Deja Vu: The Common Council’s Fiscal Mismanagement

From the Mohawk Valley Compass article on the Common Council crafting the City Budget:

“Well then I’m taking a shot. I’m going to take a half a million out of fund balance,” said Barone.

Later, Agresta said, “I can’t go with using general fund balance to balance the budget.”

“Before I raise the taxes, I’ll deplete the the fund balance, I don’t care what the state says,” said Barone later in the meeting, “I’m not going to raise taxes and I’m not going over the 2% tax cap.”

If this ‘technique’ to fiscal discipline and management sounds familiar, it should be. Here’s what the NY State Auditors said when precisely this ‘raid the fund balance’ technique was used:

The Board did not adopt realistic and structurally balanced budgets and instead consistently relied on appropriating fund balance, a non-recurring revenue, to finance recurring expenditures. Further, in two of the last three years, the County incurred operating deficits. As a result, the financial condition of the general fund has diminished in recent years. As of December 31, 2012 the County reported a total fund balance of $11.4 million in the general fund, a decline of 41 percent from the January 1, 2010 total fund balance of $19.2 million. We also found that the County’s cash-on-hand declined from twice its average monthly expenditures in 2010 to about $324,000 less than the average monthly expenditures in 2012, and the County’s contingency appropriation is not adequate for current financial conditions. The County’s declining financial condition is the result of poor budgeting and financial management practices and the Board’s failure to develop and use long-term financial plans.

If you’re a confused, and concerned taxpayer like me, you might wonder how the very same Council that touts its fiscal responsibility along with the legion of Council supporters who want the state to come in and basically take over the city all in the name of ‘running things like a business’ and ‘making tough choices’ , can actually proceed with such a plan.

A plan that without question is wholly fiscally irresponsible.  And a plan that runs counter to every single talking point on financials and budgets from the Council and their proponents.

It’s simple really: politics first, financials last.

Spring Fling Rocks! Spring Fling Sucks!

I attended Spring Fling with my kids yesterday. We ate pizza, drank lemonade and got some hugs and kisses along the way from friends we don’t often see about town. The layout of our city, with no ‘center’, makes it most unlikely you will run into someone so to be at an event that encourages that seems to me, and my kids, to be a good thing. I take it as a sign of success when my kids want to attend an event , like Spring Fling, that the event has good vibe and energy.

By most measures, I’d consider Spring FLing 2015 a success — many booths, many people.

But then I remembered this Recorder campaign piece editorial which minced no words on what a hell hole Amsterdam really is:

A handful of white rocks, some pretty tulips, and a few hundred bags of winter trash are the lipstick on a pig when it comes to the blight that scars so many of our neighborhoods. Everyone sees it. And those who can’t — or won’t — admit it are those who carry an agenda.

A stranger need do no more than enter Amsterdam from the east along Route 5 to see what any right-thinking person would consider as the place to start. Attitudes about Amsterdam that are formulated by those who don’t live here are not entirely based on fiction, hearsay and lies. They are based on eyesight.

[snip]

The city of Amsterdam gives Montgomery County a bad name.

 

So it’s funny to read this recent story by the very same newspaper:

According to Kevin McClary, publisher of The Recorder and the major sponsor of Spring Fling, “Amsterdam’s downtown is the perfect venue for the event. People have an opportunity to experience the location and appreciate what it is becoming. The Recorder is proud to be a major sponsor of Spring Fling again this year. It’s a great community building event with something for everyone.”

And then yesterday’s editorial:

Spring Fling is an event that grows every year. The fact that it takes place downtown serves only to bolster attempts by the community to shine a bright light on the center of our little city and show the progress being made there.

As has been mentioned in the past, many people don’t normally give Amsterdam’s Main Street the attention it deserves. It winds up being just a traffic pattern to get people through the city. It’s nice when people can take the time to enjoy what’s down there. Spring Fling also helps Main Street businesses get noticed. There is room for growth downtown and the more people who are exposed to this potential, the more opportunities there are for that growth.

Come on guys, it’s embarrassing. You need to stick to a consistent talking point. While I recognize the editorial intent is to campaign against Mayor Thane, you must choose only one talking point as the editorials cannot be true at the same time. So choose:

Choice 1: Amsterdam is a hell hole and as such no one would invest time and resources into such events as Spring Fling, especially a stone’s throw from the dismal East End. And no rational business , seeing such a hell hole, would certainly taint its brand and reputation by sponsoring an event  in such proximity to not only a local embarrassment but, by golly, an embarrassment to the entire county. No progress has been made in the city.

