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Here’s The Scoop … We Finally Woke Up ….

HAZARDOUS MATERIAL ….

“a magical powder that would give the power of flight to whoever it was sprinkled on; any apparently magical ingredient or effect”

Dear Readers … As we approach the LBTS Budget / Millage/Fire Assessment Workshop next Tuesday night (July 27th at 6pm in Jarvis Hall) presented after the new Int. Town Manager and her staff have waded through the Town’s finances left in the wake of the ousted former Town Manager and her pals…. I found in my archives an interesting article written by my valued friend John Thompson in 2007 that makes it clear once again… nothing is new news in LBTS… This article should also dis-spell the short-term memories and revisionist history of those who actively try to spread  “fairy dust” accolades for former Finance Director -Town Manager Colon and her predecessor Baldwin’s handling of the Town’s finances … This writer along with then- Comm.Dodd and resident Yann Brandt picked up where John Thompson and a few others (who prefer to remain behind the scenes) left off, over the last year and a half … We were ignored…and made to jump through hoops to get the real numbers released … It took a change in the majority and a few terminations…for Int. Town Manager Hoffmann to finally provide them at the June 23, 2010 Roundtable…(prev. post)…What is also quite interesting after re-reading the article is that only Candidates Dodd and Minnet who lived up to their fiduciary responsibilities after they were elected  in 2008…It was most unfortunate that it was “business as usual ” for the Colon Administration with her plethora of bank accounts at  SunTrust Bank… Accounts filled with excess monies over and beyond the Town’s own required percentages as she and the Commission increased fees on everything …   payed off lines of credit with penalties …(Colon never did respond to this writer on the penalty incurred from the State “Pool” withdrawals [see below] …. and played hardball with who got what funds depending on if you were friend or foe …in this writer’s opinion… While Mr. Thompson praises the Town Manager on her Financial reporting awards…(remember these awards were for “Budget Presentation” not content and from longtime Town auditors this writer posted were given an extended contract in 2008 without Comm. approval for 3 yrs and  $200,000.00+ ) he goes after those excesses contained in it…as he did for so long…often on his own…without support …and falling on deaf ears… What a shame it took so long for us to finally wake up!…

The Article ….
“The Town is Financially Solvent Because
it has a Rich Uncle – You, the Taxpayers!
But has your Money been Prudently Managed?
(Economic Analysis by John Thompson)
The January 22 town commission meeting opened with high praise from auditors for the Town’s 2006-2007 Comprehensive Annual Financial Report (CAFR). For the ninth straight year long-time Financial Director — now happily Town Manager — Esther Colon had won the Town an award for her high quality financial reporting in last year’s CAFR. Esther has clearly merited recognition again this year, along with new Financial Director Marty Sherwood. (Only Commissioner Clark has criticized Esther to the Sun-Sentinel; we cannot imagine why.)

The figures are impressive: $16.29 million of unrestricted net assets, (an increase of $4.57 million from last year); a combined governmental-funds balance of $20.77 million (up $857,091 from last year); and an “unreserved, undesignated” general fund balance of $8.74 million, equal to more than 80% of annual general-fund expenditures. The Town is clearly solvent, despite the auditor’s notation that $3.59 million of that last figure represents loan proceeds.

Before becoming too overjoyed, however, we must ask ourselves where all that money has come from. In fact, since a municipality cannot create value, big balances can only come from four sources. They are taxes and assessments (up 127 percent since annexation); fees (which are really just another sort of tax); grants (which have fallen off sharply since the retirement of the late Laura Ward) and loans, which have totaled over $21 million since annexation, with an unpaid balance of nearly $14 million at the end of the 2006-07 fiscal year.

One can’t help wondering in the face of such impressive figures whether LBTS taxpayers really needed to pay all those taxes and whether the Town really needed to borrow all that money, on which last year’s debt-service payments totaled over $2.6 million, or 23% of total general governmental expenditures, and nearly $1/2 million of which represented interest on those loans. Put another way, does the Town really need an undesignated cash balance of $8.74 million on top of emergency reserves of $2.3 million; $1.5 million in reserves for vehicle, equipment and capital-asset replacement; $1.3 million reserve for future year expenses; etc., etc.? Could taxpayers not make better use of that money themselves, rather than letting it lie dormant in one of the Town’s accounts?

While one can argue the merits of taking out a loan to complete projects sooner, before prices rise, that is clearly not what the Old Guard did. They borrowed $10 million the day after annexation, then they dawdled over sewer improvements so long estimated costs doubled and trebled, and to date have paid more for debt service on that loan than they have for the capital improvements it has funded, meaning the loan itself – and over $1 million in interest on that loan – has been completely wasted. … speaking of which, over $1.9 million in interest (more than $11 million in total debt service) remained to be paid on loans still outstanding as of last September 30.

The Old Guard has claimed they made more on interest on loan proceeds they have been holding than they have paid the bank on interest on those loans. Do any of our readers know a bank that will offer them a deal like that? Of course, you might be able to make more than you pay the bank for interest by investing in sub-prime loans. That is called “speculation,” and that, in effect, is exactly what the Old Guard did. To be precise, over $7 million of idle cash was invested in a State Board of Administration Investment Pool (which invested in sub-prime paper) as of last September 30. But those investments were frozen November 29 after the sub-prime market tanked. Some funds have been withdrawn, but over $2 million remain in “Pool A” – subject to a 2% withdrawal penalty – and over $1 million in “Pool B” – which currently may not be withdrawn at all, and about which the auditor writes, “full realization of the principle value … is not readily determinable.”

Could there be any better proof why LBTS voters should throw out the old guard and elect commission members like Wick, Clottey and Dodd, each of whom has demonstrated business skill and experience and who can exercise the required fiduciary responsibility over your tax revenues?

Nor need those tax payments be as high as at present. In September 2006 Commissioners Silverstone and McIntee argued for a millage rate of 3.9639 – about 9 percent lower than what Clark and Yanni were willing to approve. Those old-guard commissioners warned (another red herring? that the 3.9639 millage rate would dangerously deplete the $2.1 million “emergency reserve.” Instead, that reserve (originally set by old Town Manager Baldwin at $1 million) has since grown to over $2.3 million, and Clark recently told the Sun-Sentinel it should be increased even more. Of course, that would be at taxpayer expense. Would those taxpayers not do better to keep some of the “reserve” in their own pockets, from which some of it would doubtless be spent to boost Florida’s lagging economy, rather than to have it sit frozen in a sub-prime investment pool?
Retired diplomat Thompson is a professional economist active in LBTS civic affairs.”

This was sent to this writer prior to any publication in 2007…

more to come….

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