City Budget Needs Dose of Reality
By Dan Wood —- Comments by a Crazy Old Man
The 2016 budget for the City of Montesano is a train wreck.
It’s unusual to have to revise a budget so early in the year.
Failure to do so would take a bad situation and make it an even greater crisis.
Let me illustrate.
So far we have drama. It’s unusual (maybe even mean) to elect people and expect them to do the most important part of their jobs while they still have painting to do and rugs to buy. We have a “train wreck,” “bad situation,” “crisis.” Now our guide is going to illustrate the travesty of the mayor and the city council having to do mayor and city council stuff only 6 months into their administration. Weeping and wailing would seem to be the appropriate response at this point.
The total city budget is about $10 million; about $2.5 million is in the general fund. A healthy fund balance should allow for three months of operation – about $625,000 for the general fund, where we pay for police, office help, parks, street maintenance and other important functions.
In four years, the previous administration spent down the general fund reserve from nearly $200,000 in the beginning of 2013 to a projected $0 at the end of 2016.
This would seem like a good time to discuss how much money is allocated to the general fund from the total budget. And then maybe discuss the mechanism by which those funds are allocated. In case you missed the crisis, train wreck, bad situation, or the $0 in the previous paragraph – Zero, and Nothing are added to enhance the drama of the situation. Hug your child close. The scary part is coming
By itself, that was reckless.
Or, possibly it was by design. Good planning put just the right amount of money where it needed to be until it was time for the next administration to make decisions. Possibly “reckless” means, “We’ve been inconvenienced and we weren’t ready to do real city government stuff right away.” I’m not in city government, so I could be wrong.
Even more so when you consider how they built the budget.
They projected a 2016 starting fund balance of $100,000 and ending with $0 after all projected revenue and expenses.
Nothing left over for a party? Is it possible they planned how much they’d need accurately? What kind of reckless silliness is that?
But those numbers weren’t real.
Tens of thousands of dollars in bills from 2015 weren’t paid, making it look like the city had more money on hand. The Montesano Community Center (senior center) was underfunded. Portions of long-term employee salaries were not included in the budget.
Real numbers? “Tens of thousands of dollars” in bills weren’t paid. [cue the low minor chords] Payments weren’t made? Or were the bills not paid off entirely? Which bills? Were they contested? Were portions of employees salaries formally established to be paid from other funds? This is very incomplete. I don’t think Dan is using real numbers, or at least he isn’t sharing them. Although, “tens of thousands” is pretty scary. You should be hugging your pillow and weeping quietly at this point.
Revenue was significantly over-estimated. Mobile phone tax revenues were pegged at nearly a 50-percent increase over 2015. Pull-tab tax receipts were listed at double the actual.
“Significantly over-estimated.” “nearly a 50-percent increase.” They didn’t accurately predict how much people would stuff into pull-tab machines – those criminals. What was “the actual” and what was the estimate? Was it exactly double? I’ll bet it wasn’t more than double or he’d have said “more than double.” “Almost double” isn’t terribly frightening. Frightening is the goal. No numbers. Just drama. The orchestra begins to build to a crescendo.
Smaller revenue sources were “rounded up” by a few thousand here and there.
“A few thousand dollars here and there” How many thousand dollars? Where and where? Estimates before the fact, or actual data after the fact? More drama. No facts.
State law requires balanced budgets. Revenues should be equal to or greater than expenses.
Children should eat. Kittens are cute. Stating the obvious adds nothing to the discussion.
Spending the savings down to zero, greatly overestimating revenue, paying bills late and leaving out regular expenses is not balanced. It is a recipe for a financial crisis.
Savings? I thought it was a city general fund designed to run the city a year at a time, not be a piggy bank. “Greatly” overestimating revenue? “Crisis?” Again. Drama for drama’s sake. All chrome, no motor.
In all, the 2016 budget was headed for a negative number between $150,000 and $200,000.
It became more and more clear that major corrections were needed.
So now, only six months after finding your way to city hall, you’ll have to do the jobs you were elected to do? Horrors. Oh, those bad people who were here before.