Or

Choice 2: While Amsterdam has some problems, Amsterdam does have some positives.  Spring Fling represents a positive and successful effort to draw and to bring folks into the downtown. Local businesses sponsor this event as a way to highlight some of the good things happening in the city. Sure, a lot of folks will always disparage and put down the city, like aforementioned editorials, but the city needs to embrace some of the positives and work to countering its negative perceptions. We need to celebrate the progress being made in the city.

You really need to choose one even if it is campaign season.

 

The Recorder Editors Rail Against Themselves

The Recorder’s recent editorial criticizing the Mayor is totally epic in terms of its utter lack of self-awareness in how they exacerbate the endemic problems facing the city — the incessant negativity, the do-nothingness, the fatalism, the embrace of failed policies and strategy, and the longstanding political vindictiveness.

The Recorder editors need only look at themselves closely in the mirror to see that they are a very vocal contributor to the very things they rail against.

For what precisely have the Recorder editors advocated?

Like a large bloc of our vocal naysayers and do-nothings, they champion nothing. Nothing, of course, other than embracing the need for the city to dissolve itself. On that issue, they are vocal advocates.

No, the Recorder editors should take a close look at the state of the city and contrast it to what they publicly advocate.

The editors decry blight but harp relentlessly on how the city has no money and should spend no money and endorse candidates who likewise vow to spend no money. They editorialize and demagogue on financials even when their own reporting contradicts their editorial. The important question remains unanswered: how do you expect to fix blight while advocating the city spends no money?

The editors want growth or development yet advocate against projects that promote growth and quality of life: they supported shutting Bacon school, they supported shutting down the Walter Elwood museum, and they championed the tabling of the Chalmers deal. How are any of those decisions consistent with growth or quality of life?

The editors want zero spending and lower taxes but delight in spending hundreds of thousands, now millions of dollars, to demolish buildings with absolutely no plan to rebuild in its place.

The editors bemoan the constant bickering and political infighting yet gleefully editorialize on how their side — the current Council — finally gets to put the Mayor in her place upon the Council’s election victory.

The editors question priorities using the hubbub at the golf course as an example of focusing on the wrong priorities. But like a sly 3-card monty dealer, they want you to look at the Mayor’s actions while they fail to point out that it is the very Council members they endorse and cheer who place the golf course as their highest priority.

The editors want to call out the mayor for not getting things done, for putting lipstick on the pig. Meanwhile, they will not call out their dear Council members who accomplish nothing and not only put lipstick on the pig, but eyeliner, eyeshadow and a myriad of other cosmetics. I won’t ask why you’d put cosmetics on a pig other than, well, let’s move on.

The editors dismiss local activism and community spirit to clean up the city. So city residents spend their own time and effort to make the city look better and the editors think that merits a “F-you” to the volunteers as long as they can take a swipe at one of the Mayor’s signature initiatives. No tiptoeing through the tulips in Amsterdam. No, it’s f-you to the tulips and any volunteer effort that tries to make a difference.

The editors worry about the city giving Montgomery County a bad name. That’s pretty funny as the editors do nothing but consistently undermine efforts for the city to progress forward. How can you advocate for improving the city when you consistently editorialize against resources — aka money– to fund the very things you demand, ie, parks and growth. The editors consistently demagogue on tax rates and their need to be lower regardless of trade-offs yet wonder why the lack of investment creates the very problems they lament.

Remember how the editors mocked the very notion that the city should have a Web page to promote the city? While communities large and small leverage the Web, the editors could see no benefit to a digital strategy for marketing and public service here. In 2011 or so. Not kidding.

The editors paint the East End of Amsterdam as the true essence of the city because to do otherwise is to wear rose colored glasses. So exactly what have the editors advocated and advanced as the solution for the East End? How have the editors championed for fixing the East end and endorsing candidates who will do something about the East End? Funny, because they have not.

And if you happen to point out that the city landscape is more than just the East End, well, you would be a rose-colored hippie apparently.

I don’t want to talk about putting lipstick on a pig — that creeps me out. I’d rather stick to the classic “when pigs fly” as an expression of something wholly improbable to occur.

I predict that pigs will fly well before the city can coalesce and embrace a vision and strategy for moving ahead. This editorial shows precisely why it will not– the stubborn refusal to move beyond political agendas.

Let’s face it: the intent of this piece is a political endorsement of the Mayor’s opponent. That is why the Mayor is the only called explicitly called out when it is more than clear that the problems cited are not exclusive to the Mayor.

In the end, the editors merely voice a prevailing attitude in the city that centers on doing nothing versus trying something, fighting change versus embracing progress, and protecting the interests of the few at the expense of the many. While their lack of self-awareness is hardly surprising, it’s certainly troubling.

