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New Budget does nothing to solve County
financial problems
The new budget does nothing to
solve the problems facing the County. The Mayor and Commission did not
raise taxes. But, the Mayor and Commission also did nothing to reduce
the County's runaway spending problem. Instead, they took the cowardly
way out, by emptying the County's reserve funds, and kicking the
problem down the road until after the election.
The taxpayers know General Fund spending has been growing at 2.5 times the rate of inflation over the last five years. They know the proposed budget does nothing to bring this spending under control. Mayor Cunningham, in a rare moment of candor, admitted to Blount Today that a 40% tax increase will be required next year, if current County spending continues. Of course the Mayor is only too happy to kick the problem into next year, since he was voted out of office in the primary. For example, the Sheriff has 200 cars, 40 SUVs, 16 pick-up trucks, and 6 motorcyles for a total of 262 vehicles. But, he has less than 145 employees that could ever need an assigned vehicle. He has 117 vehicles more than he needs. Yet, your budget provides nearly $1,000,000 dollars to buy and maintain more vehicles that the County does not need. The time to rein in runaway spending was long overdue. While the Mayor and some Commissioners talked about fiscal, they failed to deliver. It is too bad they continued to choose political expediency over leadership.
Inflation
(CPI)
from
2007
to
2010 was 5.1%. Using
the high estimate of 2% inflation for next year, and assuming no
increases in efficiency, we should expect the County General Fund
budget
to show an increase of 7.1% from 2007 to 2011.
Unfortunately, the County General Fund 2011 budget has increased by a whopping 19% over this period, more than 2.6 times the rate of inflation. Some General Fund departments, like Information Technology and Purchasing, are efficient and effective. However, other departments are major contributors to the runaway General Fund budget. For example: (Click here for more) Mayor and Commission want to impose a 10% tax increase when more than 10% are unemployed The
latest
budget
pronouncements
from Mayor Cunningham and his allies on the Commission
lead us to wonder whether they have lost all touch with financial
reality. Are they listening to the people?
The General Fund budget has been increasing at 2.5 times the rate of inflation for the last five years. They are proposing to increase the General Fund budget again. Is that what the people want? They took a meat cleaver to the school budget, eliminating 25 teaching positions. Then, they budgeted nearly one million dollars for sheriff’s cars, that every thinking person in this County knows he does not need.(Click here for more) Mayor and Commission fail to explain millions wasted in shady bond deals Several
months
ago,
Mayor
Cunningham and the Commission, after denying
that the County had a debt problem, decided to hire a consultant to
help the County fix the debt problem. A thorough investigation into the
millions of dollars that seem to have been wasted in the County’s
highly questionable debt transactions is desperately needed.
Unfortunately, the Mayor and Commission hired a consultant that is a
defendant in a major lawsuit that describes many of the questionable
municipal debt practices that have cost the County millions. Let’s
review the facts we know.
The County has paid millions in fees to a company that does not even have its own phone number, or place of business. This company has a contract with the County that has an AMAZING compensation arrangement. It says the holder of the contract gets to specify his fee: “in his sole discretion”. If the County is writing more of those contracts, I am sure everyone wants to get in on the action. (Click here for more) Blount County’s “financial weapons of mass destruction” You
all
have
probably
heard
about how arcane financial tools, called derivatives, have brought our
national and world economy to the brink of destruction. Warren Buffett
captured the essence of the problem when he called derivatives
“financial weapons of mass destruction”.
Did you also know that our County Finance Director, David Bennett, has been playing the financial derivatives game with our hard earned taxpayer money? (Click here for more) Lots of errors in recent S&P report on Blount County Good
financial
decisions
require
good
information. The recent Standard and Poor’s report on the
County led the Mayor to claim “the financial management of the County
is second to none”. However, the report is just another example of how
S&P made the colossal blunder of giving their highest, triple A,
ratings to trillions of dollars of debt, that is now called toxic junk.
S&P’s work is very poor. Consider their errors: (Click here for
more)
Blount County debt doubles Mayor
Cunningham
told
the
newspapers: “Blount County is fiscally sound and
the management of the county's affairs is second to none". He based his
conclusion on the content of a Standard and Poors report on the
County’s debt. This is the same S&P who rated gave their highest
AAA rating to trillions of dollars of debt, that is now commonly
referred to as “toxic junk”. Is this is a solid base for the Mayor’s
sweeping conclusion? It is as if you were to decide that your household
finances are in great shape because you can still borrow money on your
credit cards.
Perhaps the Mayor has not read the latest County Audit Report. The report says the County’s debt has nearly doubled since 2004, from $123,505,000 to $244,570,000. Adding the interest brings the total to a whopping $479,767,000. (Click here for more) Is
the
Sheriff
feeling
the
taxpayers’
pain?
In the last month or
so, we have heard a
great deal from
Mayor Cunningham and Finance Director Bennett about the need to control
County
spending to cope with the severe economic downturn. At the January
Commission
meeting, Peggy Lambert, the self-appointed leader of the county
political
machine, even made good speech about the need for fiscal
responsibility. The
machine-controlled Commission then voted to appoint her to the seat
vacated by
Bob Ramsey. Against
this background, you can imagine our
disappointment when we discovered that, just four days later, Sheriff
Berrong ordered $518,000 worth of brand new cars. To add insult to
injury, the
Sheriff spent nearly $100,000 on three luxury SUVs. (Click here for
more)
Cunningham, Berrong and Bennett continue cover-up of 36 missing Sheriff’s vehiclesMayor
Cunningham,
Sheriff Berrong and Finance
Director Bennett recently launched an all-out effort in the press to
try once
again to cover up the problem of the 36 missing Sheriff’s vehicles. Apparently, they recently did a physical
inventory of the Sheriff’s vehicles, and found the number of vehicles
matched
what was on the county inventory. This does nothing to resolve the
problem of
the 36 vehicles that went missing in fiscal year 2007. (Click here
for more)
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