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Nazareth, Pa., United States

Thursday, June 19, 2014

Independent Auditor: The Cupboard is Bare

This is no surprise to those of us who refuse to drink the Lamont McClure and Steve Barron kool-aid. But it shocked the hell out of Ken Kraft last night. Nancy Gunza, a CPA with CliftonLarsonAllen, the County's independent auditors, told Council's Finance Committee that the cupboard is bare. She explained that the unrestricted reserve at the end of last year was just $11.1 million. Since the County spends about $9-10 million per month, we're in very bad shape.

"That's a pretty low amount," explained Gunza, who added that the Government Finance Officers Association recommends a six month reserve.

Remember when Lamont McClure scoffed at the $60 million fund balance in 2011, even though the unrestricted amount was really much lower, down around $15 million? He called it a "slush fund."

Ron Angle, as a member of Council, fought hard to keep two months of cash on hand for emergencies, a $25 million stabilization fund. But with Angle out of office, the rats have eaten away at the wheels of cheese.

This can't be! roared Ken Kraft after Gunza's announcement. He tried to claim that the $11 million figure Gunza quoted is in addition to the $25 million stabilization fund the county keeps for a rainy day.

"You had $25 million," explained the County's Fiscal Director, Doran Hamann. "I think 'had' is the operative word." he added that last year, "We spent $14 million in excess of our revenues," which brought the stabilization fund down to an unhealthy $11.1 million.

McClure, who was absent yesterday, just two weeks ago claimed that there is no deficit at all in Northampton County. It appears that the financial people think otherwise.

People could look at the fund balance now, which is hovering at about $88 million, and claim there's no reason for concern. But it is at that amount because most of the taxes haves been paid, but the expenses have not. Most of the revenue the County will realize this year is in the till, but it will draw down as the year progresses and bills and salaries are paid.

What happens if the County needs $14 million to balance the books this year? The money just isn't there. That's very bad news at a time when seven of the County's 11 unions are operating without a contract.

Ken Kraft told The Express Times after the meeting that the County has more money than it is letting on. This is an independent audit, Ken. It is not a Lamont McClure or Steve Barron AFSCME special.

Earlier in the meeting, Barron had raised concerns about nonunion custodial workers at the centralized human services building. Maybe he should be a little more focused on finding the money he insisted was available when John Stoffa had suggested a tax hike.

Thanks to Barron and McClure, they cooked the books and used money in reserve to balance the budget. That's how you end up with mega tax increases like the ones imposed by Glenn Reibman, after he had played chef.

When Executive John Brown was inaugurated, he vowed he would fight to avoid a tax hike this year. I think he has no choice, unless he intends to lay off half the workforce. You can thank Barron and McClure.


Anonymous said...

Not one Democrat will vote for a tax increase. It isn't going to happen. The tea party promised they would fix the spending ways of the Sto9ffa Admisntration so now they should fix it.

Other than Ms. Ferraro, it is impossible to imagine that any of the Republicans who ran as fiscal conservatives will vote for a tax increase.

That would make them hypocrotes and nothing but slick talking

Anonymous said...

um...isn't this stoffa's issue? in one instance, you blame reibman (executive) for cooking the books, and then mcclure (council).

if the cupboard is bare, the blame really belongs to the guy who was exec for the last 8 years, no?

Anonymous said...

Peg Ferraro fought to ignore the Gracedale administrator and overspend on non-emergency ambulance services by 38% (a public contribution to her re-election campaign). Hey, it's only your money; not hers. Babies shitting their diapers are more responsible than Peg. She wins the Wayne Grube Award (who called cost overruns for council chambers, "nice") for her consistent lack of stewardship of taxpayer dollars.

Anonymous said...

this is stoffas doing!

Anonymous said...

We the People

Anonymous said...

norco - making lehigh look good every day

Anonymous said...

We all knew this was coming. No surprise at all. Kraft knew it too and McClure. The real question is this. What are we going to do about it? Anybody want to be the adult in the room? There is no longer an option to a tax hike. Just do it and get on with the business of county government and try to be more efficient about things..please.

Anonymous said...

It's even worse than you think. Gracedale is budgeted to lose $5 million but was on pace to lose over $9 million after the first quarter.

John Brown will need to swing a big ax if there is no bi-partisan agreement to raise taxes.

Anonymous said...

JB in a tough spot but he knew that already last fall before he won that the county was taking on water. Spread the pain around is the best solution. Blame does no good at this point. We all have to do our part to save the ship.

Anonymous said...

If the new R council people dig in their heels on a no tax hike position..they are never going to get reelected..period. You can't continue to attempt to balance the budget on the backs of the workforce when some unions have already given up all they possibly can. You can only delay worker contracts for so long. When treated fairly..we get more than our monies worth from our people in service to those who need it the most.

