Well it’s happened: Editorial slant has it’s desired effect

Posted: September 25, 2013 in Social & Economic Dynamics

bankruptcyI actually feel kind of stupid because it was just about  a week ago that I stuck up for The Recorder in response to someone trashing them, arguing that generally they keep their editorial opinions out of their regular articles. But soon after I said that, I stumbled upon probably the most egregious example of editorial slant that I had seen in some time in the September 18, 2013  article titled “City continues to weigh financial options.”

In that article, David Mitchell our city’s deputy controller, outlined four options for dealing with the city’s accounting problems: declaring bankruptcy, giving up city accounts to the state, hiring an outside firm to handle the accounting, or continuing on as normal, but fixing one account at a time until everything is reconciled. Mitchell specifically stated he recommended the last option. Now why he would even mention bankruptcy or giving up our accounts seems strange to me. Maybe he was just being thorough, who knows? But when asked directly if the city was in any immediate danger, he replied:

“From what I’ve seen, we should be able to meet our obligations as we go along,”

So what was the very first paragraph of this article?

“Declaring bankruptcy or surrendering the city accounts to the state have been outlined as possible options when it comes to restoring Amsterdam’s finances.”

Sure, this statement is technically correct. But it’s obvious that these options were only presented as last resort options. Isn’t it the media’s job to do at least some interpretation so that the reader understands the situation accurately? It is clear the deputy controller was not advocating bankruptcy and did not recommend it. But yet, there they are, the most sensational options, right at the top of the article.

I didn’t respond at the time, and Flippin wrote a good response to the article here.

But what prompted me to write is when I read one of the letters to the editors today bearing the headline “Eve of destruction”

It has finally happened: Amsterdam is on the brink of destruction. After all the posturing, rivalries in the council chambers, failed revitalization attempts, Amsterdam is faced with either bankruptcy or state control. At least that’s what last Wednesday’s edition of The Recorder stated

So mission accomplished! Whoever edited this story is directly responsible for this person’s completely incorrect understanding of the problem. Score one for the journalism profession!

The situation with the city’s finances is serious, but not insurmountable. The Recorder does the public no service by confusing the issue in this way. If there was ever a time we need accurate, objective coverage of city government, this is it. Frankly, I don’t think we are getting it.

In other news, I was not able to balance my checkbook today. As a result… I …….declare…..BANKRUPTCY!!!!!!!

I’ll leave you with a classic…

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Comments
  1. diane says:

    I think what is important here, we have dialog based on the deputy controller’s statement. People have to realize we have some significant financial issues in the city, and yes they can be dealt with. But, they cannot be dealt with by bonding for things we cannot afford just because the interest rate is soooo low. We still have to pay it back….they are adding up. In August our bond payment was not made since we did not have the money, it was rolled over. On the radio the mayor stated in fact it had been paid we did have the money !! So what are people to believe? We also have a consultant’s report that says our revenue stream is not sufficient to be bonding the way we are. I will take those comments over the mayor’s since they are the financial professionals.

    I am not opposed to making improvements and buying new equipment or even giving raises, when we have the money. We do not know how much money we have. Is there anything wrong with waiting and getting some more information before we continue to borrow for things we cannot afford? This week the state audit should be out and from all accounts it will be a zinger. You may not like the tone of the editorial from the paper, but at least they have put out there what has been stated. The people do have the right to know the facts as presented. Our city is not well financially and to continue to hear “all is well” and more giggles from the mayor is no longer appropriate.

    We need to deal in and with the reality of the situation and move forward cautiously.

    • Tim Becker says:

      Diane – this post was in reference to a news article, *not* an editorial. And the way the news article was structured, it was misleading – as evidenced by the letter to the editor. I agree the situation is serious, all the more reason we need accurate reporting. But from all reputable sources we have heard from, including David Mitchell and Richard Leggerio, we are *not* in danger of going broke. This article which is supposed to be objective and unbiased, has clearly led people to the wrong conclusion. Do you think that helps the situation?