And most importantly, it keeps things just the way they always have been– focused on political and partisan ends.

You don’t dare want to smear the lipstick on that pig.

Common Council Charade: “Running Things Like a Business” (Part 3)

You must read the full article , Maintenance, fees, and debt debated at golf course budget meeting, in the Mohawk Valley Compass to see how the interests of select golfers supersede the interests of the public. Here is salient exchange:

“You can argue until you’re blue with me, I’m telling you what I’m going to put in there,” said Barone.

“It doesn’t operate that way in any golf course in the United States,” said Ritter.

“That’s fine, but it’s going to do it here,” said Barone.

Barone said he intends to introduce a resolution at an upcoming council meeting which would remove the fee for guests.

I’d not particularly care all that much if we were extending a perk to golfers. But, when you harp on about how you “protect seniors” and the city “cannot afford” anything and our city is literally “bankrupt” or the myriad of other laments anytime money is spent to lurch the city forward, then you cannot reconcile the above with the following statements:

Toward the end of the meeting, Hatzenbuher asked Ritter, “What do you think needs to be done to make the course solvent?”

[snip]

“Let us raise the rates, let us get revenue in the door. We have to have revenue,” said Ritter. “We need you to work with us and not fight with us,” she said and then mentioned the earlier debate over cart fees. “Those things have got to end. We are trying to run this as a business.”

It’s beyond dispute that the golf course is a public golf course and that it’s operations and finances rely upon the public, you know,  taxpayers. And I daresay , seniors. Every dollar in bonding by the city for the golf course is a dollar not bonded for alternate projects in the city. Furthermore, we learn that the course itself faces financial risks with its eroding revenues and as a result, places its liabilities directly on the backs of taqxpayers if they cannot sustain operations but incur liabilities through bonding and notes.

Finally, I have to believe that Christmas comes early for me this year given that the article ends with a very earnest call to “run this as a business.” when that is anything but what is actually is happening at the golf course.

I grow tired of this charade.

City of Amsterdam: True Market Value and Assessed Value

This article in the Mohawk Vallley Compass Brumley clarifies tax terms, city rate may decrease
explains why the City of Amsterdam will see a decrease in their GASD taxes.

As I posted a while ago (The Important Statistic the City of Amsterdam Chooses to Ignore at its Great Peril) , one of the important metrics for city taxpayers and property owners is the city’s assessed value which should correlate to the true market value. While the public record has been corrected on the $41 million drop — it is a drop in market value, mot assessed value– the problem remains: a municipality with declining total market values faces serious fiscal issues as I outlined in my initial post.

What does not quite make sense to me is how the city can suffer a $41 million drop in true market value while seeing the taxable assessed value remain almost the same. For the numbers to work out this way, it suggests that either:
1) Total taxable value assessments have been increased due to readjustment or due to properties coming on the tax rolls which previously were not.
2) The Taxable Assessed Value as cited reflects something with the equalization rate.

As the full suite of numbers by municipality — true market value, total assessed value and taxable assessed value and equalization rate– are not shown directly, I admit to not following how the numbers for the city make sense given the $41 million drop in true market value.

That said, a $41 million drop in the total property assets of the city shows that a significant problem exists that demands the city move to a growth oriented strategy.

The Important Statistic the City of Amsterdam Chooses to Ignore at its Great Peril

Here it is (from the Recorder, $40M loss of assessed value means hike in GASD taxes):

The biggest issue, though, is the significant reduction in taxable assessed value across the district. It’s mostly in the city of Amsterdam, which saw a $41 million drop in taxable assessed value.

“I’ve been involved in taxes a long time, and this is the first time I’ve ever seen this,” Brumley said. “The town of Amsterdam is almost catching the city as far as assessed value, so the town is growing quicker than the city.”

What this tells us , in no uncertain terms, is that the city’s asset base — its residential and commercial buildings — are either declining in value or being removed from the asset base.

So when year after year, just like this year, you see our local leaders budgeting another $500K for demolition while offering not a single penny for growth and economic development, you see that we are not even remotely addressing the issue — we’re actually putting policies in place to make it worse.

Furthermore, the town’s growth in assessed value has largely come at the city’s expense as the city has provided the very infrastructure — water and sewer– to enable the development in the town. As I’ve argued previously, the city has made a Faustian bargain with the town — by applying the city’s tax cap to the town, it promotes aggressive development and asset value growth in the town while forestalling and even killing any growth within the city. Compounding this even more is the utter resistance and relaucatance for the city itself to adopt more growth oriented policies.

