"It's deja vu all over again." Yogi Berra's words unfortunately apply to Schenectady.
Last fall, Mayor Gary McCarthy denied Schenectady was at the edge of a financial cliff. Months later, he found there was a "newly discovered" $5 million financial hole.
Next came the 2013 budget. By amortizing its pension obligations, raiding reserve accounts, and counting on gimmicks that failed in the past, a projected $5 million deficit was "reduced" to $3 million.
Then we found out no payments were made on the $20 million debt on the Taj Mahal— the public works building we didn't need and couldn't afford. Beginning next year, the debt will trigger dramatically larger interest payments.
Now we learn the city's bond rating has been lowered from A1 to A3. Of course, that means we will be spending more for servicing debt — like the Taj Mahal. The mayor states that he is unconcerned because interest rates are low. Isn't that like a ship captain saying he isn't concerned because the exposed part of the iceberg is small?
Another nail in the city's financial coffin is the nearly $4 million that the city deferred paying the school district. In amortizing pension obligations this year, the mayor is continuing the "put-the-bill-on-the-credit card" mentality he employed last fall with the school district.
Besides kicking the can down the road, the mayor's solution is to have the city collect delinquent taxes itself and sell off abandoned properties. In other words, he wants to do precisely what previous administrations had done.
Three million dollars here (the deficit); $4 million of deferred payments there (the school district); $20 million over there (the Taj Mahal loan).
When will we learn that the emperor has no clothes, and the city has no money?
The mayor knew — or should have known — the city's plight when he blithely claimed all was well. Problems must be admitted before they can be addressed. Yet, even if the mayor admitted the city's plight, he has demonstrated he is incapable of dealing with the city's financial woes.
It is time for a financial control board. Yes, the mayor has officially been in office for less than one year. Unofficially, though, he has called the financial shots for years—as president of the City Council and as acting mayor—and he has continued to finance the city's obligations on a credit card.
His decisions — and they were his decisions because his fellow council members were his puppets and always went along with him — put us in the mess we are in.
Can we reasonably expect him now to get us out of the financial quagmire he created? No.
I hope the state steps in. In the meantime, the mayor might take a pay cut. Last fall, he agreed to do so. Until the financial crisis is resolved, he should consider reducing his salary to $60,000—his predecessors' salary. With his pension from previous government positions, he would have four times the average family income in Schenectady.
Symbolic? Clearly.
Yet he would give himself the credibility to renegotiate contracts dealing with health costs, pensions, and staffing levels. And he needs to do so because we can no longer afford any "sacred cows."
Recently, a woman fainted in the medical arts building attached to Ellis Hospital. Help quickly arrived — two people from Mohawk Ambulance, three from the fire department.
We can't afford to have three firemen hand a patient to a team of EMTs to transfer her to an emergency room 200 yards away. A misuse of resources and a waste of scarce dollars? Obviously.
A financial control board can make these changes. The mayor (at least this mayor) cannot. Too many deals were made with too many people over the years; too many bad decisions were also made, like taking over the waste treatment plant and adding 21 people and future pension obligations to the city's payroll.
I don't know how a financial control board would have handled the county sales tax agreement. I do know we lost our best short-term opportunity to increase the city's revenue significantly. Certainly, a control board would have been a tougher negotiator than the mayor was, since he was negotiating with his boss, his party's county leader.
No one wants to cede control to a financial control board. Yet, given the state of Schenectady's affairs — financial problems far worse than either the rating agency recognizes or the mayor admits, and political deals that cannot be undone by the mayor who made them — we need a control board.
The mayor put Schenectadians in this financial hole; he is incapable of pulling us out of it. Without a financial control board, it will be deja vu again and again and again.
Roger H. Hull is president of the Schenectady-based Help Yourself Foundation and a former candidate for mayor.