A national fiscal watchdog www.truthinaccounting.org/ in cooperation with Bridgeport resident David Walker, the nation’s former chief accountant, places the city’s financial burden at more than $1 billion. Anyone have a rich uncle? The non-partisan Institute for Truth and Accounting whose mission is “to compel government to produce financial reports that are understandable, reliable, transparent and correct” issued a gloomy report connecticut.statebudgetwatch.org/files/2011/05/Bridgeport-CT-2010.pdf following its review of the city audit and budget practices. “A city budget is not balanced if current costs, including those for employees’ retirement benefits, are pushed into the future,” asserts the organization’s chief executive.
The city has put off paying millions in pension obligations with the help of state legislation that has prevented an election-year tax increase. Meanwhile, city bean counters hope for a stock market turn around that will boost pension investments for future payments. David Walker, while serving as chief national auditor, screamed about Washington’s spending habits and warned of a financial meltdown, years before it occurred. See findings below:
TRUE BRIDGEPORT FINANCIAL BURDEN IS $1.4 BILLION
Institute Issues Bridgeport’s “Financial State of the City”
Chicago, (May 26, 2011) — Today the Institute for Truth in Accounting and the Comeback America Initiative released Bridgeport, Connecticut’s “Financial State of the City.” After an intensive review of the city’s 2010 audited financial report and actuarial reports, the Institute determined that, like many cities, Bridgeport is in a precarious financial position, because it is $1.4 billion short of the funds necessary to pay the city’s commitments as they come due. Each household’s* share of this financial burden equals $27,100.
The Charter of the City of Bridgeport mandates a balanced budget. “If Bridgeport’s past Mayor and City Council had truly balanced the city’s budget, no financial burden would exist,” said Sheila Weinberg, founder and CEO of the Institute for Truth in Accounting (IFTA). She continued, “A city budget is not balanced if current costs, including those for employees’ retirement benefits, are pushed into the future.”
While Bridgeport reported total assets of $1.2 billion, the Institute’s review of the city’s 2010 financial report revealed that more than $944 million of these assets cannot be easily converted to cash to pay city bills. These assets consist of capital assets, including infrastructure, buildings and land; and certain assets, the use of which is restricted by law or contract. As a result the city has only $229 million of assets available to pay $1.6 billion of current and future bills. Most notably, the City does not have the funds needed to pay for almost $1.4 billion of city’s obligations as they come due.
Many of the obligations relate to city employees’ pension and retirement healthcare benefits. Years of over-promising retirement benefits, while not setting aside sufficient assets to cover them, have resulted in the city’s retirement systems being underfunded by $1.1 billion. The retiree health care programs alone involve between $800-$900 million in unfunded obligations.
While the Institute for Truth in Accounting has issued a “Financial State of the State” for almost all fifty states, Bridgeport is the first “Financial State of the City” that has been released. This report was prepared at the request of the Hon. David M. Walker, Founder and CEO of the Comeback America Initiative (CAI) and former Comptroller General of the United States who is a Bridgeport, CT resident.
In response to this report, Mr. Walker said, “Like many states and municipalities, Bridgeport faces serious unfunded retirement obligations that need to be addressed. The time has come to bring the design and funding of these plans into the sunshine. Municipal workers deserve decent retirement plans but such plans should be comparable to those offered by other major employers. Efforts also need to be taken to prevent abuses of the system, including the disability provisions of these plans.”
The Bridgeport “Financial State of the City,” available at www.truthinaccounting.org and Connecticut.StateBudgetWatch.org provides this accounting by outlining the financial situation of the city, including unfunded liabilities to the city’s retirement systems. Additional information on Comeback America Initiative (CAI) can be found at www.tcaii.org
*The number of households is based on the estimated number of occupied units according to U.S. census data.
About the Institute for Truth in Accounting
The Institute for Truth in Accounting (IFTA) is dedicated to promoting honest, accurate, and transparent accounting at all levels of government and business. As a non-partisan, non-profit organization, the IFTA works to expose accounting deficiencies while promoting better, more accessible delivery of accurate government financial data—and, in turn, providing a foundation for more informed public policy. The IFTA provides its expertise to develop more effective accounting standards and deliver accurate government financial information to policymakers, opinion leaders, and citizens, so they can all work for a more secure financial future.
