Wednesday, November 10, 2010

Hanover Supervisors Scrutinize No-Tax-Increase Budget

Many municipalities struggle annually with the growing cost of a defined benefit pension plan. But Hanover has been able to reduce that expense by instituting a less expensive pension plan for employees hired after 2006. They contribute portions of their own salary, which is then matched by the Township.

What about raises? They vary between 2 and 4 per cent. Finnigan explained how it works. "We appraise people, we require them to go the extra mile, and if they are doing that, they are rewarded accordingly." He noted that most surrounding communities have union contracts that require pay increases, but "we do it based on performance."

Finnigan's salary next year is set at $102,775, slightly less than the salaries paid to Township Managers in Lower Macungie and South Whitehall.

Finnigan told Supervisors he was able to reduce the interest rate on the Township's long-term loans from 4.25% to 4.00%.

Supervisor Steve Salveson expressed some concern over employees being forced to pay a portion of their family's health care. "That's quite a hit for most of the people with family coverage," he remarked. Finnigan assured Salveson that it's a "wash," but agreed to analyze the differences in take home pay for employees with families.

Hanover resident Al Young complimented Supervisors for posting the proposed budget on the Township web page, but repeated Lehigh County Commissioner Glenn Eckhart's admonition that "government spending is the problem."

Supervisors will tackle the budget again on November 23, 7 PM, at the municipal building.

32 comments:

Anonymous said...

6 digit salarys to do those jobs! yikes no wonder local governments are in trouble. Seems like a pay cut for those managers is in order.

Mitch Cumstein said...

A low 6 digit salary for a Tp. manager is reasonable, given what they do. Finnigan is worth it. My issue is that Tp.'s should be willing to freeze defined benefit plans now for ALL employees (this is what private employers are being encouraged / forced to do by the PBGC). These employees can then participate in a defined contribution plan, as most private employees do. And, oh yeah, and pay part of their health insurance, also like we do.

Anonymous said...

Good to see that the employees are required to put something toward their benefits - both pension and health. And it is good that there is at least the perception of performance-based pay for township employees. But that does not answer the questions that still need to be asked.

1. Are there the correct number of employees, including supervisory positions? As many who are just waking up to government spending are starting to realize, government employment is not a jobs program, but a means to an end. Hanover has a very well paid manager AND very well paid supervisors of the maintenance crew.

2. Hanover Township has approx. 11k citizens, much less than Lower Mac, S. Whitehall, and less than half of Bethlehem Township. Why does the manager get paid as much or more than the same job in larger townships? On a related note, why are all of these managers getting paid much more than the county executives and the mayors of the three local cities?

3. Finnigan's salary is not his compensation or the cost of his employment to the township. When you add in the cost of benefits (pension, health, etc.) and the cost of matching payroll taxes paid by the township, his total compensation cost is closer to $130,000 per year. Is he worth that amount?

4. Finnigan has been manager for 5 years and started with a salary below $80k/ yr. Doing the math, he has seen an increase of more than 5% per year in salary. Why is his increase greater than the people who actually do the work? On a related note, how did a man with zero experience get hired for the job at a starting salary that was equal to the salary of the outgoing manager, who had 15+ years of experience?

4. Can some of the jobs done by employees be done contractors at a lesser cost? For example, maintenance of township lands / moving the grass. What is the total employment cost vs. subcontracting it out?

5. For what it's worth, lowering the long-term loan rate in this environment is not an accomplishment. The advisors would bring this to the township's attention because they get paid for the new bond issuance.

Bernie O'Hare said...

"A low 6 digit salary for a Tp. manager is reasonable, given what they do. Finnigan is worth it."

Agreed. You get what you pay for.

"Tp.'s should be willing to freeze defined benefit plans now for ALL employees"

I'm not sure that can be done legally. I know that's what causes many municipalities to hesitate.

Bernie O'Hare said...

Anon 10:11, I'll ask Finnigan next time I see him. From what I see, he is worth every penny paid to him. Some of the cost-savings measures were started 4 years ago, when he was made Manager. I believe that's when the pension system was changed for new hires. But I sense that what you're really asking is whether he is worth the money being paid. I will do a story about it down the road.

Anonymous said...

Can someone tell me if it is possible to "convert" a defined benefit pension into a defined contribution plan, such as a 401 k? Businesses and municipalities MUST get out of the pension business. These legacy costs are going to bankrupt cities.

IMHO, the onus must be put upon the individual. My employer sets aside the equivilent of 12% of an employee's salary and the money is managed by employee using investment vehicles made available through the program. If I do a good job managing my money, I am a millionaire after 25 - 30 years. Bottom-line, when I leave, the company has no connection to me, due to insane promises such as the City of Allentown to it's firefighters etc...


