AUDIT REVEALS CITY’S FINANCIAL WOES, BUT TWO SIMPLE REFORMS WOULD PROVIDE THE FIX
BY DAN VALENTI
PLANET VALENTI NEWS AND COMMENTARY
(FORTRESS OF SOLITUDE, THURSDAY JULY 14, BASTILLE DAY 2016) — Typically, the audit performed by Scanlon & Associates for the city does little more than check the math. In its own words, its “responsibility is to express opinions” on the city’s financial claims. At worst, the auditors may spot-weld a couple of phrases telling the city not to spend too many balloons on helium. These “warnings” fall a marathon short of admonishment.
This time, Scanlon accompanied its “opinion” with a notice that if the city keeps spending, it will have to slash programs and jobs or face state takeover. University of Indiana economist Dr. Charles Trzcinka , too, gave his opinion on Pittsfield’s finances exclusively for THE PLANET. Doctor Trzcinka confirmed that the spending jag will be coming to a sour-note ending. Fat good it did to the mayor, directors of finance (city and school), school committee, and council, who collectively authored and authorized the most expensive spending plan in city history.
THE PLANET‘s careful reading of Scanlon’s audit note is what it did not audit. From the report: “We did not audit the financial statements of the Berkshire Training and Employment Program[,][BTEP] represent[ing] 14 percent, 10 percent and 96 percent, respectively, of the assets, net position and revenues of the aggregate discretely presented components units.” Sentences such as this prompted George Orwell to write his classic essay, “Politics and the English Language,” excoriating such rhetorical swamp gas, language designed “to make murder respectable” and “give an appearance solidity to pure wind.”
In case you’re wondering, BTEP’s “statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for the Berkshire Training and Employment Program, is based solely on the report of the other auditors.” In plain English, Scanlon is saying, “If the BTEP books turn out to be, uh, ‘funny’, don’t blame us.” The statement isn’t what one would call a vote of confidence in BTEP.
Record Spending, Record Debt
Scanlon’s audit reveals the city began the new fiscal year with liabilities exceeding assets by $44,990,750. This was before the new budget and capital spending plan, both setting records at $151 million and $12 million respectively. This also was well before the borrowing for the new $200 million Taconic High School kicks in. The audit also confirms a pension liability of $120,228,899. That’s the amount taxpayers owe city workers, present and retired. This does not include money owed to retired workers for health benefits and other post-employment benefits (OPEB). That amounts to roughly $370 million ($320 million five years ago, according to state figures), for a total liability of $490.2 million. For the record, Scanlon lists total liabilities of $315,939,095. Ah, but what’s $104.3 million among friends?
How can the city possibly meet these obligations
— while increasing both its operating and capital spending
— at the same time the tax base shrinks
— and both households and businesses move out or scramble to stay afloat?
It’s a rhetorical question you don’t need the Scanlon Report to answer.
A reasonable, doable solution can be found in two reforms:
(1) Recap pensions, and make it retroactive. In the early 80s, the mayor and council got rid of the $35,000-a-year maximum cap on city pensions. That paved the way for the unsustainable pensions, all won in bargaining, based on 80% the top three years of salary. The council took abandoned the cap by petitioning and receiving from Boston “home rule.” It can put it back on the same way.
(2) Reform health insurance, the most expensive driver in rising costs. Taxpayers can no longer afford nor can they be expected to pay for 85% of a city employee’s health insurance premiums. The 85-15 split needs to be adjusted, in increments, to the state law minimum, 50-50.
These two reforms will save the city tens of millions of dollars and get the finances on more stable footing. There are two missing ingredients: political will and citizen pressure. Can they be had? That’s uncertain. Currently, the shelves in Pittsfield for these two commodities are bare.
Perhaps the Super Walmart stocks these items.
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“It’s a waste of money to help those who show no desire to help themselves.” — Sir Tiberius Fruitjuice.
“OPEN THE WINDOW, AUNT MILLIE.”
LOVE TO ALL.
