Bad Information

We frequently receive requests for information from citizens, and we generally do our best to respond promptly and accurately.  Our task is complicated not so much by the size of our organization, but by the diversity and complexity of the many things we do.

Most organizations do not operate critical utilities, provide social services, regulate development and construction, respond to medical emergencies, arrest people, operate a court, investigate and resolve public nuisances, lend out books, make computers available for public use, put out fires (literally and figuratively), maintain parks, provide entertainment, protect the environment, run a transit system, keep up streets, and assist businesses.  Providing these services also requires support activities and people to do things like recruiting new employees, maintaining communication and information systems, negotiating contracts, budgeting, paying the bills, purchasing, answering phones, and, of course, making sure everyone gets paid the appropriate amount.

Last Wednesday, our Budget Committee met for the first time this year and heard from a citizen who claimed that another local government in our area was able to issue a paycheck for $7 per check while the same activity cost $35 at the City of Albany.  I was curious about the source of this information because it seemed implausible on its face.  I called Linn County and learned that this citizen had indeed visited their administrator where he was told that, like the City, most county employees do not receive checks.  Most of us are paid through direct deposit into our bank accounts.  The cost of doing payroll in both the City and County appears to be very similar.  The $7 number, according to the county administrator, is the cost of issuing an accounts payable check and that number is, again, very similar to the City’s cost.

Comparing one jurisdiction to another is always complicated.  The City participates in a nationally recognized performance measurement program developed by the International City/County Management Association Center for Performance Measurement.  The Center has worked for years to standardize reporting of data so that cities can accurately compare everything from the cost of providing services to emergency response times.  Much of this information is available to anyone on the City’s website.  Additionally, the City makes comprehensive information available through its annual budget document, Comprehensive Annual Financial Report (CAFR), utility master plans, and a large number of reports and plans available online or, in some cases, at the library.  Most importantly, City employees routinely respond to requests for information and answer questions from interested citizens. 

Those of us who work for the City are bound by ethical standards to be as accurate and honest as we can be when we provide information to the public.  Like everyone else, we sometimes make mistakes, but we have a strong record of maintaining high reporting standards that is backed up by numerous awards, accreditation programs, and independent audits.  The scope and complexity of City services requires reporting standards to avoid the kinds of inaccurate information that leads to conclusions that are simply wrong.

A House Divided

More than 155 years ago, Abraham Lincoln spoke to the Republican State Convention in Springfield, Illinois, and proclaimed:

We are now far into the fifth year, since a policy was initiated, with the avowed object, and confident promise, of putting an end to slavery agitation. Under the operation of that policy, that agitation has not only, not ceased, but has constantly augmented. In my opinion, it will not cease, until a crisis shall have been reached, and passed. “A house divided against itself cannot stand.” I believe this government cannot endure, permanently half slave and half free. I do not expect the Union to be dissolved — I do not expect the house to fall — but I do expect it will cease to be divided. It will become all one thing or all the other.”

We know that within three years of Lincoln’s speech the Union was dissolved over the issue of slavery and that “the house” was not united until the conclusion of the Civil War in 1865.  We also know that the war did not put an end to divisions within the country, many of which persist to the present day.

I believe widespread division of opinion on the great issues of the day has always been a part of our nation and probably always will be.  We often view the Revolutionary War as a battle between England and the Colonies, but it was also a civil war among neighbors and families.  Benjamin Franklin’s son, William, was the last colonial governor of New Jersey and remained a staunch loyalist throughout the war.  Other issues that have divided us throughout our history include taxation, slavery, foreign policy, military drafts, immigration, race, women’s suffrage, social programs, alcohol, and abortion to name a few.  I still find it amazing that my college-educated grandmother did not have the right to vote until she was over 30 years old, while my grandfather who had an elementary school education could vote as soon as he reached the then-legal voting age of 21.

Much as we might wish for unity, I think we need to acknowledge that division of opinion can be both healthy and necessary for countries or other relationships among people.  How differences are resolved does more to determine whether a house or a nation will fall, in my opinion, than the differences themselves.  Attitudes, knowledge, understanding, and processes that promote peaceful resolution of disputes are the infrastructure of a civil society that constructively uses its differences as tools for progress.

As Albany celebrates 150 years of incorporation this year, we are probably about as divided on many issues as residents were in 1864.  There is a legend that a hedge was planted somewhere in what is now the Hackleman neighborhood to divide northern from the southern sympathizers.  I don’t know if that story is true, but I do know we will soon be displaying a cannon in City Hall that was supposedly purchased by one side or the other in Albany’s Civil War era, then allegedly stolen by one side or the other and dumped in the river.  The cannon was recently purchased and generously donated to the City by the Tripp family and will eventually be on display at the Monteith House.  I’m glad that this symbol of division in Albany’s early days is now an artifact that can serve to remind us of how fortunate we are to have found better ways to settle our differences.

Where Does the Money Go?

If you live in the city of Albany and own property valued at $200,000, you will pay about $1,600 annually in property taxes to the City.  It may be a few dollars less than that number, but I have rounded the amount to the nearest hundred to simplify the math.  Many of the numbers I am using are approximations and none conform to Generally Accepted Accounting Practices (GAAP) because it becomes very complicated to explain all the intricacies of government fund accounting in a 500-word column.  I can, however, justify every number I use and vouch for its accuracy.

Most of your property taxes will go to pay for police and fire services.  These services receive about 83 percent of the resources in the City’s General Fund, while the library gets about 8 percent and Community Development 4 percent.  Nondepartmental functions, mostly the General Fund contingency amount of $1.2 million, receive a little more than 4 percent.  The Parks & Recreation Department also receives property tax support of about $4 million annually, which would be the equivalent of something less than 13 percent of the General Fund.

Property taxes are flexible or fungible dollars that can be used to pay for any city service, but many of the dollars we receive can only be used for specified purposes.  Most cities put most of their property tax revenues into a General Fund that covers services that do not have an independent revenue source.  In other words, if a service can’t be paid for by user fees, it is usually a part of the City’s General Fund.  Very few cities use property tax dollars to pay for utility services like water and sewage treatment, which are generally reliant on usage-based rates.  Rate money, building inspection fees, and Systems Development Charges are examples of funds that can only be used for purposes specified by law.

Through December of this year, or halfway through the fiscal year, the City has spent about $45 million; and it is likely we will spend something close to a total of $90 million by the end of the year, although this number could rise significantly if there is a major capital project underway.  The Water, Sewer, and General Funds account for about $32 million of the money spent so far this year.  Other funds that have spent more than $1 million include Parks & Recreation, Street, Capital Replacement, and Ambulance.  I look at the City’s fund balance report, which includes revenues and expenditures to date, nearly every day to see a quick summary of our financial position. 

The City is routinely accused of hiding money or spending it unwisely, usually by people who haven’t taken the time to look at the budget or the daily financial reports that are available on our website.  I think one of the problems that interferes with a good understanding of city finances is the complexity of government accounting rules that are necessary for accurate reporting, but beyond what most of us know about tracking income and expenses.

My personal view is that I receive good value for the $1,800 or so I pay in property taxes to the City, and I know the money is being properly accounted for and reported.  I don’t always agree with how we spend every dollar, but I have great confidence in our finance staff, the audit, reporting awards, and bond ratings that help insure appropriate financial management.