Well, the race for New York Comproller has shaped up into a contest. Hillary won’t lose. Spitzer is poised to become Governor. Andrew Cuomo will take the AG spot. All Dems, in a rout for the Republican party in New York.

But… Democrat candidate for State Comptroller, Alan Hevesi, has shot himself in the foot. Spitzer, the whitecoller-crime fighting AG, waited days to throw old Alan overboard but he did. “Alan, don’t stand so close to the rail!!” “Oh, God! Man overboard! Man overboard!”

Hevesi was using state funds to pay for a driver for his wife. The original story was that they had received threats. The new story is that she’s sickly. So far he’s ponied up over $170,000 to reimburse the state. Curiously that’s about a half year’s pay for him. He must be very thrifty. [/sarcasm]

Why is the Comproller at all important? The State Comptroller is the sole trustee of the vast sums in the New York State pension fund. He’s the one who decides on investments, and on the firms used for investments. The prize: $120 billion. Yeah, billion with a B.

The Republicans picked another schmoe to run against him, conceding the race as they did all the others. Then this hit, and J. Christopher Callaghan looks like he has a chance to win. So, this mook who is Saratoga County Treasurer is about the hit the jackpot.

Is he qualified? Hell, no! But I’m sure that all his friends in the Republican Party will be quite willing to assist him with all those important decisions.

Hevesi’s real crime. He got caught. He’s not the first big shot in Albany to put a driver on the state payroll and he won’t be the last. In the grand scheme of things, if you have money in the pension system, or if you don’t want to have to bail out the pension system, who would you rather have as Comptroller? Hevesi, with experience and a blemish, or bow tie guy from Podunk New York?

After I posted the original post about the Unsafe Cities Report, I began to wonder about the decades that the Democrats had controlled the mayor’s office in so many of the cities.

Why? Why would the voters of Newark vote for a Democratic mayor for 53 years? Clearly Newark has struggled during that period, had riots and crime, had an economy slump nearly out of sight. What did the Democrats bring to the voters of Newark that kept them in power?

Or, could it be the poor presentations by Republicans? Is the Republican Party in general that bad at running good candidates for the office of mayor?

Detroit has had a Democratic mayor for 44 years. In the beginning of the 1960′s they elected a Democrat. They kept electing Democrats through the riots of the late sixties, through the first and second crashes of the American auto industry. They just keep voting for a Democrat.

The mayor of Baltimore is running for Governor of Maryland. Baltimore is number 12 on the list of unsafe cities. They have had a Democratic mayor for 19 years. The mayor of Baltimore stands a good chance of being elected despite the dismal record he has in his city. Why?

There was a full page ad in yesterday’s Democrat & Chronicle suggesting that voters purposely vote agains every incumbant without regard to their party. It was presented that this would break the stranglehold that the Republicans have on the State Senate in New York and the same hold the Democrats have on the State Assembly. The “business as usual and damn the voters” attitude in Albany would be rebuked in the very best way, by sending all the political hacks home.

That won’t happen. A Republican won’t win the next mayor’s election in Detroit.

Why not?

Unsafe Cities

Some years ago, a bright idea occurred to the city fathers of Rochester, New York. Why not find a way to increase tourism and commerce, and revitalize the lake front at the same time?

An angel spoke to Mayor Johnson, who was not a baboon at the time, in a dream. “Lo, I shall send you a ferry, a shipt to guide your city to the Promised Land.”

No, I really don’t know what moron came up with the ferry idea or how. I thought it was a boondoggle from the start, but I wished its proponents well. Because, with a little luck, it might all work out.

Well… let me tell you. I hope the tax payers of Rochester enjoyed their screwing, because they got it good. And it ain’t over, neither!

The ferry franchise was given to a company that had never run a ferry operation before. Money flowed in from the Federal, State and local governments. Lots of work was done on the Port of Rochester, making it a very pretty and lovely place to go. Businesses were convinced that they could succeed in the area. Things were looking up.

Oh, remember the part about no experience? It showed. The expression “pouring money down a rat hole” is appropriate. Then they go bankrupt. The city fathers are in a panic. After some long distance phone calls, prayers, and lots of airmiles on the taxpayer’s tab, a company from Canada that runs ferries is found and agrees to run the ferry for a fee.

Only, by now, the ferry needs work. The nifty new engines just keep pooping out. By the time all the bells and whistles are working, it’s well into the travel season and ridership is down. When the ship tied up for the winter, it was mayoral election time, so not a darn thing got done. The new mayor, being at times a man of wisdom, killed the project as soon as he could.

Now the taxpayers of Rochester have a forty million dollar ship sitting tied up at their beautiful new harbor. See photo above. The foremrly wise mayor suggests we sell the ship and try to recover most of our money. That wasn’t a bad idea and there was modest inerest. A company from Old Blighty wins the bid. The taxpayers wait for the big check to arrive and the big ship to set sail. And wait. And wait.

You see, the successful bidder didn’t have financing arranged. It occurs to me that this item makes him the unsuccessful bidder, but what do I know? The formerly wise mayor, whistling past the graveyard, firmly believes that the bidder will arrange funding and we will live to see the ship sail off into the sunrise.

A list of issues:

• Sailing begun before issues of customs fees in Canada settled. Much $$$ spent.
• Sailing begun to Toronto before they built a terminal and before there was anyway from the dock to downtown Toronto.
• The “Fast Ferry” sailed along the lakeshore, not directly to Toronto, taking nearly the same time as it took to drive the route.
• The terminal is leased to the original operator for $1 a year. For decades. Even after the company goes bankrupt. No chance to change the arrangement.
• No one established that the winning bidder actually had funding for the purchase.

