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AUTOPSY ON KUFFLINKS’ BOND-REFINANCING SCHEME SUGGESTS FOUL PLAY

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BY DAN VALENTI

PLANET VALENTI NEWS AND COMMENTARY

(FORTRESS OF SOLITUDE WEST, MONDAY FEB. 22, 2021) — “History repeats itself,” observed that noted vaudevillian comic, Karl Marx. “The first time is tragedy. The second time is farce.”

Here’s are a few more profundities:

“Injuns? Why there’s no injuns in these parts” — Gen. George Armstrong Custer.

“Reports of icebergs are greatly exaggerated, ma’am” — John Smith, captain of the Titanic, to a fist-class passenger.

“The city is on sound fiscal ground” — Matt “Kufflinks” Kerwood, Pittsfield finance director.

Stop us if you’ve heard this one before.

———- ooo ———-

THE PLANET was reminded of these witticisms while reading contributor comments on Pittsfield’s bond refinancing plan. PLANET readers saw right through it. Here’s our take.

Our short take: “Hold on to your wallets, ladies and gentlemen.”

Kerwood’s press release, which THE PLANET published in full in our most recent column, makes the refinancing scheme seem like the dawning of the Age of Aquarius, “mystic, crystal revelations” — all vibrant and dynamic, of course. What’s the truth? Allow us to make a few key points:

  • Debt restructuring is rarely a sign of financial health, notwithstanding Kufflinks’ claims.
  • Refinancing presumes massive pre-existing debt.
  • Furthermore, it indicates serious debt-management issues.
  • Rather than directly deal with the problems, refinancing pushes the solution and its consequences years out. By that time, Kufflinks and the rest of the assenting crew will be long gone, doing the backstroke and sipping Kool-Aid on the strength of fat public pensions. That’s the real game going on underneath these shenanigans.

“This type of refinancing is common practice,” Kerwood boasts. … Yeah, for those sinking in ruinous debt obligations.

  • Refinancing bond debt is a sure sign of an over-leveraged balance sheet. In fact, Pittsfield is swimming in debt, having over-borrowed for needless capital projects (THS, anyone?) and facing an OPEB debt of half a billion dollars. That’s “billion” with a stinging “bee.”
  • OPEB (Other Post-Employment Benefits) debt includes all pension goodies beyond health care agreed to by a series of administrations to the Big Three unions (teacher, police, and fire) over a generation. Again, this doesn’t include health-care costs. Need THE PLANET remind anyone that Mary Jane and Joe Kapanski still pay 85% of city workers’ health-care premiums. The law requires 50%.
  • Kufflink’s bond refinancing takes advantage of more favorable current rates. However, it greatly lengthens the payment period. In the end, it will cost Pittsfield taxpayers the reverse of the “gross budgetary savings of $1,049,382 for the city over 10 years” which will, Kerwood says, “also support various municipal projects.” About that statement:
    • Curious, that exact amount. The “precision” raises a red flag. Is the figure made up out of thick air?
    • The adjective “gross.” What is the “net” figure? Kufflinks doesn’t say. Would it be a loss of “$1,049,382” or more?
    • That bit about supporting “various municipal projects.” Uh-oh. What projects? For how much? This ominous phrase promises more unneeded spending funneled to “friendly” vendors for unnecessary projects.
  • Refinancing is the Tyer Administration’s tacit admission of the city’s reckless borrowing binge.
  • Simple economics tells us that refinancing costs money. This is the opposite of an investment.
  • What’s the break even point for this new $28,000,000 loan? Kufflinks doesn’t say.
  • What are the default risks? Default can be devastating.
  • The refinancing will repay interest demands for pre-existing debt before it reduces principal.
  • Refinancing indicates liquidity issues in the city finances. What’s the city’s ACTUAL financial position? Perhaps a look at that rumored Second Set of Books would enlighten taxpayers.
  • Every cent of the city’s existing debt will have to be paid, plus interest. As THE PLANET said, that won’t be Kufflinks’ worry, since he’ll and the Tyer Administration will be long gone.
  • Other questions:
    • Will the loans be restored to their original length or put off until Ambrose Bierce returns from the Mexican revolution?
    • What are the closing costs? Kufflinks and Tyer’s office left that out of the press release.

———- ooo ———-

This bond-refinancing scheme results from a generation of constituent neglect and dereliction of duty on the part of elected and appointed officials.

