On Monday, June 23, 2014 the Arlington Board of Selectmen are to hear a plan for repainting traffic markings on Mass Ave between Schouler Court and Peg Spengler Way. See it HERE.
Selectmen, their Transportation Advisory Committee (TAC), their Bicycling Advisory Committee (ABAC),the Planning Department, other bicycling groups, East Arlington Livable Streets, “A Better Mass Ave.”, and “Word on the Street” blog all claimed reducing Mass Ave in east Arlington from four lanes to three with bike lanes would make it safer. Precinct 8 voters, by the largest margin (38 percentage points!) in April 2013′s ballot question 1 on keeping four lanes, wanted Mass Ave reduced to three lanes.
So, when it comes time to repaint lines on Mass Ave. between the high school and the library, what does the town propose to do? Mark bike lanes eastward from the high school until Whole Foods and the Baptist Church where they abruptly stop, and then stripe four travel lanes until the end of the project area, Robbins Library! This part of Mass Ave has three busy crosswalks without crossing signals and abuts voting precinct 8. They most wanted bike lanes to replace a fourth travel lane, and yet, Town advocates of lane reduction propose giving them exactly what these voters don’t want, four travel lanes.
Pedestrian advocates, bicycle advocates, and precinct 8 voters do not have to wait until sometime in 2016 to have lane removal on Mass Ave. They could have it now! If town officials have changed their mind on lane removal, then start by fixing the plan for east Arlington. Otherwise, let’s see how three lanes work out.
My Dad was from a family of eleven children; five boys and six girls. Born tenth in the family at the beginning of the Great Depression, life was hard for the Harrington family. Legend has it the family was evicted from more than one house in east Arlington for using interior walls for firewood during the winters. Three of his brothers were of an age and served in World War II; Frank and Charlie on the ground in Europe and Jack in the Pacific where he met and married a Japanese woman and was ostracized for decades from his community. One story relates how Charlie, home for leave, heard that a neighbor’s son had disrespected my grandmother. Charlie immediately went next door, plucked the offender from his dinner table and gave him a good beating; justice served by a member of the greatest generation.
My Dad was too young for World War II; he graduated Arlington High School in 1948. Instead, he served during the Korean War and used the GI Bill to become the first of his family to graduate from college. He worked hard his entire life as the CFO of high tech companies and as a founder of a telephony start up. From January until April, for decades, a long line of family, friends and business associates would come to my father for their taxes. He rarely drank, never swore, defined the word integrity, especially around money, and was well respected by everyone that I ever met.
On Saturday of this Memorial Day weekend, I went to pay my respects to my Dad and his three brothers; first visiting the Veteran’s Memorial on Broadway Plaza near the Central Fire Station. The weed chocked area surrounding the memorial, the uncut grass and the general shabbiness of the memorial reflects poorly on Arlington.
I was told that the firemen in the nearby station used to mow the lawn, but as with every public space in Arlington, maintenance is not a priority. The memorial is only 15 years old, dedicated in 1999, but has not aged well and is in need of some attention. I wonder if there are any funds in the Central Fire Station rebuild dedicated for the memorial or whether contractors will use this space for parking their vehicles.
I readily found my Dad and his three brothers on the roll honoring veterans who served our country during time of war. I recognized many family names on the memorial and also noticed the absence of names for some town department heads, elected officials and others who have displayed shocking lack of respect in the past. No doubt they will finagle their name on some public space memorializing not their selfless duty to country, but their ability to get overrides passed.
After visiting the Veteran’s memorial, I went down to Mount Pleasant Cemetery to find my uncle Frank’s, and possible Charlie’s, grave sites. Frank is buried in the veterans section, but I could not find his marker. I did find Charlie’s. As is usual in Mount unPleasant Cemetery many markers are buried under dirt and debris. I found it ironic that one completely buried marker still sported a flag.
There were hundreds, if not thousands of American flags marking the final resting places of veterans. As I visited my parent’s grave site, I noticed that no veteran’s flag marked my father’s grave. My brother told me he asked Bill McCarthy, now retired Veteran’s Services Coordinator for the Town of Arlington and Cemetery Commission bouncer, for flag placement on several occasions in year’s past, only successful once. I even mentioned this oversight during a public hearing in front of the Board of Selectmen; another example of a tone deaf board not interested in acting on legitimate complaints of residents. I saw some cemetery workers and asked how flags are placed on graves. They told me that Veteran’s Services are responsible and work from a list. Maybe now that McCarthy is no longer an employee there might be a chance to get my father on the “list”. I purchased two flags from the local Ace Hardware store and placed them on my father’s grave out of respect for him and all forgotten veterans.
On this memorial day, I reflect on the lives of those who have passed, the obstacles they faced and tyranny they overcame. These men and women deserve our respect not just for the battles they won but for the legacy they left behind. A lesson in true civic engagement that fades with time but is never forgotten by those who honor them.
The day after Town Meeting votes to allow unfettered parking in Mount Pleasant Cemetery with testimony from members about using the cemetery as a park, a place to jog, rollerblade, ride a bike, go birding, enjoy as a recreational space, one of our concerned citizens snapped this photo.
The person who took this photo told us the adults pictured here were eating lunch, reading books, spending their lunch hour leaning against grave markers in the old part of the cemetery.
What do you think?
Arlington provides ambulance services through its professional firefighters. Most, if not all, firefighters are certified EMTs and respond to several thousand emergency medical calls each year. Below are the statistics from the 2013 Annual Report produced by the Town Manager.
The Department responded to 3,061 medical emergencies. Of those emergencies, 743 were for advanced life support and 1,013 for basic life support in nature and transported to the appropriate facility by the Town-operated ambulance, Rescue 1. There were 579 medical emergencies where Rescue 1 was at another emergency medical call and 13 medical calls where Rescue 1 was dispatched, but transport was cancelled prior to arrival at emergency scene. 570 medical emergency responses did not require transportation to area hospitals.
Note the first two rows in the table above, Advanced Life (Support or ALS) and Basic Life (Support or BLS). In 2013 there were 743 ALS responses and 1,013 BLS responses. The difference between ALS and BLS are whether a paramedic is involved; ALS includes a paramedic while BLS does not. A typical situation for a BLS might be a broken bone or non-life threatening fall that requires transport while ALS might involve a heart attack or other medical emergency that requires paramedic support.
The other difference is cost; ALS costs more than BLS in several different ways. To get a handle on the relative costs let’s turn to the medicare dataset recently released by the Obama administration. In this post, Menotomy Observer points out that the Town of Arlington received $285,506 for ambulance services in calendar year 2012. For those brave enough, you can download the dataset directly and find the detail for Arlington, some of which is reproduced below:
Arlington was reimbursed by Medicare for four services; mileage and something called ALS 2 as well as the ALS and BLS mentioned above. The reimbursement rates are for 2012 and the number of times each was performed is provided. Comparing that to the table copied from the Annual Report (above) shows that medicare patients account for about 60% of all ALS services and 37% of BLS services in 2012. One can make the easy assumption that the remainder private insurance company reimbursements are not that far off of the medicare reimbursement rates.
The medicare reimbursement rates are slightly higher for 2013; $367 for ALS and $307 for BLS. Using these reimbursement rates and the number of responses for 2013 (743 ALS and 1,013 BLS) yields $582,929 for ALS/BLS services provided by Arlington. Adjusting for slightly higher private insurance rates and the two additional services (mileage and ALS2) brings a total very close to the official $633,700 in ambulance service revenues discussed below.
The Bad Deal
Arlington has no paramedics and therefore cannot offer independent ALS services to its residents. We were told at Town Meeting by Assistant Town Manager Andrew Flanagan and Fire Chief Bob Jefferson that these services are contracted out to Armstrong Ambulance with a fee split of 60/40; Armstrong receives 60% of all revenues from ALS services provided through the Town of Arlington. This makes sense. In addition, Armstrong Ambulance was chosen, supposedly by competitive bid, to also perform all billing for the Town of Arlington for ambulance services for a flat 3% fee of collected revenues.
From the 2014 Board of Selectmen report to Town Meeting the revolving fund where ambulance revenues are deposited shows a $408,493.37 expenditure for “contracted services” for 2013 to Armstrong Ambulance. Earlier, in the same report, the total revenues for ambulance services for 2013 is reported as $633,699.80. This means that Armstrong is receiving 64% of all revenues for contracted services. This fits in with what Fire Chief Jefferson reported; the 60/40 split and the 3% billing fee.
