Columbia Bankrupt? (10-9-08)

Is it? I say so, just as I have for quite a few years. I have called it functional bankruptcy, my way of saying it does not have the money to operate at the level it is for anytime in the future, but can continue to operate under cover as the real expenses of now and the future have never been made public, thereby shielding the public from the truth. What the council and city administrators know is that all revenue streams must be increased in order to try to avoid revealing the ugly truth, and those revenue streams must be increased as stealthily as possible. You can see it in new parking meters where none were; in more fines and increased fines; in the quadrupling of tap fees in 2 years; in the water runoff tax, especially on properties that really are absorbent, such as one my mother owns that is soil covered only about 30% with crushed rock, which actually retains water rather than letting it runoff, but city officials refuse to acknowledge that and no council member or mayor I emailed would respond; in the water cost that was increased 5% a year, which amounts to over 27% since this is compound interest (interest on interest), plus the sewer fee which is based on water usage, so that even if you use water for plants, car and house washing, swimming pool, you are still assumed to send most of it into the sewer in the summer and all in the winter; the hospitality tax, which is used for everything and anything the city wants, a giant slush fund that the attorney general, governor, lt. governor, solicitor, no one seems willing to address on a local or statewide basis; and….and….and….(So chime in here and tell what else I have missed.)

The city has not balanced the budget on time in at least 3 years, and it was about 2 years behind at one point, according to news reports. It is still not balanced and closed out, and the scuttlebutt is that it will always stay at least 6 months behind. Why? Because if it is finally balanced, it would show the real situation, and the city officials would have to admit the ugly truth. What the budget does not have to represent is potential liabilities such as potential lawsuits that are highly likely to happen, the real condition of water and sewer lines and what the cost of repair/replacement is, other future infrastructure problems that have no official study linked so that officials can say they have no knowledge of any needs, though they do know from “unofficial” investigation, and employee retirement and insurance liability true liabilities as they can say that those are not yet fully determined. (So what else am I missing besides rising expenses that do not have to publicly stated until they happen?)

The other side of this is that the city does not have to say that it is highly probable (gentle word for absolutely will) that city revenues will fall in the next few months and fiscal year. Across the country all 3 revenue sources are falling: property tax, sales tax, income tax. What is also falling is the amount of aid supplied by state and federal government, which was not mentioned in this NY Times article:
http://www.nytimes.com/2008/10/07/us/07citybudgets.html?_r=1&th&emc=th&oref=slogin.
We know the country has economic problems, but the state has them also. SC again is in the top 20 of something: http://images.businessweek.com/ss/08/10/1003_budget_shortfall/1.htm.
So any expected money from the state, and any from the fed that can be used by the state for itself or cities, is probably not going to make it in any usual amount to the cities.

I have blown the whistle on the city’s impending economic plight for at least 8 years, with no one paying attention. Instead, the slight-of-hand that our mayor and council use to tout the great gains and renaissance of Columbia smoke screens the real economic failures. It has worked for a while, but the problems now cannot be hidden or denied, only acknowledgement slightly delayed due to “we have to balance the books and close the year out first to see where we are”. One editorial writer for The State fairly well admitted, by not admitting, that the city is bankrupt with an editorial titled
“City’s bad bookkeeping hasn’t caused it to go broke-yet” (http://www.thestate.com/bolton/story/505493.html).
The editorial was written a few days after my article: The City of Columbia is Functionally Bankrupt (8-25-08), http://groups.google.com/group/theazarnewsletter/browse_thread/thread/fc2170991b452b88.
It was a softball editorial designed to give the council and manager an easy out and soft landing, in essence, denying the numbers put out by Adam Beam of The State, who gave a fairly conservative article on the city and conservative numbers (http://www.thestate.com/local/story/499398.html),
not including anything that had no quantitative number to it, such as estimates for the crumbling sewer and water infrastructure. I have to say that it was interesting to see one hand try to minimize the other at The State. And to read a mild comment discrediting me and my article without referring to me (my article came out 8-25 and the editorial 8-28; coincidence?). A more up to date article recently surfaced in the Free Times on October 1:
http://www.freetimes.com/index.php?cat=121304064644348&z_Issue_ID=11010110083100444&ShowArchiveArticle_ID=11010110080949539&Year=2008.
It implies that if the information the reporter obtained is true, the city effectively has no reserves and would be in the position of living paycheck to paycheck.

But, if as the whispers go, if they do bring it up to date and balanced, then they will have to admit to the economic failure of our city.

Joseph

BTW, if you do not receive this in HTML, the links for some of the articles may not appear. I hope the many embedded links do not get jumbled in this transmission. They probably will not link on the blog so you will have to cut and paste.