      • diane says:

        Tim, the article could well have been written differently. But now there is talk, and people are aware of how serious things really are. Just because we are not going bankrupt, does not mean we need to go out and bond. And while there may be positive things going on in the city, it is time that there is actual discussion about our finances. The statement that “all is well”, is far from the truth and should be removed from the mayor’s comments. We are not a well city and we have a very long way to go to get there. What disgusts me more than anything is the arrogance of former controller Reynicke saying that the AUD and other things were being taken care of, when in reality they were not. The AUD is still not completed, unless it was done this week.

        The city spent over $100,000.00 for the new KVS software that was going to solve all of the problems in the controller’s office. But when the numbers being put in are not correct and then Reynicke does not run a parallel program until all the kinks are worked out is pure stupidity on her part. It does not take a rocket scientist to know you do not drop the old system until all programs balance. But it also goes much deeper than that, when the government has failed the taxpayers by not having the properly educated and trained people in the controller’s office to begin with. We have 17 bank accounts that have not been balanced since at least 2009; there is no reconciliation of the capital awards projects accounts; or some of the grant monies and how do FEMA monies get posted to Water and Sewer account funds? How does this happen? I do not get it.

        I think of all the time the late Ron W spend trying to reconcile our accounts and the horrendous working conditions he had to deal with. The mayor and Dybas harassed him like it was his fault! It was not, they never let up. But now that Mr. Mitchell has figured out a way to move ahead it makes no difference that the nothing is incorrect. I am very frustrated by the actions and non actions of the former controller and her total incompetence. I wish she could be sued for the money the city is having to spend to correct so much.

      • Tim Becker says:

        What would you do to move forward Diane? What specifically do you think needs to be done?

  2. Rob Millan says:

    Diane,

    Here we go. Did you even consider the fact that the consultant **has** to allow for bankruptcy as an option? and that he wouldn’t be doing his due diligence if he didn’t at least give it as an option in order to protect his business reputation and perhaps a lawsuit? Suppose he gave all options but bankruptcy and then the city were actually broke in a year- would Amsterdam be able to sue him for negligence? (Yes!)

    What should be said again is that bankruptcy is always an option. Always. I really, really wish some people would actually educate themselves and learn more about how these financial instruments work instead of just grabbing catchwords and phrases piecemeal from the air and running with them. Like ‘bankruptcy’, which evidently is a big hit with the anti-Amsterdam crowd despite there being several other options advised by the professionals.

    What should be mentioned, though, Diane (and others who need to be educated on what exactly it means to file a ‘Chapter 9’), is that it’s not that simple. You can’t just wake up one morning and decide that you’re bankrupt because you think you are and because you missed one payment or even 3,563 payments for that matter to a creditor or holder or anyone else you owe money to. You need to show proof that you are insolvent and a bankruptcy judge needs to agree in order for you to proceed. In fact, the law is so specific and comprehensive that there exists an entire facet of law and an entire judicial system that deals solely with bankruptcy. Amazing, huh? And yet Amsterdam is no where near that point. Not even remotely close.

    And missing one payment (which did not happen, as the Mayor has stated many times) does NOT mean bankruptcy nor does it mean you’re even on the verge of bankruptcy just as you forgetting to make your credit card payment doesn’t.

    Borrowing money does NOT hurt! In fact it helps so long as you can continue to make payments.

    At last check, which I admit was about two years ago for me at least, was that the city’s bond rating was good. Not stellar, -no one’s is. It’s good! And it allows us to borrow money at a preferrd rate, which in turn drives growth. These are not my words or the mayor’s or John Q. Public’s. It’s the professional’s, so I hope you’d put as much hope in the guy saying Amsterdam’s bond rating is good as you would in the professional who said bankruptcy is an option.

    Amsterdam, like any municipality, needs money for every day business: employee salaries, benefits, pension payments, infrastructure, vehicles, communication, you name it. Sometimes you cannot run it and also have room for big-ticket items like fire trucks, which need to be bonded for.. Simple as that.

    And if the consultant did in fact say that the ‘revenue stream is not sufficient to be bonding the way we are’, then wouldn’t you be in agreement that Amsterdam needs to start thinking about ways to grow revenue, which if good enough, means the spending can be any amount?

    • Tim Becker says:

      Is the deputy controller a consultant? I figured he was a city employee. Either way, I think it’s reasonable to assume he was just covering all the bases in his report to the common council.