What does not add up, however, is the actual revenue split given that roughly half of all revenue is for non-ALS services. At most, the fee for Armstrong for 2103 should have been about $181,000.
743*367*0.6+0.03*(743*367+1013*307) = $181,188
743 ALS responses @ $367ea times 60% + 3% of both ALS and BLS.
Adjusting for higher private insurance reimbursement rates and the much smaller mileage/ALS2 reimbursements, would still bring Armstrong’s share of the revenue to about $200,000, not the $408,000 actually paid. So what gives?
Instead of numbers, let’s approach this from a common sense point of view. Consider this scenario.
An elderly woman insured by medicare falls in her home and breaks her wrist. She calls Armstrong Ambulance for transport to the local hospital. Armstrong sends out an ambulance and a paramedic unit even though the emergency response is for basic life transport (BLS). The woman is transported to Winchester Hospital. Every procedure performed is assigned an HCPCS code, from the ambulance ride to the X-ray to the nurse’s and attending physician’s time. The ambulance company, hospital and perhaps the nurse and physician make a claim to medicare. Perhaps the ambulance company claims $873.47 for the transport (this is Arlington’s actual submitted charge to medicare for BLS in 2012). Medicare will only pay the BLS reimbursement fee of $305. Armstrong will not be reimbursed at the higher ALS rate ($363) since all of the other downstream procedures will confirm that this was a BLS response. In this scenario, Armstrong is paid $305 for BLS transport.
Now consider this small difference. The woman calls 911 instead. Arlington dispatches the fire department (perhaps other public safety personnel as well) and Armstrong sends out a paramedic unit. Everything else is the same as before, Arlington is reimbursed for the BLS service, except Armstrong bills Arlington for the paramedic unit that medicare (or any private insurance) would not pay for. Arlington pays a paramedic expense for every call, whether ALS or BLS. That is what the $408,000 expenditure on $633,000 in revenues tells us. In this scenario, Armstrong is paid $183 on a BLS call and Arlington is paid $122.
One classic way to boost revenues for an ambulance company is to have the paramedic actually do something; e.g. take the patient’s blood pressure. In the second scenario above this could be the actual case. But notice that Arlington is not getting reimbursed from Medicare for BLS calls that involve the paramedic. Of course, any provider that only billed medicare for ALS calls and no BLS calls would be suspect. So even if the paramedic is involved in every call, it merely triggers the 60/40 split for Arlington and the higher reimbursement rate is not submitted to an insurance company or medicare to compensate for this additional service.
This costs the Town of Arlington about $200,000 per year in missed revenue. These revenues rightly should go towards increasing the salaries of the firefighters involved in providing the service. To make matters worse, Arlington allows Armstrong to handle all of its billing.
Arlington has allowed a contractor involved in providing a service to act as its billing agent which is not a good practice. Furthermore, Arlington appears to be paying Armstrong Ambulance for a paramedic unit for every emergency response, both ALS and BLS, instead of only reimbursing Armstrong paramedics for ALS transports. This agreement costs Arlington $200,000 a year which could be spent on increasing salaries in the Fire Department.
Total appropriations before Town Meeting next week will increase town and school budgets by 3.6% next year. Below we deconstruct the budget section (appendix B1-B17) of the Finance Committee Report to Town Meeting (FCRTM) into three tables for easy reading. We include both the 2014 and 2015 appropriations, offsets, employee counts and year-on-year percent change to focus attention on the largest increases in salaries, expenses and all other appropriations. We add some commentary so the reader can follow the report and highlight some common practices.
In the table below we detail all salaries in the FCRTM budget sections. We include the line item that corresponds to the summary report in appendix C1 of the FCRTM, the name of the department, the full time equivalent employees (FTEs), the 2015 appropriation, the 2015 offset from various funding sources (mostly the water/sewer enterprise fund), the appropriations and offsets for 2014, the dollar increase (decrease) and the percent year-on-year change in salaries. The table is sorted from highest to lowest one year change.
|Budgeted Salaries FY2015|
|Line||Department||FTEs||FCRTM 2015||Offsets 2015||FCRTM 2014||Offsets 2014||$ Increase||% Chg|
|22c||Council on Aging||3||$195,490||$181,935||$13,555||7.5%|
|17b||DPW -Town Engineer||4||$124,785||$197,529||$123,150||$181,145||$18,019||5.9%|
|2a||Board of Selectmen||4||$216,155||$23,007||$203,467||$24,143||$11,552||5.1%|
|17f||DPW -Equip Repair||6||$265,567||$157,107||$262,043||$148,648||$11,983||2.9%|
|17d||DPW -Natural Resources||23||$985,681||$960,609||$25,072||2.6%|
A couple of notes. Departments adding to staff included Library (1), Fire (1) and Police (2). We guessed at part time FTEs, generally assuming 0.5 of an FTE except where the salary suggested a different ratio. There were $2M in “offsets” with 75%, or more than $1.5M, from the water/sewer enterprise fund. This bothers the accountant on our staff, who is appalled to see salary expense “offset” by revenues in another account. Why not just record the budgeted salary expense and show a line item for funds transferred he asked rhetorically? Especially given that more than half of the DPW -Admin salary expense (and 2/3 of the cemetery salaries) comes from these offsets.
The accounting point can be understood by the offset in the Fire Department, which shows $131,415 from the ambulance revolving fund. This offset sounds like part of the $285,506 medicare reimbursement payment that the Town of Arlington received in 2012; growing every year since. Why the medicare payments are not recorded as revenues and appropriated by Town Meeting is another “quirk” of municipal accounting.
The total line of $22,039,151 is merely the appropriated salary expense by Town Meeting. The actual salary expense is about $2M higher. The percent changes from the FY14 budget are based on the total salary expense and not just the appropriated amount; consistent with the FCRTM. As a side note, the report shows about 349 full time equivalents (FTEs), consistent with the Town Manager’s Financial Plan (page 10). This does not include the employees in any of the enterprise funds (Recreation, Water/Sewer, Rink, etc.) nor are the enterprise expenses (salary and otherwise) appropriated by Town Meeting; except capital expenditures.
That all said, budgeted salary expense increased 4.2% over one year with DPW -Admin (9.6%) leading the way (increases in the “Energy Manager” and Recycling Coordinator positions). Other notable increases are in Planning (the “Master Plan”, no doubt), Library (whoa) and relatively average increases in Fire (4.3%) and Police (3.8%).
In the table below we detail all departmental expenses in the FCRTM budget sections. We include the line item that corresponds to the summary report in appendix C1 of the FCRTM, the name of the department, the 2015 appropriation, the appropriations for 2014, the dollar increase (decrease) and the percent year-on-year change in expenses. The table is sorted from highest to lowest one year change.
|Budgeted Expenses FY2015|
|Line||Department||FCRTM 2015||FCRTM 2014||$ Increase||% Chg|
|17e||DPW -Solid Waste||$3,443,560||$3,228,700||$214,860||6.7%|
|17e||DPW -Removal Snow & Ice||$771,000||$724,000||$47,000||6.5%|
|17f||DPW -Equip Repair||$115,250||$113,000||$2,250||2.0%|
|17d||DPW -Natural Resources||$276,650||$275,400||$1,250||0.5%|
|17b||DPW -Town Engineer||$13,900||$14,300||$(400)||-2.8%|
|22c||Council on Aging||$4,740||$4,940||$(200)||-4.0%|
Note the almost doubling of expenses for the Elections category in the Selectmen’s budget followed by hefty increases in the HR, Planning and HHS admin budgets. Overall, department level expenses are set to rise 4.8% in FY2015.
