Thursday, May 12, 2011

Talking Past Each Other In Richardson

The Richardson City Council election is widening a political divide. The charges being leveled against the city, the City Council and the city staff, are growing in seriousness and volume. Enough that the City Manager took the most unusual step of responding publicly, defending the city against what he diplomatically calls "misstatements." His letter is unlikely to settle the debate. Why?

Some Richardson residents expect things to work differently in the city and when they don't, they see them as broken and want them fixed. When they aren't "fixed" these residents think the City Council and city staff, at best, are not listening to them and, at worst, are corrupt. On the other side of the divide, there are people (including the City Manager) who recognize that the things at issue work pretty much the way they are intended to work. They see nothing important to "fix." Sure, continuous improvement is always called for, but that won't meet the expectations of disaffected citizens, which are far out of alignment with how government processes are designed to work. Because their assumptions are so different, the two sides tend to talk past each other.

After the jump, let's take a look at a few misconceptions.

  • Debt: Some people think Richardson's debt is too large. They add every future payment Richardson is committed to and lump it all together as "debt" -- principal of outstanding bonds, future interest payments on those bonds if held to maturity, future liabilities for retiree pensions, etc. The city, using a standard accounting definition of "debt," treats various liabilities separately. And around the bush we go, unable to agree even on what "debt" is.

    But even if we could agree on a definition, we're still not aligned on whether it's a problem and if so, how big a problem. The critics argue that Richardson's debt is too high. This is a value judgment. Too high by what criteria? The city points to a second issue that we can't agree on either...

  • Bond ratings: Investors rely on Moody's and Standard & Poor's to rate the credit risk of public and private companies. What investors want to know is how much risk is there that the company will not be able to make the interest payments and repay the principle of the bond the investor is considering buying. It's a forward-looking rating. History is important only when history is believed to be a good predictor of the future. Richardson's AAA bond rating is a vote of confidence in the outlook for Richardson's future performance. By buying our bonds at low interest rates, investors are betting on Richardson to do well. Investors are not betting against Richardson. That's good. No matter how little you might trust Moody's or S&P, a AAA rating is still better than a lower rating because a low rating would make that new rec center or swimming pool more expensive to Richardson taxpayers.

  • Audits: The city's finances were audited by KPMG and no issues or irregularities were found. That doesn't mean KPMG thinks the city is spending money wisely. It just means that the city's books properly keep track of revenues and expenses according to standard accounting principles.

    Some people dissatisfied with the audits seem to want KPMG to tell the city that they're spending too much money on, say, golf course management. That never was the intent of an audit. If the voters don't want the city to spend as much money on the public golf course, they need to elect council members who will cut back on the money spent on the public golf course. Hoping to do this via an audit is a misplaced hope.

    Some people dissatisfied with the audits seem to want KPMG to follow every expense receipt (maybe even follow every trip of every city-owned vehicle) to make sure no one is taking advantage of the city. If there are valid reasons to suspect fraud, such investigations might be justified. But conducting exhaustive investigations because you don't trust city staff is not a standard part of a standard audit.

  • Transparency: There's no universally accepted definition of transparency, like there's no single definition of liberty or equality or justice. Even critics agree that the city's processes are more transparent today than they were two years ago. The budget, check register and the annual financial report are all available online. The state of Texas recognizes Richardson as among the cities "that are setting the bar with their transparency efforts."

    Like with audits, critics who don't trust city staff believe that if what's currently available online doesn't provide evidence of wrongdoing, then something important must still be hidden and we need more transparency to root it out. Because you can't prove a negative, some critics will never to be satisfied with any level of transparency.

    Can more be done? Certainly. It takes time and staffing and money to put the systems in place to simplify the task of analyzing the information and drilling down for more information. Expect the state's standards to be raised over time and Richardson's transparency to improve as well. Just don't expect critics to be satisfied.

  • Ethics: Don't expect the recently enacted code of ethics to stop council members from breaking the law. There are state and federal laws for that, laws against bribery, embezzlement, etc. Don't expect the code of ethics to control stupidity, either. If you think a $66 million bond program is stupid, don't pin your hopes on a code of ethics. Instead, elect different council members. The code of ethics covers the gray area in between illegality and stupidity. Richardson's new code of ethics fills in some of that gray area, which is good, but critics want more.

    Enforcement of the code of ethics is the issue that seems to be the source of the most disappointment. Although anyone can file a complaint against a council member, the code of ethics places in the hands of the council itself the power of judge, jury and executioner. Don't blame the city council for that. It's the City Charter that requires this, not some conspiracy on the part of the council to protect themselves. The City Charter lays out the rules for removal of a council member -- only the rest of the council can do it. It'll take a revision to the City Charter, approved by the voters at large, to change that.

In the final analysis, these debates about debt, bond ratings, audits, transparency, ethics, etc., are just proxies for the real issue, which is personal. Some critics just don't trust the people in charge at city hall. As long as distrust persists, all the debate in the world won't lead to common ground. It'll continue to be just so much talking past each other.

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