      I don’t claim to understand the whole process, but the gist I get from reading some of the mayor’s posts is that some infrastructure work was bonded for because state money was slow in coming down the pipe. And the repairs that would be even more expensive to fix if we waited. So we borrowed the money in expectation that state money would pay for it eventually. Then they exercised some sort of “skip payment” option to allow for more time for state money to reimburse us. I could be getting this wrong, feel free to correct me.

      I’m not sure if this is the best practice or not, but the mayor and council are under constant pressure and criticism to “fix infrastructure” and then when they figure out a way to actually fix some infrastructure without having to raise taxes significantly, they get criticized for that too.

      My only caveat with your last point is that yes, borrowing money to spend on projects that improve revenue is a viable option – businesses large and small do this all the time. However, I’m not aware of any large investments Amsterdam is currently making that will result in any significant revenue increase. We also need a viable “business plan” to make that work, otherwise its just throwing money away. And if our debt load is increasing just to keep up with day-to-day expenses and maintenance, then that is a problem because that -by itself – will not increase revenue and it will eventually catch up to us.

      • diane says:

        I do not follow the mayor on FB, so I am not familiar with her comments that you are referring to. I am not saying that bankruptcy should not be included, as I am well of aware of what just happened in Detroit. And I do not think, even remotely that we are there. Our deputy controller is not a consultant, but a very hard working individual trying to solve some serious problems. I am referring to Daryl Puritan as one consultant and Canandaiqa Assoc as the other. I have read their reports and been at meetings where they have had presentations, and we have been going down a slippery slope for quite some time. But nobody is listening……including the mayor or previous controller. When someone that is a controller speaks in muffled tones even with a microphone, I get the sense they are trying to hide something. Reynicke was always doing that.

        We do need to fix our infrastructure and we are under a court order to do the sewer separation project and yes that is done with grants and bonding. But we have also been bonding for things that could easily be budgeted for if there was proper planning, which has been lacking. In reading the information from the Historical group and what could have been paid for under the grant, carpeting was included. Yes, that is just one item, but that is one item we could have not paid cash for, and used a grant to fund 75 % of it. There is no long term planning on the part of the administration and there needs to be. If things were planned out, all options looked at, we could be doing more with less as a result. Unfortunately we are bonding for too much little stuff, that we should be better able to plan for. I go back to the beginning of the mayor’s term, when the cash money was in the custodial budget for the roof, which instead was used to refurbish city hall. Had the study been done on city hall, it would have been possible to have the grant pay for a greater portion of it and probably could have done some other things at the same time. Instead of rushing in and pushing through an agenda to do everything now, there should be more planning and then execution.

        We do have a good bond rating. I am not looking forward to having it diminished either. Until we have some balanced books we should only we doing things that we must absolutely do to keep on going. When we have an actual accounting then we can move forward. Until we do, we should be in planning mode to make sure we make the best decisions possible for the taxpayers.
        In the past two years the water and sewer rates have been adjusted in a very hurried manner in order to increase revenue, but was it done properly for all parties involved? I would like to see both of these items reassessed due to the impact on the local taxpayer and whether or not we need to look at meters in all properties and what that cost would be and how it could be paid for.

        Next year MOSA will no longer be an option due to its dissolution. It was proposed we set aside 50,000.00 for a study of what we need to do. In the past, Ray Halgas has been very good in coming up with the appropriate numbers of what things are going to cost us. If I am not mistaken he sat on the MOSA board at one time. Before we hire some consultant, work with Ray and the county to see where we are going and what our options are going to be. We also need roll out trash cans and look to see what the impact would be on the homeowner and the DPW department employees.

        And Rob, I do not appreciate being spoken down to. I am knowledgeable on a variety of subjects and well aware of the entire section of the justice department that deals with bankruptcy and also aware of the different sections of it. My daughter is a lawyer and is currently attending Georgetown in pursuit of her LLM in tax law. We have interesting conversations to say the least. You are not currently a resident of the city or county or an attorney and you are free to speak your peace, but remember, I have been here for 13 years now, attending meetings since the Duke Administration and learning how our local government works and how things are done. I will continue to put forth suggestions, but also challenge those that choose not to follow the law.

