Thursday, February 08, 2007
Sunday, February 04, 2007
Millions at risk
Editor:
Reading School Board President Keith Stamm gets it. City Councilman Jeffrey Waltman gets it. Most of the other board members of various city and county entities that oversee financial and investment decisions do not, as evidenced by the tens of millions of dollars lost in bad investments or at risk("Reading schools pay bank $241,365,"Reading Eagle,Jan 18th).
Too few realize that as fiduciaries it is their obligation to thoroughly understand an investment and have a backup plan if the wheels start to come loose.
I'd bet a fixed against-floating rate swap that no board member can even spell the word derivative.
Robert G. Logan Wyomissing
Reading School Board President Keith Stamm gets it. City Councilman Jeffrey Waltman gets it. Most of the other board members of various city and county entities that oversee financial and investment decisions do not, as evidenced by the tens of millions of dollars lost in bad investments or at risk("Reading schools pay bank $241,365,"Reading Eagle,Jan 18th).
Too few realize that as fiduciaries it is their obligation to thoroughly understand an investment and have a backup plan if the wheels start to come loose.
I'd bet a fixed against-floating rate swap that no board member can even spell the word derivative.
Robert G. Logan Wyomissing
Bet was placed with public funds
Editor:
In April the Reading School Board placed a bet that will cost the taxpayers $230,000.
Buying a derivative is not a hedging strategy but a trading strategy that is potentially reckless. A derivative is a financial contract whose value is derived from stocks, bonds, currencies, commodities, loans or linked to changes in the weather or interest rates.
In this case the board was betting on the relationship between long and short term interest rates. The only parties guaranteed to make money in a deal such as this are the bankers and advisors, who walked away with approximately $1,000,000 Million in fees.
Advisers such as Concord Public Finance get paid for conducting a transaction. The fact that this transaction cost the taxpayers $230,000 is irrelevant to Concord. It gets to keep its $400,000 fee whether the deal works out or not.
These are sophisticated strategies and require extreme diligence in their application. In this case there may have been a legitimate reason for this transaction, but it would seem all too often entities are sold on these speculative strategies. There is no difference between betting on interest rates, orange futures or the price of pork bellies.
When will public officials fully appreciate their responsibility as stewards of public money?
William H. Love South Heidelberg Township
In April the Reading School Board placed a bet that will cost the taxpayers $230,000.
Buying a derivative is not a hedging strategy but a trading strategy that is potentially reckless. A derivative is a financial contract whose value is derived from stocks, bonds, currencies, commodities, loans or linked to changes in the weather or interest rates.
In this case the board was betting on the relationship between long and short term interest rates. The only parties guaranteed to make money in a deal such as this are the bankers and advisors, who walked away with approximately $1,000,000 Million in fees.
Advisers such as Concord Public Finance get paid for conducting a transaction. The fact that this transaction cost the taxpayers $230,000 is irrelevant to Concord. It gets to keep its $400,000 fee whether the deal works out or not.
These are sophisticated strategies and require extreme diligence in their application. In this case there may have been a legitimate reason for this transaction, but it would seem all too often entities are sold on these speculative strategies. There is no difference between betting on interest rates, orange futures or the price of pork bellies.
When will public officials fully appreciate their responsibility as stewards of public money?
William H. Love South Heidelberg Township
To All School Board Presidents
Adjust your sails--- and have a great year. Simple Wisdom:" Memories connect me to my past, like mile markers on a map, and guide me to the future." My simple wisdom statement came from the church bulletin.
Saturday, February 03, 2007
Very Interesting on use of Cell Phones
This was sent to me on 2/2/07. From the IRS Website
Employee Cell Phones : Government employers frequently provide their employees with cellular telephones and pagers to employees to conduct business. This can raise special tax concerns, due to the fact that these items are listed property under the Internal Revenue Code, and because employees may use them for business as well as personal use.
What is listed property? " Listed property"includes items obtained for use in a business but designated by the Internal Revenue Code as lending themselves easily to personal use. This includes automobiles, computers, and entertainment or recreation-related items. In 1989,cellular telephones were added to this category. Although the use of these phones is much more widespread and economical today, they remain listed property and are subject to these restrictions.
For a for-profit business, the designation of an item as listed property has implications for depreciation deductions taken by the business and computation of net income. However, this article focuses on the employment tax issuses raised for employees of government entities.
Substantiation Requirements: To be able to exclude the use by an employee from taxable income from an employer-owned cell phone, the employer must have some method to require the employee to keep records that distinguish business from personal phone charges. If the telephone is used exclusively for business, all use is excludable from income(as a working condition fringe benefit). The amount that represents personal use is included in the wages of the employee. This includes individual personal calls, as well as a pro rata share of monthly service charges.
In general, this means that unless the employer has a policy requiring employees to keep records, or the employee does not keep rcords, the value of the use of the phone will be income to the employee.
At a minimum, the employee should keep a record of each call and its business purpose. If calls are itemized on a monthly statement, they should be identifiable as personal or business, and the employee should retain any supporting evidence of the business calls. This information should be submitted to the employer,who must maintain these records to support the exclusion of the phone use from the employee's wages.
Employee Cell Phones : Government employers frequently provide their employees with cellular telephones and pagers to employees to conduct business. This can raise special tax concerns, due to the fact that these items are listed property under the Internal Revenue Code, and because employees may use them for business as well as personal use.
What is listed property? " Listed property"includes items obtained for use in a business but designated by the Internal Revenue Code as lending themselves easily to personal use. This includes automobiles, computers, and entertainment or recreation-related items. In 1989,cellular telephones were added to this category. Although the use of these phones is much more widespread and economical today, they remain listed property and are subject to these restrictions.
For a for-profit business, the designation of an item as listed property has implications for depreciation deductions taken by the business and computation of net income. However, this article focuses on the employment tax issuses raised for employees of government entities.
Substantiation Requirements: To be able to exclude the use by an employee from taxable income from an employer-owned cell phone, the employer must have some method to require the employee to keep records that distinguish business from personal phone charges. If the telephone is used exclusively for business, all use is excludable from income(as a working condition fringe benefit). The amount that represents personal use is included in the wages of the employee. This includes individual personal calls, as well as a pro rata share of monthly service charges.
In general, this means that unless the employer has a policy requiring employees to keep records, or the employee does not keep rcords, the value of the use of the phone will be income to the employee.
At a minimum, the employee should keep a record of each call and its business purpose. If calls are itemized on a monthly statement, they should be identifiable as personal or business, and the employee should retain any supporting evidence of the business calls. This information should be submitted to the employer,who must maintain these records to support the exclusion of the phone use from the employee's wages.
Friday, February 02, 2007
The New Agenda
Annual Board Presidents @ Superintendent Workshop
Balance of Power in the State
Politics
Rendell's Second Term
Speaker for the evening was Dr. G. Terry Madonna / a political analyst for WGAL-TV
Balance of Power in the State
Politics
Rendell's Second Term
Speaker for the evening was Dr. G. Terry Madonna / a political analyst for WGAL-TV
More Transparency Needed
The open records law has to be more open. When someone asks to see public records it should be made available within a week.
Thursday, February 01, 2007
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