About CAI
The Comeback America Initiative (CAI) is a Bridgeport, CT based non-profit organization that promotes fiscal responsibility and sustainability by engaging the public and assisting key policymakers on a non-partisan basis in order to achieve solutions to America’s fiscal imbalances. CAI’s goal is to foster a national discussion around the themes in the book “Comeback America,” with an emphasis on various specific policy, operational and political reforms to put government on a more prudent, sustainable and accountable fiscal path. The organization’s primary focus is federal fiscal issues; however, it will also highlight the larger national fiscal challenge and engage in certain reform initiatives in selected states (e.g., Connecticut) and cities (e.g., Bridgeport, CT).
The Truth is an Absolute Defense. Hopefully MJF can utilize Mr. Walker to help get us in the black and off the rocks. I must say that was a pretty “neat” sentence 🙂
A budget that kicks current costs forward is not a balanced budget. That’s the story folks and for years, certainly the Finch four years, that is what has been happening.
Only one item at a time: The 2010 Comprehensive Annual Financial Report of the City in footnote 12 dealing with Other Post Employment Benefits (OPEB) tells us the City has had an $800 Million liability for the generous benefits offered to workers in the past. It further explains during the Finch years, retiree healthcare costs have averaged $50 Million in 2008, 2009 and 2010. The City has funded less than 60% of that amount each year of Finch’s term on average through the current budget and current tax revenues.
That has created an additional $61 Million of added liability over three years as this annual debt is stored in an “internal service fund” probably financed in a temporary but increasing manner by tax anticipation notes. (If not that then tell us how you do it, Tom Sherwood?)
Then you go to footnote a 15 where the last paragraph tells you in both the 2009 and 2010 reports, “The City anticipates eliminating the fund deficits through FUTURE grants and revenues.” (Emphasis mine.) Bill Finch, when is that anticipated? (Mayor Green, global warming probably means that Hell is not going to freeze over anytime soon.)
That means future taxes will be raised because Mayor Finch did not deal with the issue today; unless the City has a grant source that is anxious to reimburse the City for hospital, doctor, ambulance, pharmacy, nursing, and therapy expenses several years old? Current costs have been put on the City credit card, and the leaders call it a balanced budget. Seems like Council persons Bob Walsh, Andre Baker, and former Council person Donna Curran are getting some national vindication for their annual questions about this type of hypocrisy.
Back to you Tom Sherwood … spotlight is on you … and the microphone is ready … please, speak up, sir!
Mr. Sherwood just received the David Friehling Award for accounting.
Hey Cuppy, Wasn’t Friehling Bernie Madoff’s accountant?
What do the members of the B & A have to say now? It has been proven you had no clue as to what you were listening to. For years you blindly followed the advice of Tom Sherwood and look where we are. Do the council people who spoke glowingly of the Finch Budget now want to reconsider?
I would like to know when the obligation dates are due for payment that must be met with cash available rather than extensions or postponement? Since the State of CT is responsible in part by granting the waivers are they also not responsible for the debt? Does the group plan on doing the same financial assessment for the State?
charlie // May 28, 2011 at 4:15 pm
To your posting
Charlie,
The state is not going to take a hit for Bridgeport foolishness.
Nor should the City of Bridgeport elect someone who has no idea what they are doing as to fiscal responsibility. The trouble with all municipalities is there is no personal fiscal responsibility. IF POLITICIANS WERE PERSONALLY RESPONSIBLE FOR THEIR ACTIONS THEY’D ALL BE BANKRUPT, much like the municipalities they control. TERM LIMITS and ACCOUNTABILITY need to be enforced!!!
Vigilante,
You raise a couple points that are worth keeping in mind. Although municipal (or governmental, in general) accounting differs from routine business accounting (and I am not an accountant), it is systematic, requires the balancing of numbers, and when audited provides footnotes that allow readers to better understand the meaning of the figures.
Fiscal responsibility means you are called to be more attentive to how you spend other people’s money than you do with your own, perhaps. For instance one of my Council persons has built up thousands of dollars of unpaid taxes with the City and thousands of interest reportedly. What a shame! Why? Look at Wheelabrator, they are in dispute with the City but still post their taxes. Credit may come to them in the future. But taxes are paid.
But Council persons have not read the audit! They do not attend the Budget and Appropriation hearings! And less than a handful are curious about what others are saying about the state of City finances.
