January 22, 2007

Outside Counsel, Inside Council

City Manager Bernie Lynch will report to the City Council tomorrow night that he has spent close to $13,000 on outside legal services for independent reports and opinions over the past few months. The outsourcing of services, as Lynch sees it, is for certain specialized cases where the city's Law Department might lack the expertise or where there might be a conflict of interest. Of course, Lynch could also depend on the outsourcing to either validate the Law Department's opinion on an issue, or to reject it.
So why did Lynch hire the firm of Kopelman and Paige? There were questions of police indemnification (the Boutselis case), the employees' health care, research on public ways, and f contract issues (towing). The total bill for these opinions came to about $3,500.
Also, K&P was hired to review the Stocklosa School building project and the chronology of events leading up to the mysterious elimination of three classrooms from the original design and then their replacement, at a cost of $290,000.
NOne of these issues, in my view, rise to a conflict of interest, unless someone believes there might be a conflict of interest among personnel working in the Law Department. Hmmm?
Now I'm just rendering a guess that the outside counsel came to the same conclusion that the Law Department did on many of these same issues, particularly the Stocklosa School and police indemnifcation. So maybe Lynch just wanted a "second opinion." Or maybe he wanted to question the advice of his own legal department. Whatever, it will be interesting to see how much more Lynch must outsource to get an opinion in the future. Doesn't he trust the city's law department of 13 full- and part-time solicitors? And why all these outside legal opinions all of a sudden? Could the "inside" council be telling him what to do? Good question. (Oh, I'm sorry, I wasn't supposed to mention the fact that they all live in Belvidere. Something about pitting people against each other. Give me a break.)
One thing I do know: there are a lot of thin-skinned people running the city. They can't stand to be questioned, whether it comes from an editor or a septugenarian who happens to be a former city manager.
.

Posted by JimC at 9:59 AM | Comments (1)

January 16, 2007

Devalonomics: Patrick's Budget Deficit

Gov. Deval Patrick has found the reality of the job is far different from campaigning for the job.
A week into office, Patrick said the state is facing a $1 billion deficit. Was this a signal of taxes to come? Or was it a diversion to keep all the special interest groups, like the Massachusetts Teachers Association, at arm's length from getting Deval to dip into the public treasury?
Now comes Michael Widmer's explanation in The Globe that, yes, the state does have a budget deficit despite two years of consecutive $1 billion surpluses. How can that be? Widmer, who is president of the Mass. Taxpayers Foundation, said the deficit stems from the Legislature's proclivity to use reserves to balance the budget and its overspending ways.
Remember when Patrick said during the campaign that he could find $750 million in wasteful spending, thereby returning it to cities and towns to reduce property taxes? It was wishful thinking on his part.
As Widmer points out, Patrick faces a major hurdle in meeting current state obligations for health care, pensions, and other state programs. It will be difficult, with tax revenues already declining from 8 percent per year to 4 percent, to expect any extra money coming in.
The deficit is largely the result of using surpluses to supplement budget spending. It is unwise and puts the state in a terrible position if a recession were to hit.
Patrick now has three options. He can call for a tax increase, curb spending, or seek new revenue streams, possibly from expanding gaming.
My guess is that he'll try to maneuver the budget in a way to defray costs. There's already talk of amortizing state pension payments over an extended period of years, which could save $300 million this year. Of course, the money will eventually come due.
He'll also have to take a good, long look at expanded gaming. It just makes no sense for the state to lose up to $800 million annually to Rhode Island and Connecticut, when Massachusetts communities are struggling financially.
Finally, Patrick could raise taxes. If he is going to do this, he has to strike while the iron is hot, This is the tactic Bernie Lynch used in Lowell, to call for the biggest tax increase in two decades. No doubt Lowell has a budget deficit, but it isn't $9 million. Regardless, this year's tax increase will become next year's budget surplus. Trust me.
Patrick will find resistance to a tax increase in the Legislature - more than Lynch did in Lowell - but he could probably get something approved if he wanted it badly enough. It wouldn't be good politically however.
What do you think?

Posted by JimC at 5:13 PM | Comments (4)