VOR

Anonymous said...

finnigan is one of ohare selected few - read man crush. don't expect any honesty here. just another ahole sucking on the public teat and wondering what people are talking about when they mention the Peter Principle.

Anonymous said...

Bernie @ 10:44,

What you need to keep in mind with the "cost savings" in HT is that they shifted the cost of trash collection from the taxes paid to a bill received by residents. It was promoted as a "tax cut" by Finnigian and the Supervisors, as taxes collected did technically go down, but it was a substantial increase in the cost of living in HT.

To use me as an example, that year my taxes went down $50 to approx. $400. But I received a $300 bill from JP Mascaro for trash/ recycling. That is not cutting my cost burden, and Mascaro is horrible.

Since you are asking him ... why don't you ask him about the township vehicle that he has for his use as well. Seems to me that on $102K he should be able to drive to and from work in his own car. This is a practice that should be stopped here and everywhere else in government, on principal.

And you are correct, I do not believe that these township managers are worth that kind of money. He has not looked into outsourcing jobs, probably because it would not be in his best financial interest. What I mean by that is that if there were less people on the payroll, there are less people to supervise, thus less responsibility and lower pay.

And Stoffa, Cunningham, Pawlowski, Calahan and Panto (who are all elected, accountable to the electorate, and not given their jobs) have greater responsibilities than any appointed township manager for far less pay than what we see here. If you believe that Finnigian's level of responsibility is worth $102k, then what are the aforementioned elected officials responsibilities worth?

ANON 10:11

Anonymous said...

VOR,

A Defined Benefit Plan (Pension) cannot be converted to a Defined Contribution Plan. It is complicated how things pan out when a business decides to "shut down" their DB plan, but there are a number of options. The most likely would be the benefit converted to a Cash Balance plan, where the monies stay in the plan for the employee and accrues a set interest rate each year.

The other common avenue would be the plan remains in effect, but the benefit accrual stops for the employee on a set date. The Company is still responsible for funding these benefits. This is negative for almost all employees involved as the accrued benefits are much less when you are younger than when you are closer to retirement age.

Bernie O'Hare said...

"And Stoffa, Cunningham, Pawlowski, Calahan and Panto (who are all elected, accountable to the electorate, and not given their jobs) have greater responsibilities than any appointed township manager for far less pay than what we see here. If you believe that Finnigian's level of responsibility is worth $102k, then what are the aforementioned elected officials responsibilities worth?"

Considerable more than most of them are being paid.

Anonymous said...

The job gets done more efficiently in Bushkill Twp. for $67K. One tax increase in 20 years.

Anonymous said...

Bottom line is Finnegan was Angle's campaign manager in his ill-fated 2001 run for County Executive. Finnegan was a fire breathing ultra-conservative. Then he got into elected office and when he was laid off from his job, his elected buddies gave him the manager job. Nothing special or magic. Of course if he was on O'Hare's crap list we would be hearing the other-side of all of this.

Now that Finnegan is on the public tit for a hefty amount he is not so ultra-conservative anymore, at least not in his own case.

There isn't a local township manager out there that didn't get their job but for connections. Don't be so naive. Finnegan was a failed stock broker who never managed anything. Most of these townships could be run by a part-time book-keeper for $30-40,000 a year.

Stop the Bullshit!

Anonymous said...

ANON 9:07 is spot on in his assessment of FInnigian's past and how he got his job. Worse off, he was paid a full salary from April through December of his first year while "in training" under the previous manager. Paying two managers simultaneously is not exactly fiscally conservative.

Something I noticed was that Finnigan railed against the township until he got elected. He is one of those "conservatives" who want government off their back, but we should all abide by their rules and regulations. In other words, he is a hypocrite.

And do not forget that we were real close to having 350 acres of turkey barns as a result of his crusade against David Jandl.

Nor should we forget the treatment of Lifepath Church (formerly know as Church on the Move) when they wanted to put a church and ballfields at the corner of Jacksonville and Macada. They told the mostly minority church that neither use was appropriate for that site. (Even with a church and a temple literally right across the street). When the church filed a civil rights lawsuit HT was forced to pay up $60k and let them sell the land to a developer, who packed the houses in as tight as possible.

I guess since Bernie doesn't live there he could care less the effect Finnigian has had in HT.

Just saiyin'.

Bernie O'Hare said...

Sure I care, but you know what I've noticed. When someone comes on my blog to slam somebody one or two days after my original post, he or she usually has an agenda. What's yours? Is it an interest in good government or disdain for a township manager? why would you choose to remain anonymous? I do not consider your comment a personal attack, but why not give your argument credibility by identifying yourself?