Charter reform is required if you want term limits. And Charter reform is probably also required to get financial accountability in the form of a City Finance Board whose sole responsibility is to review all City activities, capital and operations, bonding, collections, etc. that have to do with money and make recommendations that can be defended in open public meetings. Vote for Charter reform!
BEACON2 // May 30, 2011 at 11:54 am
to your posting
B2,
Did you know the City had some top-flight internal auditors working for the City … and as the fiscal abuses became more flagrant, and their concern was voiced repeatedly, they were shown the door and separated from City service, … in typical Finch contempt-for-the-law action.
V:
I agree 100%. Term Limits for a fact and lift the insulation politicians surround themselves with, immunity from lawsuits.
The Finch Vulcan mind meld was a telepathic link between two individuals, allowing for the exchange of thoughts, thus in essence allowing the participants to become one mind. (VOY: “Meld”) It was a psionic technique for “synaptic pattern displacement.” Normally it was employed only by Vulcans. It was a deeply personal thing, part of the private life, and generally not used on aliens, although cases were known where the mind meld was initiated between a Vulcan and a non-Vulcan. (VOY: “Meld,” TNG: “Sarek”) Those in a meld shared consciousness in a kind of gestalt. (DS9: “The Passenger”)
Physical contact was required. The initiator placed the tips of his fingers at key locations on the head of the other participant. This allowed him to place pressure on key nerves and blood vessels to facilitate the link.
The fact that most Vulcans who performed the meld touch the other participant in different manners, reciting varying formulas, implies that it was only ritual behavior, helping to concentrate on the task, leaving mere physical contact being the ultimate prerequisite to initiate the meld. If successful, the link resulted in a merging of both minds, essentially creating a single consciousness in two bodies.
Finch: We are safe for now, NO NEW TAXES! You are safe for NOW!
Cupcakehore–The Finch administration aren’t from Vulcan but from Uranus.
Bridgeport isn’t alone.
While it’s easy to blame the current Mayor, these problems have been simmering for decades.
Critics say politics is the story of how these problems are papered over and “pumped into the future.”
Local Eyes says policies initiated by the Federal government in 1965 hurt Bridgeport especially hard.
Either way, the IFTA has recognized this as a national problem very few cities, towns or states have managed to avoid. Forget the sunbelt, Bridgeport is part of the new “debt belt.”
The main cause is unfunded pension obligations which some have called impossible-to-keep promises.
Current pensioners are considered liabilities to their former employers. Remember, pensions didn’t exist 70 years ago. And don’t blame Tom Sherwood–he’s just using standard accounting practices while being the messenger and not the message.
Re-direct that spotlight!
Conclusion: You cannot borrow your way to prosperity and borrowed funds are difficult to retire.
That’s why Growth-Without-Debt has become the hottest topic.
You are defending Finch/Sherwood and their financial practices? Don’t blame the messenger for the message? This is their fucking job! Governor Malloy did the right thing, he made hard choices that were unpopular to bring CT’s deficit in line. These two knew this budget was a lie but didn’t want to increase taxes now before the mayoral re-election. Maybe if the common council weren’t afraid of losing their jobs they would have read the budget and asked some questions.
Local Eyes,
Go crawl back under your rock.
You underestimate my “awesomeness.”
Those who criticize their peers (I’m being polite) raise the bar for their own standards.
ZZZZZZZZZ
I would suggest you are sadly misinformed but that would infer certain cognitive capacities that do not appear to be present.
Your suggestions are meaningless. Cognitive incapacities are your hallmark and impede your advancement.
You remain sadder than any country song!
Some of Local Eyes’ Favorite Country songs
Walk Out the Door Backwards So I Think You’re Coming In
We Used to Just Kiss on the Lips but Now It’s All Over
What Made Milwaukee Famous (Has Made a Loser Out of Me)
When We Get Back to the Farm (That’s When We Really Go to Town)
When My Love Comes Back from the Ladies’ Room Will I Be Too Old to Care?
When You Leave Walk Out Backwards, So I’ll Think You’re Walking In
Whiskey for My Men, Beer for My Horses
Who You Gonna Believe, Me Or Your Lying Eyes?
Why Do You Believe Me When I Tell You That I Love You When You Know I’ve Been a Liar All My Life?
Who’s Makin’ Time with the Time Keeper’s Daughter, when the Time Keeper’s Keepin’ Time?
Would You Like Fries With That?
