Common Council Charade: "Running Things Like a Business" (Part 2)

If you at least want to claim to run things like a business, then you should at least pretend — as is often the case in business — that you follow a process of due diligence in your business decisions.
What the Council is doing however — like they have proven with most fiscal decisions of any significance– is totally disengaging from any due diligence whatsoever.
A framework for a business case involving the city administering its own ambulance service with a potential for 6-figure revenues has been brought forth. While the issues are many and the business case is not complete, the Council needs to at a minimum perform due diligence in light of its significance to the budget and ultimately the tax burden on city residents.
I’d argue that it is not good enough — indeed it is fiscal mismanagement — to not even perform a thorough and careful due diligence of this issue. While the Council invokes the Charter, it is more than clear that once again they are not following the very Charter they claim to support by misapplying the requirements of what does and what does not require a referendum.
In other words, the Council should still proceed with due diligence around the business case regardless of the Charter question. The business case underlying this is simple:
Since 2004 when the Charter restriction was implemented, the city has lost potential revenue in the 6 figure range year-over-year. Let’s take a conservative approach and say that $500k per year in revenue is best-case and if we could get 50% — $250K per year– that might be realistic. If I apply $250K per year over 11 years , I estimate that the Charter restriction conservatively cost city taxpayers $2.75 million over that time in lost revenue. Using the best-case figure, I get $5.5 million over that time.
I think if the voting public realized the business case here, the views on the Charter provision would shift. It’s laughable that the same voices who constantly clamor for lower taxes and the pressing burden of taxes wholly foregoes such a revenue stream over the past decade and apparently into the next decade. That is why the Council killing off any due diligence while hiding the behind the Charter is foolish and certainly not “running things like a business”. They owe it to taxpayers to figure out if this makes sense or not– voters may very well reconsider if such a move lowers taxes or at least avoids sizable cuts in service.  You just don’t toss off the issue as a single budget cycle issue.
Let me put it bluntly using the published figures: do you think voters might reconsider the issue if it actually meant a 12.9% tax increase without the projected revenue? (figure cited by Controller Agresta assuming no tax cap in place) Might a double digit tax increase not persuade a few voters?
Let me be a bit cynical here in talking about cuts versus revenues. It’s my belief that there is an ideology that values cutting above growing, that values risk-avoidance to risk-taking. That ideology is literally killing — and killed– the city. That is the default, favored, desired ideology above all others; that is why you see zero investment in the city.
It’s like trying to landscape your property by cutting everything down and not planting a single seed. Then in the summer, constantly begrudging your neighbors for their well landscaped lawns because they had a bit of sense to understand that you need to plant things in order to grow things. You just can’t kill weeds and expect something else to grow in its place.
Without some offset in revenue, I can predict where the cuts will be applied: economic development, Corporation Counsel, recreation. The impacts from foregoing due diligence on this issue means lower growth in the future and reduced quality of life. Cutting the Corp Counsel merely allows the Council to opine on what they would like the law to be versus what it actually is.
This issue presents many things to the public; what it does not present is “running things like a business.” Or any semblance of fiscal management and governance.

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5 Responses

  1. Luis says:

    Good revenue numbers!
    But your illustration is projected as if there is no cost to that revenue streem. Which means its a Poor business analogy and quite frankly misleading. Which warrants many questions.
    Where is your operating cost? The revenue doesn’t just streem in like turning on a faucet or without ambulance’s rolling to the seen, medical equipment stored properly and personal trained & running the system. No your “I estimate that the Charter restriction conservatively cost city taxpayers $2.75 million over that time in lost revenue. Using the best-case figure, I get $5.5 million over that time.” Doesn’t address any revenue impact to those numbers. Zero. Not a balanced factual example.
    Where is your cost of employee pay, OT and increase, pension increases, insurance increases, benefits increases, training etc. Where is your cost from that revenue, for the cost of ambulances, maintenance, insurance, medical equipment, fuel, storage, certifications and then repurchases? They don’t last forever.
    That’s why if your analogy was correct here this business would be a critical failure.
    It’s important to hear what the professionals (both sides) have to say and unfortunately they were not at least given that chance. Which I think was wrong.

    • flippinamsterdam says:

      Luis,
      Are you kidding? Do you read what I write?! Here is what I said:
      “While the issues are many and the business case is not complete, the Council needs to at a minimum perform due diligence in light of its significance to the budget and ultimately the tax burden on city residents.”
      [snip]
      “That is why the Council killing off any due diligence while hiding the behind the Charter is foolish and certainly not “running things like a business”. They owe it to taxpayers to figure out if this makes sense or not– voters may very well reconsider if such a move lowers taxes or at least avoids sizable cuts in service. ”
      You’re taking my topline figures arguing that it might be worth considering and then you use that as if I’m outlining a business case? I said no such thing and then you accuse me of misleading when I simply project numbers provided by the Controller and Chief. And as is clear from my snippets above, I am asking that a business case be presented and then studied. I don’t own the business case. Note I said ” figure out if this makes sense or not” — I hedged because I don’t claim to know whether it makes sense or not.
      As usual, you conclude this would not work even though a business case has not been presented directly contradicting your final statement: “It’s important to hear what the professionals (both sides) have to say and unfortunately they were not at least given that chance. Which I think was wrong.”
      So you know it won’t work even though you’ve not seen an actual business case. But you want to hear both sides even though you’ve already reached a conclusion with zero facts.
      Here are the actual numbers as presented by the Chief as part of the business case: The ambulance service facts Chief Whitty would have told the council