In the table below we detail all other appropriations in the FCRTM budget sections. We include the line item that corresponds to the summary report in appendix C1 of the FCRTM, the name of the department, the 2015 appropriation, the appropriations for 2014, the dollar increase (decrease) and the percent year-on-year change in appropriation. The table is sorted from highest to lowest one year change. We do not include appropriations that had no change from year to year (0% increases) for brevity.
|Other Appropriations FY2015|
|Line||Department||FCRTM 2015||FCRTM 2014||$ Increase||% Chg|
|20||Schools: Growth Factor||$885,150||NA|
|S11||Other: – Symmes||$677,750||$100,000||$577,750||577.8%|
|S9||State assessments: Special Education||$3,178||$587||$2,591||441.4%|
|S7||Library & School||$63,866||$60,566||$3,300||5.4%|
|20||Schools: Instructional Support Programs||$1,426,075||$1,362,709||$63,366||4.7%|
|S9||Metropolitan Area Planning Council||$14,164||$13,835||$329||2.4%|
|S5||Transportation – MBTA||$2,790,643||$2,745,433||$45,210||1.6%|
|S1||Capital Budget Total||$9,918,358||$9,831,310||$87,048||0.9%|
|S9||Air Pollution Districts||$14,878||$14,843||$35||0.2%|
|S9||RMV Non-Renewal Surcharge||$50,040||$51,480||$(1,440)||-2.8%|
|17g||Street Lighting, Traffic Signals, Fire Alarms Maintenance||$80,700||$90,700||$(10,000)||-11.0%|
|17g||Street Lighting, Traffic Signals, Fire Alarms Electricity||$135,000||$163,000||$(28,000)||-17.2%|
|S8||Charter School Sending Tuition||$197,685||$245,818||$(48,133)||-19.6%|
|50||Override Stabilization Fund||$4,310,363||$5,773,873||$(1,463,510)||-25.3%|
|S12||Snow & Ice Deficit||$500,000||$900,000||$(400,000)||-44.4%|
Note that the total of the three tables above are $137,032,495 which matches exactly to the bottom line number in Appendix C1 of the FCRTM for FY2015. Furthermore, the FY2014 numbers also foot to the FCRTM for FY2014.
The 3.4% increase in other appropriations shows an almost seven-fold increase in the expense for the Symmes Urban Renewal project. We have no idea what this is and there is no mention in the FinCom Report to Town Meeting; we are almost afraid to ask. A 33% increase in the town’s Reserve Fund is also noteworthy given the lack of specificity in the FCRTM. Minuteman saw a double digit increase and four years after the override, we are still socking away more than $4M into the Stabilization Fund. We doubt the School Department’s self-serving 10% increase in SPED costs, which leads to a larger base and higher multiple for future appropriations, when combined with a 7% decrease in “Management Services”. We have seen a plethora of high salary administration hires in the past year and would love some detail, any detail, on the school department budget; but that is a post for another day.
We deconstructed the 18 page appendix of the Finance Committee’s Report to Town Meeting into 3 simple tables that match exactly to the appropriations before Town Meeting. We discussed the use of offsets, fund transfers and other unreported revenues, used to decrease the amount of salaries appropriated by Town Meeting. The use of offsets is a structural issue; using uncertain revenue streams to offset inflationary expenses like salaries. The 4.2% increase in Town Department salaries is well beyond the 2.5% limit set by Prop2.5 and the 6% increase in Pension expense and 4.8% increase in Health Care costs are worrisome. We find that the FCRTM is not well designed and combined with the rubber stamp process by both FinCom and Town Meeting there is little oversight to Arlington’s appropriation process.
One often hears the refrain, the Finance Committee, a committee of volunteers, spends months reviewing every item in the budget. Town Meeting does not change the budget approved by the Finance Committee and anyone who attempts to get an appropriation quickly finds out how difficult it is to get approval from the Finance Committee.
In this post, we answer the question; what does the Finance Committee do? Specifically what changes did the FinCom make to the FY 2015 budget that the manager drafted in early January? The Arlington Visual Budget provides an unprecedented opportunity to answer this question.
On January 20, 2014 we downloaded the revenues, expenses and fund balances from the Arlington Visual Budget open data page. This represented the budget that Town Manager Adam Chapdelaine provided to the Board of Selectmen for approval. In the January 13 BoS meeting minutes:
Mr. Chapdelaine stated he would be presenting the Budget to the Finance Committee on Wednesday, January 16th.
The Finance Committee is a group of 21 representatives, 2/3 Town Meeting Members and 1/3 other residents selected by the Chair of the Finance Committee Al Tosti to represent each of the 21 precincts. Including members of the Capital Planning Committee, there are approximately 30 people involved in reviewing the budget and recommending appropriations to Town Meeting. FinCom meets about a dozen times from February through April for about 2.5 hours each time. The meetings are recorded by ACMI. All told, including subcommittee meetings, FinCom spends about 1000 man-hours reviewing the budget, conducting hearings on all appropriations and fund transfers before Town Meeting and compiling the Finance Committee’s report to Town Meeting. We are certain we underestimate the time spent by FinCom members and volunteers and completely discount the number of hours spent by petitioners in preparation for their FinCom hearing.
On April 18, 2014 the Finance Committee’s report to Town Meeting was released. We again downloaded the revenues, expenses and fund balances from the Arlington Visual Budget open data page. Now we have two views into the budget; the Manager’s initial budget from mid-January and the 1000 hour reviewed budget that will be approved by Town Meeting from mid-April. We opened each of the three categories (revenues, expenses and fund balances) for the two budget views (January, April) into an excel spreadsheet making six tabs. We then created two new tabs that recorded all differences between the two budgets. We detail *every* budget change below.
|Budgeted Revenues Changes FY2015|
|Property Taxes: Debt Exclusions – Schools (10 year)||$153,275|
|State Aid: Education – Chapter 70||$(214,888)|
|State Aid: Education – Charter Tuition Assessment||$7,482|
|State Aid: Education offsets – School Lunch||$(10)|
|State Aid: Unrestricted General Government Aid||$116,473|
|State Aid: Exemptions – Veterans, Blind Persons & Surviving Spouses||$(15,566)|
|State Aid: General Government – Veterans Benefits||$18,033|
|State Aid: Offset receipts – Public Libraries||$1,092|
|Local Receipts: Motor Vehicle Excise||$50,000|
|Local Receipts: Other Excise||$50,000|
|Local Receipts: Tax Penalties & Interest||$50,000|
|Local Receipts: Rentals||$66,000|
|Local Receipts: Licenses & Permits||$50,000|
|From Funds Total||$(20,625)|
|Other Revenues: Overlay reserve surplus||$150,000|
As can be seen in the table above, expected FY15 revenues are projected to increase. $266K in local receipts (excise taxes, rentals, etc.), $116K in unrestricted, general state aid, a $150K surplus in the overlay reserve offset the $215K in decreased Chapter 70 school funding. All together, between January and April, revenues were projected to increase $461,266. For an explanation of how Chapter 70 state aid for education changed from January to April, click on the preliminary Ch.70 funding, released January 22, 2014, after the school department had too rosy an aid outlook on their budget approved January 13, 2014. Now we have an extra $461,266 need to spend it!
Below are the FY2015 changes to the expenses between the Manager’s budget on January 20, 2014 and the FinCom report to Town Meeting April 18, 2014.
|Appropriation Changes FY2015|
|Schools: Minuteman Regional High School||$(58,453)|
|Town Departments: Treasurer/Collector – Salaries||$(16,259)|
|Town Departments: Treasurer/Collector – Expenses||$(4,000)|
|Town Departments: Human Resources – Salaries||$76|
|Town Departments: Information Technology – Salaries||$11,254|
|Town Departments: Information Technology – Expenses||$(10,000)|
|Town Departments: Planning – Salaries||$(691)|
|Town Departments: Zoning Board – Salaries||$2,029|
|Town Departments: Inspections – Salaries||$110|
|Town Departments: Public Works – Public Works Admin Salaries||$30|
|Town Departments: Public Works – Removal Snow & Ice Expenses||$29,000|
|Town Departments: Health & Human Services Admin – Salaries||$51|
|Capital Budget: Non-Exempt Service||$10,439|
|Capital Budget: Minus Capital Carry Forward||$127,542|
|Insurance: Health Insurance||$(606,448)|
|State assessments: Air Pollution Districts||$(336)|
|State assessments: Metropolitan Area Planning Council||$(17)|
|State assessments: RMV Non-Renewal Surcharge||$(2,727)|
|State assessments: Transportation – MBTA||$(23,426)|
|State assessments: Transportation – Boston Metro. Transit District||$(21)|
|State assessments: Special Education||$2,576|
|State assessments: Charter School Sending Tuition||$11,273|
|Offset Aid – Library & School||$1,082|
|Override Stabilization Fund||$1,003,583|
As can be seen in the table above, the main driver on the expense side is a net decrease in expected health insurance costs, totaling $606,448. Along with a decrease in the Minuteman allocation and the completely opaque Capital Budget changes, we see that there is more than $1M less in expenses budgeted and revenues received than expected in January 2014. This amount is to be deposited in the override stabilization fund.