No one should be surprised or shocked.

And isn’t that the true tragedy here? That’s such chicanery has become Pittsfield’s new “normal?”

Look what it’s done to a once-thriving, model American city. Take a good, long, hard look, and you’ll know why Jesus wept for Jerusalem.

———————————————————————————————————–

“We are what we pretend to be, so we must be careful what we pretend to be” — Writer Kurt Vonnegut.

“OPEN THE WINDOW, AUNT MILLIE.”

LOVE TO ALL.

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Jonathan Melle
Jonathan Melle
2 months ago

Matt Kerwood is a creative Accountant who plays financial shell games that kicks the proverbial can down the road decades from now.  Matt Kerwood shuffles money around various city accounts to build up his +$10 million slush fund.  The U.S. House of Representatives is expected to pass its $1.9 trillion stimulus bill later this week, which will provide bailout money for Pittsfield politics.  If/when Matt Kerwood gets his creative accounting hands on the bailout money later this year, will he use it for taxpayer relief, or will he continue to cook to books in the name of the lovely Linda’s questionable claims of financial stabilization?  Lastly, I agree that when Pittsfield politics’ huge debts finally get paid down instead of paying mostly interest through Matt Kerwood’s penny wise but pound foolish refinancing and accounting schemes, the lovely Linda Tyer and Matt Kerwood will be either long retired with their fat public pensions and perks, or they will be distant memories that we all wish we could erase from our minds in the name of peace of mind.

– Jonathan Melle

P.S. my new blog post: Jonathan Melle on Politics: Ben Downing for Governor of Massachusetts in 2022

Pat
Pat
2 months ago

Good that City Hall is reopening, but they could have been open at these reduced hours long ago as long as everyone wore masks, used hand sanitizer and socially distance. Also put plastic shields up between customer and city worker. Stores have done this for at least 6 months and it works very well.

Auto Phil
Auto Phil
Reply to  Pat
2 months ago

Retail has been open with acceptable precautions in place since June 8th. So have day cares.

Nearly 9 months. At this point we can practically say that stores and day cares have been open for nearly most of the pandemic, and yet city hall and our schools have been closed for nearly a year.

Everything they browbeat into you regarding the risks and the fears of the new SARS virus was overplayed, over exaggerated, propagated by imbecile social media content and spoon fed to people who couldn’t do the math themselves.

One day people will look back and realize how much they were brainwashed, and how small the actual threat of death and destruction was to them.

OhsoJo
OhsoJo
Reply to  Auto Phil
2 months ago

Edgar Allan JOE. Stop reading and get the economy going. I liked Trumps attitude toward covid better than this morbid recital.

Lenny
Lenny
Reply to  Pat
2 months ago

Reopen City Hall completely. Resume in-person council & subcommittee meetings immediately. Time to get back to work!

Fled Cruz
Fled Cruz
Reply to  Lenny
2 months ago

I said the same thing to one of the councilors via email. Was told that the Governor still has limits on in person gatherings. Council meetings prohibit the social distance for members and the public in council chambers.

J2S
J2S
Reply to  Pat
2 months ago

I read where St.Mary’s school in Lee reached a milestone in that they have been open for 100 days and so far no spread of Covid. Using masks, distancing, sanitizers and hand washing. Hopefully it continues forward as well.

Merry & Bright
Merry & Bright
2 months ago

Welcome back Dan, glad you were able to get away from this train wrecked City drama for a few weeks. In reading this today, I can’t help but feel someone else is behind all this budget finagling as knowing Kerwood during his City Council years I do not feel he has the financial intelligence to pull this off. Feel that this certain someone is related to Mrs. Mayor. Maybe some one of her relatives that likes to hang around Cumbies in the early morning and likes to bully people. Speaking of bullying, Kerwood is probably told what to do and he had better do it as he is most likely in fear of losing his job. Also, was thinking about the last time the City had to purchase new school buses it was revealed that the City had never paid for the old buses. Wonder if this loan is still not paid? They have been utilizing empty school buses to deliver lunches during the pandemic so I am sure that will be the next big purchase thrown at the hardworking taxpayers, more new buses. Pittsfield taxpayers never get a break and never will or at least for the next three years.

Pat
Pat
Reply to  Merry & Bright
2 months ago

Yes, welcome back Dan V. Hope you enjoyed your time out in the wilds of nature.

