,171 -$1,689,971 -$398,320 $102,547 $1,067,064 $1,231,980
Duchessi Duchessi Duchessi Duchessi Emanuele Emanuele
Year 2006 2007 2008 2009 2010 2011
Revenue $23,487,861 $23,846,756 $19,589,783 $25,285,206 $30,411,542 $28,643,909
Expenditure* $28,811,482 $24,458,481 $25,664,099 $27,291,345 $34,802,682 $38,779,386
Debt Service $1,660,134 $2,746,389 $2,491,959 $2,245,054 $2,739,152 $5,884,650
-$3,663,487 $2,134,664 -$3,582,357 $238,915 -$1,651,988 -$4,250,827
Emanuele Emanuele Thane Thane Thane Thane

The numbers are from the NY State Controller’s website.  *Please note, the expenditure figures from the state include the debt service amount. I am listing the debt service amount separately for reference.

This method is still not perfect. Obviously municipal finances are lot more complicated than a small business. One aspect I know is missing is that interest paid should be listed as an expense. However I don’t have figures as to what percentage of the debt service amount is principal and what is interest. I also know that the figures as reported to the State Controller’s office are not 100% correct – although I would argue that the fact that the city is not bouncing checks means that they probably aren’t that far off. I think the numbers are still usable. I think it’s better to get a fuzzy picture than no picture at all.

So why do this at all? It’s because what passes for debate on the city’s finances around here is complete garbage. The dialogue coming from elected officials, former elected officials, residents or the local media establishment boils down to over generalizations, flat out inaccuracies, emotionally driven invective and politically motivated finger pointing. And none of this serves the public at all. It pains me personally that things like historical preservation, the arts, city beautification efforts, community volunteer efforts, all things which I and many Amsterdam residents value have been dragged through the mud in this election as the alleged “cause” of our financial woes when nothing could be further from the truth.

I’ll include one more graph that sheds some additional light our city’s debt situation.

debtchart

Why am I including the former mayor’s names here? Because more than one person has drawn comparisons between Joe Emanuele and Ann Thane, portraying Emanuele as some sort of financial savior who always kept us in the black (which he did not) and somehow kept us out of debt (also incorrect). The fact is that in 2006, during Emanuele’s term, we saw the 2nd biggest jump in debt in the past 11 years.

I am stating that for the sake of perspective. I’m not trying to detract from the very large increases in debt under Thane’s term. The numbers show that the debt problem is getting worse. I think the Mayor bears her share of the responsibility for the financial situation. To be fair, one has to recognize that there was a major recession in 2008 and that operating costs (like energy and health care costs) have been soaring. It should also be pointed out that Thane, along with the common council, has found significant budget savings by cutting benefits costs, as well as increased revenue from sales tax and water fees. Without these measures, we’d be in a much worse situation. However, it’s obvious more needs to be done.  I think if we could understand why we saw such huge jumps in our debt in 2006, 2009 and 2011, we would be a lot closer to understanding what is going wrong.

I have no doubt that there are individuals in Amsterdam who are far more knowledgeable and qualified to analyze and communicate the financial situation for us folks with an average understanding of such things. So if you’re looking at these charts and thinking they miss the mark, I’d be glad to hear how you would do it differently. I’ll gladly accept informed criticism here – anything to get us discussing the real issues rather than slinging mud around like crazy people.

In the city races, it seems to me that the lack of differentiation between the candidate’s platforms resulted in a situation where perceptions, personalities and past experience were the most important drivers.

I think the release of the draft state audit (which was published in October – surprise!) was probably the most pivotal element in the election. I also think the way the Recorder covered and editorialized the financial situation – before and after the draft audit release – did it’s part to amplify voter outrage. Even though the problems with the city’s books had been known about for years, and the Mayor and Common Council had recently implemented measures to correct the situation (such as hiring the Deputy Controller), there was something about seeing it all laid out in the state audit that was extremely jarring and disheartening. I felt it myself.

In short, the Mayor’s defense didn’t get much traction. Saying it was “all good” and referring to some emails she sent to the controller a while back came across as passing the buck rather than demonstrating proactive leadership. The audit confirmed the accounting problems were widespread and had gone on for far too many years without anyone taking any decisive action. Even though neither Republican or Democratic candidates offered any substantial ideas as to how to do things any differently than what was already being done, I believe the Republicans who won benefited greatly from the public’s perception of the Mayor’s role in the situation. And perception is reality – that’s how it’s always been.

I do want to give some credit where it’s due – I have to say that 4th Ward winner Diane Hatzenbuhler has  offered a ton of specific ideas over the years – many on this blog and on others – as to how she would solve many of Amsterdam’s problems. I personally don’t agree with some of those ideas, and I think other ideas lack key details (like how to pay for them). But if she is able to implement even a handful of them I think the city could benefit. Many candidates have given lip-service to the idea of increased code enforcement. But if Diane is able to really apply herself to this issue, maybe we could get somewhere.

I also think the example she has set by coming back twice now after two election defeats is an object lesson in dedication. She has shown that if you truly care about something, you don’t give up. I think some of the losing candidates this year would do well to follow her example.

It will be interesting to see how things play out now that the Common Council will have a veto-proof Republican majority. They will clearly be in the city’s driver’s seat for the next two years and so any success or failure will completely reflect on them in the next election.

I genuinely hope that the new council does well. The state audit and numbers from the state controller’s office show we need get our books and debt under control. Balancing the budget and reducing our debt will require the council to make some tough budget decisions. I think some fiscal conservatism is probably what is needed right now to get things back under control.

