City fiscal watchdog John Marshall Lee, pounding the pavement as a Democratic City Council candidate in the 130th District that covers Black Rock and a portion of the West End, wonders why there’s so little chatter about city finances? From Lee:
Election year excitement abounds. Public safety issues cause fear in some parts of the community while reporting on crime and violence causes concern in other sectors. Parks and recreation matters have been pushed by the Mayor but with no comments on the how they were funded and ten percent of roadways are being resurfaced. Economic development indicates Grand List values have increased, but where do you verify such information?
Council and taxpayers resist subsidies from long-term tax abatements offered to current investors. And concern is expressed across the City on the expected property revaluations coming after Election Day. School construction work continues at several sites. Downtown development proceeds in fits and starts while new businesses open and close too rapidly it seems. What about info regarding City money?
The City posted a June 2015 Monthly report for the Fiscal Year 2015 marked DRAFT. (The format for expenses has been reduced and this has cut more than 50 pages from the report, a Green act, but some additional adjustments are in order.) Page 2 showed:
Net Surplus $466,037.51
A surplus should be something to brag about, right? However, when you look at the report data there is a problem. I hope it is a small one, to be easily corrected.
When you review the report itself, the Revised FY 2015 Revenues were budgeted at $523,518,279 and according to the FY 2015 YTD summary were actually $521,988,899 a negative variance of $2,983, 415. (Two BOE Nutrition line items totaling $2,087,309 and another line item from Manufacturing Machinery and Equipment budgeted at $896,106 make up the negative revenue variances.)
When you look at the summary of expenses for FY 2015 on page 26 you see the Revised FY 2015 spending Budget was $523,518,279, identical to the budgeted Revenues, a balanced proposal. However, this DRAFT report shows Total FY2015 YTD expenses of only $505,501,379 in Column I of the report. Column J shows “Remaining FY Forecast”, a sum of $19,004,898, but there is no more “year ahead” as of June 30, 2015 just time for adjustments before handing the books to the external auditors. Is there a $466,037 surplus or a $16,000,000 surplus? Or are there explanations somewhere?
Fiscal reports coming out of the City often are explained to the City Council Budget and Appropriations Committee by Finance Director Anne Kelly-Lenz and Office of Policy Management (OPM) director Thomas Sherwood. Fiscal reports in recent times have had numerous troublesome errors that erode trust and confidence. That includes the 2014 Comprehensive Annual Financial Report (CAFR) released December 27, 2014 where more than 20 different errors were identified but unacknowledged. Is there proofing done on documents released so that the public can trust the reports? Is there a $19 Million surplus for real, or is this another mistake? Possibly OPM should be renamed, the OFFICE OF PERPETUAL MISTAKES? Is Bill Finch missing some really good news to share with the taxpaying public or is an independent auditor necessary to look under the hood of all City finance matters: Operating, Capital and Grants budgets? Time will tell.