Anonymous said...

Sure he should Bernie. Then the zoning guys could harass him. Maybe the Hanover Twp. police would stop by. Or how about the code guy just keeps checking things.

You have railed against the Pawlowski patrols on decent people who complain. Let me tell you it is worse in the twp.'s because it is harder to prove. Everyone knows you like Finnegan because he is an Angle pal but don't be a hypocrite.

Anonymous said...

I find it ludicrous that you beat Finnigan up and you can’t get the facts straight. First Finnigan was never a stock broker because I worked with, and for a brief period of time for him, when we were both at our former organizations. While we were there the organization implemented a procedure whereby the entire organization, top to bottom was evaluated by subordinates, and he routinely was one of the top five offices out of seventy five. This while always leading the organization with one of the highest operational audit scores on an annual basis. He treated his associates with respect and dignity, yet demanded that we performed to the best of our ability. In his final assignment, he was responsible for the administration of millions of dollars of bonus plans. I attended his farewell luncheon and every attendee told him he would be welcomed back should he choose.

He’s no ones butt buddy, is still a fiscal conservative, and according to my friends who live in Hanover has helped guide the Township through real troubled times and successfully implemented numerous policies that in the time he’s been manager saved the Township hundred of thousands of dollars.

To the moron who bitched about moving the trash bill out of the tax base, he probably saved the Township thousands in a lawsuit. In case you didn’t notice there are two industrial/business parks on each side of the Township. For years, they paid taxes and NEVER got their trash picked up. The businesses were supplementing every tax payer in Hanover.

Jay was and is my friend, my peer, my boss and in many ways my mentor. It’s easy to take pot shots at someone you don’t know and hide behind anonymous post. I can’t wait till O’Hare does a piece on Jay. Hopefully you’ll get to know the man I respect and admire for what he’s taught me about work, family and life.

Anonymous said...

Wow, an anonymous endorsement of an overpaid Twp. manager. That carries as much credibility as an anonymous condemnation.

Listen you married the guy, the rest of us just pay the bills.

Anonymous said...

If defined benefit pensions cannot be converted, end them today for future employees. No more back ending, no more double dipping. This is a glorified Ponzi scheme. Mark these words: Within 15 years, 20 states will be bankrupted by these legacy promises. Not to mention municipalities, school districts, and other agencies.

Give workers a 401-k, a 457, or any version of a defined contribution plan. Put the onus on the employee.

End this madness now!

VOR

Anonymous said...

To ANON 1:05am, I mean Jay, this is "the moron who bitched about moving the trash bill out of the tax base," and all the move did was cost the taxpayers money and give him (or should I say you) and his (your) good personal friends who are supervisors cover for the massive tax increase that was coming as a result of overspending tax revenues for years. And it is not like you came in from the outside to correct this "problem," Jay, but you were a part of that problem when you were President of the Board of Supervisors. If you cut my taxes and it costs me a lot more money - like 40% more - I am not better off. And the possible lawsuit justification you give has no basis in reality.

On another note, grasshopper, if you are going to claim to be a close personal friend and, he mentored me, and all that bs, at least make up a name, don't do it as an ANON. Tyler Durden is a nice name. So is Buckaroo Banzi. Or maybe just go will Cliff Assness, PhD.

Anonymous said...

To Bernie @ 12:36 PM,

My agenda is good government and, in this case, an attempt to get you to see through your personal bias. I do believe that $100k is an insane amount to pay these township managers.

I also believe that we need to get rid of these little fiefdoms and consolidate away many of the little boros and townships. This is diametrically opposed to Finnigan's very public stance that the status quo was a better situation. Of course, it is better for him and his $102K + benes. The fact is, he makes an argument that is in his own financial best interest.

I respond as an ANON for many of the reasons stated by ANON 4:21pm, as I have seen this happen in HT. My argument has no less validity with or without a name attached. If that were the case, the Federalist Papers and Anti-Federalist Papers penned as ANONs by our Founding Fathers should be considered invalid, not studied in constitutional law classes.

Here is something that I notice: you do not address the issues I bring up - taxes, Finnigan's township car, Turkey Barns, etc. - and you instead concern yourself with who I am. This, to me and I am sure some or maybe many of your readers, leaves you with a credibility gap. Especially because you are friends with Finnigan and because you do some reporting for the Bethlehem weekly newspaper.

On a bright note, you do appear to be growing somewhat as you see what I said as the criticism it is as opposed to a personal attack.

ANON 9:33 am

Bernie O'Hare said...

