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.

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“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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