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Even wealthy communities with 6-figure-plus median incomes could not manage their municipal finances like Pittsfield politics. Next fiscal year, which begins on July 1st, 2017, the lovely Linda Tyer is going to have to ask for a Proposition 2.5 override to pass her 2nd municipal budget. I predict that Pittsfield voters will deny anymore about 5% annual municipal tax increases.
Pittsfield has been saved by 2nd homeowners from the NYC area who cannot afford to buy a 2nd home in Stockbridge, which is Dan Valenti’s current hometown. Pittsfield spent tens of millions of public dollars on downtown revitalization for tourism and arts/cultural venues. The problem is that once the summer season is over, Pittsfield/Berkshire County becomes a ghost town. Moreover, these are not living wage jobs that can support a family.
Pittsfield politics is in financial trouble, but the Good Old Boys have their heads buried in the sand!
– Jonathan Melle
Bill Sturgeon applauded Kathy Yon for spending more money this year in the face of a financial problem senior citizens are facing everyday.
Again this must be a very high household combined retirement to comend more spending today.I will assume he will at some point next year say it takes courage to spend this money ss recipients dont have.
Bill had Pignitali on the show but would not stop talking.Bill please ask a question and listen to the answer.Then ask another question and listen to the answer.Finnish the interview by asking more question and listen to more answers.
Mr. Sturgeon, it is rumored, was both a Lanesborough and a Pittsfield city police officer, He may be receiving a disability pension or other benefit as it doesn’t appear he put in a full number of service years (20 ?). His spouse is a retired Pittsfield school teacher. Can he really be expected to be objective concerning municipal spending that impacts OPEB ?
Not sure if political pressure even works in this city anymore. They do what they want regardless of what anybody but the school employees want. School employees are the only ones with any ability to influence the suits when they show up in a large mob at school budget meetings and at the voting booth.
Most people in this city want a Super Walmart, but will they listen? Will they ignore the petition signed by many people saying they want a Super Walmart?
Will they heed the dire warnings from so many about the financial situation of the city and actually do anything about it? I agree with an earlier article in which Dan V. predicted they will continue to spend outrageously as the city goes into death spiral.
If Walmart pays the ransom they will get everything they want. It will not be the politicians that stop this project. And they should not. NOBODY else is coming to a superfund site to set up business. If they were they would be here by now because the land has been free and the taxes almost waived.
Just build the damn thing and get it over with before Walmart bows out and it goes back to the way it was when the Indians hunted there and fished on Silver lake.
Moving the Cumbys to the middle of a busy intersection however is NUTSO and I hope that no matter how much palm grease is offered or demanded this does not happen. Stop gridlocking the damn city and let some traffic flow. I am surprised there is not a huge smog cloud over the city from all the idling car and truck engines stopped and waiting at all the lights. Thousands of people run red lights every day in Pittsfield because of the frustration. It gets worse every year. Used to be one extra car would chance it. Now a days I sometimes see 7 or 8 cars blow through a light. Where does it end before somebody starts writing tickets? Why bother having lights at all?
Whoever set up the traffic patterns here in Pittsfield was definitely stoned at the time. They defy logic. Too many lights, poor traffic flow, lights that last forever on little side streets. It’s crazy!!!
Pittsfield better grab Walmart before Walmart figures out they could capture the Macy’s/connecting stores /Sears end of the Berkshire mall. Perhaps Walmart realty will pick up the mall for a song, and make it a Wal-Mall, leaving Pittsfield completely. That would be the smart play.
Ask high 2.5 on the override and get low 5%, when low will do just fine. All along, it has been the Planet’s proposal of pensions and insurance that will save the City millions. If this happens,this Mayor still has millions in obligations. Matt Kerwood told everyone at the Council Budget sessions, that we are driven by debt?
Union contracts cannot be broken, but as the Planet explains,other real avenues, can be explored,some of these avenues require backbone as well as timing, a candidate won’t have the chance to be elected if he or she seeks pension or insurance co-pay adjustments. My current adjustment increased fifty percent, why is the City side so different? And don’t get me started on Dental.
