From city Councilor Kevin Fuller to City Council and others:
Wed, May 25, 2011 at 11:20 AM
subject Budget Alternative
11:20 AM
As we move forward to adopt a budget I am troubled with one item I want to address to see if we can come to a resolve. The tension between the finance board and the Board of Ed is having a huge impact not only with its employee's but also with the students that we are educating to become successful adults. The rift is only going to hurt those students who's programs will be cut, it will not address any of the problems you may have with the Board of Ed. We need to look at the children and put our differences aside and not let them fall through the cracks of the economy. I suggest that we take 2.5 million from the rainy day fund to save Westwood academy and the other programs being cut because that money is their just for this type of situation, by doing this we can still keep a ZERO increase in the mill rate and it will be a win all around. But most of all it will be a win for the children that we are all responsible to give the best education possible and I for one do not want to let the children down. Thank you,
Kevin Fuller
From city Councilor Ken Cockayne
Wed, May 25, 2011 at 11:44 AM
subject Re: Budget Alternative
11:44 AM
Kevin,
I’m completely against this! If we deplete our "rainy day" fund to much it will have a direct impact on our city rating as well as future bonding we go out for. It is also Fund Balance policy not to be used for operating expense but for emergency or a one time use. Using this money will be go directly against that policy and will be used for operating expense.
In the past the BOE has received the following increases. 2007 - 5.06%, 2008 - 3.40%, 2009 - 6.09%, 2010 - 1.40%, 2011 - .29%. For 2012, the BOE has approx 2.5 million from Fed money that will also be used.
Also, as you know the City, nor the Council have any say as to what the BOE money is spent on or what they do with it. It is the BOE decision to cut the programs not the City of Bristol. At some point, the city leaders must say enough is enough!!!
Respectfully,
Ken Cockayne
From Fuller
Wed, May 25, 2011 at 12:01 PM
subject Re: Budget Alternative
12:01 PM (2 hours ago)
Ken, I do respect you position on this issue and agree we must be very tight with the budget, I also feel it is my responsibility to try to close this gap. I understand we cannot dictate how the money is spent but I feel the Boe Administration feels the same about their students. I am not sure that this would affect our rating and I feel this is a one time use and a emergency situation. I feel I need to stand up for our students and try to fund these programs. Thanks for you response Kevin
From city Councilor Cliff Block
Wed, May 25, 2011 at 12:46 PM
subject Re: Budget Alternative
12:46 PM
Ken,
When the City side of the budget takes a hit some roads don't get paved or maybe the streets are not plowed in a timely matter or we don't fill positons that open, but when you cut the BOE budget 2.5 million from the base of last year you hurt our childrens education which can not be made up at a later date, it's lost!!
So as a city leader Ken I would hope you would reconsider your stand on this issue and realize the cost to our childrens education and future.
Thanks,
Cliff Block
From city Comptroller Glenn Klocko
Wed, May 25, 2011 at 12:51 PM
subject Re: Budget Alternative
12:51 PM
Councilmen/Commissioners: I feel I must respond. It may be a long response, but necessary. The city has a formally adopted fund balance policy. It is in our budget document under "policy initiatives".
Now then, allow me to get to the point(s):
First and foremost, this suggestion by Mr. Fuller would be a use of fund balance for operational expenses at the BOE. Our various city opinion's that it is an appropriate use or it is not does not matter. What matters is the opinion of the three rating agencies, and they would say it is a use of fund balance for operational purposes...a no no. They would also say we are going against our own policy and nationally recommended practice, resulting in not so favorable comments to the market in two weeks. That has the likely affect to cost the city a lot of $$$ in terms of interest over the life of the 19 year $40 million bond issue coming up. Perhaps several hundred thousand dollars. This is our largest issuance ever, and not a time to change policy. The two new schools are in the issuance.
Here are several direct quotes from our 3 previous rating reports in 2009 (last time we went to market) and given to the market place about Bristol and its reserves:
Standard & Poor's: "S & P consider Bristol's financial management practices as "strong". The city's financial practices are strong, well embedded, and likely sustainable. Highlights include: Formal reserve policy that sets a floor for reserve balances and how fund balance can be used in budgeting" "In our opinion, Bristol's financial position is stable due, in part, to its demonstrated fiscal management. We believe the city's conservative budgeting, expenditure controls, and adherence to debt and fund balance policies have allowed management to maintain a stable financial position and strong reserves".
Standard and Poor's upgraded us in 2009.
Moody's Investors Services: "sound financial operations"..."conservative budgeting practices and adherence to prudent financial policies". Citing the following: "city's formal fund balance policy which calls for the maintenance of the Undesignated general fund balance at no less than 10% of budget." "Future rating reviews will incorporate the city's ability to maintain financial flexibility with reserves growing consistently with budgetary expansion through structurally-balanced operations."
