CHTA – Election Cheat Sheet

CHTA – Election Cheat Sheet

Last updated: 28 Oct 2013

Terms

Several terms have been used in email. Some can be confusing, especially the terms used in the audit and budgeting process. Here are a few:

Term Definition
Fund Balance Similar to a savings account. Money that has not been spent accumulates in this account.
Unappropriated Fund Balance Fund balance dollars that have not been tagged for future spending
General Fund The area of the budget that covers all items NOT covered in special funds.  
Special Funds A set of accounts specifically assigned to a certain area like Water/Sewer, Lighting etc.
Unrestricted Fund Balance Fund balance dollars that may be spent on any item; they are not restricted
   
   

Fiscal Mismanagement/Audit Issues

The audit reports for the Town of Plattsburgh list many disturbing findings.  Audit reports are available at http://www.cumberlandheadta.org/town/budgets-and-financial-documents/

1. Water and Sewer Department cannot be audited

Shockingly, the Water and Sewer Department in the Town of Plattsburgh has not been audited since 2007 because the auditors can’t reconcile the numbers!

The audit reports for 2008, 2009, 2010, 2011 and 2012 state “The monthly billing interface reports originating in the Water/Sewer Department, and provided to the budget office, did not agree and could not be reconciled, to the annual billing reports.  Also, the monthly and annual utility billings are not being reconciled to the general accounting records.  In addition, yearend billings for water and sewer were not properly recorded.”

Five years have passed since the original problem was discovered by the auditors. Why hasn’t this problem been fixed?  The Water/Sewer department has a staggering $7 million budget with billings that are irreconcilable and/or not properly recorded.

2. Deficit Budgeting

Audit “findings” were reported in 2010, 2011 and 2012 indicating that our money is being mismanaged; that we are “deficit budgeting” or spending more than we bring in. Deficit budgeting was not recommended by the auditors, however the Town chose to continue overspending.

“The Town budgeted a deficit for 2010 in the General Fund with surplus net assets being used to fund the deficit.  While this method of budgeting can be used during certain times … we recommend that the Town not use this budgeting method in excess, since it will reduce the Town’s overall surplus and could create a budget shortfall in future periods.”

The Town continued spending more than they took in which resulted in the current fiscal drama. Our elected officials have irresponsibly kicked the can down the road and are planning a tax cap override for the 2014 budget to “fix” the problem they had known about for 3 years.

3. Outstanding Receivable from 2008 – Still unpaid

Another example of financial mismanagement is described in the 2012 audit and states “The Town has an outstanding 2008 receivable of $29,478.91 from the Town of Plattsburgh Fire District #3 resulting from an article 7 settlement paid by the Town. No recent efforts by the Town have been made to collect this receivable.”

The receivable was four years old and the Town was not even attempting to collect it.

4. Additional Audit Findings

Year after year the auditors cite pages of findings; many of them ongoing problems that, year after year, have not been addressed.  Now, our elected officials are planning a tax cap override. They want more money even though they cannot properly manage the money they already collect.

Five years, five disturbing audits and no resolution: Why are we paying $29,000 annually for audits that have been ignored? 

Audit reports are available at http://www.cumberlandheadta.org/town/budgets-and-financial-documents/

Operational/financial Issues

Several members of CHTA attended Town Board meetings in 2012 in an attempt to convince the Town of Plattsburgh (TOP) Board to rein in spending. Compelling arguments were given. Taxpayers were and still are struggling to pay their bills. The following list identifies the primary talking points that CHTA members delivered to the TOP Board in 2012. Everyone needs to understand these issues, at least at a high level. The long term implications of inaction are profound. More information is available on the CHTA website ( http://www.cumberlandheadta.org/ ) but this list will at least give you a high-level understanding of the hot-button issues:

Lighting District

Basically, the Town has taken over a function that should be (needs to be) performed by experts. The TOP has purchased lights from NYSEG and will maintain them. This is neither cost-effective nor safe. Several cost items were omitted from the analysis including

  • ·         no labor estimate to tag the poles
  • ·         no labor estimate to install the disconnects
  • ·         no labor estimate to replace the bulbs

The details follow.

Lighting District Details

A presentation was made to the TOP Board presenting a compelling argument against the TOP taking over a service provided by NYSEG. Specifics were given and the overall argument was the promised savings would not be realized because the analysis performed by Paul Lamoy was faulty at best. The TOP estimate a 300-400K savings. The current budget clearly points out that there is no savings. Costs have been shifted:

 Art Brault’s and Rick Rascoes salaries are going down (Art’s by $11,405 and Rick’s by 16,195). But the lighting budget is going up: $12,500 for Senior Maintenance Worker  (Art Brault) and $18,700 for Building and Grounds Maintenance Tech (Rick Rascoe).  Lamoy’s analysis with promised savings isn’t savings at all. Lamoy’s plan simply cost shifts from General to a special district ($31,200 in wages, $6,410 in retirement, $2,380 in FICA, $500 in worker’s comp, and $14,000 in insurance for a total of $54,490 this coming year for wages and benefits).  These costs will continue to grow annually and is unsustainable.

Lighting District Budget Truck

$90,000 Bucket Truck

The TOP approved the purchase of a bucket truck for $50,000 … The truck ended up costing $90,000! The $40,000 difference may seem small but the price paid was almost double the estimated price! The lighting district proposal is littered with similar miscalculations.

Management Issues

TOP officials are highest paid in our region

I think we all agree that no one wants to see people lose their jobs. The reality is though, that cost of employees is the biggest element of most municipal budgets. The 2012-13 edition of What They Make, the Empire Center’s annual report on public payrolls, allows New York taxpayers to compare this key element of local government costs around the state. Here’s the 2012/2013 report: http://www.empirecenter.org/CMS/Documents/WhatTheyMake_Web2.pdf

From the website http://www.empirecenter.org/AboutUs/news_releases/2013/08/whattheymake2012-13.cfm:

“Local government is a labor-intensive business, and employee compensation is the single biggest element of most municipal budgets.”

Plattsburgh is #2 out of 119 municipalities in the North Country! The average pay / employee (pp. 23-25 in the pdf report above) is $42,352. Massena is #1 but their average pay accounts for hospital workers.

It’s not the role of government to provide gainful employment. Municipalities need to be efficient, cost-effective, and frugal – especially given the current state of the economy.  We are on an unsustainable path.