Oh, yeah. One more thing. A little thing. The State Comptroller’s Office did an audit. And it is not pretty. Democrat & Chronicle

A damning audit of Rochester’s high-speed ferry service released today by the state Comptroller’s Office found that former Rochester city officials ignored many warnings that the project had a “very high potential for failure” and didn’t adequately protect the city financially when the project went awry.

The audit [PDF file]:

We recognize that new opportunities for economic growth can present some risks that are hard to predict exactly. Sometimes government officials need to accept some level of risk to achieve potentially significant results. However, the City started the fast ferry service with a start-up company whose principals had never before performed these services. This type of project, with individuals who have no track record in the field, required a significant level of due diligence by City officials. We have tried to be careful in this audit to avoid second-guessing the decisions made by City officials based on information that has become known since the project began. Rather, we tried to review what City officials knew, or what they reasonably should have known, at the time they made decisions, and to evaluate the information they had and the actions they took in initiating the ferry service.

As a result, we found that there were a variety of clear warnings that were known, or should have been known, by City officials during the approval process of the ferry project. These red flags should have alerted City officials to the extremely risky nature of this venture, and should have caused them to increase their review of various aspects of the Project’s plan before proceeding and committing public funds to the Project.

Democrat and Chronicle

Because of poor fiscal management and budgeting, and lax oversight from the Town Board, Gates went from a $1.7 million surplus in 2000 to a $2.8 million deficit in 2005, a decrease of $4.5 million, according to an audit released by State Comptroller Alan G. Hevesi this morning.

The 2000-05 deficit of $2.8 million does not include an additional projected shortfall of more than $1 million in 2006.

The audit reviewed the town’s financial records and procedures from January 2001 to December 2005. In November, the comptroller’s office also released a review of the town’s 2006 budget.

The Audit

I read the audit, the Town’s response, and the audit response. This is as damning an audit as I have ever seen in over 20 years of accounting.

Three issues, not responded to by the Town, jump out as significant.

The first is the use of agency funds and deposits for other purposes, to pay expenses from other funds. This was not the town’s money. It was held in trust and it is and was a very improper accounting practice to use it for any purpose. It belongs to other people and agencies and should not be used without their permission.

Another issue is the transfers between funds. Both law and regulation govern how, when and why such inter-fund transfers are made. They also inclue timing for repayment. For much of the audit, the Town was in direct violation of such rules.

Lastly, the massive, truly massive fund balance deficits. The combined deficit is over 12% of the annual budget. It will take years to bring that sort of deficit down, and break even or run a surplus. Appropriating non-existent fund balances into the budget, as was done in 2006, is just plain crazy.

The town supervisor’s response to the audit failed to directly address the major accounting and finance issues raised by the audit. Instead, he was reduced to raising political strawmen and taking credit for making minor corrections after the issues were brought to his attention. The audit does not indicate political hackery or some Democratic conspiracy. It details years of improper practices and an administration that appears to ignore or not care about the financial hole that the Town of Gates is now in.

Solutions: Cut payroll and raise taxes. As painful as that may be, the Town must take action to address the deficit. How many administrative staff does the Town need? Does the Town need its own police force? These, and other serious considerations have to be on the Town Board’s agenda in the immediate future.

If the Town of Gates were a private company, the stockholders would demand changes in leadership. There would have to be changes at the Board level as well as among the executives. Elected officials don’t bear that level of responsibility, though the voters of the Town of Gates should certainly think about it long and hard before the next election. The money being so carelessly flung about is their money. It is not the personal property of the Town Board or the Supervisor. It belongs to the voters and taxpayers of the Town and they deserve a well-run, fiscally sound town government in return for the money they are forced to pony up.

The Supervisor stands firm on the statement that

There is not one cent missing from our funds. Every single penny is accounted for on our books.

Of course, that was not the purpose of the audit, nor any part of its conclusions. Mr. Esposito, you’ve spent far more than you took in. And, it appears that your administration lacked the ability to know this, because of poor internal practices and improper use of existing funds. The alternative, Mr. Esposito, is that the Board and the Supervisor did know everything that the audit revealed, and just did nothing. Which would you rather be, ignorant or careless?

In closing, Yonkers and Erie County can certainly provide a glimpse into the possible future of the Town of Gates. New York State took over their finances after they made a muddle of them. Is that what will happen to Gates?

NY Times

Billions of federal dollars are about to start flowing into this city after President Bush on Thursday signed the emergency relief bill the region has long awaited. But, with the anniversary of Hurricane Katrina approaching, local officials have yet to come up with a redevelopment plan showing what kind of city will emerge from the storm’s ruins.

No neighborhoods have been ruled out for rebuilding, no matter how damaged or dangerous. No decisions have been made on what kind of housing, if any, will replace the mold-ridden empty hulks that stretch endlessly in many areas. No one really knows exactly how the $10.4 billion in federal housing aid will be spent, and guidance for residents in vulnerable areas has been minimal.

A month into his second term, Mayor C. Ray Nagin has said little about his vision for a profoundly different city. In an interview on Friday, he said it would be six months before a “master planning document” was issued to address questions like which areas should be rebuilt, although he suggested that thousands of residents were making that decision on their own.

Caution should be the watchword, Mr. Nagin said, months after the apparent demise of a planning committee he set up. “New Orleans is a very historic city,” he said. “We can’t come out and just do something quickly.”