Fitch Ratings: "Rating rationale - a history of healthy reserve levels and strong management practices underpin the city of Bristol's sound financial flexibility." "Best Financial Management practices - Maintaining a Rainy Day Fund is perhaps the most effective practice an issuer can use to enhance its credit rating"
Mr. Fuller, you were probably not aware of the above considering you're new(er) to the council. I would be happy to review the rating reports and recommended financial practices we have in place that maintains our strong credit rating at AA+. Triple A is the highest. The mayor, myself, my staff, and Jonathan, will be giving 3 credit rating presentations June 8th. Reserves will be a discussion by the agencies. Please understand we can not and should not ruin our solid financial reputation and rating with the analysts by giving the BOE our fund balance to satisfy their operational needs. That would not be defendable. 10 years ago we were using $3.6 million dollars to balance our budget. Today, the number is $750,000 with a goal of Zero. We told the rating agencies of our goal and they liked it very much. Going into a credit rating is like a gun fight...You got to consistently shoot straight to hit the target with them. Please continue to give me the ammunition to do so and not reverse 10 years of prior city accomplishments. Glenn
Kind regards, Glenn Klocko, Comptroller
From Fuller
Wed, May 25, 2011 at 1:16 PM
subject Re: Budget Alternative
1:16 PM
Glenn, Thank you for the information and the last thing I would want to happen is our credit rating to be blemished, With that said we need to put our heads together to solve this problem of not funding the Board of Ed, I was at westwoods acadamey and the students at that school have grown by leaps and bounds. If it is closed those students will not rejoin the high school they will drop out and I hope at least get a GED. Look at the graduation rate at that school and how many went on to college, It is our duty to not let these students down. When these students look back I don't want them to remember us as the Council that let them down. So I urge all members to look at all options to find a way to fund the Boe.
Once again Glenn that's for you information on the fund balance. Kevin
From Mayor Art Ward
Wed, May 25, 2011 at 1:22 PM
subject Re: Budget Alternative
1:22 PM
I will reiterate, at the initial presentation of the BOE budget request, it was stated by Dr. Streifer and Mr. O'Brien that the BOE could withstand one year of 0% increase but could not take 2 years of 0% - this is the year that the Board of Finance decided that the option would be exercised.
While I understand the significance of education, are you ready to incur the potential ravages of the impact of the lay-off of some of the parents of these same children?
The city has eliminated 40 positions through attrition and cannot absorb any more without the burden being sharedd, at least somewhat, by the BOE.
The options which they are employing are very disrespectful when they are suggesting to the parents that the city is to blame - the city/Board of Finance is being responsible with regard to the allocation of funds for ALL city services and the BOE needs to accept some of that responsibility.
Additionally, it would have been a lot easier to have addressed these issues during the budget process rather than after the Comptroller's office, all of the city departments and the Finance Board have rolled up their sleeves and sweated through hours and hours of meetings, only to be confronted with second-guessing of the outcome.
The Finance Board meetings were void of city council presence except on very rare and personal agenda motivated occasions.
Mayor Ward
From Klocko
Wed, May 25, 2011 at 1:27 PM
subject Re: Budget Alternative
1:27 PM
You are most welcome. I'm sure you didn't have my information available on fund balance useage to you in your decision process. I'm sure we can work together to resolve the Westwoods situation. However, in my professional opinion (again), the BOE has to assist us in creating savings and saving programs. The BOF chairman and others have recently identified many area's in the BOE budget that give the impression of 'desired but not needed'...for instance...they budget over $200k for conferences, I believe there is a line item for BOE members to attend a national conference out of state and possibly on the west coast. The BOF chairman's observations have a possibility of saving or transferring the savings to the tune of $1.2 million dollars. Of course, the lowest levels of employee are being threatened but not some of the higher levels...they remain in tact. Just some observations..hope it helps. GK
From Cockayne
Wed, May 25, 2011 at 1:34 PM
subject Re: Budget Alternative
1:34 PM
Cliff,
The BOE needs to be fiscally responsible. This year they passed a new contract for supervisors and administrators giving a 3yr contract, 1.9, 2.5 and 2.5. In this tough times, it does not sound to me as that is being fiscally responsible. A couple years ago the teachers understood the times and voted on what I believed to be an appropriate contract, so yes, they did what was best for the children.
Again, it is not the City who cuts programs, its the BOE! The City does not have an open checkbook that can be balanced on the taxpayers. It's the BOE who will cut the programs as some continue to take raises. I also understand the new contract has a provision for revoking the raises if necessary.....seems to me this is the time to do that. Was it done? If not, then why not?
Ken
1 comment:
Great post if you want to follow an issue like this. Congrats Steve. Nice JOB!!!
Tom Cosgrove
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