1000 hours of work for 20 changes
Let’s talk about these changes a little bit. First, there are a total 15 revenue changes and 25 expense changes. Of these 40 changes, 11 are about $1000 or less. Who really cares that there was a $10 decrease in expected school lunch offsets? That leaves 29 changes. Of these 29 changes, about half are on the revenue side and are merely reporting of new information (preliminary Chapter 70 funding, etc.). The only work we can determine on the revenue side is in two items; an increase due to school debt exclusion from the early retirement of school rebuilding debt and work by the Treasurer’s office on an increase in local receipt projections.
That leaves a dozen or so expense items that were changed; the Minuteman allocation came from that district, the state assessments are merely a recording of what the state released after the manager’s January budget. There are a couple of rejiggering of department budgets (IT moves an expense to a salary, the Treasurer’s office gets stiffed in about $20,000 of expenses) and that is it. The fudge factor, the $1,003,583 into the override Stabilization Fund is what makes the books balance.
To be fair, FinCom did not restrict themselves to the FY2015 budget. Oh no! The April budget saw several rewrites of the FY2014 budget totals complete with detail that fails to match the subtotals. We saw this before, in our original ‘Budget – Fudge It’ post where we detailed all FY2014 changes between the Spring, 2013 Town Meeting and the January, 2014 FY2015 budget. At this point, the rewriting of historical budgets can easily confuse anyone trying to follow FinCom’s trail.
|Rewriting History FY2014 changes|
|Line Item||2014 Amounts|
|Property Taxes: General Property Taxes Total||(2,016)|
|Property Taxes: Overrides – 2012 override||0|
|Property Taxes: Overrides – 2006 override||1|
|Property Taxes: Debt Exclusions – Schools (10 year)||(46,467)|
|Property Taxes: Debt Exclusions – Symmes||(157,130)|
|Property Taxes Total||(247,516)|
|From Funds Total||(184,625)|
|Town Departments: Registrars – Expenses||200|
|Town Departments: Police – Salaries||89,000|
|Town Departments Total||989,200|
|Capital Budget: Minus Capital Carry Forward||(27,000)|
|Capital Budget: Minus Capital Carry Forward Total||(385,625)|
|Capital Budget Total||(27,000)|
|State assessments: Special Education||(16)|
|State assessments: Tuition Assessments – Charter School Sending Tuition||(203)|
|Other: – Court Judgments||(96,000)|
|Other: – Snow & Ice Deficit||195,457|
|Other: – Other Deficit||79,719|
Not to pick on the Capital Planning Committee, but the FY2014 changes in the April budget defy all logic. But FinCom did not stop at merely rewriting FY2014; they rewrote every fiscal year back to 2008, see table below. This time, only department and total appropriations were changed from 2008-2013; no revenue changes.
Note that the historic changes in expenses is to increase them. This is called padding expenses and has the effect of making year-on-year percent changes look smaller than they actually are. We also included the future changes; note that all future expenses show decreases, as compared to historic changes that all showed increases. We don’t have much to say about the future, except that we can expect large changes.
FinCom spent 1000 hours making half a dozen changes that needed some research, totaling less than $100,000 in appropriations or less than 1/10 of 1% of the overall budget. The change analysis suggests that FinCom does very little in terms of the setting the budget; instead the Town Manager and the Superintendent set the budgets and the FinCom makes minor adjustments, mostly due to changes in anticipated revenues between January and April. FinCom rubber stamps the Manager’s budget and then Town Meeting rubber stamps FinCom’s recommendations. Town Meeting and its Financial Committee have little or no say in how money is appropriated in Arlington.
The 56 warrant articles for the 2014 Annual Town Meeting and the 7 warrant articles for the 2014 Special Town Meeting are listed in the table below. All warrant articles are sent to either the Redevelopment Board (ARB) for articles pertaining to the zoning bylaws or the Finance Committee for articles that request appropriations or to the Board of Selectmen for bylaw changes. Articles 6-9 and for some reason article 22 (CPA) are reviewed by the Redevelopment board; see their report here. Articles 8,10-22,24-25,54 and 2STM are reviewed by the Board of Selectmen; see their recommended votes here. Articles 26, 29-53 and 3s-7s are appropriations which are reviewed by the Finance Committee; see their report to Town Meeting here. As well, a hard copy report was mailed to each Town Meeting Member on Wednesday, April 16.
You might wonder what the difference is between the annual Town Meeting and the “Special” Town Meeting (STM). For most Town Meeting members, there is no proactical difference. One advantage of the Special Town Meeting is that the timing is known in advance (time certain) and is scheduled to begin the second night of Town Meeting on Wednesday, April 30 this year. Also, the STM generally ends the same night and is dissolved which means that the voted actions are sent to the Attorney General’s office for review and become effective much quicker. Since there are two 2014 budget items on the STM warrant, these articles need to take effect before the end of the 2014 fiscal year of June 30.
There are four columns in the table below; the number and (abbreviated) title for each article, the proponent (who initiated the article), the reviewer (Board of Selectmen, Redevelopment Board or the Finance Committee) and the result of the review (vote for/against color coded green – favorable, yellow for split decision, burnt orange for no action). Click on any article to jump to the section that details the comments by the reviewing board, any additional information that is available, the debate (when it occurs) from Town Meeting and our analysis.
2014 Town Meeting Warrant Articles
color coding: passed tabled defeated
|2 – State of the Town Address||Vision2020||None||None|
|3 – Reports of Committees||Moderator||None||None|
|4 – Measurers of Wood and Bark||BoS||None||None|
|5 – Election of Assistant Town Moderator||Moderator||None||None|
|6 – Marijuana Dispensary Zoning||ARB||ARB||Accept|
|7 – Comprehensive Permit||J. Belskis||ARB||No Action|
|8 – Outdoor Lighting||Schlichtman||ARB/BoS||Accept|
|9 – Outdoor Seating||Ruderman||ARB/BoS||No Action|
|10 – Cemetery Commission||Harrington||BoS||No Action|
|11 – Electronic Voting||Moderator||BoS||5-0|
|12 – Cemetery Parking||Harrington||BoS||No Action|
|13 – Poet Laureate||J. Curro||BoS||5-0|
|14 – Public Music||J. Curro||BoS||5-0|
|15 – Cultural Commission||Marlin-Curiel||BoS||5-0|
|16 – Venner Rd Easement||D. Long||BoS||5-0|
|17 – Second Water Meter||G. Tibbets||FinCom/BoS||2-3|
|18 – Lake St. Signage||L. Bennett||BoS||No Action|
|19 – Junk Cars||Manager||BoS||5-0|
|20 – Tar Sands Oil||G. Sonder||BoS||1-4|
|21 – Minuteman Agreement||MRVSDC||BoS/FinCom||5-0/12-1-1|
|22 – CPA||S. Stamps||BoS/ARB/FinCom||4-1|
|23 – Local Option Taxes||FinCom||FinCom||No Action|
|24 – Endorsement of CDBG||BoS||BoS||Accept|
|25 – Revolving Funds||BoS||BoS||Accept|
|26 – Collective Bargaining||Manager||FinCom||No Action|
|27 – Positions Reclassification||Manager||FinCom||Accept|
|28 – Town Budgets||BoS||FinCom||Accept|
|29 – Revaluations||Assessors||FinCom||Accept|
|30 – Capital Budget||BoS||FinCom||Accept|
|31 – Rescind Borrowing Auth||Treasurer||FinCom||Accept|
|32 – Sewers||Manager||FinCom||Accept|
|33 – More Sewers||Manager||FinCom||Accept|
|34 – Minuteman Appropriation||MRVSDC||FinCom||Accept|
|35 – Committees and Commissions||Manager||FinCom||Accept|
|36 – Town Celebrations||Manager||FinCom||Accept|
|37 – Miscellaneous||Manager||FinCom||Accept|
|38 – APS Fees||W. Downing||FinCom||No Action|
|39 – Water Bodies Fund||Vision2020||FinCom||Accept|
|40 – Harry Barber Community Service Program||Council on Aging||FinCom||Accept|
|41 – Uncle Sam Signage||L. McKinney||FinCom||No Action|
|42 – Uncle Sam Stationary||L. McKinney||FinCom||No Action|
|42 – Uncle Sam Lights||L. McKinney||FinCom||No Action|
|44 – Historic Signage||C. Rowe||FinCom||No Action|
|45 – Old Burial Grounds||C. Rowe||FinCom||No Action|
|46 – Scenic Byways||C. Rowe||FinCom||Accept|
|47 – Pension Adjustments||CRB||FinCom||Accept|
|48 – OPEB Trust Fund||CRB||FinCom||Accept|
|49 – Increase Allowance||CRB||FinCom||Accept|
|50 – Long-Term Stabilization Fund||FinCom||FinCom||Accept|
|51 – Overlay Reserve||FinCom||FinCom||Accept|
|52 – Transfer of Funds/Cemetery||FinCom||FinCom||Accept|
|53 – Use of Free Cash||FinCom||FinCom||Accept|
|54 – Electronic Voting Resolution||Moderator||BoS||Accept|
|55 – Electronic Voting Equipment||Moderator||FinCom||Accept|
|56 – Stabilization Fund||FinCom||FinCom||Accept|
2013 Special Town Meeting Warrant Articles
color coding: passed tabled defeated
|1 – Reports of Committees||BoS||None||None|
|2 – Alcohol Licenses||BoS||BoS||Accept|
|3 – Amendments to 2014 Budgets||Manager||FinCom||Accept|
|4 – Collective Bargaining 2014||Manager||FinCom||Accept|
|5 – Central Fire Station||Manager||FinCom||Accept|
|6 – Peirce Repair||APS||FinCom||Accept|
|7 – SPED Stabilization Fund||APS||FinCom||Accept|
Over the next two weeks, we will review all town meeting warrant articles and add our unique commentary. As the articles are discussed, we may select a few to highlight points of particular interest.