Last edited 2 months ago by Pat
Matt Hair Plugs
Matt Hair Plugs
Reply to  Merry & Bright
2 months ago

Kerwood jumped feet first into that fire. He used to work in Beckett and Richmond and couldn’t wait to leave. He knew what he was getting into and it was only about getting paid. Look at his salary in Pittsfield compared to Richmond and Beckett.
Kufflinks is a willing participant and co-conspirator.

ShirlYNuts
ShirlYNuts
2 months ago

There have been many suggestions offered on the Planet on how the city can right their ship. It’s not rocket science, everyone has to budget on a personal level so you know they have some idea, even though I will grant that the city has a more complex budget, accountants and city leaders should be expected to know how to balance a budget. If the city was really interested in getting ideas for balancing their budget they should read the Planet!

Tex Elect
Tex Elect
Reply to  ShirlYNuts
2 months ago

Exactly. Problem is,it’s their credit card and your money.

Wilson
Wilson
2 months ago

Tyer is also planning to add another 1/4 billion in debt during this term

ShirlYNuts
ShirlYNuts
2 months ago

Finished reading the hate rag again with nothing to enlighten anyone just more spewing of hate. Versus difficult to read but it’s important to see what all sides say even the haters. Also didn’t see anything about the robbery at Berkshire Bank, which you would have thought would have been front page news. I hope Wilson is wrong when he says Pittsfield will be running a huge deficit again, when will they enact a balanced budget?

Pat
Pat
Reply to  ShirlYNuts
2 months ago

Hope they are not also going to go after the ATM machines like they were this past summer. With Biden killing so many jobs, people are getting desperate for money.

Last edited 2 months ago by Pat
acheshirecat
acheshirecat
Reply to  Pat
2 months ago

I don’t think Berkshire Bank was robbed. None of their branch lobbies are open. Rumor is someone was robbed using the North St. ATM.

Ban Narcan
Ban Narcan
2 months ago

Bumpouts, Bike lanes and reduced on street parking is coming to Tyler st.

It’s funny, the city rams through north street and the public reaction is 90% negative. So what do they do? The same thing with Tyler plus a rotary!
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Tree Fiddy
Tree Fiddy
Reply to  Ban Narcan
2 months ago

Follow the money to figure out why this is happening.
Overtime for DPW and a fat contract to a friend of the mayor.

J2S
J2S
Reply to  Tree Fiddy
2 months ago

$ 6 million project in total. $3 million from city capital budget and remainder from Mass Grant money (Taxpayers). Grant Money sounds better. Morning Star/Milltown and something else going on that we don’t know about yet.

Middul Consoul
Middul Consoul
Reply to  Ban Narcan
2 months ago

Who s the idiot ? And why hasn’t he been on the Stooge Show?

Middul Consoul
Middul Consoul
Reply to  Ban Narcan
2 months ago

Or she?

In Bed
In Bed
2 months ago

Capeless/Tyer

The school committee
The school committee
2 months ago

Would love to see angle parking on both side of North street and would love to see speed limit at 20mph…better lighting by the Beacon theater. Would like a pedestrian bridge over park square

Last edited 2 months ago by The school committee
Duarte Everything
Duarte Everything
Reply to  The school committee
2 months ago

Tyler streets a shithole

Bridge Over The River Why
Bridge Over The River Why
Reply to  The school committee
2 months ago

Yes let’s put a $4 million pedestrian bridge in at park square. We can then add a $1 million elevator system for bikes and ADA accessibility.
Better idea, let’s put a monorail in that runs the length of north street!

Happy Tobeaniware
Happy Tobeaniware
Reply to  The school committee
2 months ago

Thanks to Chris Connell again for possibly saving hundreds of thousands of dollars by asking the public works commissioner, who misspoke admittedly after questioning who’s ,responsibility of the sewer connection at the former Bousquet project. While the erroneous info was given, it was only retracted when the commissioner deferred Connell question to Ruffer. Double Speak!

Happy Tobeaniware
Happy Tobeaniware
Reply to  The school committee
2 months ago

Ricardo. Stick to roads. Your barely maki g it there.

pjmh
pjmh
Reply to  The school committee
2 months ago

I mean, I don’t know much. But I do know 1+1 = 2, the earth is flat, Trump lost straight up and if you need to put orange cones out in the street to alert drivers of a new traffic pattern… you probably got it wrong.