Increasing the Budgeted Salaries and Benefits by 17% in One Year !

The Council continues to believe Town Manager, Laurel Prevetti, who now states that rather than an increase of 1.2%, it’s nearly 5.8X that, or 6.95%!  So the real increase is 580% above what they have told the public in the the ballot measure and they knew that they had some big increases coming.  That was the selective misrepresentation of data.  But even that does not compute.

The Town Manager and Staff measure finances by comparing this year’s budget to last year’s budget. The problem with that is that budgets are arbitrary numbers as opposed to the ACTUAL numbers.  You can’t argue with ACTUAL. The auditors will audit ACTUAL numbers, and ignore budget numbers.  Why do you think they use ACTUAL?  Why do we only see ACTUAL’S in the Consolidated Annual Financial Statement  and there are no mentions of “budget to budget”?

The town’s method can give you arbitrary results depending on what they want you to see.  Nobody but a few outliers use “budget to budget” as a measurement tool.  The town does not compare last year’s budget to this year’s ACTUAL numbers and you have to ask yourself why?

Here’s a simple example:  These numbers come from the town;  Item 5 of the 10-16-18 Agenda.

Note that in the table published by the Town Staff, boxes A, B and C are budget numbers.  You don’t see any ACTUAL numbers in the town’s presentation.

If you include the ACTUAL numbers, you will get an entirely different story in the table below,

If we include the ACTUAL salaries and benefits for ‘17/’18 (which you can find within the 2017 Consolidated Annual Financial Statement , but nowhere to be found in this agenda), you can see how ACTUAL increases are dwarfed by budget increases. The town ACTUALLY spent $24,700,282 in ‘17/’18, or $2,306,000 less than they budgeted.  That’s a huge miss, though we suspect it was intentional for reasons you will see below.   But that excess budgeting has  been going on for at least 4 years running for a total over $9,500,000 and we already know that cash has gone up $16,000,000 in just 4 years !    So in ‘18/’19 they raised the budget by another $341,000, or 1.26% (see Percent Change (B/A)) in the town’s table above), while at the same time they reduced projected head count by one person.  This is called padding a padded budget.

Keep in mind that the $2,306,000 excess is “out of bounds” for spending on other things we might need like roads or police without formal Council action.  Roads and police are just two things for which Council-people Rennie, Leonardis and Jensen want to increase the sales tax.  And they’re padding the padded budget with another $341,000 this year.

That excess cash has been sitting in the account for more than 4 years.  We ask, why not use that cash instead of letting it sit at 1-1 ½% interest?  Remember, we have been paying “interest” on pension debt at over 7.5%  for at least these past 4 years.

By letting this money sit in this account, the Council has cost the town roughly $604,000 of additional interest costs in just 4 years!  Is that good financial management?  And they want more money?

Ms. Prevetti tried to insert this budget increase as a consent item, which meant no public discussion.  Fortunately, Councilwoman Sayoc asked to have it pulled.  If you analyze the background data that the town had to publish, you will find that Ms. Prevetti neglected to inform anybody that the salaries and benefits budget increased by more than a staggering $1,537,904.

She didn’t even put it in the original agenda until Phil Koen called her out on the missing numbers.  Now, we have an “Addendum” that acknowledges that omission.

Councilman Leonardis defended the salary and benefits increase as a consent item by saying that in his 8 years on the council, that’s the way it’s always been done.  That’s just one of our many issues – “the way it’s always been done” needs an annual review.  How many times has something like this been passed over because no one was looking? This was pure lack of transparency and another “Whoops!”, one too many.  We need the Council to do their job and catch this type of thing or have a staff that tells them the facts before they get embarrassed again when citizens do the work that staff should be doing.  This was again, a lack of transparency and forthrightness by the staff and accepted by Mr. Leonardis and the rest of the Council as “business as usual”.

The long and short of this is that the budgeted dollars for ‘18/’19 are $ 4,184,716 over the ACTUAL wages and benefits paid in ‘17/’18 – of which, approximately $2,647,000 is budget bloat to make you think there is no money in the bank.  Councilmembers Jensen, Leonardi and Rennie then  justified the need to tax the community with this misleading information.  This was politics at its worst.

Why would you want to give this town more money to mismanage through taxation?