Of the 63 warrant articles, 12 (19%) are citizen initiated warrant articles, 17 (32%) are from the Board of Selectmen or the Town Manager, 7 are from the Finance Committee and the rest are from the Schools (1), the Retirement Board (3), the Redevelopment Board (3), two each from the Moderator (John Leone), Vision 2020, one from the Minuteman Regional Vocational School District Committee (MRVSDC) and five from various committees (Tourism and Economic Development, Electronic Voting Committee, Council on Aging and the Uncle Sam Committee). Of course, the various committees are in many cases just a single proponent. For examples, the Uncle Sam Committee and aTED have one person as the driving force behind the warrant articles.
As Town Meeting progresses, we will color code each article with the color green for a favorable vote, yellow for a motion that is tabled and red for those articles that are voted down. All warrant articles that are voted “No Action” by the various review boards will not be accepted for debate at Town Meeting unless a substitute motion is requested. Finally, click on the title for any entry in the table to link to the comments by the reviewers, debate at Town Meeting and our analysis of the debate and vote for each as they become available.
A couple of general comments.
Finance Committee – early!
OMG, the FinCom sent their report early this year. Woo Ha!
Second Class Citizens
Note that 25% of the warrant articles are initiated by citizens. Citizen initiated warrant articles are allowed at Town Meeting by state law, you only need 10 signatures to place an article on the Town Meeting warrant. Note that almost all of the citizen warrant articles were voted no action by either the Board of Selectmen or the Finance Committee. This is also the pattern in the past, where citizen initiated articles are treated poorly. If you consider that almost all of these articles are in response to a lack of response by town employees or administrators to address citizen concerns, well you see how representative our elected officials have become.
We believe the 2014 Town Meeting will be a bit longer than the 2013 meeting which was the shortest in recent memory. With only 64 articles vs 57 in 2013 and 78 in 2012, there is a real chance the meeting could be done in five nights. Our take is that there are only 10 or so articles that should see serious debate.
The most controversial articles will be the CPA (article 22) which seeks to increase property taxes by 1.5%. With looming debt exclusion overrides for rebuilding both Arlington High School and Minuteman High School and an expected operating override in 2019/2020, Arlington taxpayers are looking at four override over the next five years. Add to that the recent operating override of 2011 and Arlington faces the real risk of becoming completely unaffordable.
The Federal government released a dataset containing over 800,000 Medicare service providers along with the 2012 reimbursement amounts paid by Medicare totaling $68B. The table below contains all of the Medicare providers in Arlington with their 2012 reimbursement amounts, sorted from highest to lowest. This is similar to the analysis provided by the New York Times, although the Times left out the “out of facility” providers, like Armstrong Ambulance, which have some of the highest reimbursement totals.
TruePersons has the entire dataset loaded into our proprietary case series data structure providing a unique platform to perform in-depth analysis of Medicare payments. Contact us to find out more.
|Armstrong Ambulance Service||87 Mystic St.||Ambulance Service Supplier||$4,260,032|
|Town of Arlington||112 Mystic St||Ambulance Service Supplier||$285,506|
|Kenneth Krutt||37 Broadway||Internal Medicine||$256,829|
|Gerald Harris||37 Broadway||Rheumatology||$253,310|
|Barry Paul||22 Mill St||Dermatology||$248,851|
|Bishal Mainali||142 Lake St||Internal Medicine||$162,065|
|Ronald Criscitiello||37 Broadway||Internal Medicine||$134,810|
|David Desimone||305 Massachusetts Ave||Cardiology||$122,911|
|Joseph Gimbel||22 Mill St||Podiatry||$106,886|
|Robert Melino||22 Mill St||Physical Therapist||$105,923|
|Kendra Martin||22 Mill St||Dermatology||$96,654|
|Robert Liberman||37 Broadway||Internal Medicine||$94,152|
|Margaret Hayes||127 Ridge St||Internal Medicine||$93,007|
|Maureen Norman||22 Mill St||Family Practice||$86,891|
|Mark Sullivan||37 Broadway||Gastroenterology||$80,782|
|Ryan Flesher||49 Decatur St||Emergency Medicine||$78,448|
|John Berkoben||37 Broadway||Cardiology||$75,534|
|Jane Craig||22 Mill St||Internal Medicine||$56,702|
|Anne Laraia||22 Mill St||Dermatology||$52,604|
|Herbert Ang||37 Broadway||Internal Medicine||$51,283|
|William Hartigan||31 College Ave||Podiatry||$51,200|
|Paul Burns||22 Mill Street||Internal Medicine||$48,607|
|N. Archambault||9 Chestnut St||Chiropractic||$46,680|
|Ruth Ross-Mccormack||37 Broadway||Internal Medicine||$45,586|
|Alan Ertel||22 Mill St||Hand Surgery||$37,322|
|Timothy Knight||90 Lowell St||Chiropractic||$36,043|
|Jennifer Warkentin||11 Colonial Village Dr Apt 8||Clinical Psychologist||$35,405|
|Harold Zeckel||22 Mill St||Psychiatry||$30,256|
|Donna Katcher||22 Mill St||Internal Medicine||$30,159|
|Konrad Mark||6 Mill St||Neurology||$29,845|
|Robert Buckland||22 Mill St||Psychiatry||$29,151|
|Tamar Finan||Lahey Arlington||Internal Medicine||$26,698|
|Nathaniel Price||22 Mill St||Internal Medicine||$26,357|
|Lisa Kunins||37 Broadway||Internal Medicine||$26,168|
|Linnea Meyer||22 Mill St||Family Practice||$25,387|
|Stanley Sagov||11 Water St||Family Practice||$24,765|
|William Flynn||22 Mill St||General Surgery||$23,213|
|Ruth Lewis||7 Court St||Clinical Psychologist||$22,479|
|Stanley Cheren||22 Mill St||Psychiatry||$22,132|
|Beth Galan||180 Massachusetts Ave||Nurse Practitioner||$20,807|
|Anjana Trikha||18 Wyman St||Clinical Psychologist||$19,744|
|David Khoury||22 Mill St||Cardiology||$18,447|
|Merri Shaw||22 Mill St||Licensed Clinical Social Worker||$18,419|
|Mark Potter||366 Massachusetts Ave||Chiropractic||$18,389|
|Roy Baker||11 Jason St||Optometry||$18,145|
|Jayme Kurland||18 Claremont Ave||Licensed Clinical Social Worker||$17,752|
|Ann Morvai||22 Mill St||Family Practice||$16,669|
|Wayne Altman||11 Water St||Family Practice||$16,162|
|Laura Zucker||11 Water St||Family Practice||$15,760|
|Hetal Verma||12 Brattle Ln||Diagnostic Radiology||$15,121|
|Elizabeth Cranska||22 Mill St||Licensed Clinical Social Worker||$14,823|
|Gregory Bauer||42 Pleasant St||Chiropractic||$14,444|
|Therese Hattemer||108 Churchill Ave||Psychiatry||$14,225|
|Martina Voglmaier||22 Mill St||Clinical Psychologist||$13,654|
|Alan Corman||94 Pleasant Street||Psychiatry||$13,635|
|Tom Pedulla||390 Massachusetts Ave||Licensed Clinical Social Worker||$13,522|
|Bari-Sue Brodsky||11 Water St||Family Practice||$13,488|
|Maureen Gormley||1250 Massachusetts Ave||Chiropractic||$13,397|
|David Farrar||22 Mill St||Family Practice||$13,308|
|Walgreen Eastern Co Inc||324 Massachusetts Ave||Mass Immunization Roster Biller||$13,025|
|Nancy Giles||22 Mill St||Clinical Psychologist||$11,974|