  3. flippinamsterdam says:

    Let’s also remember demolition — 1+ million dollars last budget cycle alone — funded via bonds. So that means that the empty lots we see stay on our books for a few decades in the form of bond liabilities. The Esquire demo alone took $400K , all of which was bonded. I still maintain that demolition should not be bonded and should be expensed in the current year; Of course, that would immediately spike the tax burden if we had to properly account for demolition so that is why it gets bonded. Regrettably, demolishing properties is seen as sound fiscal policy versus the ever growing liability it incurs on city taxpayers. Bonding enables the true cost to be obscured versus expensing it– if folks saw the real costs of demolition, they just might rethink it I’d love to see the cumulative expense of demolition over the past few decades via-a-vis bonding.

    I’m still amazed elected and potentially elected officials decry high tax rates and the city’s growing bond payments while simultaneously championing demolition as if there is no relationship between the two. Unreal.

  4. diane says:

    Tim, I am but a peon in the big picture. I have read the financial reports and the two different consultant’s reports. We have to stop, step back and regroup. Mr. Mitchell has explained what he is currently doing, which is coming up with sound numbers for 2013-2014. And it appears the council is going to be meeting with an accounting firm that can come in and correct all the rest of the mess. The question remains, what is the dollar cost? Are we talking 30,000.00, 50,000.00 or 100,000.00 ? That is the big question. And is this the best way to go? People I have spoken with think it is a good start. Does city hall need an accounting office, or do we contract the whole thing out to a firm? Right off the bat, the unions need to be spoken to about changing pay dates from weekly to every two weeks. That frees up a payroll clerk to help out in other areas. All the clerks should be cross trained so that this never happens again.

    We need short term and long term planning. Immediate and 5 years out expenses. That is not currently done. Department heads need to meet weekly with the controller to go over their expenses and see where they are and if they can reduce anything and move it further out. We are currently hearing the term…….”we are growing our fund balance”. How bad is it, if we are growing it?? Do we need to look at freezing salaries where they were on July 1st, 2013? It may seem drastic, but with out good numbers, how do you hand out raises? Mr. Mitchell says we have enough to keep going. What about some outstanding fines that the city is possibly looking at: One is from the corps of engineers for the pond at Shuttleworth Park; another is not having a workplace violence policy posted and that was ignored for a couple of years. There is no excuse for the second, it was just ignored from what I have heard. We have no idea what is going on with the insurance trust and if we will ever see any money from that, or is it all being spent on attorneys? What about the Baia suit, how much is that gonna be, if in fact the city did break a contract?? These are just the ones I know about, not the others that may be out there that I do not know about. We also have some contractors that have not been paid, that are due close to 200,000.00 or thereabouts. We certainly cannot afford to not be paying our contractors.

    I think part of the problem is there is so much going on at one time and we have limited staff. We have to contract with McDonald Engineering to do quite a bit of oversight work, as I understand it and that adds up. Our storm drains need to be cleaned on a regular basis, if it is only every two years than never at all. I have got plants growing out from the one across the street. If they were cleaned routinely, that would not be happening. And we already have the equipment 🙂

    In the meantime we can do little to nothing with code enforcement since our corporation counsel favors settling things for very little in punishment fines. Of course he is a landlord himself, so that is part of the problem. We need to set standards for what we want as a city for our apartments so the landlords have an investment in the community: the properties are maintained; all units come with mini blinds; all upper floor units have carpeting to help with noise issues on the lower floors; units are painted according to some standard; modern appliances, central heat units, and modern plumbing. Just as an aside, I was in a unit that the same landlord has owned for 40 years, the outside was in great condition, but inside it had one of the old heaters in the living room area, the original claw foot tub and wall sink and toilet, all three of which were in deplorable condition. There must be set standards in order to have a nice place that people will want to come and call home. This place also had newer thermal windows but was not insulated, and the TV and other items were on blocks because the floors were all sloping. That is no way to live. By setting some standards the city can control the apartment situations to a degree. Much of this can be accomplished with standard leases.

