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tetris
Moderator
2040 Posts |
Posted - 02/05/2008 : 10:53:45 AM
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Justme,
I'm all for getting as much money as possible into the pension fund as soon as possible. The quicker this is done, the more the money will grow through investment and ultimately cost the taxpayers less to make up for the inadequate funding.
Also, I'm very interested to learn more about the directives that are coming the corner office that you feel are based directly on getting Carlo re-elected. Do you some information that the rest of us may be unaware of?
Massdee,
Yes, a lot of money is being moved around. As I said before, we can thank the previous administration for this. For example, the new high school wasn't taken into consideration when budgeting for general liability insurance. The road salt one baffles me though; we haven't had that much snow this winter. Although I would agree overall that the snow removal efforts in the city overall were much better in the last storm, I know some of the streets in my area could have used some sand or salt. This was one of the line items that the city council wanted to cut deeply during the budget process. So where did all the money go?
I think that your assumption about the line items is correct. It would probably be better to move money around within the same account but the amounts don't match up. This could cause some of these transfers to be funded from two sources. It is probably being done this way only for the sake of clarity.
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massdee
Moderator
5299 Posts |
Posted - 02/05/2008 : 12:52:33 PM
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I just don't want to hear Carlo blame things on the previous administration. There was more than enough of that during the Hanlon administration. If he sees a problem, just fix it. No more blame game. I realize Carlo is still dealing with the residue from Hanlon.
To change the subject, kind of, isn't Friday the 8th, the deadline Carlo set for his department head changes? Has anyone heard anything yet? I hope employees will have some notice. I know what it feels like to go to work and be told you are laid off starting today. I realize some can figure out they will be going but I am also sure some will be surprised.
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tetris
Moderator
2040 Posts |
Posted - 02/05/2008 : 1:32:33 PM
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| Just to clear up a misconception that some people on this board may have. The transfers being made from pension line item are not "borrowing" or "taking" from the pension fund. The pension line item in the city budget is used to hold the funds that are deposited at PERAC, which is the administrator of the city's pension fund. These funds are usually transferred on July 1st of every year. For some reason, there is still money left in this line item after this year's required payment was made. We need to get an explanation of why this is from someone; the auditor would probably be a good choice. I could hazard a guess why this happened but that is all it would be, a guess. |
Edited by - tetris on 02/05/2008 4:58:17 PM |
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massdee
Moderator
5299 Posts |
Posted - 02/05/2008 : 2:10:25 PM
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Tetris,
Can the city pay more than the required amount to PERAC so that debt could be payed down more quickly. It just makes sense to try and eliminate this debt as soon as possible. I understand it will take years to get where the city needs to be but any amount of time that this could be shortened would be good for the taxpayer. |
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billydee
Member
21 Posts |
Posted - 02/05/2008 : 3:01:45 PM
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I write about the order (on tomorrow's Council Agenda) to transfer $2,000,000 from this year's free cash to next year's taxes. Mayor DeMaria should be applauded, not cursed, for having the fiscal insight to try to rectify a problem created last November when the City Council approved Mayor Hanlon's order to transfer $4,000,000 from free cash to offset this year's taxes. The order would have been better if the transfer could have been spread over two years and not simply apply to this year's taxes. It was stated during the Budget process last year that that a current year’s free could be used to offset the next year’s taxes. Because the November transfer was used as a revenue source, it effectively means that the City is going to have to raise an additional $4,000,000 in taxes next year.
With the November transfer, the tax levy (the amount of property taxes) is technically $4,000,000 lower than it should be. Whether taxpayers know it or not, they got a tax break this year. If Mayor DeMaria did not ask for this transfer, taxpayers would have to pay for that tax break next year with a huge property tax increase---$4,000,000 divided by 9,000 Everett households. Knowing this today, Mayor DeMaria is attempting to position the City for a better budget and the taxpayers for a better tax bill in FY '09.
