Tom just sent me the 5 year projections, so they exist. Any projections involve speculation. On the expense side Tom showed Council longer term projections for the VEBA and pension plans. In my opinion those are the the two most speculative items in the expense projections. He also discussed with Council his assumptions for property tax revenues, which has the biggest impact on revenue projections. It would be a lot easier for Council to understand the implications of the financial and real estate meltdown to the city budget if they had seen the bottom line, or better yet, a range of bottom lines with optimistic to pessimistic assumptions for the next 5 years.

I don’t often name names, but I don’t think the city’s top management is off limits. My biggest complaint with the way business is done at the city is that the public does not get the complete and impartial information they need to provide meaningful input. The accounting scandals should have made everyone aware of how easy it is to manipulate financial information and get away with it. We only know about the ones that were caught. A few years ago I had a debate with a city employee (not top management) about a transaction that resulted in deducting the same expense twice. When I pressed, the answer I finally got was “I understand what you are saying but I have to do what I am told”

While I criticized Tom for not showing council the 5 year projections, he has also done positive things like take the initiative to clean up the billing mess in the utilities department. I also think the current auditor, which he helped select, is doing a good job.

Stew

I emailed a request to city council members, asking them to consider the land swap possibility.

Karen, your apparent speculation about Crawford’s motives detracts from your otherwise objective (and valuable) analysis. I think you could convey the same information without mentioning Crawford.

According to the audits, in 2008 the city had 19 million more in revenue than it did 5 years earlier and spent 15 million more than 5 years earlier. The increases have been adjusted for inflation. That means the city can afford to lose the $4 million in Pfizer revenue and still be ahead of where it was 5 years ago. It also means the city has not cut costs in real dollars despite all the service cuts. Maybe those flat screen TV’s are only the tip of the iceberg.

Despite the spending increase, city expenses for the past few years have failed to reflect the true cost of city benefits because the accounting rules did not require using realistic figures until 2008. That allowed the city to push the benefits problem down the road so what was a $90 million retiree health care problem in 2005 is now a $155 million problem. That increase is before considering the results of the financial meltdown.

The stock market meltdown has added to the problem but the rules allow the city to delay reflecting the market drop until 2011. The reason Crawford does not want to use 5 year projections is because it would reveal the huge financial hole the city is in. It’s hard to justify spending $47 million on a police/courts building and $56 million for a new parking structure for the proposed convention center when you will need to tell taxpayers that the benefits millage they pay no longer comes close to covering the cost of city retirement benefits.

This is a golden opportunity to create a comprehensive transit center.

(Then if only we could get the post office to downsize and free up enough space to put some store fronts on Liberty, that area would really get hopping.)

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