At the Nov. 20, 2014, Peachtree City Council meeting, I witnessed growing disquiet among citizens who appear very frustrated at being effectively shut out of deliberations that involve decisions of great importance to the long term financial viability of PTC.
The frustration, in my opinion, is resulting from a less than honest PTC senior staff that refuses to provide basic information to the public, and by a PTC Council that is not requiring enough transparency.
The discussion in the Council meeting was, frankly, disturbing. I observed personal, ad hominem arguments (on both sides of the issues) that were not constructive. I fear that if we do not solve the communication and decision making weaknesses of PTC, then we will face years of public, truculent, city-image-destroying public hearings.
I also believe, however, that the solution is simple. I have a recommendation at the end of this letter. But first, I feel the need to report my impressions of manifestations of the problems, so that the solution I propose will be better understood and appreciated.
The staff communication problem, in my opinion, is one of a lack of respect for the public. Information about financial decisions is presented in a shallow, misleading fashion. Basic questions and concerns, raised publicly by citizens, go unanswered. I believe that this is why the community is getting so frustrated, and why the tone in public meetings (and editorials) is becoming so strident.
The pension issue illustrates and confirms this problem. Months ago, I asked in a public hearing how new accounting rules (GASB 67 and 68) would be affected by proposed increases in the number of staff, and by increases in salaries.
I stated an accounting change (which will affect all local and state governments) will require long-term pension liabilities to be disclosed in the PTC government wide financial statements.
In the past, this disclosure occurred in the footnotes (“off balance sheet”); in the future it will be a long term liability (net pension liability) that will officially reduce assets (“on balance sheet”).
For many governments, this liability is going to cause the entity to be in a negative net position. (To use a financial accounting comparison: Equity = assets – liabilities. The net pension will be a reported liability, that will be so large for many governments that it will cause them to go from having positive equity to having negative equity).
Bond rating agencies (Moodys, S&P, Fitch), and therefore bond investors, care about a city’s “equity” when they consider investing in a city’s bonds.
More staff, and higher salaries, both increase (by definition) the cost of pensions.
In this context my question was quite simple; “In the Fiscal Year 2015 budget proposal, PTC staff are proposing to increase the number of staff and increase salaries. Can you tell us what the incremental impact of these changes will be on pension costs, particularly given new financial presentation standards (GASB 67 and 68)?”
It seemed like a reasonable question. Rather than being provided a simple answer to a simple question, we were told – nothing (even after Open Records requests).
Now, I actually do not think that the PTC pension liability will be as significant to us as it reportedly will be for many other governments. Yet the deeper question is: why don’t we know?
“Trust me and don’t worry your sweet little heads about it” is not an acceptable answer for staff to give citizens, especially those who are attempting to exercise good civic engagement by being involved.
In fact, it is what the staff in Detroit told their citizens, before filing for bankruptcy (which is part of the reason for GASB 67 and 68).
After the council had voted on the staff salary scheme (without having answers to pension, compensation and other basic questions), our city manager proceeded to claim, in the local paper, that pension questions, benefits questions, and other fundamental questions had been answered adequately.
It was clear in the Nov. 20 council meeting that from the public’s perspective (and even some members of the PTC Council), they had not been.
Unfortunately, our city manager went on to make the same claims during the November council meeting, after the period for public discussion was over.
He even stated, “We have a pension expert here tonight who can talk to council members about any pension related questions.”
With all due respect, our council members do not have the same level of expertise about pensions and governmental accounting that some of our citizens do (and we do not expect them to). Why didn’t citizens get the chance to ask questions?
More importantly, why did the city manager bring in a “pension expert” to the council AFTER the council had already voted on raises?
To our city manager, I have a word of advice – stating a lie (even a little white lie) more often and more loudly does not make it any more true.
And doing so in a way that misleads the public, without opportunity for public rebuttal, is not going to make the criticisms go away. If you have not noticed, it is only getting citizens more frustrated.
Some PTC Council members also disappointed the public, and I believe, made the problem worse. One council member stated that he was, “Tired of beating a dead horse, and that he was not interested in process.”
Well, the process that he so disdains is actually the process of clear, cogent, fact-based decision-making. I hope for the sake of PTC’s future, that he will change his mind about “process” (see my recommendation below – please).
Now, to be clear, this same council member stated that he did what he thought was right, for the PTC staff. I actually do believe that this was his motive for the snap decision that led to his vote on reversing the earlier approved pay raise in favor of the one proposed by PTC staff.
Unfortunately, flaws in the approved plan will do more damage than good, for the staff (if one cares about all of them, not just the senior ones).
In a shallow way of trying to silence dissenters of the new salary plan, the council member (and other PTC citizens) suggested that anyone opposed the new salary plan simply did not care about PTC staff. This is entirely false.
We, involved citizens, care deeply about having satisfied, motivated employees. We also care about the financial viability and reputation of our city. This is why others and I were appalled to learn that some of our lowest paid employees will receive NO pay increase, while high paid staff will get large increases (which will also fatten their already vested pension benefits quite nicely).
Now, I hope, the reader can see the point. The new salary increase (that replaced the earlier adopted salary increase) was poorly presented and haphazardly approved. Those of us citizens who care about our city (including our staff), are earnestly attempting to help PTC improve its decision-making process to ensure better outcomes. We know that Peachtree City deserves better!
For my recommendation I will dispense with financial jargon and use a term from my time in the military. In the Army, we understood that mistakes happen and that the worst thing to do was ignore them. From a leader’s perspective, the most important thing was to objectively review mistakes, to determine why they occurred and to determine how they could be avoided in the future. We referred to this as an after action review (AAR). I propose that PTC conduct an AAR.
Admittedly, there is no PTC staff or council member that could objectively be the senior member leading the AAR. Fortunately for PTC, there are many entities that could fill this coach/advisor role.
For starters, we probably already pay to be members of the Georgia Municipal Association. They are a non-profit entity that exists to help city councils and staff with city governance issues.
Additionally, the Carl Vinson Institute of Government exists to help local governments with all sorts of management issues. It is the preeminent organization in Georgia, charged with assisting local governments in being better in all facets of local government management. They could very effectively conduct an AAR.
They could also provide suggestions of how to summarize, report and analyze information in support of decision-making. They could even assist in helping PTC become more transparent and, perhaps, win back lost public trust. I am certain they could show us many examples of good government all over Georgia. Surely we are not too arrogant to learn best practices from other governments!
Actually, what I am proposing is nothing new (just, perhaps, a new way to get there). Our PTC logo refers to us as, “Peachtree City, a Planned Community.” I am merely suggesting that we get back to our roots and start doing some planning. And do so in a credible, transparent fashion.
Scott Austensen
Peachtree City, Ga.