You Can’t Deal Me All The Aces And Expect Me Not To Play
You Can’t Have Your Kate and Edith Too
You Can’t Roller Skate in a Buffalo Herd
You Changed Your Name from Brown to Jones, and Mine from Brown to Blue
You Done Me Wrong, But Keep On Doing It ‘Til You Do It Right
You Done Tore Out My Heart and Stomped That Sucker Flat
You Hurt the Love Right Out of Me
You May Put Me in Prison, But You Can’t Keep My Face From Breakin’ Out
You Stuck My Heart in an Old Tin Can and Shot It Off a Log
You Wanted to Get Hitched, But My Heart is Filled With Whoa
You Were Only a Splinter as I Slid Down the Bannister of Life
You’re a Cross I Can’t Bear
You’re Ruining My Bad Reputation
You’re the Hangnail in my Life, and I Can’t Bite You Off
You’re the Reason Our Kids Are So Ugly
The story of those who are now retired and receiving their pension, i.e. firefighters and police gave up on getting pay increases because the City said it could not pay them the same as others in the Cities in the State that were the same size as Bridgeport so these firefighters and the police continued to pay 8% of their pay towards their pension and that money was placed in the City’s General Fund. The said instead of increasing your weekly pay the City will provide you with benefits, so the firefighters and police did their part with Good Faith but now we see the City didn’t.
FD & PD pension plan A members you’d better start getting your ducks in a row and prepare to start placing liens on all city assets to make sure you are first in line when the city can’t pay its debts, and the FIRE sale starts. Remember, the “Village Idiot” has no clue!
DonTito, federal law provides for that now. Those who have already a standard of living from their retirement are first in line but your point is a good one, prepare for a fight to get what is yours.
Scary.
You know what is scarier? These same shitheads who have created this financial mess over the past three or four decades are the favorites for reelection.
Y:
You are right. This is because the idiots who put them in office in large part have no concept of what they do only what party they are with. The thieves count on this to keep getting re-elected.
The same goes for the idiots who helped get them elected who didn’t get their city job or pay raise. That goes for mayoral wannabees who spout idiotic rhetoric thinking that will get them elected.
Suprise, surprise the truth is finally out. People on this blog have been talking about this deficit for awhile now. We now have a definitive answer as it relates to the finances of the city. We have finally shown Sherwood and company have been lying and fudging numbers to present a false sense of financial security to the people of Bridgeport.
The city and its people have been put in this position by the Finch administration and to some extent the Fabrizi administration. This latest budget passed by the council is a perfect example of the incompetence of this administration and the council.
This administration has spent three years doing absolutely nothing to improve financial conditions in the city. They have wallowed in incompetence. Show me one top official in this administration who has done their job properly.
It’s time to clean house from the top down. We need a new mayor who will replace those now in positions of authority. It’s time to stop recycling these assholes from one administration to another.
Can this latest financial problem be corrected and the city put on a firm financial footing? Yes it can!!! It’s time for all of us to put aside our personal goals and to join in one common goal. Let’s get rid of all who are in office and put qualified people who give a shit in office.
I agree with Mr. tc, it’s time to ask Ned Lamont who has already received the DTC and Mario’s backing, to move to B’port and run for mayor! We Need Ned! Finch Is Dead!
Oh Great!!! Anyone who has El Squid’s endorsement is really good for the city. Ned Lamont as mayor. Absolutely amazing. These are serious times, good people of Bridgeport. Such times demand serious people exercising serious thought.
tc,
To effect change, it must be complete. The entire administration as well as Common Council must be eliminated. All candidates need to offer a full slate. To leave the same lemmings in power on the Council is a promise of a “Lame Duck” mayor. The same old power brokers will continue to suck the lifeblood from BPT. Personally I am not in a position to cut a $27,000 check to bail out the city. However I do urge Finch, Wood, Sherwood& all of the Common Council representatives to do so. Show some balls, set us all an example and lead from the front.
In our current strong Mayoral form of government where the incumbent holds so much power, it will be hard for the current Council members, knowing as little as they do about the actual operation and financing of the City, to do anything but be sand in the gears. So a new Mayor will have a more difficult first year, but by being clear about what the goal of government is to be and using open, accountable and transparent processes, it will be a new season. The Council persons will look around them and see businesses, Churches, neighborhood groups, and others pleased with this new season and they will get in step or when challenged they will step aside. Perhaps they will even recuse themselves if they have a City job when it comes to voting on financial matters.