Guess again. When Pittsfield goes bankrupt all contracts are null and void.
The Commonwealth will not allow municipal bankruptcy.
Sure it will
I hope we can have a discussion about the ramifications of an override. And I hope it is soon so that the people can prepare. Either way it won’t be pretty so get out if you can because your home loses value every day you stay in Pittsfield.
What are Mr. Trzcinca’s thoughts on the layers of bureaucracy added on in the Schools in an economic downturn, that are totally unsustainable, requirements if you will. Mc Candless said we don’t have the room to close Mercer and distribute employees in other areas ( schools) no room.
One of the mind sets we must abolish is how good or bad we have it compared to other communities. Comparing income and how much we pay in taxes is not relevant. We cannot even say how great our enviorment compares, yes we have Lakes and Tanglewood and Mountains, we also have G E, pcb, drugs, murders, unemployment and tax increases. The 900g for policing is a waste. Police have no chance out there, if the people they protect won’t help them, they have no chance at quelling crime.
Is the understanding on this article concerning Scanlon’s advice is that the City ignored him? One thing we do have, in Ward 2, a natural jungle habitat…Plant Valenti Gardens at Hess Forest, we do have that.
My family is having our reunion guess where? The Berkshires “garden spot” Planet Valenti Gardens at Hess Forest. My only concern is that I hope site maps are installed. Otherwise people may get lost.
With the City of Pittsfield facing the closing of Covanta Waste to Energy Plant in March of 2017, ….it will one way or another impact a huge amount of financial need Again, this, and addressing the possibility of technology changes at the Water Plant,………. spotlight the irresponsibility of ramming Taconic High School down the throats of the Taxpayers. This School is going to be forever etched in the minds of Taxpayers…… as the straw that broke the camel’s back.
How many other cities and towns does Covanta collect trash from? We may have to add all of these garbage barges waiting at the lights trying to get to Canaan, N.Y. which is where Covantas nearest plant is. Or, perhaps this is just what the city has been waiting for so they can go to the pay-as-you-throw plan they have been pushing for for years. You pay for trash pickup with your taxes now and still will but you will also pay for every bag you put out for pickup. One more pop to the chops of the taxpayers.
And I’m sure if that happens, the businesses of Pittsfield better be prepared to lock their dumpsters after closing. Or them dumpsters are gonna fill up pretty fast..
When the City doesn’t heed Scanlon’s advice, then why are we involved with him at all?
I am sure there is a law that says the city must have some facsimile of an audit even it it just skims the surface of the city finances A forensic audit would probably reveal much more about the inner workings of city hall but don’t hold your breath on that ever happening as long as the GOBs run the town.
I could be Scanlon’s at no charge, ready? You need to add to your reserves, it is always better to have a lot of free cash on hand, and Pittsdield’s Bond rating is great because of that..no charge, thank you.
Spa, just the excavation would have payed for a refurbished old Taconic.
Another joke is the Pittsfield Board of Health. You mean to tell me we couldn’t survive without that entity?
You are right Bill, the Board of Health is useless and does a pitiful job policing the local eating establishments.
Thank you.
Nature Boy, good choice. My first choice for my daughters wedding reception was Planet Valenti Gardens at Hess, but it’s all booked up, we have to settle ( and this is a hard one)
Silver by the Lake, the old Kentucky Fried Sicken, but we are leaning towards West Housy Lumber at Housy Junction..
Rumor has it that Collingwood is building an enema factory on the grounds of Hess Gardens and Nik Cocomo will build a driving range next to the new Wal-Mart which will carry Narcan. The sun is once again rising in morning side.
We had three snow storms last year, the two in April were the most per inch all year. The Clown over at the Bored of Health gave us a non-shoveling citation on the other one. There had to be 100’s that didn’t shovel snow and my tenants were ticketed.
Once you get the ticket you are liable for any future slip and fall, this clown had nothing else to do, that’s his job, I guess?