When a Mayor knows that the City has a fiscal problem, he should address it. That is what Mayor DeMaria is doing. In response to “massdee,” the Mayor should not wait to see where the FY ’09 Budget stands before making this transfer. He needs to commit some of the remaining free cash now to address the problem created by the November transfer. Between now and June (when the Budget must be finalized), other urgent financial matters could come up. Free Cash for FY ’09 may not be certified until after the tax rate is set. So Mayor DeMaria is being proactive and addressing next year’s tax problem head on. “Justme” suggests that the $2,000,000 transfer order to tomorrow’s Council agenda is a sign that Mayor DeMaria is already running for re-election. "Justme" could not be more cynical. Mayor DeMaria is simply trying to make his bosses—the taxpayers—happier than they would otherwise be next November when the tax rate is set.
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tetris
Moderator
2040 Posts |
Posted - 02/05/2008 : 3:17:12 PM
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Massdee,
As I understand it (and I could be wrong), PERAC sets the minimum payment that the city must make to the pension fund each year; the city could pay more, especially since the pension fund is currently not fully funded. |
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massdee
Moderator
5299 Posts |
Posted - 02/05/2008 : 4:29:41 PM
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billydee,
I don't see where anyone was cursing Carlo for tomorrow night's agenda. We were discussing it and airing our concerns and opinions. |
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murph021
Member
5 Posts |
Posted - 02/05/2008 : 7:21:28 PM
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Billydee
Thanks for the Clarification on the issue.
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justme
Advanced Member
1428 Posts |
 Posted - 02/05/2008 : 9:11:36 PM
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billydee,
Do not put words in my mouth! I DID NOT suggest the $2,000,000 transfer is a sign Carlo is running for re-election.
I said: quote:
Every directive coming from the corner office right now is based on getting Carlo re-elected.
I have many friends at city hall and they all tell the same story. Whatever will keep people happy is what they're being told to do because he wants to be re-elected. (their words, not mine) Carlo needs to learn that it's impossible to keep everyone happy and a waste of time and energy to try to be all things to all people. That attitude is going to undermine his department heads and very possibly his administration.
When the general public becomes aware that all they have to do is go complain to the mayor, or his staff, and they'll make the problem go away, all hell is going to break loose. I'm talking about ignoring city ordinances to make a complaining person happy. How long does he think it's going to be before that philosophy bites him in the a$$?
Don't get me wrong, I think Carlo was the best choice we had and, like most people here, I want to see him succeed. I just don't think he's starting off on the right foot. |
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jcklla
Member
32 Posts |
Posted - 02/06/2008 : 08:45:10 AM
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I'd like to hear more about when the general public becomes aware that all they have to do is go complain to the mayor or his staff, all hell will break loose.
What city ordinances are being ignored to make them happy? |
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massdee
Moderator
5299 Posts |
Posted - 02/06/2008 : 7:31:42 PM
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| I have a question. Does the School Department pay the insurance on all their buildings? If so, since the old High School has not been turned over to the city yet, why is the city, not the School Department, picking up the price of the insurance on that building? Carlo's explanation did not make sense to me. Can someone explain it better? |
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massdee
Moderator
5299 Posts |
Posted - 02/06/2008 : 7:57:31 PM
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| Okay, I missed the first item on the agenda. I just heard Napolitano say that the Mayor siad the budget will probably increase for next year. What was that all about? |
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tetris
Moderator
2040 Posts |
Posted - 02/06/2008 : 8:29:16 PM
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Massdee,
I believe that it works as follows. As the mayor's chief of staff stated, the city purchases one general liability policy for all of the city's buildings. Theoretically, the school department pays their share of this and other expenses thru chargebacks. The chargebacks are done by the school department paying a percentage of certain departments budgets, i.e., purchasing, personnel, etc.. The percentage was set a while ago and was equal to the percentage that the school department budget was in relation to the entire city budget was at that time. This is one of those things that the school committee complains about all the time especially since the school department's percentage in relation to the city budget has become less over time. It may not a perfect solution but it's the one that the city is using.