|John Chaglassian||1021 Massachusetts Ave||Orthopedic Surgery||$11,572|
|Naomi Lown||94 Pleasant St||Licensed Clinical Social Worker||$10,975|
|Walgreen Co||1425 Mass Ave||Mass Immunization Roster Biller||$10,967|
|Carol Ball||22 Mill St||Clinical Psychologist||$10,824|
|Gary Goldman||22 Mill St||Clinical Psychologist||$10,531|
|Town of Arlington||27 Maple St||Mass Immunization Roster Biller||$9,494|
|Anil Gullapalli||11 Water St Ste 1A||Family Practice||$9,473|
|Joan Deppe||22 Mill St||Clinical Psychologist||$9,132|
|Sarika Arora||180 Massachusetts Ave Ste 303||Internal Medicine||$9,109|
|Toseef Khan||20 Jason St||Diagnostic Radiology||$7,345|
|Kerstin Cmok||22 Mill St||Nurse Practitioner||$6,994|
|Marilyn Cohler||22 Mill St||Clinical Psychologist||$6,418|
|Carmen Goulet||1289 Massachusetts Ave||Chiropractic||$5,952|
|Charles Deveikas||22 Mill St||Occupational therapist||$5,635|
|Nicholas Stamoulos||104 Massachusetts Ave||Chiropractic||$5,535|
|Stephan Steisel||22 Mill St||Clinical Psychologist||$5,426|
|Gary Gurka||63 Mass Ave||Allergy/Immunology||$5,314|
|Martin Kafka||22 Mill St||Psychiatry||$5,065|
|Ryan Garrity||180 Massachusetts Ave||Clinical Psychologist||$5,024|
|Virginia Deforge||691 Massachusetts Ave||Certified Clinical Nurse Specialist||$4,896|
|Mary Ward||742 Massachusetts Ave||Licensed Clinical Social Worker||$4,296|
|Isaac Greenberg||94 Pleasant St||Clinical Psychologist||$4,130|
|Lisa Gordon||11 Water St||Family Practice||$3,933|
|Mary Lucca||37 Broadway||Nurse Practitioner||$3,827|
|Peter Cohen||22 Mill St||Psychiatry||$3,367|
|CVS Pharmacy Inc||833 Massachusetts Ave||Mass Immunization Roster Biller||$3,065|
|Laura Kramer||226 Massachusetts Ave||Psychiatry||$2,894|
|Karen Hinchen||22 Mill St||Physician Assistant||$2,713|
|John Archibald||476 Mass Ave||Optometry||$2,489|
|Shari Herman||37 Broadway||Nurse Practitioner||$2,215|
|Stop and Shop Supermarket Co Llc||905 Massachusetts Ave||Mass Immunization Roster Biller||$2,197|
|Charles Kaplan||22 Mill St||Nurse Practitioner||$1,776|
|CVS Pharmacy Inc||23 25 Massachusetts Ave Alwife Plz||Mass Immunization Roster Biller||$1,308|
|Wyatt Biel||22 Mill St Ste 101||Nurse Practitioner||$1,067|
Below is a state by state comparison of Medicare spending combined with the 2012 state population and a per capita Medicare expense calculation. Note that Florida has the second largest per capita expense while Utah, Alaska and Idaho have the lowest per capita Medicare expense (not including Puerto Rico). It will be interesting to compare the correlation between per capita spending and the percentage of elderly in each state’s population. Wonder why New Jersey has such a large per capita expense…
|State||Services||Medicare ($MM)||Population||Per Capita|
|Dist. of Columbia||23,937||$166.46||632,323||$263.26|
Reimbursements by Specialty
The table below summaries the medicare reimbursements by specialty, sorted by percentage of total medicare spending. The average reimbursement, part of the dataset, is also shown.
|Specialty||Reimbursements ($MM)||Avg Reimb||% Total|
|Ambulance Service Supplier||$3,684.22||$242.78||5.4%|
|Ambulatory Surgical Center||$2,260.34||$476.13||3.3%|
|Physical Medicine and Rehabilitation||$724.40||$68.00||1.1%|
|Independent Diagnostic Testing Facility||$681.62||$172.84||1.0%|
|Interventional Pain Management||$320.10||$83.95||0.5%|
|Mass Immunization Roster Biller||$213.93||$20.03||0.3%|
|Critical Care (Intensivists)||$203.44||$86.35||0.3%|
|Licensed Clinical Social Worker||$127.61||$42.96||0.2%|
|Plastic and Reconstructive Surgery||$123.56||$142.10||0.2%|
|Colorectal Surgery (formerly proctology)||$65.87||$135.78||0.1%|
|All Other Suppliers||$40.19||$243.39||0.1%|
|Audiologist (billing independently)||$39.90||$26.65||0.1%|
|Certified Clinical Nurse Specialist||$34.47||$48.78||0.1%|
|Osteopathic Manipulative Medicine||$31.31||$60.99||0.0%|
|Multispecialty Clinic/Group Practice||$16.80||$47.14||0.0%|
|Peripheral Vascular Disease||$13.88||$152.55||0.0%|
|Unknown Physician Specialty Code||$13.23||$95.37||0.0%|
|Speech Language Pathologist||$11.73||$80.19||0.0%|
|Oral Surgery (dentists only)||$10.98||$95.43||0.0%|
|Hospice and Palliative Care||$10.92||$82.36||0.0%|
|Slide Preparation Facility||$8.12||$52.78||0.0%|
|Public Health Welfare Agency||$6.53||$20.65||0.0%|
|Psychologist (billing independently)||$6.49||$68.11||0.0%|
|Registered Dietician/Nutrition Professional||$3.83||$27.26||0.0%|
|Mammographic Screening Center||$2.80||$72.57||0.0%|
|Certified Nurse Midwife||$1.03||$39.80||0.0%|
WSJ Vs NYTimes
line_srvc_cnt * average_Medicare_payment_amt
to calculate the “Total Medicare Payments” on the interactive database search (http://projects.wsj.com/medicarebilling/). For example, in Arlington, MA the top provider was Armstrong Ambulance with $5,751,317.21 in Total Medicare Payments.
Interestingly, the NYTimes used:
bene_day_srvc_cnt * average_Medicare_payment_amt
giving Armstrong Ambulance a total of $4,260,032.24 (see http://www.nytimes.com/interactive/2014/04/09/health/medicare-doctor-database.html)
Overall, the NYTimes methodology yields $68B in total payments for 2012, the WSJ methodology yields $77B.
The Medicare CMS documentation states:
line_srvc_cnt – Number of services provided; note that the metrics used to count the number provided can vary from service to service.
bene_day_srvc_cnt – Number of distinct Medicare beneficiary/per day services. Since a given beneficiary may receive multiple services of the same type (e.g., single vs. multiple cardiac stents) on a single day, this metric removes double-counting from the line service count to identify whether a unique service occurred.
Not sure at this point which methodology is correct. We contacted the reporters from both and are waiting to hear a response.
When I was a graduate student in Physics at Boston University during the 1990s, I had the opportunity to work in a research group with about 20 other students. For a time, I was the only American in the group. Many of the students were from Eastern Europe; Bulgaria, Slovakia, Hungary and Russia. As well, most of the students in this graduate program at Boston University were from India, China and South America. At that time, Boston University had the second largest foreign student population of any US university and the graduate program in physics is truly an international group at most US universities.
On one month-long trip to China, my travel mates were from Russia, Iran, Portugal, Argentina and South Korea. We were like a little United Nations with the attendant problems crossing borders; the Russian was hassled by the US embassy trying to obtain his re-entry Visa, the Argentine was not allowed to enter Macau, not by the Portuguese, but for re-entry to Hong Kong by the British – a hangover of the Falklands, the Iranian was welcomed by the Chinese, while my passport was met with scrutiny by the cigarette smoking customs guard with the machine gun who welcomed me to a free country on our entry to Xiamen.
To this day, I count people from Iceland, Venezuela, Israel, Japan and from all over the world as my friends.