    Landlord Inspections should be mandatory for all units, 2 family and above on an annual basis. The same way that Gloversville does theirs. They set up a date, meet you there, do a walk thru, address issues. The landlord is billed per unit. The landlord can do all his properties at one time, or during one week, or spread them out depending on the total numbers. By working with the landlord, there will be more cooperation. Driveways have to be paved and sidewalks in concrete. We need a sidewalk program like other cities, where the property owner pays for the material, the city provides the labor. Give the landlord time to work on the expensive items and they will be more accommodating on the less important ones. By working together, and if it doesn’t work, you go back to doing it every year. Fair, reasonable and upfront. Illegal units will have to be made to conform or they do not get rented. The point system has worked thru the police department and that needs to be encouraged. As soon as some one is arrested for selling drugs, contact the landlord so they can be evicted. We do not want those individuals in our community.

    When I was on the master plan committee we talked of density reduction. That is being accomplished for us in some cases by demolition. In other cases, we need to reduce the number of apartment units in the city. An example would be to convert two families under 2000-2500 sq ft to single family homes. In Charlotte NC there are investors buying homes priced in the 150-200,000.00 range and fixing them up and renting them out. People cannot qualify for loans like they used to or may not want to buy, so this way, they have their own home, only they are renting it. The other multi family units need to be reduced in size also, possibly cutting them in half. Fix them up, offer more amenities and then target the commuters who want to be close to ALB or elsewhere, but not live there.

    I have brought up before these basketball courts in the street. They need to be moved off the street. All these TV dishes need to be moved to the back of the house and not on every front porch in the city. Only porch furniture on the front porch. And for those that have trailers, boats, RVs snowmobiles, or any other accessory piece of equipment that cannot be stored in a garage and out of site, needs to be stored in a storage lot. Our properties look tired and very cluttered for this one reason alone. The lots are very small. All of these accessories are adding to the clutter. Clutter affects your property values in the long run.

    We also have way too many old overgrown hedges that need to be taken down and replaced with fencing. Maybe we can contract with a couple of people that have tractors to come in and remove the old hedges a couple weekends in the fall and then a couple in the spring. Do several streets at a time and get a much reduced rate. The homeowner benefits and so do the neighbors and the whole neighborhood. It becomes a win win. I think by working together in your own neighborhoods and doing things in groups, you can get discounts and do more at one time.

    I know our streets are in really bad shape and for those of us in the 4th ward, with all the utility work being done it is certainly aggravating the situation. Once this project is complete in an area, the streets need to be reassessed for a new paving schedule. There are certain public lots in the city that need to be paved: first and foremost is the URA/city lot at the p/o library and then the Reid St. lot that is currently being used for staging by the utility workers. A proper sidewalk on Bell Hill must be constructed. There is going to be an accident there before long and somebody is going to be dead. The old Milton School property should be made into off street parking for the neighborhood and a playground. It would make for an excellent neighborhood /city project and could possibly have room for a neighborhood garden if the residents wanted it.

    Wherever there are commercial properties in the city, there should be a privacy fence between the commercial and residential property. Commercial properties that have dumpsters should have a screen built around them. (This is standard practice with new projects) This city is not supposed to have any junk yards, so those that are here need to be cleaned up. All dirt parking lots should be paved…….it makes for a much better appearance. Those that have commercial equipment parked in a backyard, should think about storing it in a commercial lot somewhere. Many properties in the city can not be rented because there is ugly commercial trucks, trailers and such in the back yard. Do you want to look at that all the time? I know I do not.

    We are an old mill town and the only way to make ourselves better is to think what it is like in the new cities or the communities that we go to in Florida for the winter. We can be like them, we just have to adopt and follow those policies. We also have to start thinking how our actions affect our neighbors, especially the loud music, at any time of the day.

    Ok Tim………those are just some of the ideas. I also think that all DPW/off city hall premise employees should have to have a thumb print or eye scan so the abuse of card dumping is stopped. The taxpayers are loosing way too much in time from some employees. There also needs to be accountability with any equipment that is signed out/driven by an employee and there is an accident or whatever. Three times and you loose your driving privileges with the city. All departments need clear work rules from the city, in addition to their union work rules. There must be accountability from all departments on an ongoing basis. There must be better communication between all departments. And I certainly believe in a transparent government, 200%.

