Monday, July 4, 2011

Unclear on the Concept

There's an old joke that goes like this:

Question: What do you call the student who ranked last in medical school?

Answer: Doctor.

You see, just because someone has a title or holds a position doesn't mean they are actually fully qualified for it.

Take the words of one Troy City Council hopeful on the upcoming library millage:

The whole problem with the city is the shifting numbers. One day they need 4 million a year, the next day they need 2.4 million, then the next day they need 3.1 million. Which is it? I (and a lot of people like me) don't trust the numbers the city shifts around conveniently whenever they feel the need for a tax increase.

This wannabe civic leader is referring to a couple of things here, but he/she clearly doesn't get it.

The CITIZEN LED Proposal 1 millage request (NOT the city's request...again...CITIZEN led) was for a .9 millage SOLELY dedicated to the operation of an independent library. It would have generated about $4 million THE FIRST YEAR...and then less and less each year thereafter as our revenue from falling property values continues to decrease.

In addition, as an independent library, a VOLUNTEER board would be responsible for paying for/funding all of the following:

-- maintenance and upkeep of the physical plant, including outdoor landscaping/snow-removal, utilities, cleaning, etc.
-- rent/lease of the building IF the city chose to charge for that
-- salaries of all employees (and associated costs of payroll, accounting, bookkeeping, etc.)
-- all library expenditures (books, subscriptions, office supplies, etc.)
-- internal IT that the city has always provided, but might not into the future
-- establishment of an "emergency fund" for things that would no longer be funded from the city's "fund balance" or "capital fund."

In other words, the INDEPENDENT library would have no built-in services or safety net from the city like a city-run library would. Much research and thought went into finding a workable number that kept the library free from peril or threat of closing.

To be honest, Proposal 1 was the soundest possible solution to keeping a soundly run library.

Right now, the library is still a city-run entity. It will cease to be funded by the city as of August 5, however, if the current millage proposal doesn't pass. But for now...it costs about $2.4 million to fund at it's current level. That level is a FAR CRY from the fully-funded, award-winning library we used to have.

Library Director Cathy Russ had NO CHOICE in the matter, though. She was told she had to fund the library at that level, and so she did. She made painful cuts. She had to fire employees. She cut back service. To compare to prior levels:

-- acquisitions are at about 50% of they had been previously
-- far fewer individuals staff the library
-- programs are greatly decreased

But the library is OPEN, and that's crucial.

So...that brings us to August 2. If the .7 millage request is approved, it will generate enough income OVER THE FIVE YEARS to run the library at about what it costs today. That number of dollars raised WILL FLUCTUATE over the years, though, as our property tax revenue does the same. It might bring in $3.1 the first year, but far less from there on if leading economic indicators are to be trusted.

Again, we're looking at an AVERAGE of revenue over five years.

The bottom line is that ANY MILLAGE NUMBER does not generate the exact number to the penny needed for funding actual costs. Budgets are not set by ACTUAL costs; they are set by proposed numbers based on careful analysis of past spending, estimated future spending, and assumed increases/decreases as determined by economic conditions.

Anyone who doesn't understand that shouldn't be sharing opinions as though they do.

Anyone who doesn't understand that has NO BUSINESS in city government.

6 comments:

  1. PS: I purposely did not name the council wannabe. He/she is still a private citizen. Respect his/her identity.

    But as soon as his/her name is on an official docket, he/she will be open to full and frequent disclosure of his/her opinions and public record statements.

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  2. Budgets aren't set to be actual costs? Wow that's a new one on me. In the real world, the big boss gives you a budget and you live with it. In fact a lot of times theres a mad scramble at the end of the year to spend the unused portion of your budget for fear of having it reduced because you didn't need it. The big boss doesn't give you a budget and accept you going over it during your first quarterly meeting. Theres fear of losing your job to a better manager if you do.

    And I suppose I just don't understand when the city overwhelmingly defeated a 1.9 millage increase, that every budget across the board wasn't given a decreased budget to live with. The library obviously got a haircut (to 2.4M) In a declined economy after a no on a millage vote, that's the appropriate thing to do. Now the city is asking for more on a seperate millage. I don't hate the library, I believe we should do what it takes to keep it open, but you and I simply have different ways of approaching it. You want more and higher taxes, I want better management of what our city already gets from us. Incidentally, the projection of the 3.1 million this increase will bring in could be higher as values stablize and go up... my tax statement arrived this week with a $ 2,290 increase in my SEV from 2010. I understand that isn't the case across the board, but it is an increase and the city will receive more taxes from me this year than last, completely the opposite of what they've been telling me.

    Dave
    Wanna be civic leader, feel free to post this if you feel the gloves are off yet.

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  3. VOTE FOR DAVE!...I will.

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  4. A vote for Dave is a vote for even lower property values!

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  5. Seriously, Dave...do me a favor. Read ALL OF THE INFORMATION before you try to refute it.

    Again, you aren't equipped to manage a city budget. You shouldn't try.

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  6. Martin is also not equipped to understand the budget, and unfortunately he is already on council. I went to an information session with someone with 25 years experience analyzing corporate and public budgets, and when Martin "explained" the money available to fund the library, my friend said he either knows he is lying and trying to pull something, or he is completely illiterate when it comes to budget prepartion, budget execution, and the principles of acctuary science. And no Tea Party candidate will get my vote.

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