News from Patrick Flynn

Dollars and sense

Mark Twain, born Samuel Clemens, is supposed to have written:

“Reader, suppose you were an idiot.  And suppose you were a member of Congress.  But I repeat myself.”

I don’t happen to be a member of Congress and, while the jury may be out on the former point, I’m somewhat concerned about how Anchorage’s 2010 budget writing process is developing.

First off, it’s clear that the world’s economic recession is affecting Anchorage.  That’s no surprise, and residents should expect a slimmed-down municipal budget next year.  Given those facts there are a couple matters to consider:

  1. How far back should we cut?  And,
  2. What are our top priorities?

On Friday, August 28, the administration unveiled a preliminary look at the circumstances affecting the 2010 budget.  It wasn’t a pretty picture, with a variety of scenarios dictating differing levels of reductions in municipal spending.  But, less than a week later, a KTUU story indicated that municipal budget officials had drastically underestimated revenues associated with ambulance services provided by the Anchorage Fire Department.  Here’s what an IAFF officer had to say about the matter:

“Tonight KTUU ran a  story on EMS billing.  Over 1 million dollars of the mayor’s 9 million dollar shortfall for [20]09 is  due a change in accounting practice.  The city now counts any EMS bill past 120 days as a zero.  We have an 88% collection rate overall.   Unless something were to change drastically we will still collect that million plus that the mayor counted as a zero and called a shortfall.   There is a proven past pattern of collections.  Why adopt a new one?”

And it doesn’t stop there.  IAFF officials have been aggressive in pointing out discrepancies between statements from the administration and their view of MOA finances, and made the following inquiry to the Office of Management & Budget regarding projected labor costs:

“I was looking at the handout provided to the assembly.  On the second page it lists the salary and benefit increases for 2010.  The fire department increase is listed at $3,481,612.  At the bottom it notes that this does not include the PIP.  If we have 400 employees (which I think is high at this point) it figures out to be about $9000 per employee.   I know we are scheduled to get a CPI raise (looking like 2.9%) and I know a minority of our members (Captains and Senior Captains) will also get rank separation.  A 2.9% increase on $50 million is roughly $1.4 million.  The rank separation is a couple hundred thousand.  I have been told that for the second year in a row medical costs will be flat.  Can I get a breakdown of the $3,481,612 number you provided the assembly with?  I want to make sure that when I speak I have the correct numbers.”

Here’s how OMB responded:

I will have the AFD budget analyst produce a report that identifies FY 10 costs, so stay tuned.”

And the AFD analyst?  Here’s what he had to say:

This estimate was prepared jointly by the Office of Internal Audit and OMB.  The department, to the best of my knowledge, played no role in the development or presentation of the figures.”

If the information received by Assembly members on one department’s expenses are that convoluted it reasonably raises the concern of how we’ll ever answer the first question I posed above and, if we can’t answer that one, how can we address the second?  In my day job I’m only responsible for revenue budgets in the $90 million range and expense budgets in the $20 million dollar range, so perhaps I lack the sophistication to work on a municipal budget in the $400 million neighborhood.  Then again, maybe I am capable.  Either way, it’ll be hard to know unless and until I have confidence in the quality of the information imparted by the administration.



This contribution was made on Sunday, 06. September 2009 at 12:45 and was published under the category Fiscal matters. You can follow comments on this entry through the RSS-Feed.

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  1. Pat
    Thanks for the update. Is there any place in this city for those who like the services the city delivers?. Those of us who like the libraries, like the roads fixed and plowed, appreciate a good police department and a good Fire Department? Will we just be shouted down by the tax protesters who claim we are overtaxed in Alaska? Is it even in the discussion to continue city services?

    Comment: John Doe – 06. September 2009 @ 7:08 pm

  2. Mr. Flynn,

    I appreciate your following this, and also making it known. Obviously we need ONE set of books that we can all agree on. We’ll still have disagreements in that case, but we could at least have trust.
    I’m one more citizen that loves his own personal money, but voted yes on all the bonds. We have a good city, and it could be a great city. But it won’t be free.

    Thanks again, and please keep the information coming.

    Comment: Andy Holleman – 06. September 2009 @ 9:56 pm

  3. Patrick,

    There is no confidence in the numbers. Please keep watching it!


    Comment: Jillanne – 07. September 2009 @ 1:22 am

  4. More of the same from Dan Sullivan. First he promises no cuts to public safety during the campaign and then admits on Channel 2 that it was “campaign rhetoric”. This is crazy – why aren’t the people of Anchorage holding him accountable for his campaign lies? There are other revenue sources available but all Dan wants to do is fire public employees. And the people of Anchorage will suffer for it.