      • Luis says:

        Flip,
        First, Hedging is a financial term unless you meant hedges?
        “Hedging a risk management strategy used in limiting or offsetting probability of loss from fluctuations in the prices of commodities, currencies, or securities. In effect, hedging is a transfer of risk without buying insurance policies.
        Hedging employs various techniques but, basically, involves taking equal and opposite positions in two different markets (such as cash and futures markets). Hedging is used also in protecting one’s capital against effects of inflation through investing in high-yield financial instruments (bonds, notes, shares), real estate, or precious metals.”
        Hedging your statements, is more like essentially “stating” one thing then stating a counter statement to help offset any loss from the first statement. You appear to be for the change and push it but then hedge to cover the fact you don’t have all the facts.
        Your prediction, “Without some offset in revenue, I can predict where the cuts will be applied: economic development, Corporation Counsel, recreation. The impacts from foregoing due diligence on this issue means lower growth in the future and reduced quality of life. Cutting the Corp Counsel merely allows the Council to opine on what they would like the law to be versus what it actually is.”
        Your making “poignant statements!” and then you hedge against your statments. I don’t even see in your original post where you even state where you got these numbers from? other than quoting the Controller for what would happen if the revenue was not included in the budget.
        You are (stating)! “Since 2004 when the Charter restriction was implemented, the city has lost potential revenue in the 6 figure range year-over-year. Let’s take a conservative approach and say that $500k per year in revenue is best-case and if we could get 50% — $250K per year– that might be realistic. If I apply $250K per year over 11 years , I estimate that the Charter restriction conservatively cost city taxpayers $2.75 million over that time in lost revenue. Using the best-case figure, I get $5.5 million over that time.” [This is your statement only as you use (I) and again you only figure in revenue gains with no show of impact on that revenue which is misleading.]
        You say, “Let me put it bluntly using the published figures: [who’s published figures? The Recorder published figures too] do you think voters might reconsider the issue if it actually meant a 12.9% tax increase without the projected revenue? (figure cited by Controller Agresta assuming no tax cap in place) Might a double digit tax increase not persuade a few voters?”
        You, ” I’d argue that it is not good enough — indeed it is fiscal mismanagement — to not even perform a thorough and careful due diligence of this issue [I agree with you here only]. While the Council invokes the Charter, it is more than clear that once again they are not following the very Charter they claim to support by misapplying the requirements of what does and what does not require a referendum.” [This is only if you trust DeCusatis. You do, they don’t and have good reason but that doesn’t mean the council can’t get another opinion.]
        You do not state until the end of your last additional post, the Fire Chief info which is provided by another blog not you.
        So NO, to your statement, “So you know it won’t work even though you’ve not seen an actual business case. But you want to hear both sides even though you’ve already reached a conclusion with zero facts.”
        Your facts are convoluted and obviously misleading so as to try to tell me, what I may know and/or are thinking.
        Remember I’m not your tool.

        • flippinamsterdam says:

          Luis,
          Epic: you constantly challenge and misstate my numbers and assumptions yet never put forth a single fact or link in favor of any of your arguments or positions. My numbers are from a Recorder article. The reason I did not link to the article in “another blog” initially is that the article interviewing the Chief was published after I published my post.
          I find it interesting that you dismiss my reference to the Mohawk Valley COmpass as “another blog” — for someone so dismissive of blogs, you seem to spend a fair amount of time reading and posting upon them. Moreover, Tim Becker actually practices journalism as his piece interviewing the Chief and his past piece with the Controller and budget demonstrate. You wish to dismiss the substance and facts of the article as they contradict your position and support mine. That is why you have to cast it as “another blog”.

  2. Luis says:

    Flip,
    I can’t be mistating your numbers as I am clearly quoting them entirely from your own posts. All I am asking, for the most part is where is your cost of operation as you do not in anyway identify the impact of that cost to your streem of only revenue, within your proclamation. I, am not arguing for or against this proposal as you are, so there is no need for me to provide an alternative. It’s simple about how you are presenting this information.
    As far as you state “I find it interesting that you dismiss my reference to the Mohawk Valley COmpass as “another blog”. Nothing against them but good try, you stated the numbers within your post and said “using the published figures”. But you never said the Controller, Chief and Compass, until your last post. ” I said no such thing and then you accuse me of misleading when I simply project numbers provided by the Controller and Chief.” I dont see where you truly identified your source for these numbers. Now that we know they are essentially the city side. That’s of course very important, as well as hearing from GAVAC. It is only fair to factor them since they have been providing ambulance etc. service to the city residents.
    As I stated in the first paragraph of my first post here, you left me with many questions. Your additional post have answered some, no question. But don’t assume for me what I understand from what I may know, its no indication of what I may know or think.

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