Sunday, February 06, 2011

Municipal Math

[Note: This article originally appeared in the February 2011 edition of Ferndale Friends] 
In June 2007 council approved approximately $39,500 to repair a section of the screening wall around the Winthington parking lot.  Five months later, DPW director Byron Photiades was back asking for another $30,755.

When council asked why it was so expensive he said something about deteriorating caps, expanding rods and a park bench, but wrapped up by saying, “It may sound expensive, but it’s a really nice wall.”

It’s a really nice wall?

Just last June city council spent over $438,411 on new hardware and software to improve efficiencies. The very next month they spent another $447,930 on office furniture and carpeting one council woman (I won’t say which) thought was necessary to make city hall ADA-compliant (that cost was a relatively modest $21,500 – just 5% of the total).

But it’s really nice furniture.

According to (then) city manager Bob Bruner, the investment would save over $150,000/year in efficiencies and pay for itself in three years.

Of course, those savings didn’t show-up in the budget as expense reductions for the Financial Planning Committee to consider.  Why not?  Because the money was already “saved” when council laid-off staff earlier in the year. You can’t save the same money twice—except perhaps at Enron and Ferndale.

Well, not at Enron anymore.

Somehow, this little double-counting slipped past the Financial Planning Committee when their report commended city council for its efforts and encouraged them to keep it up.

And what, triple-count it?

Two council seats are up in November.  Anyone challenging the incumbents should publicize their ability to do math along-side their endorsements and favorite cities other than Ferndale (one of the tougher questions asked candidates for mayor last month).

If candidates avoid discussing their math skills, maybe someone in the audience at a League of Women Voters-sponsored forum can pass a simple multiplication or division problem on a 3x5 card to the candidates.

Here’s a multiple choice math problem you can write down and save for October.

“Ferndale’s proposed 5.45 millage increase was closer to a) 33% increase in city taxes, b) 10% increase in homestead property taxes,  or c) a drop in the bucket.“

Answers: a and b.  C is a quote from Galloway when he favored passing a Principle Shopping District tax in 2008, perhaps to help pay for the screening wall.

DDA Math

How about a story problem?

“If Ferndale’s DDA gets a National Park Service grant for $120,000 to help pay for 36 way-finding signs and kiosks downtown, how many previously unknown bars, salons, and stores might be discovered?”

Actually, that’s not a math question.  Some business owners suspect DDA staff are the only visitors to Ferndale that need a map, as they’ve never visited their stores.

Let’s try another.

“If Ferndale’s DDA gets a National Park Service grant for $120,000 to help pay for 36 way-finding signs and kiosks downtown, how much money did taxpayer’s save?”

With apologies to Adam Sandler’s Water Boy (1998):
“Mama say [sic] that grant money is from magic rays of sunshine that come down when you feelin' blue.”
The correct answer is it didn’t save them anything.  In fact, those way-finding signs will cost taxpayers more than $120,000 because we (the US government) borrowed $48,000 (40%) to pay for them.  And since we’re barely making interest payments on our debt, your children, grand children, and great grand children will be able to enjoy those signs, kiosks, and historical markers AND still be paying for them long after the DDA director and city council have retired.

Remember that when you pass the signs, kiosks, historical markers, and DDA members.

But the real magic is yet to come.

According to the DDA, the city of Ferndale’s $20,000 contribution toward the $262,254 spent on the signs represents an 1150% return on investment.  (Applause--really!  Don’t take my word for it.  Watch the video yourself from the January 24th council meeting.)

With all the laptop computers on city council’s table it remains a mystery why no one on city council laughed out loud or demanded an immediate audit of the DDA’s books.  Or maybe it’s not a mystery if math isn’t a core requirement for urban planning or law degrees.

Independent calculations aren’t able to duplicate the DDA’s numbers exactly, but using DDA math (not taught in Ferndale Public Schools)  if the city’s $20,000 “investment” earned an 1150% return, then the Woodward Avenue Action Association’s (WA3) $10,000 contribution earned 2300%.

If Cristina Sheppard-Decius, the DDA’s director, had pitched-in $100 of her own money hers would have been a 23,000% return.

(More applause.)

Only Bernie Madoff got those returns for his investors.  Well, not anymore.

The only return the city, WA3, and National Park Service got for their money is 36 signs and kiosks that can’t be exchanged for dollars to help balance the city budget.  The only return they got is that way-finding signs will outnumber sidewalk sandwich boards 2-1, and the DDA didn’t need to apply for a variance to the sign ordinance or pay an annual permit like downtown businesses are required to pay.

But they’re really nice signs.

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