    I also believe that every elected alder person has a responsibility to his or her constituents to be responsive to any and all complaints, comments or suggestions. I have been told by one individual, that they are really only there to legislate; well if you feel that way, you should not be in public office. And just in case anyone would be interested, I did offer my time to the controller to try and balance one ck book, but he thanked me and said I was not a city employee. I did what I could, and I do no one other person that offered also and got the same answer.

    I am certainly open to any comments good or bad, it goes with the territory 🙂

    • Tim Becker says:

      Wow,.. epic! I appreciate the amount of thought you’ve put into this and I think there are some good ideas in here.

      Couple thoughts though – many of your solutions – ie hiring a firm to handle finances, fixing streets, sidewalks, converting two family homes to single family – they all cost money. So you can’t on one hand say “stop spending money!” and then propose solutions that cost money. The only cost cutting measure you’ve suggested is a salary freeze. But would that pay for all these things? And how would you go about breaking the existing agreement for raises that currently exists for the APD and AFD?

      I think others have challenged you on this before, but I don’t think you’ve really answered satisfactorily yet. How do you pay for the solutions – raise taxes? borrow? wait years for state/federal handouts? or what specifically would you cut from the budget?

      I think converting two family homes to rent-able single family homes is an idea worth considering. But again – either the city has to do the renovations, or provide some sort of incentive for investors to do it – and that costs money. Also, you loose the ability to charge two user fees, so that costs money too – you see where I am going with this? 🙂

  5. diane says:

    Tim, yes you loose the fees, but you gain a single family house which will cut in the overall expense department. People that buy housing or rent single family homes are not the individuals that are accounting for so many of the social services programs that are eating away at society. These people are more likely to maintain even a rental home than trash it. Less code enforcement, police issues etc.

    As part of the Land Bank program, we should/could be looking to do this with many of the properties. The vacant lots that have been created need to be disbursed to the neighbors with a deed. Many of these lots are already being used by neighbors that are not applying for purchase so they do not have to assume a greater tax responsibility. Take away the space and they will purchase it. Buy it for $1.00 is better in the long run, then haggling over the upfront costs….split those upfront costs and everybody wins. We also need a more flexible tax repayment plan in the city for people that come in to buy property and then find out thousands are owed.

    I am concerned how the fees are being tacked on to the properties and whether or not this is legitimate, since when the property is sold many are being waved. It looks like a revenue generator but in reality it is not. There needs to be more study inhouse done on this.

    Frankly, I would prefer working for a sound local government than one that is “broke”. I would take a pay freeze until such time in the next year we see where we are financially and then make adjustments accordingly. In private business raises are never handed out the way they are here. You work for that raise…..you earn it. GD has not earned his salary in the least. There is no justification for some of these raises and no one did any checking on comps in the area. As least it was not discussed. And back to GD, never except in this community, have I ever heard of paying for benefits for contract personnel (the whole point on having contract personnel was to avoid these expenses). Plus we are paying for his personal secretary at his personal office, plus he gets stipends for other stuff. This is so totally over the top it is insulting to the average tax payer, they are so fed up with this.

    We have areas of the city that need more help than others. Take the next five years and address those areas with the sidewalk and road improvements. That alone will help an area revitalize. Sidewalks could be added to their taxes over a two year period of time and help reduce the burden on the taxpayer. When I was on the planning board, we worked with the people when they had to pave parking lots and allowing time for them to get the work done. Give them time to raise the money. I think it worked well each time.

    A lot of the improvements need to be done by landlords. Each building is different, and therefore you need to work with the owner to get things done. When they do not want to do anything except collect rent, then you take them to court and hit them in the pocket where it hurts. The reason we are attracting the people we do, is because of the cheap rent. Rent is cheap because some landlords have not done anything to improve their properties in years.

    My job as alder person is to work with my constituents and help solve their problems with city government and with their neighbors if necessary. I am already doing this in an unofficial capacity routinely. The other hat I would wear is one of a legislator making our government financially accountable to the taxpayer and the local government work for the people. This would include actually putting in place or enforcing local laws that will allow us a great quality of life in such a small community.