    Comment: Arnie Johnson – 07. September 2009 @ 1:56 pm

  5. I appreciate you taking the time to share this info. Although I’m a skeptic of government spending, it makes me feel better knowing that there are still those that are willing to question what’s actually being done. I love Anchorage and everything it offers, my family has over 35 years of history here. I would like to continue to live here after my career and encourage my children to do the same. If we continue to take away from our town and continue go backwards, why would anyone want to stay. Kids will continue to lean towards outside schools, retired citizens will look elsewhere to spend their better years, and the quality of government employees will rapidly decrease. Why do I want to work for the city in traffic engineering with my Masters degree when I get paid $12 an hour, why would I want to be the CFO with an accounting degree and make $14 an hour, or why would I want to be mayor if I wasn’t able to run the city at it’s highest ability. I enjoyed a recent campaigns message of being able to run the city like a CEO, but I have yet to meet a CEO that wants his company run by a mediocre workforce. I want my city to be a sound working environment and not a training ground for the private sector. Success is 20, 25, and 30 year employees. Please help continue to keep Anchorage growing. I’m willing to pay for libraries, pools, parks, public safety. It’s my city too, and I don’t want to go backwards.

    Comment: Moving forward...not back – 07. September 2009 @ 2:15 pm

  6. This is my first time writing to your Blog but I have been following it for a few weeks now. It is certainly refreshing seeing a public figure (yourself) approaching issues from a non-biased standpoint and in open view of the Public. For that I thank you.
    I have enjoyed my 40+ years in this city and have watched it grow and become something we can be proud of.

    The change in Management style that we are enduring has the potential to cripple our City. Is there a way to change the argument from “Lower my Taxes!” to “Keep our City Safe!”?
    Mayor Sullivan –“Where is my Quality of Life?”
    We need Public Safety (Police and Fire) to remain at their current levels, if not increased. Statistics show that during economic down turns Crime goes up! Why aren’t we posturing ourselves to “Keep our City Safe”? Instead we are Laying off Public Safety Employees and posturing to lower the Municipal Budget with scare tactics and questionable accounting?
    Plowed roads are not a luxury but a necessity for a City of this size.
    Public Transportation is now a more important aspect for the lower class than ever before. If our citizens can’t get to work how can they pay taxes?

    Is there a way to get the current Administration (Mayor S.) to look at new incomes instead of just cutting personnel? We have thousands of people coming in from the Mat Su Valley every day, when will we get them to share in our expenses?

    I was here in the late 1980’s when people were walking away from homes because they couldn’t pay their bills. All their furniture was left behind and food still in the refrigerators. Condominiums in South Anchorage could be purchased for less than $15,000. We are nowhere near that level of emergency yet the Mayor is scaring the public into thinking we are Breaking the Bank! We received 16 Million dollars from the State in Revenue Sharing, couldn’t that have been used to lower our deficit instead a Property Tax Relief?

    I realize that you are just one person on a 9-person Assembly. Thank you for doing what you can to ‘Keep our City Safe!’

    One last question; Mayor Sullivan –“Where is my Quality of Life?”

    Comment: Jason – 07. September 2009 @ 6:54 pm

  7. I have lived in Anchorage for 30 years. The reason I choose to live here and not out of town is because I want to have libraries, safe roads, parks, and a public safety system that I can rely on to protect my family. I am happy to pay for these things, but the reality is I actually get paid to live here. My wife and I actually made money last year after we paid our property taxes and then collected the permanent fund check. We do not pay too much in taxes in Anchorage, we just need to fix the manner in which we collect taxes. To put a majority of the burden on the property owners is not right, and once that is fixed we need to set the amount of taxes collected to insure that we can continue to provide superior public safety, plowed roads, and have a good quality of life in Anchorage.
    I was surprised to learn by listening to Dan Fagan’s radio show the other day that the union contracts have not added any increases to the city budget this year from 2008. The Mayor continues to sight this as a reason, but I would like someone to get the facts together on this for us in the public. I assume the shortfall is partly to blame on the state of the economy and the effects that has carried over to the city through our investment accounts, but does this really account for all of it? I assume there is something more there.
    Thanks for being someone who continues to provide solid information back to us in the public. I like being educated on the facts and not hearing political answers for everything.
    Remember, the job of the city government is to provide for and manage a safe and prosperous city. We should not be making sacrifices that could affect businesses and people’s lives. If the road system is broke, fix it. If there aren’t enough cops to keep the thugs under control, then hire some more. Let’s not nickle and dime the city services, let’s fix the tax allocation system and continue to have a place we can all call home.
    Thanks for your service to our city.

    Comment: 30 year resident – 07. September 2009 @ 8:11 pm

  8. Mayor Sullivan has subscribed to the theory that a quality of life simply means more money in your pocket. His actions in his first two months have shown that things like parks and rec, the permitting department, and the fire department are merely fluff that provide no value to living in Anchorage. Just as he promised to fully fund public safety department while stumping for office, all other promises, and numbers produced by his office should be considered “rhetoric,” and should be carefully examined before we believe anything he says.

