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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

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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?

—– 00 —–

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.

 

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dusty
dusty
10 years ago

Bianchi is never going to let you interview him now. He may even take you off his Christmas list. uh oh…can I say Christmas on here?

MrG1188
MrG1188
10 years ago

To quote Glinda the Good Witch, “I’m a little muddled.” The 1/4 to 1/2 million dollars you reference are not “hard dollars,” but rather depreciation of value of the current fleet further because of the delay, right? I mean, still lost $$$, just trying to clarify. More troubling is the “not knowing,” both on the parts of the city & school officials AND the First Southwest people. Bad news.

Terry Kinnas
Terry Kinnas
Reply to  MrG1188
10 years ago

They are “hard dollars” because the dollars will have to be made up the by property tax payers. This is a developing situation.

scott
scott
10 years ago

One thing the made infamous by American media mayor of Ontario Mr Ford has done is privitize things like garbage pick up saving the city and tax payers Money maybe Bianchi should take some pointers from him save the crack smoking and unwanted groping while intoxicated of female associates.

Dennis O'Keefe
Dennis O'Keefe
10 years ago

Dan,

No fair minded person opposes the City saving money, but where is the data to support your statement that “leasing beats ownership”? Based on what? Mere supposition? Whether the City owns or leases buses, the taxpayer ultimately pays the bill. And, you are well aware that competitive bids are notoriously padded with unnecessary and duplicative costs. On what do you base your conclusion that the City is going to lose hundreds of thousands of dollars? Have you tabulated the costs of leasing the buses and the costs of owning the buses and analyzed them? I tend to doubt it. It’s all just rhetoric.

Further, is there some obligation that every communication made by a municipal employee be written down? People do still use the telephone. That there isn’t a verbatim transcript of every conversation Behnke had with the bonding company doesn’t mean she’s incompetent.

You really are too quick to condemn people for how they do their jobs. And, you use quite flimsy evidence to do so.

And, it is a tad hypocritical of you to so frequently condemn public sector employees and their taxpayer-funded salaries. Given that you wanted to become Pittsfield’s mayor on at least a couple of occasions means you were prepared to take the mayor’s salary, no? Don’t tell us you were going to donate it to charity.

Terry Kinnas
Terry Kinnas
Reply to  Dennis O'Keefe
10 years ago

Mr. O’Keefe, all the related information should be on the school department web site. The Mayor proposed the lease agreement. I supported it. I am not an expert on public sector bonding responsibilities. However, I did expect the Mayor and the two chief financial officers to be professionals knowledgeable in those areas. In the privates sector, burrowing for operational expenses is frowned upon. I would be in Kansas planting sunflowers if this was done in the private sector. One always confirms in writing what is agreed to verbally.

levitan
levitan
Reply to  Terry Kinnas
10 years ago

Matters of property, contracts that extend beyond 1 year, or crosses a certain dollar amount are not binding unless expressed in writing.

I doubt a bus contract could bind without signed papers.

scott
scott
Reply to  Dennis O'Keefe
10 years ago

You do make a good point on public vs private cost and it would be nice to see it in black and white. Of course private business tend to be more competitive and more apt to tightenthier belts and sustain where tax funded govt control always tends to continue to bleed us out no matter what the economy is doing. Hence the unopposed mayors new proposal to raise buisness and property tax again.

Dennis O'Keefe
Dennis O'Keefe
Reply to  danvalenti
10 years ago

Hardy. Neither you, nor your commenters (all 6 of them, excluding you and myself), as evidenced by their facile analysis, have no understanding of bonding requirements or you municipalities account for depreciation. And, given that the bonding notes run for a period of 12 years, or through 2020 (according to the memo), you conclusion that the City will experience these massive losses is laughable on its face.

Furthermore, where exactly is the agreement the City supposedly made with bond counsel that Mr. Kinnas imperiously suggests should have been confirmed in writing? Bond counsel issues legal opinions to the City on a proposed course of action; it does not enter into a series of intermittent agreements based on phone calls with municipal employees. Cities reject bids all the time for a myriad of reasons. Like I said, your story is all hat and no cattle.

Dennis O'Keefe
Dennis O'Keefe
Reply to  Dennis O'Keefe
10 years ago

Correction: how municipalities account for depreciation

Dennis O'Keefe
Dennis O'Keefe
Reply to  danvalenti
10 years ago

You did “pedagogic” research? Why would you research issues about teaching for a story about depreciation and city buses? As you know, Dan, pedagogy is the science and art of education. It has nothing to do with accountancy.

