When you think about it, Mammoth Lakes Town Council member Wendy Sugimura and President Barack Obama have a lot in common.
Okay, maybe one thing in common. Their last names end in ‘a.’
Wait, two things. They’ve each never encountered an expenditure that couldn’t be justified.
But it would be unfair to pin everything on Wendy. After all, Messrs. Stapp, Eastman, Harvey and McCarroll were all present and accounted for during the 2007 labor negotiations.
I’ve been poring over the Town’s labor union contracts and most recent audited financial statements this past week. It’s how the labor contracts dovetailed with the increasingly sketchy financial outlook which leaves me puzzled.
The audited statement from 2006-2007 shows that the Town had run about a $4 million deficit in fiscal year 2006-2007. General government expenditures (which include all expenditures, not just that from the General fund) totaled $35.52 million while revenues were $31.28 million.
The Town’s response, as you may recall, was the “conservative” response of planning for “only” one of three development projects to break ground (among the “1” Hotel, Eagle Lodge and the Ritz) in FY 2007-2008.
Meanwhile, labor contracts were up for renewal. Surprising as this may seem, the Town’s lead negotiator was also its #1 taxeater, Town Manager Robert Clark. I guess this is standard practice for Town Managers to negotiate these contracts. They say it “saves money” because you don’t have to hire someone from the outside.
Save $20,000 and squander a million. That’s my Town government.
Problem with the scenario is that you’ve got a Town Manager in Clark who has no incentive to play hardball with the people who will ultimately work for him after the negotiations are completed.
Loyalty is more easily won with largesse.
And largesse they got. The Town gave its unions a 4.5% annual salary increase through FY 2011-2012.
Which amounts to 24.6% over five years.
When I showed this to a more experienced hand in such matters, this person merely sighed and said, “Most entities only negotiate a 12- or 24-month window on salaries. Five years is unusual.”
Here’s the other problem that arises. Each salary increase necessarily begets an increase in benefits (like retirement).
So consider. The Town paid $16/month per employee into CalPers health prior to 2004. That payment is now $105/month, and that payment occurs every month through retirement until death.
The Town contribution to CalPers retirement was $885,000 in the fiscal year ending June 2004. That contribution was $1.6 million for the fiscal year ending in 2008. And the CalPers fund on a statewide level is acknowledged to be underfunded (somewhere around 85%), so we don’t really know what extra liability we face. Because the assumption of investment return by CalPers is fairly generous. If they invest poorly, the taxpayers are forced to make up the difference.
In FY 2006-2007, the Town counted 118 full-time equivalent employees.
As we all know, the roof fully caved in the next year. General expenditures outstripped revenues by over $5 million.
Meanwhile, the number of employees rose to 126 FTEs.
Now it’s hard to follow the money because it just gets transferred all over the place from one fund to another. But this I found illuminating.
Here are the Town’s cash balances and investment yields starting in June 2007.
June 2007 $21.9 million 5.25%
July 2007 $21.6 million 5.26%
Nov. 2007 $11.4 million 4.96%
Dec. 2007 $8.6 million 4.80%
June 2008 $14.1 million 2.90%
July 2008 $10.5 million 2.79%
Nov. 2008 $8.2 million 2.57%
Dec. 2008 $6.5 million 2.35%
June 2009 $11.1 million 1.38%
It’s not that Town employees don’t understand all of this. They do. And they recognize that change is coming. But I still heard the rather dubious argument from one member of upper level management that, well, look what the private sector made during the boom times.
As if they were all passing that up, squandering their awesome talents and looking on in envy while the private sector cleaned up.
But hey, when you’ve got a weak-kneed Council sitting there offering up the farm, can you really blame your taxeaters for sitting down for second and third helpings?
They’ve got a chance to redeem themselves as the Police Union contract comes up for renewal this summer.
I separated out the following Mountain Town News item just because it made me wonder why our Council couldn’t also make amends by volunteering for the shark tank.
Park City goes for Google
PARK CITY, Utah – Add Park City to the list of communities that are putting in an application to be a model in Google’s planned Fiber for Communities program. In its bid, Park City says that it is “capable of providing unprecedented exposure to this new technology from across the country, and the world.”
Among ski towns, Aspen is also angling for a shot to get Google’s fiber optic network which features speeds `100 times faster than what is now commonly available.
Neither ski town, however, seems to have plans for self-promotion such as what was reported by the new York Times on Monday. The newspaper that the mayor of Duluth, Minn., had flung himself into the ice-ringed waters of Lake Superior, while the mayor of Sarasota, Fla., immersed himself in a tank filled with sharks, both feats intended to draw the attention to their Google bids.
And from Geisel’s desk …
Wait for interim District 4 Supe terminated
Governor Arnold Schwarzenegger announced last Friday he appointed Robert Peters to the Mono County Board of Supervisors, representing District 4.
Peters, who previously ran unsuccessfully for a Board seat, has owned and operated the Bridgeport Inn since 1999 and comes from TV & movie industry executive background. Previously, Peters was senior vice president of Paramount Pictures Corporation, where he also served in various financial positions dating back to the late ‘60s and early 70s.
Peters served as a member of the Mono County Tourism and Film Commission from 2000 to 2007, serving as chair in 2003 and 2007. He also served as a member of the Bridgeport Regional Planning Advisory Committee from 1999 to 2007, serving as chair from 2006 to 2007. In 2002, he created Mono County’s first local funding grant program to finance economic development in local communities.
Peters reportedly was one of several who applied for the appointment late last year, but apparently had no intention of running for the seat in the election.
Early reports indicate that part of the governor’s motivation for making the selection was a concern that Mono County, which is dealing with numerous large, timely issues such as water rights, bighorn sheep grazing and continuing its successful efforts to maintain fiscal solvency, is in need of a five-person Board at least until the June election, and possibly November, should the race be continued until then.
District 4 represents the cities of Coleville, Lee Vining, Walker and Bridgeport. The seat was vacant due to the passing of Supervisor Bill Reid on Oct. 21, 2009.