By: Diane Benjamin
Local CPA Carl Woodward injects himself occasionally in local government when he sees something everyone is missing. You should know he supported and funded Tari Renner 4 years ago, he no longer supports him. (I tried to talk sense to him, he didn’t listen)
Within the past week or two he has sent 2 emails to local government you need to see. Carl makes a strong case for dumping Renner and his Council cronies as well as the bunch running Normal! I don’t totally agree with the first email because government shouldn’t have handing out subsidies to ANY business that already has competition – government is killing the free-market system by picking winners and losers.
I have some comments about the officials from both B-N. I have been involved in thousands of negotiations over the years and have had to analyze financial matters thousands of times.
The B-N officials are a combination of the following adjectives: ignorant, incompetent, arrogant, stupid, ego, lack successful negotiating skills, etc.
They have cost the citizens tens of millions of dollars in taxes by allowing businesses to work each town against the other to the detriment of the taxpayers.
They should have worked out a deal between them (B-N) to eliminate businesses being able to “work” them so much. This is due to ignorance of the real world, ego, incompetence, lack of intelligence, lazy, and not being able to get along. It looks like it is getting worse.
Shame on these two government bodies for allowing this to happen over the last 10-15 years.
“Ignorant” is probably the best single word to answer all of the above.
Woodward & Associates, Inc.
The failure of the Bloomington and Normal City Councils to meet their obligations from a fiscally responsible perspective for pension payments for police, fire fighters and IMRF(other employees) funds as well as the health benefits due these retirees is akin to parents using a credit card to pay for the parent’s current necessities and expecting their children to pay the bill.
The total unpaid amounts for Bloomington of $ 164 million and Normal of $ 109 million, were incurred in the last few years. To be fiscally responsible, this obligation should have been paid and met annually . Bloomington and Normal officials have intentionally allowed this financial situation to develop and deteriorate for at least the last 7 years. By failing to pay for pension-health obligations now or in a timely manner, the city councils are shifting the obligation to future taxpayers well past the time the obligation was incurred.
If these huge amounts were to be paid proportionately over the next 23 years, it would amount to over $7 million a year for Bloomington and over $4.7 million for Normal. Several questions emerge from this dismal financial picture:
Has the city and town allocated these payments in their budgets? Where are they going to get the cash to make these payments? How reasonable and practical is their proposal to pay less now and more later, rather than make proportionate payments or pay more now and less later?
The responsibility for this accumulated debt falls on past and present city councils, both city managers, and current and past mayors. All had a chance to avoid and minimize this and didn’t. Any plan by current officials to catch up on the credit card balance by 2040 obligates future taxpayers to pay the bills of a previous generation—a wholly unacceptable and shortsighted plan.
The city and town offer several defenses for their inaction, among them an argument that the state is responsible for the situation. This is not a valid excuse, given the city and town’s ability to act responsibly and pay for these compensation benefits as incurred.
The argument that Bloomington and Normal both have cash surpluses is not valid. They only have cash by not paying these obligations timely. With the outstanding pension-related debt, the cash merely represents money they are spending on other things.
Finally, the position of town and city officials that changes in accounting rules have forced them to make some effort to address the shortfall is also a weak defense. The accounting rules have changed to be more fiscally responsible and it is no surprise for they have known for several years. If they had made the timely fiscally responsible payments each year the accounting rule changes would not have materially mattered.
The graph below reflects the underfunding for Bloomington and Normal’ s pension (police, firemen, IMRF) and health care deficit from their annual fiscal audit reports .
Please forward to anyone you know in McLean County.
Woodward & Associates, Inc.