Activity Report

I apologize to loyal readers who have wondered where I've been.  I am engaged in some academic research that is absorbing all of my waking time. I used to be in such a state and am again. The reason is in part that my employer, Brooklyn College, has decided to transform a once-miniscule economics department into a business school.  They have hired a dean, Willie Hopkins, from Cal State Chico and Dean Hopkins is focused on winning AACSB International accreditation, which is the best accreditation.  Part of accreditation is research output.  But, in addition, my Sabbatical the year before last stimulated a new interested in business ethics and I am working on a philosophical and historical project that will take several years to complete.  During this time I have also been writing a monthly column for the AICPA Career Insider and writing a monthly column for Mike Marnell's Lincoln Eagle. I have also been working on additional research projects.  I am developing two courses for the CUNY Free Institutions program and have a three course teaching load. Therefore, I have a full plate. I intend to keep blogging but have been totally engrossed in studying the history of positivism and related subjects. 

Town Special Reserve Accounts--a riddle, wrapped in a mystery, inside an enigma

 

Via E-mail and US Mail

PO Box 130

West Shokan, NY 12494

October 1, 2011

Supervisor Berndt Leifeld

PO Box 180
West Shokan, NY 12494
845-657-8118
FAX 845-657-6117

Dear Supervisor Leifeld:

At the recent Town of Olive budget workshop several citizens raised the question of balances in special reserve funds being used for emergencies such as the recent tropical storm devastation.  Your response was that money in reserve funds cannot be used for purposes other than those designated in the accounts.  Your claim is false because special reserve accounts can be reduced or dissolved.  I located a policy statement of the New York State Comptroller’s Office located  at: http://www.osc.state.ny.us/localgov/pubs/lgmg/reservefunds.pdf .   The report states:

When conditions warrant (subject to legal requirements), the board should reduce reserve funds to reasonable levels or liquidate and discontinue a reserve fund that is no longer needed or whose purpose has been achieved.

The report implies that different reserve funds are subject to different methods of dissolution or reduction.  As well, the report states:

Because of the complexity of some of the legal requirements relating to the establishment, funding, expenditure, and dissolution of reserve funds, we encourage local officials to consult with their municipal attorney.

I assume that you have done so and can produce letters to and from lawyers as to the statuses of the various special reserve funds.  As well:

(R)eserve fund(s) should be established with a clear intent or plan in mind regarding the future purpose, use and, when appropriate, replenishment of funds from the reserve. Reserve funds should not be merely a “parking lot” for excess cash or fund balance.

The report also gives some guidance as to prudent oversight of reserve funds:

Reserve funds can be excellent financial planning tools when combined with a realistic analysis of future financial needs and obligations. All too often, however, reserve funds are established and substantial cash is accumulated without due diligence in monitoring the reasonableness of reserve fund balances. To help ensure that reserve funds are being properly established for an authorized and needed purpose, and the balances in existing reserve funds are not accumulated excessively or unnecessarily, governing boards should answer the following questions:

• ·         Has legal counsel provided guidance on the authority to establish new reserve funds?

• ·         Has the financial need or purpose served by the reserve been identified?

• ·         Does the reserve fit within or complement the long range financial or capital plans of our locality?

• ·         Has a written reserve fund plan or policy been developed?

• ·         What events and obligations is the board planning for?

• ·         Is cash being accumulated for the purchase of a major piece of equipment or to help finance other major capital outlays?

• ·         Is cash being sequestered to help mitigate the impact of other large, nonrecurring expenditures?

• ·         Are there risks that need to be protected against?

• ·         Does the board’s policy address replenishing depleted reserve balances, as appropriate?

• ·         Is the board provided with periodic financial reports on reserve fund activity?

• ·         Are reserve balances at an appropriate level?

• ·         Has the board reviewed all reserve funds currently established and determined if the balances are necessary and reasonable?

• ·         Is there a limit on the dollar amount to be accumulated?

• ·         Is the reserve serving the purpose for which it was established?

• ·         Are the best interests of the taxpayers being met?

• ·         Any governing board that is planning to establish and finance reserve funds on a regular basis should develop a written policy that communicates to taxpayers why the money is being set aside, the board’s financial objectives for the reserves, optimal funding levels, and conditions under which the assets will be utilized. Boards should also periodically assess the reasonableness of the amounts accumulated in their reserves.