You could show your neighbors some respect, have some pride in your city, and shovel the damn sidewalk.
Leave him alone quit complaining shh
What is important to people considering whether to invest in Pittsfield is the direction of the budget. If taxes and obligations are under control and falling or stable, then it will be far more attractive than if they are not. At this point, it looks to me like they are not, especially with Taconic High School on the horizon. Why is it that other communities can build infrastructure, and fund education, health care and pension obligations but Pittsfield is struggling? The two changes that the Planet outlines above would help and might help attract investment.
There are no new revenue streams, there are no jobs to sustain living and buying homes, there is no new growth, that is….the problem.
Tyer acts like she is on the Home Shopping Network and QVC at the same time now that she has the taxpayers bankbook. And she is buying gifts for all her friends.
While it is quite true that the city has no new revenue it also has an out of control spending problem. While we cannot stop her from bankrupting the city we might be able to save ourselves by moving elsewhere in the county or country. You owe it to your children to move out of Pittsfield just like most of the teachers and other city employees who know the city is sinking into the abyss.
No Company is going to plant twenty million into the City.
I believe garbage pickup waste will have to go to Springfield…guess who is going to have to pay that extra charge?
Locals will have to begin paying for garbage removal. Electric rates are out of control. Cable is becoming out of reach of the average person. Let’s all vote for Hillary so she can sink the country like the Titanic which is the direction we are heading as we continue to take on more water.
Kristen Behnke is right now adding another position to her business dept so she can play checkers with Joe Curtis all day.
I wonder how many of these school jobs are the result of some Federal mandate? We need to have them or lose funding.
Found it funny everyone acted surprised about the closing of trash facility. It was common knowledge. Time to stop wasting resources, must go to toter system ( one can per house hold) and streamline recycling ( paper and containers together every week) There would be savings and the amount of trash would drop dramatically. Garbage is not free.
Or Yahtzee.
Or Freedom.
One thing about pay as you throw the garbage gets strewn all over
Should build transfer station on PEDA site, next to rail line. Seems like a good fit.
Great idea.
Another horrible terrorist attack in France. ISIS has already claimed responsibility.
Has 0bama blamed the NRA yet?
I thinks it is time to call for a ban and confiscation of trucks. If only they had been rounded up and confiscated, this could have been prevented.
Loved that France came right out and said “Terrorism” without hesitation.
Amazing how one individual can raise millions in taxes, and does anyone want their taxes raised? She is making these major decisions that effect a lot of seniors and low income families? On what experience did she rely on? Non City employees working taxpayers in Pittsfield got screwed.
Evil proved again that it doesn’t need firepower. This Truck had one driver, one truck and a crowd. How do you plan for this. Let us Pray for the Victims. I keep watching these sporting events in other country’s as well as the U S..let’s hope our security is on the ball, these stadiums seem so vulnerable, we must keep our eyes and ears open, even to the point of hysteria, if you see something, act, call police!
Am I the only one who is sick of the erectile dysfunction Commercials?
Good news for Bettie Blight (Mayor Tyre). Gaetaini has been working with Home Depot, Big Y and Wal-Mart to get donated flowers for Hess Forest. He will be sending his crew to cleanup and landscape the property. Mayor Tyer why couldn’t you do this? Oh that’s right you were too busy raising taxes.
why aren’t we requiring the OWNERS of the Hess Forest to care for their property?
I don’t know how he has time to do this with the summer boat rides on his yacht. I went on one the other day and I admit it was quite a treat. That little Bucky dog is cute too.
How does Collingwood find time to give enemas?
Maybe you could invite Collingwood on the yacht and he could give you an enema? You certainly fantasize about it enough.
You have issues
That is a question for Bettie Blight.
Shakes, I’m just trying to promote local small business, I’m sure the customers are lining up a Bruce’s back door to take advantage of his fine service.
Mccandless..curtis…behnke make 1/2 million dollars combined.
Before or after benniesA.