On the other item, it was actually the city auditor who said that it was reasonable to assume that certain line items in the budget (health insurance, pension payment, etc.) would most likely be going up next year. It was also stated that they don't know what new growth would be and what cuts could be made to the budget. Also, the point that billydee brought up yesterday was also made, i.e., presently, next year's levy will only be cut $2 million, not the $ 4 million that it was this year. The real bottom line is that no one knows what next year's tax levy will be yet but it is easy to see why some could assume that it will be going up from what we know now. |
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massdee
Moderator
5299 Posts |
Posted - 02/07/2008 : 07:57:06 AM
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Tetris,
Thanks for the clarifications. I was unable to watch the remainder of the meeting, was there anything else of interest? |
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tetris
Moderator
2040 Posts |
Posted - 02/07/2008 : 1:08:32 PM
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Massdee,
Sorry it has taken me so long to get back to you on what else happened at last night's meeting. I have been doing some research to make sure that I have my facts straight this time before posting. I felt that I needed to do that because as I thought about my last post in this thread, I didn't feel as confident about the answer that I gave about how the school department pays for its share of the general liability insurance as I did when I posted it. Although the school department certainly pays back the city for certain expenses in the method I described, I really am not certain that this expense gets reimbursed that way. Also, I'm not sure that the percentage that is used to calculate the school department's chargebacks is constant or changes from year to year. I am ready to eat some crow on this subject if anyone knows any better. Sorry if I caused any confusion.
Now on to the rest of last night's meeting. I thought that this meeting was less bumpy than the last Common Council meeting but it is still a work in progress. There seems to be some friction growing between Ranieri and Bruno. I understand that Bruno wants to run things by the book and I'm not usually a supporter of Ranieri, but I don't really see the need to put an item on the calendar to get someone to appear the next meeting when it is possible to get them to appear at the current meeting. Bruno's interpretation of the rules was that it gave the other members a chance to vote on whether or not they wanted the person to appear. Ranieri stated that he has never, in his experience, had anyone vote against a member's request for someone to appear before the council. Bruno's approach just slows things down in a process that usually moves at a snail's pace already. If anyone on the council has an objection with bring someone forward, they can do so before the person is allowed to come forward. It may waste the person's time but I can't be how this would be exception rather than the rule (i.e. Mr. Thibault and his lawyer last fall). The friction between Ranieri and Napolitano (which is a holdover from their prior tenures) also continues.
Hicks got shot down hard (and she should have been) when she went way of topic on the "smart" car item and proceeded to vote against only because she couldn't have her way. Typical.
Cornellio got shot down hard on his first ever agenda item but rebounded nicely on the "smart" car issue.
Will the Independent smack McKinnon around for getting involved in the budget process like they did DiPerri? If the auxiliary police have a problem with their budget, why can't they go directly to the mayor?
As far as the issue of the transfers goes, I thought the explanations that the mayor and the auditor gave about each item were more than adequate. My guess about why there was extra money in the pension line item would have been dead on if I shared it. Oh well. With last night's transfer to next year's tax levy, there will only be $3.6 million left in FY2007 free cash. Therefore, it makes some sense to take money from over funded line items and transfer it to under funded ones.
As far as putting $2 million towards next year's tax levy at this time, I have had somewhat of a change of heart. It's not like the money's going anywhere. If something unexpected happens and the money is needed for something else, it can always be pulled back. It's really the mayor's choice.
As much as I'd like to see more money put to the pension fund, it seems that the city government doesn't feel that it is a priority at this time. The city council has already rejected a proposal to transfer some the record free cash to it and the mayor last night gave me the impression that he would not be doing more than sticking to the existing schedule that PERAC has already has given to the city. Don't get me wrong, it is a tough issue. On one hand, you don't want to overburden today's taxpayer but God help the city's taxpayer's ten to fifteen years in the future.
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Edited by - tetris on 02/07/2008 1:14:55 PM |
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COMMON COUNCIL 2008
