BIANCHI, PITTSFIELD SCHOOL DEPARTMENT GOOF ROYALLY ON BUS LEASE BONDING … TAXPAYERS LEFT HOLDING THE BAG … COLOSSAL BLUNDER LIKELY TO COST CITIZENS FROM $250K TO HALF A MILLION SMACKERS
By DAN VALENTI
PLANET VALENTI News and Commentary
(FORTRESS OF SOLITUDE, MONDAY, NOV. 25, 2013) — It’s not even Turkey Day, and already the streets and roadways of Berkshire County wear the white, not of snow, but of salt. It used to be we as a community didn’t get so panicked about pre-winter, but that’s not how it’s done today, when Christmas carols can be heard the day after Halloween and with even a rumor of snow, local cities and towns feel obliged to salt the road the way overweight gourmands pour Morton’s on their buttered popcorn.
Salt not only preserves traction on roads, even when there’s no snow or ice, but it also wakes up old wounds into fresh ones. Try rubbing a little of it into your next paper cut.
Thus it came to pass at last Wednesday’s school committee meeting in Pittsfield that we learned of a colossal goof by the Bianchi Administration and the Pittsfield School Department that will end up costing bedraggled taxpayers anywhere from a quarter million to half a million dollars or more. Needless to say, which is why THE PLANET must mention it, The Boring Broadsheet ignored this whopper either through negligence or fear. You can guess which.
As background, THE PLANET has long advocated that the PSD gets out of the transportation business. The business of public schools should be education, not busing. The PSD should deal in chalk dust, not axel grease. Public schools, especially ones as badly managed as Pittsfield’s, shouldn’t be in the transportation business at all. The best way to handle to “to-ing and fro-ing” of The Little Darlins from home to classroom and back is to contract for the services with a bus company in the Dreaded Private Sector. That takes the burden of fleet ownership, maintenance, and scheduling off schools officials, enabling them to direct the extra time (to say nothing of extra resources) for the purposes and greater good of The Children. Naturally, this being in Pittsfield, the common-sense idea has not been given a chance and for some time now.
Now to the matter at hand.
This year, with an aging fleet of 52 buses, the city began looking at its options. In September 2013, the Pittsfield Public Schools decided to ask for bids from companies for a three-year lease of school buses. So far, so good. According to Kristen Behnke, assistant superintendent for business and finance (salary $000,000 plus benefits), four companies responded with bids. Leasing buses beats outright ownership. However (there’s a “however” to most any piece of good news that emerges from official Pittsfield), Behnke’s Nov. 15, 2013 letter to the school committee supplied the required “Duh-oh!!”
THE PLANET’s first observation has to be the letter’s convenient date of 10 days after the Nov. 5 city elections. It’s not like we didn’t warn everyone. In one of our earliest columns about Campaign ’13, we noted that everything that emerged from the Bianchi Administration prior to the election would be taken with a grain of — yeah, you guessed it — salt. We also noted that shortly after the election, be on the lookout for the bad news. That’s when these skunks like to spray their malodorous contents, after they’ve been safely re-elected. One annual example of this is the Tax Classification Hearing, which always comes packed not at budget time in June but as the annual post-election November Surprise
We recall here our dad’s great epithet for the progenitors of such actions: “God-damned phony bastards.”
In the Nov. 15 missive, Behnke writes:
“In preparation for the bid[s], in early June 2013, Mayor [Dan] Bianchi, Superintendent [Gordon] Noseworthy, [city finance director] Susan Carmel, [school committee member Jim] Conant and I spoke with the city’s bond advisors, First Southwest, to discuss the fleet renewal plan and how that may affect the city’s bonding capacity. After the bid opening [that is, after the September bid request and a full three months after the June meeting with bonding company], Susan Carmel and I spoke with First Southwest again to clarify the process of moving forward with the fleet renewal plan. In conversations this past week [mid-November], two pieces of information have come to light that will affect how we are able to proceed with the bus fleet renewal:
“1. Proceeds from the sale of the [city’s current] buses may only be used to purchase additional buses. Bond proceeds may not be used towards an operating lease or a municipal lease purchase of buses.
“2. Proceeds from the sale of the [old] buses may not be used to fund another capital project of similar repayment term. The buses were authorized in 2005 through bond anticipation notes and funded through a general obligation bond in 2008 for a period of 12 years. We are awaiting clarification from bond counsel on whether the sales proceeds may be used to purchase buses for a shorter term that better reflects the useful life of the vehicles.
“As a result of this new information, it is likely in the best interest of the district to cancel the current bid for school buses and solicit a new bid for the purchase of buses, or a combination of purchase and lease. I am working with First Southwest to run various scenarios and determine the best and most cost-effective way to renew the bus fleet.”