Generally, during the good weather, the graduate students would climb out of our cold, subterranean laboratories to share lunch together on the plaza in front of the Science Building at 590 Commonwealth Avenue. Even at that time, I couldn’t help but recognize, and somewhat cringe, at the sight 20 or 30 young men (and some women) would make, dressed alike in jeans and flannel shirts, even on warm spring days, while the fashionably dressed young undergraduates would walk by.
Although we represented the entire gamut of ethnic, religious and national identities, what differentiated us most, in our minds, was whether we studied theoretical or experimental physics. What I realized two decades ago, whether I was sharing tea on a beach in China at 2:00am, scaling a 20 foot high wall after the city gates had closed, packed with seven other people into a Trabant driven by a crazy Russian or making a “pilgrimage” with an Indian friend to the local Walden Pond is that I had a stronger bond with these other physicists than I did with the people I had grown up with in lily white, mostly Irish Catholic Arlington. Our bond was not how different we were in appearance, background, economic experience or beliefs, but in our mutual pursuit of science.
That is the lesson I learned. Diversity is not what separates us, diversity is what brings us together.
There is an old accounting expression that certain numbers can be 100% accurate and 100% useless. … The budget that represents what is paid for by the taxpayers is reflected by the Finance Committee report which is voted by Town Meeting. … Please take the time to read the various reports.
Al Tosti – Chair, Finance Committee
In this post, we take to heart what Al Tosti, Chair of the Finance Committee, wrote to the Arlington List of Crazy PeopleTM in response to our Town Employee Payroll Increases 12% post. We start with the Arlington Visual Budget, compare the open source data to the 2013 Finance Committee Report to Town Meeting and find several discrepancies which violate the most basic accounting principles. We detail improper revenue recognition and padding of expenses that fail to properly serve Town Meeting and are the basis of the often referenced “structural deficit”. We show that the much lauded additional funding to the school department is merely the required 2-year increase in Chapter 70 funding. We provide indications that Free Cash was used to fund the 12% one year increase to town employees; an unsustainable financial legerdemain. We conclude that actual expenditures and revenues are far superior to the historic budgets provided by FinCom to Town Meeting.
Arlington Visual Bullshit
A local company, Involution Studios, did a reasonable job using modern web techniques in providing a visual view into Arlington’s budget (AVB). This AVB was widely advertised by the Board of Selectmen as well as in the annual financial propaganda (PAFR) mailed to every Arlington household last week. We find no fault in what Involution Studios did, with one exception that we will note below. In fact, we applaud the company for providing all of the data in csv/json downloads and the source code in a github repository.
The AVB consists of budget details (revenues, expenses and fund balances) from 2008 through the current year and projected into 2019. An important thing to note is that the FY2015 budget will be discussed at the 2014 Town Meeting beginning in April. This means that the current data at the AVB shows historic budgets (2008 – 2014), the 2015 budget to be appropriated at Town Meeting this year, as well as projected budgets for 2016-2019. Our analysis here focuses only on the 2014 and 2015 budgets. The AVB (and the FinCom Report to TM) has (almost) no actual expenditures or revenues.
We became aware of the AVB last year. Since TruePersons’ staff members are über data geeks, we copied the entire data+code last October when the “current” fiscal year data was 2014. Earlier this year, after the manager released his 2015 budget, the AVB was loaded with the 2014 budget as historic data and the “current” fiscal year 2015 budget. Again, we downloaded all of the data and code. Having two views into the data across two different fiscal years gave us the opportunity to answer the most basic accounting question; was the ending 2014 budget detail and summary for the FY2014 budget the same as the beginning 2014 detail and summary for the FY2015 budget?
Improper Revenue Recognition
Before we describe how FinCom cooks the books, let’s look at the big picture, answer whether the ending amounts from FY14 equal the beginning amounts for FY15 and talk about some just plain silly mistakes in the AVB.
Below we copied the AVB revenues summary for fiscal year 2014. We are interested in seeing the starting point for the FY2015 budget, which is the ending amounts for the FY2014 budget. Notice that the total revenues summary page consists of 5 categories; Other, Transfers, Local Receipts, State Aid and Property Taxes. The subtotals sum to the top line “Revenues” of $133,507,209. This is the AVB 2014 revenues number that will be used by FinCom as the starting point of the FY2015 revenue to show year-on-year change.
How does this compare to the revenues as reported in the FY2014 budget used by Town Meeting to make appropriations? To answer these types of questions we refer the reader to the Finance Committee Report to Town Meeting for FY2014 (FCRTM). The printed version of this report is virtually impossible to read for most of the old timers at Town Meeting with budget numbers set in a 6 point font. We will be referring to Appendix C, the second to last page in the link above, titled “SUMMARY OF FINANCE COMMITTEE RECOMMENDATIONS FISCAL YEAR 2014″.
We reproduce the section titled “Summary of Revenues” below so we can compare the AVB revenues summary with the FinCom report to TM last year.
Notice the differences. First, the total revenues reported in the FCRTM is $132,320,744 not the AVB total of $133,507,209. That is a more than $1M difference. Plenty substantial. Almost every sub category is also different; the AVB “State Aid” corresponds to the two FCRTM line items “Local Aid Receipts” and “MSBA Receipts”. AVB’s “Other Revenues” at $200K does equal the “Overlay Reserve” category on the FCRTM, but the rest of the categories differ slightly.
There is no reason why the AVB and the FCRTM needs to use different nomenclature for the same line items which just leads to confusion. Furthermore, FinCom fails accounting 101 by not using the FY2014 final numbers for the FY2015 beginning numbers.
Even more significant issues come to light when one compares the category detail line items. For example, below we reproduce the expanded AVB “Local Receipts” revenues category. If you add up the detail you will come to the total of $8,505,000 which is $347,000 more than the AVB “Local Receipts” total of $8,158,000. The subtotals on the AVB do not match the provided detail! Let us repeat, the AVB subtotals do not match the AVB detail in the Local Receipts (and some other) categories. Normally, we would be aghast at the programmers who created a “spreadsheet” that was inconsistent between subtotals and detail, however, inspection of the AVB code shows that this was a design feature. Apparently, the town wanted the “flexibility” to enter in category totals instead of letting the computer program simply calculate them.
Comparing to Appendix C of the FinCom Report to Town Meeting (FCRTM) we see that the detail matches exactly to the section titles ‘Local Receipts Detail’ which has the higher ($8,505,000) total. Each of the line items compare favorably between the AVB and the FCRTM.
The conclusion is that the actual revenues are even higher ($347,000) than the already inflated 2014 revenues reported by the AVB. For those keeping track, the 2014 AVB starting revenues are $1,533,465 higher than the 2014 FCRTM. This is problematic for several reasons that we will expand upon below.
Inspection of the State Aid and Property Tax line items indicate that the original $1.1M difference between the FCRTM (what was used for appropriations) and the AVB (the starting point for the 2015 budget) comes mainly from two sources; an unexpected $280K in increased Chapter 70 Funding and $900K in increased property tax receipts.
A laughable example of the “flexibility” of the AVB is in the General Property Taxes category of the Revenues page. The sum of the detail is $2014 less than the summary total. Coincidence that the summary total differs from the detail by the fiscal year, 2014? Or are we seeing an excel autosum mistake on a column headed by “2014″ and then blindly copied into the AVB? Either way, the massaging of summary totals is not a reassuring feature for a financial application.
Chapter 70 Two Year Shell Game
As a side note and germane to the increased Chapter 70 funding we see above, we remind diligent readers about the attempt to use $300K at the 2013 Town Meeting to eliminate school user fees; see this post by Dr. Harrington. Note well, the argument about the additional, unappropriated $300K in Chapter 70 funding in May of 2013 is in addition to the $280K we see above. The reason this happens, every year, is because the Commonwealth provides cities and towns preliminary appropriations in January (on 1/23/2013 for FY14) for Chapter 70 funding, after the School budgets are approved (1/10/2013). In the fall and early January 2013, the school administration expected $9.4M in Chapter 70 funding and not the $9,768,439 in the preliminary Chapter 70 funding. Instead of that $300K additional funding being appropriated to the schools or used to reduce school based fees, the extra $300K was put into a reserve fund and/or free cash which can be spent at the whim of the Town Manager.
