Glen Cove City Council Candidate Responds Again to 'Mayor's Surplus Fantasy'

Philip Pidot, a Republican City Council Candidate who first responded to Glen Cove’s mid-year budget evaluation, has released a second response after new details regarding the City’s budget were released.

Pidot said the corresponding budget memo was recently delivered to all the councilmembers and the details give a clearer picture of the City’s finances.

Read below to check out his response to these new details.

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Read more here:

• Part I— City Council Candidate Responds to Claim That Glen Cove is on Track For Surplus
• City of Glen Cove’s Budget Update

Written by Philip Pidot:

Response to Mayor’s Surplus Fantasy - Part II

As I continue to wait on my FOIL request for the full midyear 2015 budget (the city clerk has promised some kind of answer by Primary Day), I’ve compiled enough new data to fill in some of the gaps mentioned in my previous post about the mayor’s claim that Glen Cove may be headed for a budget surplus.

That post noted that 1) a surplus seems mathematically unlikely given that we’re continuing to issue more debt to cover our expenses, and 2) the City relied on one-time windfalls in early 2015 that can’t be expected to sustain spending that exceeds recurring revenues.

Thanks to summary data contained in a budget status memo to councilmembers, even more troubling details emerge. (Some council members did not receive that official memo until they specifically requested it, after reading the mayor’s claims of budgetary healing in the Glen Cove Patch.)

The supposed fiscal improvement seems to be a product not of budget discipline, but of sloppy accounting, irrelevant comparisons, and cherry-picked data. The result is a wholesale distortion of our financial condition. Deficit spending spun as surplus. Waste spun as efficiency.

The memo discusses a mixed bag of results, but it touts two major victories.

1) A $120,000 reduction in police fund overtime expenses.

If you make it to the last page in the report, however, you see that this savings was more than wiped out by a $140,000 increase in salaries and hourly wages. Yes, if you hire more people, you can cut overtime costs. But clearly the net impact here is a wash at best. And that doesn’t even factor in the additional fringe benefits or retirement costs related to an increased fulltime headcount.

2) Also celebrated is a reduction in salary costs in the general fund (which includes city bureaucrats, building department, code enforcement, public works, etc.). The memo says we saved “$380,000 or 10% from the prior year.”

What it doesn’t say is that the prior year’s salary costs included more than $700,000 paid out as termination incentives, meant to make the workforce leaner and more efficient. So this comparison is effectively worthless. If you adjust the midyear benchmark for half of the 2014 termination pay, you wipe out virtually all the reported savings.

In other words, we spent nearly three quarters of a million dollars in 2014 to eliminate jobs and we’re left with a 2015 workforce that’s just as expensive. It’s unclear whether this is because our newest hires are coming in at inflated salaries or whether the bureaucracy is simply being run less efficiently, but this hardly qualifies as any kind of success when presented honestly.

Finally, we come to the issue of budget adjustments. The council approved a $64 million budget for 2015, $42 million of which went to the general fund. Over the first half of the year, however, we’ve already had to increase that spending authority by over $1 million. So the general fund is on pace to blow its own budget by more than 5%.

Predictably, a huge chunk of that “surprise” was due to unrealistic forecasts about judgments and claims against the city, something the NYS Comptroller has repeatedly told us is a problem, and not one we should be papering over by issuing new debt.

But fear not: the midyear financials show a corresponding $1.1 million upward revision to budgeted revenues, listed as “Miscellaneous budget items” (which you will by this point be unsurprised to learn translates to newly issued debt, as confirmed by the city controller’s office).

We already knew Glen Cove’s budgeting practices were irresponsible. That’s clear enough to anyone who’s ever managed a family budget or owned a credit card. We’re now learning it’s something more than that. If we weren’t the ones funding this egregious waste, we might call it a joke.

Maybe “sham” is a better word.

If you wonder why I’m concerned about City Hall conjuring the additional $100 million shadow budget proposed by the mayor, this is why. We’re not even getting a fair representation of the traditional, non-shadowy budget. These are the people’s books and it’s our right and responsibility to review them. Doing so shouldn’t require an MBA, forensic accounting experience, FOIL requests, and hunting down belated budget reports.

Put bluntly, this is not just a mess. It’s a farce. And it’s getting worse, not better. The City can not afford to ignore the repeated warnings from state financial overseers and the credit ratings agencies. It can not afford endless deficit spending and undisciplined, self-serving management. It can not afford the crippling debt it’s saddled itself with. And it certainly can not afford to be anything less than forthright with the citizens whose financial security it is so zealously squandering.

More to come if/when the rest of the financial statements are released.