End of disastrous memo. The best way for Behnke and Bianchi to do what she proposes in her final sentence — get for taxpayers “the best and most cost-effective way to renew the bus fleet” — has now passed. They royally blew that chance, as the memo clearly indicates. You can see why the screw-up wasn’t revealed until after the elections.
Let’s perform the autopsy for you. We caution those with queasy stomachs that the dissection won’t be pretty.
First, for the June meeting with the bonding company, why did the mayor and Behnke include Conant? He’s chairman of the school board’s safety subcommittee. Terry Kinnas chairs the school committee’s finance subcommittee. Kinnas is the man who should have been included, but no. Bianchi’s had it in for Kinnas politically since January (anyone remember the Scopes Monkey Trial and Bianchi’s cowardly no-show?), and if the mayor’s petty political grudges cost taxpayers half a million bucks, tough keeblers. THE PLANET would have included Kinnas, and we would have asked city councilor Barry Clairmont to be at the meeting with First Southwest. Clairmont is an accountant by trade, and a good one. He knows how to read and pick apart financial statements. The city could have used his expertise, but no, not when there are politics to be played.
Second, since the city will likely “cancel the current bid for school buses,” all of the time and money spent on advancing the process so far has been wasted. Anyone want to put a dollar amount on that?
Third, the wasted time will delay for months or longer the sale of the current, aging bus fleet. Depreciation of the buses will certainly continue at an accelerating pace, and the ultimate sale of them will be reduced by many tens and likely hundreds of thousands of dollars. In 2005, when the city purchased the current fleet, new buses cost between $80,000 and $100,000. Those costs have risen. A depreciation of $10,000 per bus per year would be a good ballpark estimate. Based on that figure, when the city gets around to selling the aging fleet, taxpayers will likely be out $500,000 or more (based on 53 buses in various states of “pre-owned.”).
Fourth, and this is perhaps the biggest. Behnke references “conversations this past week” in which the bonding company told the city it couldn’t do what it wished to do with the bus money. This begs the question: You mean to say that neither she, Bianchi, Carmel, nor Conant thought to ask First Southwest in June whether they money could be used to finance the city’s lease plan? Had any one of them have asked that one question, the city would have known then and made other arrangements for a September bid. Instead, none of those dumb rumps asked the key question: “Uh, can we do this?” which would have been the first query raised by Kinnas and Clairmont after the initial “Hi, how’re ya doin’?”
Fifth, as the city’s bond advisers, why didn’t First Southwest ask the city what they wanted to do with the money. Didn’t the company have a fiduciary responsibility to ask this question, which the city was too stupid to ask for itself? Is this actionable?
Sixth, if First Southwest proved as incompetent (or negligent) as the city officers, why would Behnke and Bianchi keep them on board? If you will re-read the last sentence of Behnke’s memo to the school committee, she clearly says she is “working with First Southwest” again. Bianchi is OK with this? The school committee is OK with this? School Supt. Jake McCandless is OK with this? Doesn’t McCandless realize that the June meeting fiasco is going to cost taxpayers a lot of money? Doesn’t he care? And doesn’t he know this ultimately reflects on him?
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At the school committee meeting on Wednesday, Kinnas asked Behnke for the paperwork on the “recent conversations.” According to Kinnas, Behnke said there is none: All of it was verbal, with nothing in writing. If that had been the financial officer’s answer to her CEO for a company in the Dreaded Private Sector, how much longer after do you think Benhnke would be employed, or Carmel for that matter? Not to worry, though. This is Pittsfield. That type of on-the-job performance wins you promotions and six-figure salaries.
When Kinnas asked Behnke if the current buses are adequate to keep using, Behnke couldn’t answer. Kinnas said that months ago, when the question of replacing buses first came up, Benhke said the city doesn’t do a depreciation on the buses, “because we don’t have to.”
Scary. These are the people entrusted with more than $100 million? Scary.
“No one cares,” Kinnas told THE PLANET. “That’s my professional and personal belief.”
Kinnas is mistaken. He cares. THE PLANET cares. As for the rest of them, we ask the biblical question, if salt loses its saltiness, what can be done with it?
Climb a tower of freedom. Paint your own deceiving sign. / It’s not my power to ccriticize or to ask you to be blind / to all your pressing problems and the hate you must unwind. / So ask of me no answers. There are no I could give you wouldn’t find.” — Ian Anderson, Jethro Tull, “Nothing to Say,” (1970).
“OPEN THE WINDOW, AUNT MILLIE.”
LOVE TO ALL.