Gotta love it. I blog about the county and city debt and then the Tribune jumps in with not one, but two front-page news articles--- actually they're more like front-page press releases---with the county and city saying everything is just fine while ignoring the real issues with the structure of the city and county debt.
If you ask the wrong question, you'll get the wrong answer. And that's exactly what the Tribune did with the county debt.
The county article was about the county's bond rating. The key questions, however, are NOT about the county's bond rating or whether the county can eventually pay off its debt. The county can pay down its bonded debt; it just hasn't done so for the last 10 years! The county keeps refinancing and passing the ever-growing debt down to another generation. What a legacy "for the children." This county has taken its cue from the feds. Debt is great. Even more debt is better. And handing debt off to the unborn is the best--after all, the unborn aren't here to complain.
The right questions to ask about county debt are: 1) why has the county not paid down one penny of the 1998-2001 county-school bond issues and why has the hospital not paid down one penny of its bond issues? 2) why did the county get into technical, complex, and risky derivatives/swaps? 3) does the county now owe even MORE in bonds than it owed just one year ago? and 4) why in the world does the county let a person (Joe Ayres) who has his finger in every piece of the financial pie provide financial advice that always leads to more fees, more commissions, and more money for Joe?
Who's looking out for county taxpayers? Where's the person who'll stand up and say "Whoa! We've got to get this fox out of the henhouse and start paying off our debt!"
The Tribune ignored the key questions and just provided front-page space for a county press release on bond ratings. Our bond rating may be OK---but why is the county making interest-only payments and why is the county allowing someone (Joe Ayres) to lead us into financial deals that line his pockets over and over and over again? The Tribune never once mentioned that the county's financial advisor-- Joe Ayres -- made national news in the NY Times--and it wasn't a pretty sight.
In the City debt article, Morristown City Administrator Jim Crumley was very defensive. The article on the City's debt was longer, more interesting, and didn't seem as much like a press release, but answers to crucial questions were left out such as: Why did the Tennessee Municipal League (TML) sever its relationship with Bank of America? What other seven municipalities--in addition to Morristown--is Moody's reassessing? Is Moody's going to look at the debt of other municipalities? Why were eight cities singled out for reassessment? If so, why?
And isn't it "convenient" that Moody's report on the City debt won't come out until after the city council elections!
And isn't it convenient the city audit (for the fiscal year that ended on June 30, 2008) still isn't ready and won't come out until after the city council election! Wonder why?
The City pays a tidy sum for an annual audit. What a shame that the City can't see its audit until over 9 months after its fiscal/audit year ended. Imagine trying to prepare a budget for FY 2010 when you still don't have the audited figures for FY 2008! And who knows if anyone has a clue about where the city really stands in the current FY 2009?
How many "bonuses" and "pay raises" and "car allowances" has Crumley single-handedly handed out. Who got what? How much other money has he spent, where did he spend it, and from what line item did he pull the money--without notifying city council!
It's time for the City to pull its financial act together. The Council needs to step up and say we don't just appropriate one big lump of money and hand it to the City Administrator to spend and shift around however he chooses.
Then City Council needs to say to Mayor Barile and Crumley, "Paying attention and asking where the money goes is NOT bad and is NOT micro-managing. It's our job! Questions and oversight by the council provide a system of checks and balances instead of a City Administrator-run dictatorship."
And the City sure needs to get its long-time auditor on-the-stick or have someone else perform the city audit. Did anyone consider letting several CPA's submit proposals to do the audit?
The county used to wait and wait for the same auditor to finish the county audit. When I was elected to county commission in 2002, my first proposal was to eliminate the use of a private auditor and have state auditors perform Hamblen County's audit. The result was two-fold: 1) the county saved a bundle since the state auditors charged less than 50% of what the private auditor had been charging; and 2) with a new set of eyes on the county's finances, a lot of violations of state law and other irregularities that had been going on for years and years were spotted and corrected.
The first year (2003) that the state auditors performed the Hamblen County audit over 27 findings and irregularities were reported. In that year Hamblen County had more findings and irregularities than any other county in the state. [The previous year, the private auditor reported only one finding/irregularity]. Click here for a summary. At long last, a lot of problems were straightened out and processes were improved.
The city and county--despite the Tribune's many press release articles--have spending problems, debt problems, and serious accountability and openness issues.
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