• ·         When conditions warrant (subject to legal requirements), the board should reduce reserve funds to reasonable levels or liquidate and discontinue a reserve fund that is no longer needed or whose purpose has been achieved.

The last three bullets address questions that citizens asked you and that you failed to answer.  Surely you have addressed all of the concerns listed in the above bullets, and I now request you to apprize the public of your deliberations, due diligence, and thoughtful planning at the next town meeting.  Alternatively, I can send an additional freedom of information law requesting documentation of your compliance with the Comptroller’s guidelines and take the information to the media.  As a local gadfly, I anticipate your response with interest.

Sincerely,

Mitchell Langbert, Ph.D.

Freedom of Information Request Regarding Town of Olive's Agenda 21- and Section 8 Housing-Driven Comprehensive Plan

Via E-mail and US Mail

Freedom of Information Law Request

Ms. Sylvia Rozzelle

Town Clerk

Town of Olive

PO Box 96
West Shokan, NY 12494

October 1, 2011

Dear Town Clerk Rozzelle and Supervisor Leifeld:

Under the provisions of the New York Freedom of Information Law, Article 6 of the Public Officers Law, I hereby request records or portions thereof, or to inspect such records if copying costs exceed $50, pertaining to (or containing) the following:

-All correspondence, meeting minutes and invoices that mention the proposed Comprehensive Plan

-All correspondence, meeting minutes and invoices that mention the Rudikoff consulting firm, including, but not limited to, any invoices received from the Rudikoff firm immediately following the August 8 meeting.

-All correspondence concerning the legality of transfer of development rights mentioned in the draft comprehensive plan

-All correspondence and minutes of any meetings with with Rupco or any of its directors or officers

-Regarding potential paid work for the Town of Olive, all correspondence with Mr. ...  and minutes of any meetings with him

-All correspondence with Tongore Pines Housing Development Co. and minutes of any meetings with any of its directors or officers

-Minutes of any meetings held in the past five years and any correspondence concerning establishment of special revenue funds or any other encumbrance of specific or special purpose funds

If there are any fees for copying the records requested,  please supply the records without informing me if the fees are not in excess of $50. If they are above $50 please advise me when I can inspect the records in person.

As you know, the Freedom of Information Law requires that an agency respond to a request within five business days of receipt of a request. Therefore, I would appreciate a response as soon as possible and look forward to hearing from you shortly. If for any reason any portion of my request is denied, please inform me of the reasons for the denial in writing and provide the name and address of the person or body to whom an appeal should be directed.
        

Sincerely,

Mitchell Langbert, Ph.D.

PO Box 130

West Shokan, NY 12494          

845-657-8460

Obama's Stock Market Weakness

The Dow fell 391 points today while the S&P 500 fell 37 points, 3%, to 1129.  The immediate reason was that yesterday the Fed announced a lukewarm as opposed to a hot easing whereby it is exchanging long term for short term securities.  Take this into account: Federal Reserve Bank Credit has increased over 300% in the past three years. That's the largest money supply increase in American history except when the Continental Congress destroyed the Continental, America's first currency, back in Revolutionary War days.  Given the massive easing, including QE2 earlier this year, one would think that Wall Street would be satisfied. But it isn't.  Dollar inflation isn't enough, and when the Fed announced a lukewarm response to the implosion of European socialism, the American markets crashed.  I've lost a chunk of change because I wasn't expecting QE2 to have had such a weak effect. Plus gold, following a record high within the past few weeks, is in a correction or consolidation mode.  But the strengthening dollar due to the Fed's relative conservatism means that cash has gone up in value, which reduces the losses in riskier assets.

The Obama administration deserves responsibility for recent stock market weakness.  The massive quantitative easing should have had more of an effect on the markets.  It still might. What's holding it back is that the left-wing Obama Democrats have sledge hammered America's economy--the health care bill, environmental regulation, and proposed tax increases frighten investors.  Perhaps Obama and Congressman Maurice Hinchey believe that subsidies to corrupt "green" businesses that quickly fail will somehow stimulate the economy.  Such are Democrats' and America's economics profession's superstitions.  Throwing away money will not stimulate the economy.  We are in for a generation of economic decline because of Obama, Bush and The New York Times.