Mayor Cohen's So-Called "City Manager" Report on Finances ~ Annapolis Capital Punishment

Thursday, August 19, 2010

Mayor Cohen's So-Called "City Manager" Report on Finances

As he continues to disregard consistent, articulate and sincere protestations from citizens, Mayor Cohen insists that he is leading and managing our city through the ever rising turbulent waters of our budget crisis, saying as much that it has been "solved"...there's just that nagging matter of the cash flow. I cannot recall any citizens testifying in behalf of his plans and he continues to get the five votes needed. These are actually charter amendments that authorize huge borrowing and we the people are allowed to gather signatures of twenty percent of voters to go to referendum. Fat chance of that! And to think, he has fought and fought the will of the people to amend the charter to create a real council-manager style of government and even refused to sign the petition bringing it to referendum!

He appears to have clamped down on overtime excesses, although at the Transportation Department, he could sure use a heavier approach, seeing as some drivers are earning salaries approaching the hundred-thousand dollar mark!!!! And he cannot even get a proper department head in place...However, back to the budget, his so-called "City Manager" whop is really just a renamed city administrator, has put together a slide show used at a recent presentation. See it at

Meanwhile, your dedicated publisher has once again been sent commentary by a local businessperson and financial manager who has offered his/her thoughts on the presentation. This person has  a degree in finance, leads a corporation based in Annapolis and wishes to remain anonymous but he/she is known to me. This person, to my knowledge, has not ever sought public office. Of course, the mayor does not seem to listen to anything any citizens are saying these

"I decided to amuse myself on a rainy evening by viewing the City Manager financial presentation to the Mayor and Council. I was disappointed none of the web based versions of the presentation had audio, so I had to add my own thought process to the power point presentation. I can only hope some of the issues that raised questions in my mind may have been addressed in the verbal presentation.

The City is proposing to improve its financial condition by revising solid waste policies but the numbers do not appear to be in sync with the proposed changes. The first change in policy is to reduce refuse collection from two times per week to one time per week. One would think this would result in reduced cost, even though there is no reduction in staff associated with the change. Logically the gas costs would be halved and maintenance on the vehicles should be less. I was quite surprised to go to the numbers page of this part of the presentation and see that the proposed cost of cutting a service in half is actually $4,825 higher than the cost under the current policy. Why would the City eliminate a service to residents if eliminating the service does not save cost?

The second change is to eliminate the four annual bulk pick-ups and provide bulk pick up in conjunction with the weekly refuse pickup. I was relieved to see a savings of $264,686 for this reduction in service. The next change is to add education and bins to recycling while continuing a one time a week recycle pick up. There is no change in this cost. Great, free education! Perhaps the plan is for the employees, who will be making half as many trash pick-ups weekly, to utilize their free time by going door to door and educating the citizens on good recycling habits.

Currently the City picks up yard waste and “leaves” (actually I believe leaf is correct) every other week and processes them at the landfill site. The proposed change is to pick up yard waste and “leaves” every other week (sound familiar) with possible private collection and/or private processing. This change is a real deal for the citizens. The current cost of yard waste and leaf pick up is $924,073. The proposed cost for the same service is $600,000 with an additional possible reduction of $76,788 by privatizing some or all of the service. I suppose the City saves through privatization because it can’t afford to pay its private contractors. Hey, why not privatize it all and see some real improvement in cash flow?

The City currently pays $52,714 for landfill monitoring and maintenance. There is no proposed change listed for this service, yet this cost is not included in the proposed changes section of the program cost.

Where did it go? It does affect the bottom line.

There also appear to be basic math errors in this presentation unless all the households in the City do not receive all the services. The net annual cost per household (last column under current system and proposed changes) is derived by dividing the program cost by the number of households. Conversely if the program cost is divided by the cost per household, the result is the number of households and that should be the same number for each category. Not so. This is really boring except for the most hard core perfectionists; so I’ll give just two examples from the proposed changes columns—total cost for leaf, yard waste and land fill monitoring = 600,000 divided by 67 (cost per HH) = 8,955 households; privatization savings 76,788 divided by 42 (savings per HH) = 1,828 households! This is just sloppy work, but it has implications. Citizens are billed based on the cost per household. Sloppy errors can result in citizens paying too much or the City shorting itself. I will leave it to readers (or perhaps the Aldermen) to figure out if the budgeted fee for FY 11 exceeds, is lower than or equals the proposed cost for FY 11.

The presentation is very professional looking and has beautiful Annapolis pictures; but I hope our City Council is not fooled by the glitz and really digs into the substance (or lack thereof)."
ACP agrees with the above. I have never understood how reducing trash collection service would result in much savings unless it results in cutting jobs--which does not appear to be happening. I can tell you, based on experience, that there are many creative ways we as citizens, working with government, can transform  bulk pickup days. Having passed his budget--yes his budget--Mayor Cohen has missed all opportunities to legitimately and honestly place the blame on the previous administration. It's now his show. He owns it. He has gone out to borrow once already based on bad projections. He has gone out to borrow again based on who-knows-what-kind-of-projections a second time. He is confident that this is the right course and that he is "rightsizing" our government, i.e. bureaucracy.

Only time will tell. His career will be made or broken on whether this works, but our financial backs will be either straightened out or broken as well.  Again, despite repeated and consistent pleas from citizens and taxpayers to cut the budget, he has opted to essentially stay the course. He will protest that he made a huge budget cut, but in reality, five million dollars of that former budget supposedly cut so much was a sleight-of-hand done at the last minute by borrowing by the previous administration. Yes, it was a budget cut, but behind the cutting was a different story and the supposed huge cut, what he claims to be the largest of any MD municipal government, must be understood in that light, as well as his claim.

After the above was published, the mayor's PIO Phill McGowan wrote in to correct what may have been a misapprehension on my part--and to add his own spin:

"The Mayor has not borrowed again. The City Council approved a charter amendment last month to raise the City’s credit limit from $10 million to $16 million. The council, however, must approve a separate resolution to allow the administration to tap a specific dollar amount up to the new limit.

Mayor Cohen said this week that such a resolution would be presented to the council on Sept. 13 – if, and only if, the administration determines that the City needs additional short-term cash reserves. In testimony on Monday, City Manager Michael Mallinoff said that he could not rule out the possibility of the City’s needing to borrow over and above the $10 million mark. But in pointing to updated cash-flow projections and efforts by the state and Anne Arundel County to expedite revenue transfers to the City, Mr. Mallinoff said the City might not need to take on additional debt.

In any case, the charter amendment requires that the City reduce its credit limit to $5 million by the end of the year." ______________________

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