    Mayor Sullivan’s staff has shown that they are willing to skew the numbers so that they can manufacture an economic crisis. By putting a worst case scenario forward by doing things like ignoring historical collection rates for the fire department, Mr. Sullivan can then ride forth on his white horse, slashing every city department’s budget, laying off employees, and diminishing the services that we have grown accustomed to. When he’s done, will we have pools and libraries? Will there be nice parks and trails for our kids to play in? What will downtown look like this winter when we’ve gotten rid of our half of our plow truck drivers?

    Mr. Sullivan has shown that he is incapable of looking for alternative solutions. When faced with tough decisions, Mr. Sullivan has a fight or flight mentality, except his is to cut wages, and cut workers. In his mind, the ultimate city workforce would consist of himself and his inner circle.

    Comment: back2thefuture – 08. September 2009 @ 10:29 am

  9. Mr. Flynn,

    Isn’t it interested that a little over a week prior to the layoffs, I received this email from Dan Sullivan in response to an email I wrote to him:

    “Thank you for writing – there has been no degradation of fire services the city has actually added three fire stations and dozens of new personnel in the last few years. The occasional limitation of overtime has not compromised our public safety levels, despite the rhetoric. Who said we are cutting public safety personnel? We are just now meeting with department heads to discuss how to solve our 9 million dollar deficit. Thank you for writing. Dan Sullivan”

    WOW. Do you have an opinion of this?

    Comment: Concerned Citizen – 08. September 2009 @ 3:07 pm

  10. […] addition to the comments generated by my previous post I received several phone calls and e-mails, a few of which gently suggested that some additional […]

    Pingback: Patrick Flynn's Blog » Steady fiscal ground | An Assembly member's take on Anchorage issues – 09. September 2009 @ 4:24 pm

  11. In ’89 I moved to Anchorage, from Colorado, to accept a paramedic position. I found pure, unadulterated corruption within the municipality, and set out to change the world, including the issue of EMS billing.

    Four municipal employees handled the EMS billing, and their performance was abysmal, not to mention criminal. Their collection rate averaged 38%-42%, first time billings were sent out 6 months after the transport, and their practices constituted a high degree of Medicare fraud.

    I spent countless hours of my own time researching the issues by speaking with other departments, billing agencies, etc..My suggestions to the municipality were not well received, so I wrote a proposal to privatize the AFD’s EMS transport services. For two years I was stalled, undermined, and lied to by the MOA, but the Assembly took great interest in what I had to say.

    The MOA responded with an internal audit that was tasked with discrediting me. Peter Raiskums, verbally, said I was 100% correct but that Mayor Mystrom directed him to corrupt his audit, and so he did (97-16, dated 10-3-97). With that, I lost all of the support that I had, and AFD administration told me that I had no choice but to drop the entire matter. I didn’t, and was viciously attacked and overtly threatened by the Mystrom Administration. When I began to regain a foothold of interest, George Vakalis told the Assembly that my proposal was without merit and, again, I lost all support that I had.

    Ultimately, I took my box of documents to an ADN editorialist and told her who to call (Raiskums, Mystrom, and the fire chief) and the questions to ask. Within days, Mystrom announced the MOA would privatize its EMS billing, and they did so exactly as I proposed.

    A year later, during the Wuerch administration, Denis LeBlanc reported that collections were at 85% (a two million dollar increase in revenues) and that the AFD EMS division had become 96% self-supporting.

    As it was explained to me, Mystrom opposed my proposal because it threatened his access to the revenue, that went straight into the general fund. In other words, Mystrom would rather collect and have access to 40 cents on the dollar than, on behalf of the general public, collect the whole dollar. The billing issue is just one small piece of my accomplishments which, to date, have benefitted the public approximately $100M dollars, and the benefits are eternal.

    The retaliation I received for accomplishing this and many other things was brutal and incessant. One of the many lessons learned was that corrupt officials (i.e. Raiskums) are protected and rewarded but the true public servant (me) is actively destroyed.. I was “set up” many times and ultimately fired in ’05, by a mayor who feared the threat I presented to his political aspirations.

    My point here is that the Mystrom and Begich administrations were enormously corrupt, and Sullivan’s has every appearance of being the same. The numbers from the Hill Building are manipulated to suit their purposes, and the laws and their oaths of office are meaningless.

    Ask Raiskums about it. If he doesn’t tell you the truth, I will prove it , along with a myriad of other criminal allegations I will be bringing forward, very soon.

    Kurt Sorensen
    EMS Battalion Chief, “retired”/fired 2-05

    Comment: Kurt Sorensen – 10. September 2009 @ 10:07 pm

  12. I agree that there is much to be discussed and resolved. I do feel that the city is being shortchanged and the public, the many of you whom post to this blog as well as the rest of Anchorage and you friends and family need to attend the next ASSEMBLY PUBLIC HEARING on Tuesday SEPTEMBER 29th! Come and express to your assembly members your take on these budget cuts and why public service is important to your quality of life. Remember that we do get paid to live here, that we do not have a sales tax and that we are rated in the top ten taxable cities to live in – and for what, so we can save a buck and the city services can get pillaged by our own Mayor?

    Comment: Concerned Citizen – 23. September 2009 @ 10:28 am

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