Charter Financial Analysis: The Numbers Don’t Add Up

At their May community event at the City Center, the Charter Review Commission gave out a document titled “Saratoga Springs Charter Commission 2017 Proposed Charter Fiscal Impact Summary.”  The document had been drafted by Jeff Altamari.

Mr. Altamari moved to Saratoga Springs some years ago when he retired from an executive position with a Texas energy company.  Mr. Altamari has an impressive resume.   In a previous post I go into his credentials (https://saratogaspringspolitics.com/2017/05/03/charter-review-commissioner-altamari-calls-for-independent-internal-auditor/)  but for the purpose of this blog I would note that he is a Certified Public Accountant and has a strong background in finance.   I have chatted with Mr. Altamari on a number of occasions and I have always found him charming and informative.

In contrast to Mr. Altamari, while I studied economics as a history graduate student and have read extensively in the area, my focus and understanding is at the broader (macro as they say in the profession) level and I know little about accounting.

I have read his summary analysis of the projected financial benefits of the commission’s charter proposal and I ran into an issue that simply made no sense to me.

His paper documents that the proposed charter would eliminate all four commissioners, the four deputy commissioners, and the deputy mayor.  It asserts that all the rest of the city employees are assumed to continue in their jobs even though this could change over time if, for instance, the city manger decides to make changes in the workforce.  The only employees to be added, according to the paper, will be a city manager who they project will be paid $125,000.00 and an assistant city manager projected to be paid $90,000.00 although this position is not mentioned in the charter.  In addition, it proposes that a full time city mayor be paid $40,000.00.

Chris Mathiesen has made a strong argument against the commission form of government citing his experience as Public Safety Commissioner.   In my conversations with him he indicated that being an effective commissioner requires many, many hours.  While he enjoyed his tenure it was apparent from our conversation that it has taken a toll on him.  Apparently all the commissioners who spoke to the Commission expressed similar sentiments about the long hours required to administer their respective departments.  The Mayor has made similar remarks to the media.

Oddly, the Charter Review Commission, which sought testimony from many sources both inside our city government and outside, never interviewed the deputy commissioners or the deputy mayor.  In light of the fact that these people are charged with actually running their departments and are full time, one would have thought that interviewing them would be of particular value.

I know and have known several deputies.  I can tell you that the individuals I know and knew spent many more than forty hours a week on the job.  I am sure Chris Mathiesen would confirm that regarding his deputy as would all the other Commissioners and the Mayor.

So to a lay person like me it makes no sense that Mr. Altamari’s summary would expect the city manager and the assistant to absorb the work of four “part time” commissioners and five full time deputies yet the savings identified in Mr. Altamari’s summary factor in the savings from eliminating these positions.

I am also concerned about costs associated with the mayor and the six members of the proposed city council.  The budget makes no mention of any support costs for these positions.  It is the intention of the commission that the mayor’s position will be full time.  They envision the mayor as a kind of community organizer who will mobilize individuals and groups to support the work of the city government.  One would assume that the mayor will need office space, computer, some sort of secretarial/administrative assistance, travel costs, etc.  Similarly, one would expect the members of the council to need some sort of support budget.

I wrote to Mr. Altamari asking him to address these issues.  He declined to respond formally.  I followed up and here is our email exchange:

From:    John Kaufmann []

Sent:     Friday, June 23, 2017 12:46 PM

To:          ‘jeffaltamari’

Subject:   Financial Analysis

I am disappointed that you have declined to respond to my questions.  The latest iteration of your proposed charter  eliminates the four commissioners and the five deputies. Given that this charter proposal only calls for the hiring of a city manager (and you have indicated a deputy will probably be needed as well) it is logical to assume that the charter commission expects that the two new executive  positions will assume the workload of five fulltime and four part time positions.  This simply does not make sense.   I would also note that the financial plan you have put forward does not address the support costs for the ambitious responsibilities expected of the revised mayor’s position nor the support costs for the seven members of the council.

Given your acknowledged skills as an analyst and the assumed fact that you have thought this out, it does not seem unreasonable to ask you to explain these apparent anomalies.  I asked you to do it in writing in the interest of accuracy because I expect that I am not the only citizen that will have these questions about this proposal and I would like to post your response on my blog.

The Saratogians who will be voting on this charter cannot all be expected to attend the commission’s meetings and forums as you suggest in order to get clearer information.  Sooner or later you will need to address these issues in some kind of written document made available to the public.

While I will not be publishing your recent emails to me, I will be posting the text of this email to you.

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From:    jeffaltamari

Sent:     Friday, June 23, 2017 1:10 PM

To:          John Kaufmann

Subject:    Re: Financial Analysis

As I stated previously, I will be happy to respond to you at our next public forum and was disappointed you deigned not to attend our previous forum, where these issues were addressed. I am happy to do this for you and any other citizen of Saratoga Springs. As a practical matter, and one of basic courtesy to Charter Commission members, we cannot be expected to provide lengthy written responses to all the email requests that come from the public. I hope you can understand and appreciate this.

Kind regards,

Jeff

Jeff Altamari

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I was away on May 30 when they had their forum.  Even if I had been in town I would probably not have attended.

A confession to this blogger’s readers:  I rarely attend meetings.  They are, as a whole, interminable.  Fortunately, most of the city’s meetings are videotaped and can be viewed on line.  This allows a person like me to skip through them fairly quickly looking for anything that strikes me as significant.

In the case of the Charter Review Commission this approach is problematic.  The quality of the audio for meetings in the City Council chambers is excellent.  Unfortunately the Charter Review Commission rarely meets in the chambers.  I know there are probably scheduling challenges as the meetings of the council and the city’s boards would take precedence.  Still there are many nights that the council chamber is available.

The use of the city’s video equipment is limited to the council chambers. When the Commission meets in the Music Hall, as they frequently do, assistant  City Attorney Tony Izzo who assists the Commission uses his personal equipment to record their meetings.  The acoustics in that large hall are problematic and Commission members do not have microphones as they do when they meet in the Council chambers. The result is that it is almost impossible to follow the discussion of the commission when they hold their meetings there.  Several members have clear voices but many do not.  In addition, frequently there are several people talking at the same time and under those circumstances the voices are unintelligible.

So the public and I cannot use many of the videos on the city’s website to follow the work of the Commission.

I have some sympathy for Mr. Altamari.   He is a volunteer who has devoted many hours to the meetings of this Commission and it is not surprising that he bridles when asked to respond to someone like me. Still, this Commission often goes on about the need to educate the public and their frustration at how little interest in terms of public attendance at their meetings there is.

There may be a reasonable explanation as to the apparent anomaly of having two people doing the work of roughly nine people but in terms of what is available, I cannot find an explanation.

I  advised Mr. Altamari that I planned to post on the issue of his analysis on my website and offered him the opportunity of providing some kind of explanation.  Given his skills as a writer and my assumption that he has thought all of this through, it seems like a modest request to have him draft a response.  I regret that he declined.

This is a link to his document Fiscal Analysis. There is a table in the document that offers three scenarios of the money he projects the city will save with this form of government. Basically the first scenario projects no savings from greater efficiency (savings $118,326), the second projects savings from an increased efficiency of .5% (Savings $292,176), the third projects savings from an increased efficiency of 1% ($466,026).