This is going to come back to haunt Bill Finch and his major domo, chief cook and bottle washer, Adam “Pecker” Wood. Mario will be unpleasantly surprised. His kept boy will have to go out and find a real job.
Kid, I disagree. Mario is looking for a way out of backing Finch. His guy is Joe Ganim. Always was and always will be. Watch what happens when (not if) Joe announces and the polls show him ahead of Finch. Mario will say Finch is not electable (just like he did to Fabrizi) and Joe Ganim will become the candidate.
You need some new material. Your remarks sound outdated and repetitive.
You need a new ghostwriter.
Are you having a bad day or are you having a bad life?
Loco Eyes your village called and it wants its idiot back. We appreciated your absence for the past few months. I figured you were in some mental health facility in a straight jacket. Were you released or did you escape? Well either way I am sorry your medications aren’t working well.
To all of America’s veterans and all presently serving in the military I say THANK YOU. TO THOSE SERVING ON ACTIVE DUTY MAY GOD KEEP YOU AND YOUR FAMILIES SAFE.
You’re welcome.
Amen,
We are all indebted to all of the brave men & women who have proudly served our country in the past, present & future. May God keep them all safe and bring them home safely and soon.
I hope the President or the military sent the Seal Team & their families to Hawaii for this weekend. If anyone deserves to party it’s that group of brave warriors. Two shots–Geronimo!
We seem to be losing sight of the meaning of Memorial Day. While I think we should honor all of our veterans every day, today is a day we set aside to remember the men and women of our nation who boldly stood their posts in harm’s way and gave their lives in order that our liberty can be preserved.
Can’t understand why a city vehicle is in the suburbs with his full family inside. That my fellow BPT taxpayers is pure and utter bullcrap. Finch must go.
AntiTesto,
In addition, Bridgeport’s charter needs to change to create a Board of Finance. Right now the twenty Councilpersons represent their 10 districts. Except for the Mayor, no elected position represents the city as a whole. With the exception of one or two, none of the Councilpersons have skills and experience in finance and those two aren’t on Budget and Appropriations. Therefore Bridgeport’s fiscal house needs to be restructured to create an independent Board of Finance with specific requirements that those elected to serve must have serious education and experience in finance. That Board would be dealing with these pension, budget, and mil rate issues all year long. This finance stuff is much too complicated to leave it to the Budget and Appropriation committee, OPM, and very concerned and dedicated volunteer residents. Bravo Mr. Walker for the objective fiscal evaluation from Chicago. Bravo to our Vets for keeping us free!
countdown,
You’re 100% correct regarding the need to have a Financial Review Board. The problem is it will run into the same opposition as the discussions about Charter Revision. Transparency & Accountability are words that are freely thrown about, but they are only words. Corruption hates daylight.
My call for the replacement of the Common Council is not personal, it’s only business. They are only on it for themselves not for us. Look at other towns, their boards are made up of volunteer professionals from accountants to lawyers who look out for the voters.
In honor of Memorial Day.
www .youtube.com/v/ervaMPt4Ha0
Thank you for this video. It said it all.
Up On Bridgeport,
Thank you for sharing that, it should be required viewing for Americans. That was heartbreaking to watch & brings home the true message this Memorial Day. These soldiers putting their lives on the line day and night are doing it for us.
It saddens me we are losing our best & brightest in wars on foreign soil. Just think how much better all of our futures would be if they could have all returned home.
For Transparency & Accountability for Bridgeport then we need the Financial Review Board to come in from the State just like they did before to manage the City’s financial problems no matter who gets elected.
This is all just so much bullshit. Unless and until the Finch administration is removed from City Hall root and branch, unless and until the tax cheats and DTC puppets on the City Council are weeded out, nothing is going to change. I haven’t been on here that much lately, because this is a waste of time, a dreadful waste of time. If a member of the City Council is not paying municipal taxes that makes him a cheat, which is another word for CROOK. I’m comfortable using that word to describe someone who has refused to pay his fair share of the city’s financial burden. Now the Judge of Probate, a domestic abuser, is being evicted because he hasn’t paid rent. Guess what, Judge Ganim? That makes you a CROOK.
The list of attorneys and law firms contracting to do legal work for the city of Bridgeport that have also contributed to Bill Finch’s re-election campaign is disgusting. The payments may be campaign contributions but we all know that is just another way of saying “kickback.”