As Ben Franklin said, “If you know how to spend less than you get, then you have the philosopher’s stone.”
The philosopher’s stone was a legendary chemical that turned other metals into gold. One can only hope that Fort Wayne’s administration has not been looking for this stone these last four years; but they clearly have not mastered the art of not spending more than you get.
The mayor and the controller established a fiscal policy team, just this year, to explain the cash balance deficit. It is as if they are now asking outsiders to explain how this has happened and how this team of experts can fix it. We know how it happened: a systematic disregard for conservative fiscal policy and a lack of careful stewardship of the people’s money.
In the last four years, Fort Wayne has received various unexpected income tax revenues, funds that came from pre-recession years when incomes were higher. Then, in the past year, another $8.5 million was forwarded from the state, also money not anticipated in the budget.
And yet, instead of referring to a long-term fiscal plan to carefully determine where these monies should be applied, every one of these shiny new pennies has been spent with an almost childish anticipation.
Knowing since 2008 that future revenues were going to be reduced, fiscal restraint could and should have been implemented. Instead, over and over again, we have been presented with municipal schemes and a lack of planning that have confirmed the proverb that “a fool and his money are soon parted.”
The city’s parking costs for city employees in Citizens Square and the Rousseau public safety building were higher than anticipated, so the city had to raise rates in the city-county garage to meet its expenses. But those costs should not have been a surprise since the plan for employees, especially police and fire vehicles, was part of the original Citizens Square presentation. Conversely, the county paid off its share of the debt on that same garage and doesn’t have those same costs.
The mayor just recently requested an additional employee in the radio shop but offered no plan for other cost savings to offset this new expense. The 911 merger has been ongoing for years, and the resulting costs and workload distributions to city and county have been hammered out and long anticipated. And yet, on the eve of his fiscal policy team’s summit, the mayor asks for another unplanned expenditure.
When the city went to single-stream recycling after new contracts were signed, it began receiving $100,000 a year from the solid waste and recycling contracts for education and marketing. City staff was able to increase participation to over 70 percent (from 35 percent) and bring significant revenues into the city’s solid waste fund from the recycling revenues. This helped reduce our garbage fees.
And yet, the city now will outsource the marketing, and spend almost all of that $100,000 in order to increase recycling a mere 10 percent. One wonders if those currently not participating will then recycle enough to bring in sufficient revenues to offset the expense of those marketing dollars and actually add to the cash balance.
Time and again the mayor has shown no evidence of a fiscal plan, but tough decisions cannot be avoided forever. Since 2008 officials knew that the new radio system would cost around $10 million, a cost that could not be paid out of a single year’s budget. Instead of planning ahead, they waited till this year, presented a contract to but the radios to City Council without knowledge of the funding source, then decided to use half the money that Fort Wayne received from the state’s income tax refund mistake and finance the other half. Can we presume if we had not received that income tax money this year we had no ability to fund that purchase, except through acquiring even more debt?
Finally, an audit of our city’s computer system shows the department woefully behind in establishing a backup system. The Public Safety Academy is built to house this, but no monies have been set aside to complete this. Our administrators acknowledge the need for this but have never attempted to budget monies for it.
Some may say it is an example of government that is so big the right hand doesn’t know what the left is doing. I disagree. Rather it is a careless disregard for stewarding the people’s monies, especially in these difficult economic times. Our roads are falling behind in maintenance and repair, and we budgeted less to fix them than we did last year. We are short funds to provide services after disasters such as the ice storm and the more recent windstorm, but we talk about increasing staff and marketing. And we ignore budgeting for significant expenditures, such as computer systems and emergency radios when we know they are necessities.
We know where this is going, when the controller states that City Council has some interesting work to do. Remember this is the same mayor who asked for a tax increase the first month he was in office.
They know that only the City Council can raise income taxes. They have made no attempt to save for these expenditures that are required. And yet they have rebuffed all attempts by council to trim the budget, even presenting a budget last year they knew was unsustainable, a budget that would put us in the red.
Fort Wayne is not Stockton, Calif., or Harrisburg, Pa., or other cities that have had to declare bankruptcy or default on debt payments. But these cities’ failures affect us. Insurance companies that insure their municipal debt have expressed concern, and soon all cities may be paying more for coverage. As Assured Guaranty stated about their client, Stockton, they “failed to make the politically tough decisions to adopt serious budget reform and consider alternative plans to resolve its long-term structural deficit.”
We will not declare bankruptcy here, but this administration has consistently avoided those same tough decisions, and now wants us to pay with higher income taxes.
Tom Henry has let the well run dry and wants City Council to bear the burden of filling it at our expense. Ben Franklin also said, “When the well is dry, we know the worth of water.” Although his administration may just have discovered that this well is soon to be dry, we citizens have helplessly watched him drain it for the last four years.