And, now you trot out some anonymous, retired bond expert (whom you didn’t even mention in your column, not even on background) to add ballast to your flimsy conclusions? When you’re in a hole, stop digging. Who’s the poseur, again? (Yes, that’s the proper word, Dan, not poser).

Mike R
Mike R
Reply to  danvalenti
10 years ago

DOK for the win.

Rivetor
Rivetor
Reply to  danvalenti
10 years ago

Don’t think its dok for the win. Oh man, Valenti is playing him like a cheap fiddle. Funny thing is that dok doesn’t see it, he keeps taking Dan’s bait. Planet, first round KO.

Dennis O'Keefe
Dennis O'Keefe
Reply to  danvalenti
10 years ago

Dan,

I’m perfectly familiar with the word, though I suggest you check with Merriam-Webster about its proper usage, which is “poseur.” A “poser” is merely someone who poses.

Speaking of familiarity with words and phrases, I recall your misuse “veil of tears,” rather than the correct “vale of tears.”

But, we’re all waiting with bated breath for this lawsuit with First Southwest that will assuredly never happen.

And, you never responded to the question whether, were you to become Mayor of Pittsfield, you’d take the Mayor’s salary.

Dennis O'Keefe
Dennis O'Keefe
Reply to  Dennis O'Keefe
10 years ago

Correction: your misuse of “veil of tears.”

Dennis O'Keefe
Dennis O'Keefe
Reply to  danvalenti
10 years ago

You are simply incorrect in your use of poser. You must own a usage dictionary, no?

Dan is Right
Dan is Right
Reply to  danvalenti
10 years ago

Dan is correct.

http://en.wikipedia.org/wiki/Poseur

See attached link. End of story.

Dennis O'Keefe
Dennis O'Keefe
Reply to  danvalenti
10 years ago

No, he is not. Read a dictionary. Wikipedia is an inherently unreliable source.

Stephen
Stephen
Reply to  danvalenti
10 years ago

“Dennis” I am an English professor at a local college. You are incorrect Move on.

Dennis O'Keefe
Dennis O'Keefe
Reply to  danvalenti
10 years ago

Dan,

If you believe that “Stephen” is an English professor anywhere, then gullible is not in the dictionary. If he were indeed an English professor, then he’d know how to properly punctuate his sentences.

And, since you don’t own a newspaper, I’l take my chances with your arrogant references to so-called immutable laws.

Dennis O'Keefe
Dennis O'Keefe
Reply to  danvalenti
10 years ago

[MESSAGE REDACTED]

Evian
Evian
Reply to  danvalenti
10 years ago

Dan thanks for putting this know-it-all “dennis” in his place. He’s a fake, of course, you know that and have taken him to the woodshed. We love it. Happy holidays.

Nota
Nota
10 years ago

Disagree with D O…when you do it by the city the benefits are the deal breaker.

Gene
Gene
10 years ago

Mr. OKeefe is obviously for the status quo. Wonder why? Seems to me like today’s news by the Planet has upset him. Also his response looks like he’s trying to deflect attention from what is reported here. We thank Dan for the amazing job he does singlehandedly to expose the truth.

levitan
levitan
Reply to  Gene
10 years ago

Gene,

No disrespect directed towards you, but if you read a column such as this and don’t ask similar questions, then you haven’t really read it.

I suspect O’keefe is not inclined to pile onto a mob.

Dennis O'Keefe
Dennis O'Keefe
Reply to  Gene
10 years ago

The truth? What is that, exactly? I am challenging the validity of Dan’s conclusions. That does not mean I’m part of this GOB cabal that a lot of Dan’s more paranoid readers are obsessed with.

scott
scott
Reply to  Dennis O'Keefe
10 years ago

Thr fact of the matter remains that anything govt touces has huge unecessary waste and risk. Good politicians minimize this risk and waste to save the tax payer money. This administration and th previous ones that have held office have done Pittsfield a huge disservice. Bianchi jumped on the hope and change Obama train and fooled us all! Thats why we’re left with a polluted industrial park no one will build on a failing school system crim gangs and drugs. I think the depreciation of the school bus fleet is the least of our worries.

Jonathan Melle
Jonathan Melle
10 years ago

“Mayor Bianchi’s plan: 2.59 percent tax rate hike”
By Jim Therrien, Berkshire Eagle Staff, 11/25/2013

PITTSFIELD — Mayor Daniel L. Bianchi is proposing higher residential and commercial tax rates that reflect a 2.59 percent hike in the overall local tax levy.

“It’s a tax rate that is pretty balanced and compares with the budget,” Bianchi said Friday. “And it will recognize the need to moderate the commercial tax rate.”