Anonymous said...

JB was and still is clueless as to how county finances operate!

Bernie O'Hare said...

"if the cupboard is bare, the blame really belongs to the guy who was exec for the last 8 years, no?"

Not when that man twice tried to raise taxes and was rebuffed.

Anonymous said...

If ken Kraft and other members of County Council do not like the outside auditors "audit" he should recommend they fire the auditors. The auditors are an "independent" organization hired by County council under the mandates of "The Home Rule Charter" Section 708 "Independent Post Audit". They will not fudge the numbers or cook the books. They report to Council and Council pays them.....not the administration.
Doesn't anyone ever read the Charter or the Administrative Code? You can not and will not threaten these outside auditors and they will not jeopardize their reputation by altering their recommendations and findings for political reasons. What the outside auditor provides is financial accountability. It is not always what you hope to hear but their job is provide information to the County Counciland guarantee that the County Council is well informed of the County's financial status. This is not an administration audit. It is an audit to keep them honest.

Bernie O'Hare said...

:Not one Democrat will vote for a tax increase. It isn't going to happen. "

So you will fuck the county and force layoffs to make apolitical point? You're as bad as the people in Washington. Tell us who you are so we know not to vote for you.

Anonymous said...

Too bad Stoffa waited until 2012 to take the advice given in 2009 to hire the firm to collect accts receivable from gracedale;
Surrendered without a fight to Bank of America and paid $27 million to end the swaption;

And now we have Brown the clown who obviously thinks his team is so inept that he tried to waste another $750,000.00 for an efficiency expert and when that didnt work hire a nonprofessional professional PR firm for a couple 100 thousand more.

Even after major concesdions blame the uniins for the problem

Guiness record to Brown for most lawsuits in the shortest amount of time wasting taxpayer money.

Anonymous said...

JB said he would be ready to roll from day 1. That obviously did not happen. Come on John..get up to speed and lead! This county needs you to point the way and tell us how to get there. Stop pussyfooting around and man up for goodness sake. Tell us the truth and do the right thing.

Bernie O'Hare said...

"oo bad Stoffa waited until 2012 to take the advice given in 2009 to hire the firm to collect accts receivable from gracedale;
Surrendered without a fight to Bank of America and paid $27 million to end the swaption;"

Fight BOA, lose, and pay lots more? That sounds wonderful.

Anonymous said...

Ken Kraft needs to get his head out of His ass since thats where it has been parked since He has been elected and start working for the county no His union cronies.....


Anonymous said...

John Brown is an AssClown! He hoodwinked the voters. Awful character, never tells the truth. The public is seeing his corruption now. Can't wait to see the cuffs on him.

Anonymous said...

Why a tax hike and not spending cuts? Council just agreed to fund MUNICIPAL parks projects and a golf course.

Why hike taxes to continue blowing money like that?

Anonymous said...

The Democrats got caught up in the Stoffa nonsense about the unneeded multi-million dollar lease that is not paid for, the huge union contracts and the no tax increase.
The Republicans ran on promising to stop the cash hemorrhaging. No new taxes and to cut back on all the bad fiscal decisions of the past eight years.

How can fiscal conservative Republicans go back on their word in their first year in office and raise taxes.

This is like Cheney blaming Obama for the nightmare in Iraq. Cuckoo!!!

Bernie O'Hare said...

You demonstrate ignorance with this statement. First, ht centalized human services building has thuis far been budget neutral and may actually save the county $ in the long run. Second, it makes sense to start with a lease. A private owner is not bound by the cumbersome and expensive bidding process that hampers government, driving up cost. It makes fiscal senese to let someone else buy and buiold, lease, and then exercise a buy out. Third, I do not believe a single R running for Council vowed that there would never be a tax hike. They did vow to be responsible fiscal stewars. The only person who vowed not to raise taxes at all over the next four yearsa is Democrat Lamont McClure. He will attempt to convince otrher Dems to vote against any proposed tax hike.

McClure wants to curt services, starting with programs that have no impact on his voting base. He'll want the CEC program at the jail discontinued. He will eliminate nonunion jobs left and right. He will cut services to the poor, mentally disabled and the young.

But he'll vote to buy a golf course.

Anonymous said...

Ron Angle and Bernie were right! Gracedale should have been sold


Anonymous said...

If Brown is smart he will oust Premire so that the county can actually control some (but not all ) of the bleeding at gracedale.

Then, if he is smarter, he will privatize staff in laundry, dietary and housekeeping, as well as RN Management. Contracted services can do this for alot less money.

Anonymous said...