Mayor Vini Samuel put the brakes on spending early in the year. When a department head retired, that position was not filled. Neither was a vacancy in the public works department.
Replacement of a police car was delayed until 2017. Other expenses were held back.
A CFO was added at a salary of $130,000 per year who, in spite of making significant campaign contributions, was almost certainly not a political appointee. Sounds like Mayor Vini needs to get new pads on the brakes.
But that wasn’t enough. Layoffs were necessary.
People not paid from the general fund who supported the political opponent had to be laid off to save money from the general fund which will now pay more to their unemployment compensation that it did to their wages. The savings will be enormous. Thank you, Mayor Vini.
Two of seven clerk positions were laid off. Per the union contract, the least-senior clerk was laid off from the main office. Mayor Samuel then eliminated one of the two full-time police clerk positions. Under the contract, the more-senior police clerk “bumped” the next least-senior office clerk.
Duties and desk locations have been re-arranged to cover the work.
I’ve been laid off before. I’ve also had to lay people off. The experiences were unpleasant.
Our hero provides a brief explanation of how union rules were effectively manipulated to eliminate dissent. He fails to mention that the union was a strong supporter of the election of the new administration and sat on their hands when it came time to represent the laid off employees. Those facts don’t fit the narrative. Then a brief, utterly meaningless, and unnecessary description of the layoff experience.
Unfortunately, a budget that projects no money at the end of the year – and is built on a house of cards to get to that point – leaves the city with no other options but to lay off staff.
Or maybe assess the possibility that the budget was supposed to provide money for a year and then a new allocation to the general fund would occur, and maybe hire someone to do the job the new CFO is doing for a less princely sum.
In an April letter to The Vidette, former Mayor Ken Estes said, “The 2016 budget was gone through by the 2015 council with a fine-toothed comb, line by line…”
Former city administrator Kristy Powell wrote from Logan, Utah in May to share her thoughts on the last budget she put together for the city.
She wrote “No money was saved by terminating the deputy clerks…” I don’t think I need to explain how disconnected that statement is from reality.
Of course you don’t need to. Several people already have connected it to reality. And the reality has facts and “real numbers” included in it. Including facts and real numbers in this explanation would upset the tone.
Powell also claimed that “Included in the projection was an increase of 100 previously vacant homes that are now occupied, and will contribute to the tax rolls…”
The reality is, property taxes are owed on homes, whether occupied or vacant.
And, of course, the only taxes paid by residents living in homes is property taxes, right Dan? There’s no other benefit to the city tax revenue. No utilities, or sales tax, or any of that other stuff. Never mind. Facts aren’t necessary here.
The claim of 100 newly-occupied homes was made last year, too. But, according to real estate professionals, that would have created an influx of about 250 people, or a more than 6-percent increase in the population of Montesano.
In the most generous terms, we should consider the claim to be “unsubstantiated.” Even if there was a significant population boom to Montesano, this would not have justified budget numbers so separated from reality.
Translation: They used real numbers to explain what they were doing. We’re using drama and adjectives. They’re liars.
How many new businesses have started up in Montesano in the last year? 4? 5? Why aren’t you citing that increase? Is that positively impacting revenue? How much? Would good news dampen your drama?
In November 2014, I warned the administration that its budget practices were unsustainable. There was too much administration and too much neglect of our buildings, streets, alleys, sidewalks and equipment.
Mayor Samuel has reduced overhead. There is one less administrator.
But we have a long way to go to address the poorly constructed budget and the neglect of basic care of our city.
We’re going to blame all future problems on the previous administration while we entertain you with sound and fury.
We’ll get there.
We expect applause and adulation the whole time we’re blaming somebody else, too. Shut up unless you agree. Also, you shouldn’t read anything into the fact that we wasted a half a page of the local paper dragging the previous administration through the mud with accusations of gross mismanagement to explain a personnel action that in most places wouldn’t get a column inch near the obituaries. We don’t want you to think we’re bad people, after all.
Please share your thoughts with the Mayor and council at the June 14 and June 28 budget hearings at 7 p.m. at City Hall.
Dan Wood was elected to Montesano City Council in November 2015 and started his term in January. He is a former county commissioner and school director.