Local Government TV

Tuesday, March 31, 2009

Tony Phillips Warned Council Bobbleheads About Revenue Shortfalls

It's hard to read Sunday's Jarrett Renshaw/Darryl Isherwood exposee of Allentown's troubled financial waters without feeling a deep sense of disappointment in the bobbleheads who sometimes refer to themselves as Allentown City Council. Despite being provided with monthly financial statements showing that revenue was way below projections, six out of seven council members rubber-stamped a bogus budget they knew was based on inflated revenue projections.
After all, it's an election year.

One council member voted against that budget - Tony Phillips. Now you might say his vote was politically motivated, too. But the reason Tony opposed this budget is precisely because he knew those revenue projections are fairy tales. Here's a copy of a memo that Tony circulated to fellow council members on November 18.

"As discussed last night, attached is an Excel spreadsheet* that analyzes selected budgeted revenues and expenses from the 2009 City of Allentown Proposed Budget.

"My analysis of budgeted revenues estimates the proposed budget is overstating revenues by $2,076,462 comprised of items where revenues is overstated by $3,143,129 and items where revenues are understated by $1,066,667 (Account #s 5215 and 7116).

"My analysis of budgeted expenses estimates the proposed budget is understating expenses by $2,151,888 comprised of items where total expenses are overstated by $1,126,433 by including theoretical net understatements of certain special expenses (Pension Expense, Capital Fund Contributions & Reserve for Encumbrances) by $3,278,321. I backed out the theoretical understatements at the end of the expense spreadsheet to arrive at the 'working number' of a net expense understatement of $2,151,888.

"The net result of the two separate analyses of revenues & expenses leads me to estimate that the 2009 Proposed Budget includes a net understatement of a deficit of $4,228,350. Combined with the 'published' deficit of $1,793,568 yields a total estimated 'real' deficit of $6,012,918."


* The spreadsheet can be examined here. He tells me it was prepared by a CPA, not him.

Tony, the person snarked on his own blog as in need of "elocution lessons" (Hint, Hint), is the one person on Council who had it right.

5 comments:

  1. perhaps if tony had prepared the spread sheet, or at least the statement about it, he could have presented it with more knowledgeable enthusiasm and be associated with it.

    ReplyDelete
  2. Borrowed$$$$=Surplus?March 31, 2009 at 7:57 AM

    Anonymous said...
    I suppose it's progress that the Morning Call is investigating something other than puppy mill abuse...how about Jim Martin next?


    Haven't i seen this on every o'hare blog lately???

    anywho... a 2nd grade math student could look at the budget and see it was a fairytale... and you wouldn't have to bribe them with a trip to chucky cheese (or Moody Bible College) to get that result. One accountant figured that out and yet Pavlowski's Dog pound consists of 17 financial experts now on city payroll??? boy i hope thier their not from Moody's Math Dept or we could be in for further problems.

    ReplyDelete
  3. anon 7:42, 7:49, 8:32 aka bill and angie villa, how sad that you blog about ruth ginsberg and women's rights, but routinely use words as pusillanimous. how hypocritical to blog about art and humanities, and routinely use language of violence, threatening to break people's jaws. how deceiving to blog about courage and then comment all day anonymously and impersonating other people.

    ReplyDelete
  4. "perhaps if tony had prepared the spread sheet, or at least the statement about it, he could have presented it with more knowledgeable enthusiasm and be associated with it."

    Perhaps it is time to give him some recognition for doing something right. I'm unaware that a CPA was a mayoral qualificiation. Give a little credit where credit is due.

    ReplyDelete
  5. bernie, as one who attended many city council meetings, and follows city government carefully, i cannot give credit when i hear about a memo, for the first time, five months after the fact, even if you do

    ReplyDelete

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