The city’s preeminent fiscal watchdog John Marshall Lee made his case to the Bridgeport City Council Monday night two weeks before Mayor Bill Finch submits his proposed budget to the city’s legislative body. Lee claims the city’s budget deficit is much larger than we’re told. Lee’s remarks:
Ladies and gentlemen of the City Council, you were elected to represent all the people of Bridgeport. (You do that best by advancing your own learning about areas that deal specifically with your Committee Assignments, by attending those Committee meetings, reading the documentation provided by the City, and searching for the best way to accomplish things in the City as a City Council body. You also represent the folks in your District to provide them with effective services, in an efficient and fiscally sound manner that will build City strength and resources.) You happen to be a check and balance on each elected administration. You happen to be the only remaining fiscal watchdog inside Bridgeport. Are you up to the task, the responsibilities and the time commitments? Do you need help? When will you discuss the three serious matters I raise tonight?
It is budget time of year. The Mayor will be presenting his 2013 budget to four meetings where the public may ask questions. Superintendent Paul Vallas and his team of education administrators have developed an “educational implementation plan” and two budgets: one for our current year as well as another for the coming year. They have been at meetings sharing and listening. The current Board of Education is expected to vote on that plan and budgets next Monday evening, March 26, 2012.
The seven citizens whom you appointed to the Charter Revision Commission in early January have been meeting twice weekly to review our Charter, first in redlining sessions, and then listening to City administrators, Council members, legal advisers, and a number of ‘experts’ on the role of Mayoral appointments to Boards of Education in seriously underperforming urban educational districts.
Mayor Finch was the initial speaker. He emphasized accountability that is necessary to effective governance. It is Mayor Finch’s record of fiscal accountability I question tonight. Accountability (as well as open and transparent process) has been my topic in previous addresses to you. Our City governance is failing in my opinion, so I raise the subject once again in three specific regards:
• First the City Charter, Chapter 9, Section 7 calls for the Mayor to submit fiscal reports including revenues, expenditures and variances to the City Council by the fourth Friday of each month relative to the prior month. However, a full 12 months of these reports has been unavailable to you, to me as a member of the public searching in the City Clerk office and most importantly to the Budget and Appropriations (B&A) committee members for their oversight and systematic review at their monthly meetings. This has persisted for over 20 years according to one City finance official. None of the three lawyers present has commented up to this point on this critical omission of very specific Charter language on the part of our Mayor. The three have been present at most meetings and all of them are compensated for this legal representation by taxpayers of the City. The Mayor failed to mention this specific lack of accountability to the Current Charter as did Chief Administrative Office Nunn and Council President Thomas McCarthy in their remarks. Why does this unlawful pattern continue? How does this show a record of accountability?
• Second the Charter and budgets, presented and passed by your body each year including last spring, indicate “internal audit staff.” City ordinances speak to internal controls as part of the oversight process for the City. The Comprehensive Annual Financial Review (CAFR) 2011 specifically charts internal audit staff in a Table of Organization. Council President McCarthy in his testimony to the Charter Revision group indicated as his final comment (not recorded in the official minutes of that meeting though the minutes were approved) that this City has not had an internal audit staff for a number of years. What’s the story? Where are these watchdogs?
• My final comments have to do with total City spending and total City revenues, the whole annual pie. From 2007 through 2011, the City had a deficit in total cash flow each year for a sum of $163 Million, an average of almost $33 Million annually. How can City expenditures exceed revenue regularly? Well, we have bonded $133M in the past five years, entering the debt market on four occasions. But this still leaves $30 Million in excess spending. The City fund balance has decreased during that time by half at least but not by $30 Million. Is there a secret? Is this subject ever discussed by Budget and Appropriations? Does either the Council or B&A formally review the CAFR each year? Is the Management Letter from our external auditor (that is sometimes addressed to “Board of Finance,” a body that our City has not had for more than 20 years) shared with all members of the Council annually as well as the City’s response? Is the Council aware of the entire City fiscal picture? Unlimited taxing power is available to the Council but the Mayor with a four-year term is insulated more than you are for fiscal failure and disarray. Where is financial accountability? Where is transparency? Net assets went down this year.
I have many specific observations based on sitting in on Council, Council Committee and Charter Revision meetings. Tonight I am making general comments appropriate to your five-minute time limit. Next Sunday at 4:00 PM I will be at Harborview Market for my fifth public session on Bridgeport Finances 101 with plenty of time for questions and answers. If you want the shorter version as an appetizer please go to YouTube.com and look for Bridgeport Finances 101 for an 11-minute commentary. Look forward to hearing some bark from all of the Bridgeport watchdogs. Time will tell.
John Marshall Lee
30 Beacon Street
Bridgeport CT 06605