Letter: Professor made some sloppy mistakes
To the editor:
I read the article in last week's Barrington Times with some concern. I remember well the meetings on whether or not to privatize trash pickup and yard waste in Barrington. I have attended many meetings over the
last 20 years and I am often found standing up giving my opinion. What was different about the meeting over privatization, was that I found myself speaking against what the town manager was recommending. That
very rarely happens, as I often find myself not only agreeing with but impressed with the steps the Peter DeAngelis takes.
But this time I felt strongly that the town should not get rid of the union employees and hire a private contractor. I stood up and said so. The only reason I ever feel privatizing is justified is when the union in question is totally uncooperative, or the employees in question are not doing their jobs satisfactorily. Neither of these were present in the workers in question. All accounts had them performing their jobs well and they had taken a zero raise when the town's need was great during the recession.
But as much as I want to keep the employees in their jobs after having gone through all the numbers I can tell you there were no scenarios where privatizing would not have saved Barrington money. The sad truth due to employee benefits very high pensions is that almost all town employees and functions, including fire, police and even teachers, if privatized would save the town of Barrington money. The question is never whether or not privatizing would save money, but should we relinquish control of our own services in order to save the money in question. My belief then as it is now is that it is not worth the savings. But there is always room for good people to disagree whether the savings are worth it or not.
But Ms. Ruggieri's claim that the town spent more privatizing that it did with its union employees is sheer financial quackery. Ms. Ruggieri's claims that she went through reams of paper ( online I suppose) to come up with her conclusions. Well I don't think there are more than a handful of people in the town of Barrington who have studied this budget more than I have over the last 20 years and I attended the meetings in question I didn't just read the minutes. How she thought she could get to conclusions without consulting the people who work with the numbers every day is financial malpractice. Especially with so many variables.
By looking at the paperwork online she might have seen that the costs over the last three years with Mega were higher than the previous three years and came to the conclusion she did. But one of the first things that I learned in accounting 102 was when doing a year-over-year analysis the first thing you do is you equalize any variables that might make the comparison apples and oranges rather than apples and apples. The numbers that allow you to do that are not available online.
Gasoline is up 40% from 2010 when we privatized. Sincethe amount of gasoline used is not itemized in the last three years audits, how could she have correctly accounted for that in the cost analysis that she did?
Pensions have been eliminated. I am told we have eight less pensions than we did when we privatized how which you quantified that savings without contacting the people involved? Exactly how much savings is eight pensions?
The pension assumptions which we used in 2010 had rate of return of 8.75%. Now Lowered to to 7.5% in 2011 incurring additional cost to the town. These numbers are not available anywhere in the town audit. How would she be able to determine how much more money that would cost us for the eight employees in question without talking to administrators involved?
The pension assumptions are going to change yet again as we realize that we are not actually achieving 7 1/2% rate of return but more like 5% rate. This means all of our pensions will cost us more money for decades. How much money will we have saved by eliminating those eight pensions in 2010? Had she accounted for this?
I assume since it's three years of privatization that she compared it to the three years prior for how much the expense would be as a base point. Perhaps if she looked out her window from Roger Williams University she may have noticed that the last three years the weather has been perhaps worse than any other three years in history for the state of Rhode Island. Hurricane Irene, super storm Sandy, the blizzard, all of these things would increase the amount of yard waste and refuse to be picked up. My yard alone lost 35 trees. Had the town not privatized the town would have incurred additional overtime and ergo correlating higher payroll and pension costs. Not to mention gasoline. Did she take these factors into consideration? I don't see how since the amounts are not quantified on any of the online documents she says she's read. The only way to do that would be to meet with the employees who deal with it on a daily basis. Which She has refused to do.
To say the last three years cost us more than the previous three years because privatization without factoring in the amount of extra work that the three largest storms in my memory in Barrington cost us is just poor accounting method. Of course the last three years cost us more! It was the worst three years of whether anyone can remember.
And as to Ms. Ruggieri's indignation that Mr. DeAngelis called the University when she refused to meet with the town staff, I will agree that may be Mr. DeAngelis did not have to do that. But frankly Ms. Ruggieri, Mr. DeAngelis's phone call should not call into question whether or not "Is this is America?" As you stated in the article. Stating that he is a town employee. I assume buy that she means he is paid by the taxpayers.
Well Ms. Ruggieri when you use the prestige of your lifetime protected, unionized position with a heavily taxpayer subsidized institution (see property tax exemption, Pell grants, federal and state subsidized financing, tax deductions for tuition plus assorted other grants) to use highly questionable accounting practice to question town employees competency or integrity the very least you should expect, the very least you should expect is a phone call to your boss. Your cushy job with no real oversight is pretty much paid for by the tax payers, just as the town manager's job is.
Lastly due to my obsession with numbers many people ask me if I can recommend an accountant to them on a regular basis. I would be obliged if Roger Williams University will provide me with a list of the students who take the class with this is taught as an example, so I know not to recommend them as accountants to people I know. If this is how she teaches her class that I can only imagine what kind of accountants they will be.