If you look at our city’s books, you will note that the city has bonded to pay for demolition. In other words, we assume debt to pay for lowering our asset values without any investment or policies to promote growth. This is disastrous. And totally devoid of sound financial management. That is why taxpayers today are still paying for demolition of buildings that occurred several years ago. Think about it: you are paying for something that does not even exist.

Guess what happens when you lower the total assessed values on properties in the city: you are raising the effective tax rate. And when you raise the effective tax rate, you further depress home prices and you put further pressure on cutting quality of life as you cannot raise tax rates above the tax cap. That leaves you with cuts as the only option when you have negative asset growth. And this will be true of the school budget and the county budget as well.

I cannot comprehend how this state of affairs is accepted and allowed to continue. City residents appear to relish the sideshows and freakshows on financials while wholly oblivious that the center tent is collapsing onto itself.

Why I Decided Against Opting-Out for State Testing

I debated whether to post on this issue but after reading a few Facebook posts criticizing parents like my wife and me who decided to opt-in for testing, I thought I’d share a few of my own thoughts for deciding against opting-out.

This test is not the first, nor the last standardized test, that our kids will face. In fact, it is one of a constant stream of tests in their academic careers. As such, this test does not differ substantially from most other standardized tests in that it is, at its core, a standardized test.

Yes, it is more difficult. Yes, it contributes to overemphasizing standard tests versus more critical thinking skills. Yes, it might fluster and frustrate students given its difficulty and skew my child’s performance downward compared to other years. Yes, it is driven by the politics of public education and the push-pull of the various stakeholders in the public education debate. I get all that.

But the issue for me boils down to a simple question: “What are the plusses and minuses of opting-in versus opting-out for my child?”.

For me, the major factor for opting-in aligns somewhat with the reasons its critics cite in their decision to opt-out: the weight and burden it places upon kids stuck in the vortex of the educational debate over standardized testing. Where we differ is how to best address it. I believe that choosing to opt-out actually empowers the test and other stakeholders at the expense of empowering learning and empowering our own child. Let’s face it: this is fundamentally a test on the English language and shortly, a test on mathematics. That’s all that is being asked of students this year, just like past years and unquestionably, just like years hence on a number of alternate, widely accepted standardized tests such as the PSAT,SSAT,SAT,ACT, AP , Regents, et al — you get the idea.

What I’ve observed in this debate is that the pressure and stress surrounding these tests does not come from the child; it actually originates from outside stakeholders and is projected onto the students. So why should my child bear the projection of fear, anger and other negatives about the test when the test itself is simply another standardized test ,of many, my child must take to advance in academic life? That gives way, way too much importance to the test , indeed, it actually makes the test almost larger than life in importance– and that is a terrible lesson and burden. I want my child to master test taking, not the other way around.

In talking about this to my kids, I view the test and debate on opting-in versus opting-out as a teachable moment, namely, a chance to discuss the what and why on standardized tests. In my view, the teachable lesson here is that standardized tests serve many purposes for many different people with the important caveat that those interests do not always align with the best interests of my child. I don’t intend this last statement to be provocative; I think it’s simply a fact that in multiple stakeholder issues like public education, you get competing interests and not surprisingly, those interests don’t always align with the child’s or parents’ interests.

What I want my kids to fundamentally understand is that a standardized test does not define who you are;  a standardized test does not predict whether you will do well in college (as research shows the SAT to be a poor predictor for college success); a standardized test will not predict whether you will succeed in school, in life or provide a measure of the person. The test does not define you.

A standardized test measures nothing more than providing a snapshot of a point in time in your academic career. Nothing more — it’s fairly well established that these tests are assessments at best, and predictive in the least.

Meanwhile, the debate will swirl but it is more than clear that the resolution of the complex issues surrounding public education go way beyond this single exam. My role as a parent with kids within this swirl– this maelstrom of interests and policies and practices — is to teach them how the system , the game , works. Unfortunately, standardized testing resembles game theory in many ways — you have multiple stakeholders employing their own strategies with each trying to ‘win’ , naturally, to their advantage.

I don’t think it’s controversial to observe that standardized testing has been , and will continue to be, a major part of the board on which the game gets played. Without a radical departure — arguably merited– from standardized testing, standardized testing will unquestionably form a critical part of my children’s academic and professional or vocational careers. As such, I want my kids to understand the board and the other players at the table because their academic careers — from elementary school to college and beyond — require that they play the game.

So no matter how the game plays out, I want them to play the best game they can, heads held high. And they need to understand that this game is not the endgame to success and happiness in life nor to true learning and knowledge.