However, given many local Republican’s (and not a few Democrat’s) bent toward the idea of regional consolidation, it would not surprise me if instead of working hard to cut expenses and increase revenues, that the idea of declaring bankruptcy or turning over our finances to the state were seriously explored. After all, the population has already been “primed” for this idea anyway. This would essentially amount to giving up being an independent city and would pave the way to creating one BIG regional government. I sincerely hope that doesn’t happen.

If a religious leader wrote an article for the paper during an election season stating that their religion was the “only answer” and then implied that not all candidates were as strong believers of the faith as others, I have no doubt there would be a public outcry admonishing this leader to keep religion out of politics. Beyond that, it wouldn’t be surprising if the IRS and ACLU trained their sights on the leader’s organization as a result.

So does anyone else think it’s inappropriate for FMCC President Dustin Swanger to essentially do the exact same thing? In his article published on October 26th in the Amsterdam Recorder, he asserts that the “only answer” for economic growth is through “regional thinking/cooperation” (aka consolidation) and then all but asks us to vote for those who subscribe to that ideology. Of course he carefully hedges and stops short of endorsing any specific candidates, but overall, the message is clear: vote for the “true believers”.

Non-profit organizations risk their tax-exempt status when they endorse political candidates. I’m not sure if FMCC is technically subject to the same restriction. But the college president is a taxpayer-funded, non-elected position. I think Swanger comes very close to overstepping his bounds by using his position (and the visibility that position gives him) to promote a political point of view.

Make no mistake, the latest article from Swanger does not use the term “consolidation” however the idea of combining all localities into a single regional government has been clearly articulated and advocated for in past articles. He’s just using different terminology now.

And also make no mistake that just like all other consolidation proponents, Swanger has yet to show any solid plan or actual numbers that might indicate that municipal consolidation would deliver any tax relief, help restore our downtowns, or revive our economy.  The small scale consolidation plans that I have seen that do work, fall apart once you take out the financial handouts from NY State which is our tax money that is apparently being held in reserve for communities who consolidate.  Consolidation proponents have yet to show how their ideas do anything other than replace more accountable, small governments, with less accountable, big government.

I would definitely recommend that readers take a look at Swanger’s take on the role of community colleges in local politics. He presents a lot of ideas that I think are both good and essential. I think that local colleges providing leadership in the area of economic development is a great idea. But what baffles me is how Swanger’s narrative in the local paper over the years seems contradictory to the ideals he espouses in his thesis.

He affirms that small and medium-sized businesses are essential to revitalizing the economy, but promotes “regional cooperation” which primarily benefits big businesses as the “only answer”.

He talks about the importance of livable communities and neighborhoods and the importance of building up a “sense of community” but then proposes that towns, villages and cities are somehow archaic ideas that need to be done away with.

He talks about community planning as a “resurgence of order” but fails to address how reliance on big businesses (like the type that Mike Mullis works with) have disrupted that order over the past decades.

He quotes from “Rise of The Creative Class” by Richard Florida, which focuses on the ability of cities to attract creative professionals as a key economic driver, but on the other hand would discourage local cities like Johnstown, Gloversville and Amsterdam from trying to do this on their own.

Finally, let’s call this article out for what it most likely is – a recommendation against voting for Johnstown mayoral candidate Michael Julius who has been outspokenly resistant to the idea of consolidation between the cities of Johnstown and Gloversville.

And that’s kinda funny because in my view Johnstown is one of the best examples in the Fulton/Montgomery area of the type of livable community that Swanger claims to be in favor of. Is it any wonder that city residents and leaders might want to preserve that?

I have to say, the interviews of the various candidates for common council that have appeared so far in the local media have been nearly to useless to me. I have no doubt the editorial response to the recent State Audit will be scathing. But when it comes to the candidate’s interviews, I’m reading softball answers to softball questions. Amsterdam’s financial difficulties have been well known for years now and have been underscored by the recent release of the State Audit. But I’ve read precious few details about how any of the candidates plan to cut expenses or raise revenue. Whether online or in print, I’m hearing a lot of rhetoric, vague ideas and finger pointing, but no solid proposals.

Please note, I’ve revised the table I had here before based on the advice from some of my commentors. I’ve posted the new table with an explanation here.
The pie charts are still good though!

The fact is the city has outspent it’s revenues in every fiscal year since 2000. Here’s the stats compiled from the NY State Controller’s website

Over the past 12 years, on average the city has overspent by 3.2 million dollars per year.

I think voters need to task our local leaders with a simple and achievable  target that will get us back on track financially. I think that target should be to reduce expenditures and/or increase revenues by a total of at least $4M (or by about 11% of 2011’s expenditures) per year.

We’ve only got about a week left before the elections, but I believe that candidates (as well as the Mayor) need to provide some solid answers to the $4M question. Where do we cut? And where do we find new revenue? How do we bridge that $4M gap? Here’s the pie charts that show where the money comes from and where it gets spent. Tell me where we should slice or where we can increase…

City Expenses 2011
City Expenses 2011
City Revenues 2011
City Revenues 2011

It’s not like the data isn’t out there for candidates to do their homework. The current budget is available online. The state controller’s office also has a wealth of stats that document our finances over the years (h/t to Flippin for guiding me to this resource). You can also view the finances of every other city in NY for comparison.

I understand politicians don’t like to stake specific objectives – lest they be held accountable if they fail to reach them. But frankly, I don’t think we should continue to accept that.

Stipulation: I don’t accept a candidate pointing out a few minor expenses and then claiming “it all adds up.” If you’re sure it all adds up, show your math. Then I’ll believe you.

If you agree, feel free to share this challenge with your favorite (or least favorite) candidate.