But the story gets better. Arlington actually received $10,048,980 in Chapter 70 funding for FY2014 when the final tally was released on July 12, 2013; fully $600K more than was expected by the schools. This extra $600K can be seen in the AVB line item Chapter 70 revenues of $10,048,980. Adding in the preliminary Chapter 70 funding increase of $200K for FY2015 to the $600K increase from FY2014, one quickly sees that the increased state aid matches, almost exactly, to the widely advertised “generosity” of the town that increased the FY2015 school budget by an additional $885K. This additional increase is entirely the 2 year increased Chapter 70 funding. The Finance Committee did not use any property tax dollars to fund the additional $885K, and essentially transferred about $600K in FY2014 funding away from the schools for the 2014 fiscal year.
Ok, the FY14 revenue summary provided in the AVB does not match the AVB detail line items and, furthermore, does not match the actual appropriations from Town Meeting. What about the expenses?
Comparison of the FY2014 expenses detailed in the AVB, both from the October version and the current version, as well as between the current AVB and the FinCom report to the FY14 Town Meeting (FCRTM), shows a large number of discrepancies. We detail a few below.
First we start with the AVB Expenses Summary page for 2014 reproduced below. Note that the AVB Expenses summary page top line number of $131,933,691 does not match the AVB Revenues page top line number of $133,507,209, differing by the $1.5M in unappropriated revenues detailed above. As a point of reference, the FY2015 (to be appropriated) budgets on AVB show revenues equal to expenses within $626. The same *was* true for the FY2014 budgets when released last year on AVB. It is only historic budget amounts that are changed. We call that “re-writing history”
Comparing historic revenues and expenses in AVB since 2008 shows a persistent bias of expenses much less than revenues in every year (except 2010) averaging $2M per year and totaling $14M over the past seven years. To understand why this happens requires an understanding of Fund Balances and in particular the Manager’s use of Free Cash which we address in the next section.
Ok, so the AVB FY2014 expenses do not equal the revenues by $1.5M. There is more to this story. The FY2014 expenses recorded on AVB do not match the FinCom report to Town Meeting (FCRTM) reproduced below. We enumerated the categories to analyze in depth on the FCRTM Summary of Expenses.
1- Capital Budget
The Capital Budget, the third largest budget presented to Town Meeting, has several deficiencies not the least being lack of sufficient detail in the AVB. That said, the AVB data is inconsistent since the detail provided sums to $10,216,935 which does not match the summary page $9,858,310, neither of which match the $9,831,310 that was presented to Town Meeting. The process by which the Capital Budget is prepared lacks transparency, the public meetings are not recorded, the budget has a history of funding all sorts of appropriations for the politically connected and the committee has shown little interest in accountability to the residents of Arlington. We will have a much longer discussion of the shenanigans disguised in the capital budget in another post. For now, the take away is that the 2014 AVB Capital Budget category was changed after appropriation in a crude way.
2 – Charter/choice Tuitions
The reported number in the FCRTM shows $245,818 while the 2014 AVB summary shows $171,283. The difference is understandable, when Town Meeting approved the budget, the school department probably did not know the actual tuition and the difference is reasonable. However, changing the historic number is poor accounting and does not allow Town Meeting to understand that more than $70 appropriated for this expense was diverted somewhere else. This is endemic in the use of “budget” to budget comparisons, sometimes FinCom, and especially the School Department, use actual numbers, sometimes they use budgeted numbers and at no times are they entirely consistent. The worse of both worlds.
3 – Symmes Urban Renewel
4 – Snow & Ice Deficit
So far the amounts are small and while poor accounting do not account for the $400,000 difference between the 2014 AVB expenses and the FCRTM expenses. The line items “Symmes Urban Renewel” and the “Snow & Ice Deficit” show large variances between the two budget views. The FCRTM appropriated $100,000 for the Symmes Urban Renewel project, barely noticeable. However, the AVB is now showing an $830,239 expense, substantially more. However, Town Meeting will never see this substantial variance and although we have not searched every document and watched the hundreds of different committee meetings, we find no mention explaining this $730K variance. Also, the snow and ice deficit, which was explained to Town Meeting to be $900,000 (and well discussed) now is being reported in the AVB as a mere $500,000 (the usual projection).
5 – Overlay Reserve
The Overlay Reserve that was budgeted for $700K in the FCRTM shows now as a $1,019,663 in the 2014 AVB. Recall that this is an expense and not a fund balance. Also, do not confuse the “Overlay Reserve” with the other line item “Reserve Fund” under the Town Departments category and expensed out at $750K. We need to delve deeper into the various reserve funds to get a clearer picture of where all this money is going.
To wrap up this already long section on Expenses, we make a few more observations. First, the detail in the Town Departments, that corresponds exactly between the 2014 AVB and the FCRTM, sums to $31,075,702 and not the $30,175,702 reported – a $900,000 difference. For those who have experience in reconciling large lists of numbers (check processing, auditing, etc.), you might recognize a typo when you see a difference that is a multiple of “9″. In this case, whoever typed the Town Departments total into the AVB transposed the “1″ and the “0″ in the millions and 100sK place. Again, a “feature” of the AVB which reaffirms that the AVB is not a serious financial reporting tool.
We note that the differences in expenses are almost entirely due to the actions of the Finance Committee and not the Town Manager. It appears his budgets are consistently reported (at least over this two year period), while the line items reported by the other entities involved in the budgets (capital budget, overlay reserve, snow removal, symmes) are suspect.
Cooking the Books
A buzzword describing fraudulent activities performed by corporations in order to falsify their financial statements. Typically, cooking the books involves augmenting financial data to yield previously non-existent earnings. – Investopedia
Improper Revenue Recognition
“…augmenting financial data to yield previously non-existent earnings.” The $1.5M in unreported, unappropriated revenues mostly from additional property taxes collected to increased Chapter 70 funding falls under the category of improper revenue recognition. The difference between public companies, which make up false earnings, and public entities, that don’t report additional revenues, is an important one although no less fraudulent. The $1.5M that was not appropriated was spent during FY2014, as a true account of the revenues and expense reveals. However, this is “forever” money in that those additional revenues are added to the tax (aid) base on a go forward basis. Future budget increases of 3.5% (or whatever) will be applied to this higher base. Improperly recognizing these revenues, changing the 2014 budget to reflect a higher base than what was presented to Town Meeting and applying future tax increases is fraudulent; this practice allows for increased, ongoing expenses, such as salary increases or increases in head count, that are never appropriated by Town Meeting.
Free Cash and the Funding of Ongoing Expenses
We suspect that these additional revenues were placed in “free cash” and then spent at the discretion of the manager. We believe that this is one mechanism by which the Town payroll increased by 12% in one year. The 2014 $1.5M revenue increase is just one in a long series of improper revenue accounting that can be gleaned from the AVB revenue/expense differences. Looking at the AVB free cash graph, see below, one can see the $4M change in free cash over the past two years.
Without actual revenues/expenses that match budgeted revenues/expenses and a full forensic accounting audit to prove otherwise, we believe that this unstated policy, using unappropriated increases in the property tax/aid base, to fund ongoing, employee expenses is Arlington’s structural deficit.
Appropriated but Unspent
On the expense side, we have more than a dozen examples where funds appropriated for specific expenses were not spent. For example, the charter/choice tuition of $70K detailed above. Another example is the perennially funded but unfilled Assistant Town Treasurer position ($65K). Other examples included new, partial year hires and unspent capital expenses. We believe this amounts to about $1M every year in Arlington’s finances.
This is not an unusual occurrence in finance; department-level budgeted funds are not spent all the time. However, managers in private companies track budgeted vs actual expenses. When there are unspent monies, managers report this back to senior management for guidance. When these monies are used for one time expenses (bonuses, etc.) senior management approves. These funds should never be spent on increasing head-count or base salaries since that would represent ongoing, unfunded liabilities.
In Arlington’s finances, the “boss” who appropriated the budgeted amounts initially, Town Meeting, is not in the loop deciding how these funds should be allocated when unspent. As well, we have reason to believe that these one-time funds are used to increase head-count or base salaries elsewhere also creating a structural deficit.
The AVB is not a serious financial reporting tool with inconsistencies in detail line items and subtotals, the “flexibility” of entering in totals which are not verified and the ability of the end-user to re-write established history. The Town of Arlington received an additional $1.5M in revenues in 2014 which were not matched to expenses appropriated by Town Meeting. Furthermore, these funds were added to the base revenues with historic budgets adjusted after the fact. Indications are that improper revenue recognition has averaged $2M a year for the past seven years. Historic budgets are changed and ending amounts from one fiscal year to the next are not consistent, biased to the upside for revenues and to the downside for expenses. These practices would be considered fraudulent in the private sector and are the reason for the structural deficit requiring periodic operating overrides.