  6. diane says:

    Tim, the comment about hiring a firm to handle the finances is something that may well save the city money. I do not know, but do think it should be looked into. It may also be so costly it is totally out of the ballpark. But if it is not investigated then how do we know.

    As for economic development, we have the MCAIDA, Amsterdam AIDA, and the Community and Economic Development Dept in the city. Each one should be assessed and determined who is bringing in the leads and go from there.

    • Tim Becker says:

      Right, but that’s my point – sometimes you have to spend money in order to save money or generate revenue in the long run. You can’t on one hand say “no more spending” then on the other say “spend money on…”. But that’s essentially what you are doing. I realize as a challenger you need an angle – but I think you just have to admit – the mayor and common council took the only viable option when it came to bonding for the projects that needed to be done sooner than later, because it would have cost us more if done later.

  7. diane says:

    Ah Tim, that line…..do it now while the rates are cheap I do not buy. I am saying for the next 12 months or however long it is going to take us to find out where we stand financially, we need to pay only those expenses we are financially obligated to. In the meantime we can be looking at short term and long term goals. That of course would include reviewing which projects we are going to have to do quickly and those which we can spend more time on, a little here, a little there. I would also propose looking at a second part time shift for the summer months when weather is better in order to get the work done in house versus outside contracting. That would also require working with DPW and Ray Halgas to make sure that things can be opened up and closed with in a relatively short period of time……say two weeks. If there are no assurances from DPW that they can do the job, then contracting it is, which in some cases is going to be more costly.

    Another legal issue pending out there is the $100,000.00 or million dollar suit filed by the owner of the Book warehouse that burned two years ago.

    I am also a believer in, if it is your property and the city has to demo it because you chose not to insure it, then the city will be coming after you for the demo costs. Or putting a lien against the property until such time as that cost has been repaid. This administration has demoed several properties that they did not own, albeit with the owner’s permission according to some FOILed papers. The homeowner should take out a loan and pay the city back. I would also put a notice against his credit report and attach what ever property that can be found. Reimbursement against an expense equals revenue. Something is better than nothing, and frankly, this city has been on the short end of the stick for too long………..and part of that goes directly against our current corporation counsel 🙂

    • Tim Becker says:

      No, I don’t think it has anything to do with cheap rates. You are saying you would have voted against bonding for any of the work that was done and you would have left the Esquire building as is.

    • flippinamsterdam says:

      Diane,
      I have to challenge this claim as proper financial management: “The homeowner should take out a loan and pay the city back. I would also put a notice against his credit report and attach what ever property that can be found. Reimbursement against an expense equals revenue.”

      You should not put on your balance sheet as an asset or as revenue any item for which the likelihood of collection or its asset value is close to zero. No homeowner will be issued a loan to payback a demolished building as what collateral will a bank have if they default? No bank will ever lend for such a purpose. Ever.

      Furthermore, for folks who are in arrears, their credit is already bad and hence the likelihood of collecting anything is again remote. Why should the city litigate against folks with no assets, or as is likely, against LLCs and other corporate entities which shield themselves from such claims?

      I’m afraid your recommendations only worsen the clarity of the city’s finances (I’m pretty sure no accountant would ever let you put bad assets and revenues on the books anyway) and yield negative returns to taxpayers through fruitless litigation.

      • diane says:

        Flippen…..Just read your post and the graph in your blog. Sometimes a picture is worth a thousand words.

        I do not think it would have to be litigated. I am assuming and maybe wrongly so, that the homeowner would not show up and a judgement could be taken. And I would not presume to know how the controller would post it. However, since it is really pie in the sky, have the controller maintain a special column for all those things like fees that are being posted as revenue, and then being waived by the council as soon as the property changes hands. Is that not the same thing? I do believe that is going on now.

        A while back there was a house on Bunn that burned, the owner collected the insurance, turned around and bought a house two doors down the street, sold the burned out one he got the insurance money for, that had not been fixed, and we ended up demoing it at our expense down the road. If somebody wants to mess with the city and ultimately the tax payers, I say two can play that game. But I also say, that maybe he may tries to correct things on his credit report, but until the city is made whole, I see no reason in spending a limited amount of dollars in filing a judgement or something similar in nature that would alert people that there have been problems in the past. I consider this to be fraud and thinks it needs to be prosecuted.