Find the waste and abuse in MH/ MR and cut it, because there is nonsensical spending there.

Anonymous said...

After eight years of non-stop spending and lavish union contracts this will happen. Stoffa spent the Reibman surplus on high salaries for his Administrators, more than any other county executive. He also spent on his new buildings without raising taxes.

So now we have a problem. I did hear and read that Mr. Kraft and Mr. McClure stated that the county is fine and this is a game the fiscal folks are playing to get a tax increase to ensure big raises.

I wonder if Mr. Brown has any comments. I didn't hear or read any form him.

The Public Ear

Anonymous said...

How about something novel; stop the partisan "blame game" (both sides) and face reality. The I'm right - you're wrong mentality gets all of NC nothing. The cold hard issues must be addressed.

GRACEDALE is a cesspool of waste and should have been sold. There is not one person on County Council that is qualified to make judgments about the operation of that facility. The Federal government operates hundreds of health care facilities and can't get it right. How can NC expect to make ONE even a break-even proposition?

OPEN SPACE / GOLF COURSES might be great investments when the economy is expanding and County assessments are increasing from significant growth and local investment. NOT when we are facing the continued downward trends in employment and wage (other than the public sector!) stagnation.

How 'bout a Council that says "We as a group (HA!) are truly going to prioritize. Human Services, primary infrastructure (like bridges and County property) are going to be maintained. Eliminate waste where it exists. Improve on the things that ARE being done well.

BOTTOM LINE: We have all complained about DC and HB with the lifetime politicians polluting everything they touch. It does not have to be that way in the County. PUT THE POLITICS ASIDE (HA AGAIN!) AND WORK FOR THE ULTIMATE BENEFIT OF OUR COMMUNITIES. Take a chance - try something different. Too many people depend on you to deliver.


Anonymous said...

9:59, I was listening and then you tipped your hand, calling Gracedale a cesspool of waste. The same bombastic and dishonest appraisals used by "past" county officials.

You talk about long term officials negatively, so you are obviously tooting the horn of your new Republican majority control;.

However, it would appear you are now backtracking and justifying a "tax increased" AS a bi-partisan solution. The county Democrats do not believe we need any more new taxes just as the Republicans and the tea party said during the last county election cycle.

Let's see who is lying and who is not.

Anonymous said...

Just read about Barron is now in another job. Instead of doing his Controller gig, he is checking to see if the Custodians at the new Human Services building have had their criminal background checks. When is this guy going to wise up and do just his job?

Anonymous said...

Lot of folks here with short memories. First off ,if Gracedale would have been, and should have been sold for 35 m the county would be sitting there with 65 million at least in cash reserves. And Gracedale would still be there pretty much as we know it. People like Mc Clure and Barron always claimed for years that stoffa was hiding money somewhere. Two attempts were made to raise taxes and failed. Gracedale will never make money again and competes with private enterprise. Brown has no plan and never had one. Taxes were not increased in 8 years. Too bad school districts can`t manage their money as well.

Anonymous said...

Makes sense. So if John Brown is half the executive John Stoffa was he should give us at least four years if no tax increase budgets. Since Stoffa lived off the Reibman surplus for eight, Brown and the Republican majority can better manage what's left for four years.

Once they fix the planned neglect at the nursing home that was done to make it look terrible.

I wish Mr. Brown luck in cleaning up the mess and doing at least half as good a job as John Stoffa.

Nuff said.

Anonymous said...

That blowhard opportunist Barron seemed clueless about the custodial contract. At the HS building, yet he bragged about how his staff attended every bid opening. Check with procurement Bernie. I guarantee that one of his staff was at that bid opening and probably even received copies of the bids. The company that won the contract fair and square is now being demonized by Little Stevie Bland overall it is saving the county moneyunder in his attempt to kiss up to the unions. The union did not object to the contract and no employees lost their jobs. It has resulted in not just the HS building having better cleaning services, but all of the county buildings seeing improvements. And overall it is saving the county money for better service.

Anonymous said...

Please excuse the typos, of course I meant Little Stevie Blunder.

Anonymous said...

Lamont McClure, Ken Kraft and Steve Barron have stated Stoffa regularly cooked the books. they have stated that there is no need for a tax increase. They have studied the issue and know the truth.

The conservative Republicans talk a big conservative game but lest see what they do with the budget. The Democrats have not raised taxes, what will a Republican controlled county council do?

They are already backtracking. This is the kind of political bullshit you get form these so-called "tea party" endorsed candidates.

All talk no substance.

Bernie O'Hare said...

I'll have plenty to say about this tomorrow. Ian no defender of Rs , but McClure and Barron are the ones chiefly responsible for this mess.