The mayor’s proposal, which will be the subject of a public hearing before the council on Tuesday, shows a residential tax rate of $17.09 per $1,000 of property valuation, compared to the $16.70 per $1,000 approved last year.

Commercial property owners would pay $35.38 per $1,000 valuation, compared to $34.47 last year.

If the city budget through June 2014 were to be funded with a single tax rate, that figure would rise from $20.52 per $1,000 to $21.03 for this year, reflecting a 2.5 percent increase in the rate.

Last year, the council modified the commerical-residential rate ratio after Bianchi proposed a rate shift of 1.72, up from 1.66 the previous year, prompting complaints from business owners. Councilors voted to set the shift ratio at 1.68.

The proposal this year would create a virtually identical shift of 1.682.

Under state law, municipalities are allowed to shift the percentages of the tax burden each property classification is responsible for, resulting in different rates. All but a handful of those that set different rates assign the higher one to commercial property.

Ward 6 Councilor John Krol, who last year proposed reducing the split in the rates to relieve the tax burden on businesses, said Friday, “It is good the mayor is being conscious of the plight of business.”

But Krol said he would prefer to drop the commercial rate further, adding that he and other councilors “have attempted to nudge it” lower at the annual rate hearings in recent years.

“I think I look forward to hearing what the public has to say as well,” Krol said.

When both rates go up, the actual dollar amounts can be higher for businesses, he said, because the average property values are much higher.

During the rate hearing last November, business owners and chamber of commerce officials claimed rising commercial taxes would send a negative message and prevent Pittsfield from attracting new businesses, possibly forcing others to move to a neighboring town.

Information submitted with the mayor’s proposal, prepared by the treasurer’s and assessor’s offices, shows a total local tax levy of $70,342,981 for fiscal 2014, compared to $68,567,362 for fiscal 2013. The increase is $1,775,619 in the amount to be raised in taxes.

In addition, figures show that on the average Pittsfield residential property, valued at $177,766, the tax bill would be $3,038 with the proposed $17.09 tax rate.

For fiscal 2013, on an average-valued residential property of $177,553, with a rate of $16.70, the bill was $2,965.

On the average commercial property valued at $508,764 and the proposed rate of $35.38, the bill would be $18,000. On the average-value property last year, $510,688, and with the $34.47 rate, the bill would have been $17,603.

Veteran Ward 5 Councilor Johathan Lothrop said tax rate hearings each year have typically found someone arguing for raising or lowering the commercial or residential rate. However, he called the current proposal and the overall tax increase a conservative one and in a “pretty reasonable middle space.”

He added that city officials must weigh the wishes of diverse constituents in setting the rates. “Our job is trying to balance them when we can,” he said.

Other figures submitted with the rate proposal show that, unlike most communities in the Berkshires, the city remains well below its levy limit under Proposition 2 1/2. The excess capacity this year is listed as $9,495,391, up from $7,390,986 last year.

Proposed rates

Residential property

* Fiscal 2014: $17.09 per $1,000

* Fiscal 2013: $16.70 per $1,000

Commercial property

* Fiscal 2014: $35.38 per $1,000

* Fiscal 2013: $34.47 per $1,000

http://www.berkshireeagle.com/news/ci_24594120/mayor-bianchis-plan-2-59-percent-tax-rate

scott
scott
Reply to  Jonathan Melle
10 years ago

Seems to me hes holding his own.

dusty
dusty
10 years ago

If Evan Dobelle becomes available perhaps Bianchi can hire him as a “consultant” to help the city with its finances. He seems to have the credentials to work for Bianchi.

eddiep
eddiep
Reply to  dusty
10 years ago

Sure, hire Dobelle. Now there’s a guy that really knows how to spend taxpayer money.

joetaxpayer
joetaxpayer
10 years ago

Bottom line is not everyone can afford these yearly tax increases. We also have to deal with water and sewer rate increases. Mayor Dan should step away from the over sized scissors and gold plated shovles and get to work on a innovated budget. There are savings out there, some not very large, but it would be a nice start.

dusty
dusty
10 years ago

How many elderly took up Bianchis offer to work off part of their taxes last year? And since the taxes are going up for the umpteenth time in a row do these elderly toilers get a raise in pay? To keep up with the tax inflation

oh my

scott
scott
Reply to  dusty
10 years ago

For real we are not that far from nazi Germany I wonder can a young person do the labor forvan elderly person.?

Dennis O'Keefe
Dennis O'Keefe
10 years ago

[REDACTED]

Donny Robare
Donny Robare
10 years ago

Dan, respectfully request you stop posting comments from this fool. I defer to your judgement of course.