      • flippinamsterdam says:

        Diane,

        Whether we put a derogatory on a credit report or not has no impact to any revenues received from the city — I don’t think you’re advancing a sound policy. I also have to push back when you say “pie in the sky” yet we should still somehow recognize it in a special column of our financials — if we are doing that now and recognizing it as asset or revenue from a financial reporting perspective , that appears fraudulent. If you mean that we maintain some running report or spreadsheet, that is fine but you seem to decry the state of financials while at the same time suggesting very problematic approaches to budgets and financial reporting.

        I’m not familiar with the case on Bunn St but I would guess if there was an issue wit the propriety of the transactions, his insurance company would pursue the case. I agree we should pursue litigation when practical but if litigation were such a winning strategy, why do we have to bond for millions of dollars to demo properties? I know this runs counter to the usual talking points against the CC but that still does not make it sound fiscal policy. Seems the opposite to me.

  8. Rob Millan says:

    Diane,
    That’s the thing- you seem to know what the processes are and be accepting of them and yet continue be resistant to their implementation, especially if it involves the mayor signing off on them.

    ‘No long-term plan’? Please tell me you’re joking. Look around you- capital projects left and right, Riverlink Park in various phases- all part and the result of long-term planning. Solid infrastructure, including hydrants and roads, stable and healthy municipal departments. All part of long-term planning. And yes, some projects do require bonding.

    Also, once again I can’t believe after so many years I need to reiterate, but you don’t know anything about my credentials, schooling, my practice, etc. Please refrain from professing to.

  9. diane says:

    While the projects themselves require short and long term planning, the actual city finances also deserve the same. Looking at everyday finances including contracts, pensions, insurance and all the associated costs, along with lawsuits also need to be accounted for. They are not. It seems that the numbers are just being plugged in at budget time. That is not planning, at least in my mind.

  10. wildthane says:

    You are wrong, Diane, yet again.

    Budget numbers are not picked out of the air. Long-term impact analysis is done on everything from sales tax redistribution, utility fee changes and revenue sharing agreements with the towns to our GAVAC agreement, renegotiated labor contracts and preparation of capital purchasing list. Gerry’s input has brought our community millions of dollars in revenues over the past 5.5 years.

    It’s unfortunate that you cannot acknowledge the achievements this administration has brought about physically and economically. We are quite proud of the direction we are taking the city in.

  11. diane says:

    Hey Tim, I have thoroughly enjoyed the back and forth. While my idea about going after the homeowners may not be viable, something has to be done to deal with these properties that are being left to the demise of the city. And I think maybe all those fees that are being charged back to a property and we know they will not be collected, should in fact be set up on a spread sheet as opposed to being listed as receivables on the books, which I think they are. And I could be wrong on that, but since most seem to not be paid or then waived, it would certainly give us a more accurate idea of real revenue. If we ever get reimbursed, it would be a lovely windfall 🙂

    I am not a magician and I do not have all the answers, but I am willing to put forth my ideas as a solution. And I am willing to sit and work with the other members of the council to solve our city’s problems. By working with my neighbors to solve their problems, I stop them from becoming everybody’s problems and going public, which in the long run eliminates the negativity on the radio 🙂 And here in the 4th Ward I have some great ideas for our neighborhoods. Like I said I already Our quality of life issues that were ignored for so long 🙂

    • ROGO says:

      I have to agree with diane on most of her statements. if you don’t have accurate numbers to start with, numbers ARE picked out of air. Gerry is not controller and should not even be involved with any numbers. Only way to prove anything is the state audit. Is anybody holding the audit up?? What about ura and 47 Florida avenue, $125,000 foreclosure, where is current rent going to?????????

      • diane says:

        Rogo, According to comments made in regards to the audit, the final document should be sent out sometime in the next week or two. The aldermen have already or should have met with the state during the last week of August. That is where they learned it was not going to be good news. However, this is not a financial audit, but a procedures audit. As the city is finding out, without the proper procedures in place, how can you have the right numbers.

        Going to be very interesting.

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