March 9, 2009

Apparently Higher Spending Is "Savings" in Tiverton

Justin Katz

Unfortunately, time-critical tasks kept me from tonight's Tiverton Town Council meeting, at which the council will (or won't) ratify the latest AFSCME union contract. However, I did take a moment to rereview a document that the town council posted online titled "Contract Negotiations Summary."

That document shows a negative "net change" for each year of the contract and proclaims "total savings" of $117,065. Based on my inability to match the numbers, I emailed Town Administrator James Goncalo for the formula, and as I suspected, the town derives that dollar amount by assuming increases in salaries and other costs and counting some mitigating changes as savings. Basically, one totals the "wages," "health increase," and "co-pay" numbers for each year, finds the difference between one year and the year before, and then adds and subtracts the new expenditures and savings items.

Now, I don't believe that those who put together this spreadsheet are being deliberately dishonest, but I'm reasonably sure that they have made a conceptual mistake that conveniently embellishes their "savings." Simply put, the various line items are calculated from different starting points. For a measure of "net change," the wages, health increase, and copay items are calculated from the prior year,but everything else is calculated from the last year of the prior contract (2007-2008).

Thus, for 2010-2011, aggregate wages increase to $927,367 from $904,759, but estimated overtime savings don't actually increase an additional $60,000. They increase $60,000 compared with 2007-2008 rates. For the wage amounts to be comparable, they would have to be listed as the actual dollar-amount increase from 2007-2008 — or, $8,654 for 2008-2009, $39,375 for 2009-2010, and $61,983 for 2010-2011. Alternately, one could calculate all numbers as a change from the previous year. Recalculated in these ways, the "net change" amounts would render as follows (adjusting for a $10 error in the original calculations for the final year), with savings denoted as negative numbers:

Town Council
Change from
2008-2009 -$12,249 -$12,249 -$12,249
2009-2010 -$46,948 -$16,870 -$4,621
2010-2011 -$57,858 $23,886 $40,756
Total "savings" -$117,055 -$5,233 $23,886

The most reasonable measure of this contract's impact is the total increase or decrease compared with a flat-lined continuation of the status quo, or $114,647 -$5,233,* and I hope the town council isn't in the process of ratifying the contract as I type. If it does pass, residents can expect to hear that "locked in" phrase repeatedly during future budget battles, and we will be entirely justified in making these specific councilors pay a political price for having done the locking in.

* My initial number resulted from a data entry error as explained here.

Comments, although monitored, are not necessarily representative of the views Anchor Rising's contributors or approved by them. We reserve the right to delete or modify comments for any reason.

So let me see if I have the math straight with how these towns are "saving" money.

Being a good reader, I tell Justin that I'm going to start donating $5 a month to Anchor Rising and then every three months, I'm going to increase that by $5 per month.

So for three months, I'm paying $5/month, then for three months $10 per month, then for three months $15 per month and then for three months $20 per month. So I'm on the hook for $150 this year. But then I realize, that's just too much. So then instead of increasing by $5 a month, I'll only increase by $4 per month.

So now I do the math and I'm only on the hook for $141 for the year. Heck, I've SAVED myself $9! I'm sure my wife will be thrilled when I tell her that I saved us $9! Oh and by the way, the monthly expenses are still going to increase by an additional $4 every quarter, but pay no attention to that part, I saved us $9 this year!! Wahoo!!

Posted by: Patrick at March 10, 2009 10:36 AM

Hey! That's what my wife does. She goes shopping, spends $100 for things we don't need and comes home to tell me how she saved us $200 by not paying full price.


Posted by: John at March 10, 2009 11:34 AM

Yeah, you see this trick all the time at the grocery stores too. An item will be $4.29, but if you buy two, they're $7. So even if you don't need two, or if it will spoil before you use the second one, you can say you saved $1.58 by buying two!

Posted by: Patrick at March 10, 2009 1:41 PM

Thats how they do math in Tiverton

Posted by: pat at March 11, 2009 10:54 AM
Post a comment

Remember personal info?

Important note: The text "http:" cannot appear anywhere in your comment.