Setting Setti’s Financial Record Straight

Submitted by Joshua Norman

I must have struck a nerve with my recent column published on the Newton Wicked Local Website (Choosing Our Next Mayor, December 6, 2016). It prompted someone who considered running for mayor, but ultimately did not go through with his run to respond with a column in which he attacked my credibility and competence but failed to directly address my observations.

Most of my two dozen columns published in the Newton TAB and or Newton Wicked Local have analyzed and evaluated Newton’s structural spending problem that is due to its lavish compensation practices for its employees. Newton’s fiscal irresponsibility has resulted in Newton accumulating nearly $1.4 billion in debt and other liabilities, primarily net unfunded liabilities for pension and retiree healthcare (OPEB). When I cite data, I simply cite reports prepared by the City of Newton (particularly the Comptroller’s Office) and or the Newton Public Schools department. In my opinion, TAB readers who may be prompted to write a letter or column to the TAB taking issue with what I write would be better served by taking issue with the following people instead of my columns:

• The Mayor (who submits the budgets that continuously increase spending to the city council),
• The City Council (which routinely rubberstamps the mayor’s budgets by 24-0 vote margins) and
• The Comptroller’s Office, Actuarial Consultants and External Auditors (which prepares Newton’s Annual Financial Reports and Actuarial Valuation Studies highlighting the increase in spending, debt and pension/OPEB liabilities)

When I referred to the Angier School’s initial cost of $30 Million, this was quoted from an article in Newton Wicked Local which said “Officials are forecasting that a new school could cost $30 million”, as did the December 8, 2011 CIP PowerPoint Presentation made by the Newton Public Schools. Now, it will cost at least $36 Million according to Newton’s Angier Elementary Capital Project Report. The only way one could accept the premise of Angier being $1 Million under budget is if one also accepts that the budget cost of Angier increased by $7.5 Million relative to the initial estimate. Nevertheless, that still nets out to a $6 Million increase in costs relative to the city’s initial project cost estimates.

I encourage Newton residents to visit the City's website, read the Mayor’s FY18-FY22 Five-Year Financial Forecast, and pay extra attention to pages 25 and 26, which show how Newton’s annual spending is projected to be well in excess of its annual revenues. I also encourage Newton residents to read and compare the following 2010 and 2016 financial reports to see how Newton’s debt and other liabilities have continued to grow under Mayor Warren’s tenure in office:

• Newton Contributory Retirement System Actuarial Reports: Newton’s net pension liability has grown from $208 Million when Mayor Warren first took office in 2010 to $317 Million in 2016, despite boosting Newton’s annual contribution by 50% during this time-period.
• Newton OPEB Actuarial Reports: Newton’s net OPEB liability grew from $531.7 Million in 2010 to $719.2 Million in 2016, even after Warren put $3.6 Million aside to pre-fund the liability.
• Newton’s Audited Comprehensive Annual Financial Reports: Newton’s outstanding bonded debt, notes and interest payable increased from $218.65 Million in 2010 to $297.8 Million in 2016 even after “saving $20 Million in interest expenses from debt refinancing”.