I don't mention the things you write about because I don't know they are true. Finnigan was Ange's campaign manager and I do like the guy, but I'm lucky if I see him once a year except at those meetings. I do know this. There are three sides to every story. Your side. His side. The truth. I am interested in the truth. I have no idea what you're interested in bc you are anonymous. When you make these criticisms, and they ae not personal attacks so they are fair, I still have to wonder about your agenda when I don't know who you are. It might be good government. It might be a personal vendetta. I have one friend who hates Jay and they got into all kinds of arguments.

On other point. Jay is no longer really involved in politics.

I will look into your allegations. If your point is that $100k is too much, I'm going to disagree. I have consistently taken the position that people in government deserve better compensation so that we attract and retain quality. But I will ask Finnigan for an interview.

Anonymous said...

Money equals quality! Not really look at the clowns in Northampton County. Stoffa is paying each of his clown posse $90K and these guys couldn't manage their way out of a paper bag. Hell that Human Services manger is just a mouthpiece for Stoffa and Angle. After five years the guy sits at meetings without a clue. So no, money does not equate to quality, those jobs are and will always be based on patronage and deals.

Philly Steak

Anonymous said...

No Anon, I didn't marry the guy but was a peer and subordinate, who has the utmost respect for him.

Again, your facts are totally wrong because of your personal vendetta as evidenced by your multiple postings.

Mr. O'hare has you pegged!

Anonymous said...

Hey anon which anon are you yelling at? This anon never damned anyone but questioned the need for high priced Twp. officials, The other anon said the bad stuff.

So listen here anon, don't confuse this anon with any other anon.

Got that!

Anonymous said...

Bernie,

Tell Mr. Finnigan (correct spelling) that it's not worth sitting down with you because he has nothing to gain and nothing to lose. No matter what answers he provides to your interview questions, the naysayers posting to your blog will still beat him up.

He's better off devoting his time to running the municipality.

Maybe someone needs to ask about the Mayor in the City of Bethlehem who now needs to borrow money to pay "past due" obligations. Where is the money, raised through past taxes and two years of casino revenue go? Borrowing over 20 years to pay back "past due" obligations is downright asinine!

HB

Bernie O'Hare said...

HB,

Finnigan certainly has no obligation to sit down with me, and the same people who hate him will still hate him, but the interview s ntended for people with open minds and who want to know what is going on in their township.

Anonymous said...

And the people who kiss his ass will still kiss his ass no matter what he says, right??

Anonymous said...

"And the people who kiss his ass will still kiss his ass no matter what he says, right??"

This is why if I was Finnigan I wouldn't sit down with you. The people in the Township that want to know what's going on ask and don't blog.

I guess if you respect someone it's ass kissing. I guess no one respects the individual who posted the ass kisser comment. I wonder why.

Bernie O'Hare said...

I posted the original blog here on Wednesday. The above two comments were posted on Sunday. It is very obvious that the Anon, and I suspect it is just one Anon, has a very personal agenda here.

Anonymous said...

Bernie this is ANON 9:33am,

I just want to be clear on a couple of points:

1. I am NOT the ANON who posted the derogatory comments and name calling. I'll assume you get that from the tone of my posts.

2. Good government is what I am about, but I think that the conversation has been stilted by all sides. To me it is simple: we need to ask what each level of government should be doing, and then ask how this should be properly funded. To me, at the township should be taking care of my roads, providing adequate (not over-providing) police protection,take care of common lands/parks, and have some reasonable level of zoning regulation. Providing a pool, workout facilities, etc. is beyond the scope of what they should be doing.

3. Township employees should not receive perks. In this case, I would include the township provided vehicle Finnigan received the day he started working for the township.

4. I can agree that the city mayors and county executives are underpaid for their services. $120k total compensation on a $300MM budget (Lehigh County) is 4/100 of 1% of the budget. $120k total compensation on a $7MM budget (Hanover Township) is approx. 2% of the budget. Looked at from this perspective, either Cunningham has been Waaaayyyy underpaid, or Finnigan is grossly overpaid. Or both.

And, if the size and scope of what the townships do was reduced to the proper size, there would be little use for a full time manager.

4. You seem to be obsessed with what "my agenda" may be. Get a copy of the budgets and see what you find. If what I say is true - which it is - is all that should matter. AND FYI, I have no personal vendetta. If I did there are many other damaging things that could be brought up about Finnigan.

Bernie O'Hare said...

I'm sorry, but it's my nature to be suspicious of underlying agendas, but I agree with many of the points you raise. Finnigan also seems to have attracted some people who hate him, perhaps more so than other Township managers.

Anonymous said...

Maybe it's because like you Bernie he is an Angle stooge. If he can support someone like Angle there is sufficient cause to doubt his judgement as a public official.