Monday, August 31, 2009

Cooper City's Latest Budget Workshop

This past Friday I read the news and did my homework for this evening’s budget workshop, and what I saw was very frightening. What I saw is that interest rates are at zero, and the government is flooding the market with cash. Fannie Mae and Freddy Mac are up 251% and 286% respectively, yet they were in big trouble 6 months ago, and now they are soaring. Bank of America is $40 billion in debt to the government, AIG is 80% government owned (along with the auto makers) and had a 277% gain in one month, yet they were left for dead last fall. The USA is broke, and as such, you don’t print more money, or raise taxes and fees. What does all of this tell us?

I don’t know about you, but it tells me that this country and government is just delaying the pain. The risk in holding any investments in US dollars is tremendous! The government, including ours in lil’ ol’ Cooper City, is turning the recession into a depression. It also tells me that our government called the Municipal Corporation of the City of Cooper City, has not done its due diligence in protecting its residents and business owners from excessive costs and fees in a time of recession.

Yes folks, the national economy and crisi directly affect all of us whether you see it, feel it or not. Consumers aren’t buying anything of real value right now. The consumer is scared and won’t infuse capital into the system for a long time. The government is on the short squeeze & the last thing you want to do is get in bed with the government! What happens when all of this passes over? We will have inflation like we’ve never seen before. Probably upwards of up to 400 to 500% in the next few years.

What does this have to do with us, lil’ ol’ Cooper City? Well, for one, our General Employees Pension Fund was at least $4 million in the hole a year ago. It may very well be another $2 million in the hole on top of that for this year. We spent lots of money on consultants for water conservation matters and water studies, when in reality, it was more than likely a political action, and we raised water rates up to 75% because we lost revenues due to the people’s proud and meaningful conservation efforts in saving water.

There was no 6 month review of the 2008-09 budget. 1 in 16 residents in Cooper City are unemployed, almost 350 homes are now in foreclosure, and we want to spend $3.5 plus million dollars on basically what amounts to water enforcement, we want to buy a backhoe for 300+% more than monthly rental costs, we cry ‘poor mouth’ yet we have millions in cash per the auditor. We were lied to for 3 or more years about the so-called ‘reserve funds’, we completely ignore the Enterprise funds, and the department heads threaten layoffs when asked to suggest cuts in expenditures and discretionary operating costs, when they could have easily found and submitted ways to reduce expenses and costs, and eliminate known waste. The problem is the Department Heads don’t want to cut discretionary expenditures. They haven’t ever had to do it, so the backup data which threaten layoffs that is before us tonight is the end result.

As tenured employees and professionals making well over 6 figures a year, they should be able to do a simple task such as provide detailed specifics on cutting expenses and waste, not just say “we have to lay off employees”, which would contribute to the already high unemployment rate in our city and county.

The fire assessment for a residential single family was just approved for a 23.1% increase and the total of the fire assessment in revenues per the recent trim notice for next year says Cooper City will derive one million two hundred thousand in additional revenues, in English that’s $1,200,000.00, when we are all scrimping and scraping every dollar we can justify. What is that $1.2M going to be spent on? That question should have been answered at the last budget workshop.

The question arises as to what exactly does the trim notice mean when it says that the City will receive $1,200,000 in funds? If the funds are collected by the county and then returned to the city are those funds entered into a special fund for payment for the services of the BSO fire division or are they placed into the general fund? Or are they meant for some special purpose expenditures? I know asking these questions is a little on the late side but they only arose once I received my TRIM notice.

Just the fact that this workshop is today at 5 PM tells me that this commission does not care about its stakeholders. A 5 PM start time is ridiculous and absurd. If the majority on the commission have so much to do that they couldn’t have had this meeting at a later time to cater to their constituents, then there is a problem. It is downright insulting to our residents and business owners, most of who don’t even get off of work at 5 PM, much less have to rush home, feed their family and try to make it to the budget workshop before adjournment.

Cooper City has a history of spending money like crazy. The resulting debacle is what we have before us now. The ‘voodoo economics’ practiced in Cooper City is largely due to decided fiscal issues a few years ago which are definitely affecting all of us now.

As such, the current Cooper City commission just hasn’t done the job that the residents and business owner’s expect us to do. We bicker about petty nonsense, personalities and collectively allow it to happen at each and every commission meeting while we sit back and 'cry poor mouth'. The Mayor can’t play by the rules, and the rest of the commission can’t seem to lay out a solid financial plan and a future for our city in this economic crisis due to the politricks, hatemongering and bias and prejudice emanating from, and occurring at city hall. It is very apparent that we sorely lack real leadership in Cooper City.

As such, for this Commission to approve this proposed budget as submitted would be a disgrace and an injustice to our constituents and the city’s stakeholders.

PS, there were some issues that were addressed and at least in consensus, parenthetically yet to be confirmed, scheduled for the budget hearing of September regarding the water meter project and capital expenditures. Stay tuned for more...
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Monday, August 24, 2009

Cooper City Budget Issues...continued

The essence of a good Government is that they are prepared to make difficult decisions to achieve long-term prosperity. Given the recession, one would think that the city manager's proposed 2010 budget would include a reduction in city generated taxes and fees, and that he would be very prudent regarding discretionary expenditures. We will see that this is not the case.

What we have is a national, state and county/local government that is completely out of control regarding the recent expenditures of taxpayer dollars. True leaders in our city should consist of private business owners, not ‘go-along-to-get-along’ politicians, who will unfortunately approve this upcoming budget because they just don't want to challeng the 'status quo', or they don't understand what it is we are all facing. The commission should consist of the same type of business oriented leaders that understand that during a recession you don't charge your customers more money just because you refuse to make the cuts that are necessary and expected when revenues are down. Some on the commission just don't seem to get it. I guess it's because it is not their money. If they disagree, rather than attack me, I say "put your money where your mouth is, and reduce this budget drastically!".

As public officials, we are in a position of Public Trust and as such, we have a sole duty to provide honest services while in elected office and to do our absolute best to assure absolute public confidence in the government. This has simply not been the case in our beautiful city since even before I was elected. The public’s trust is imperative and is determined by civic values such as open government, integrity and professionalism. Although the integrity of our Mayor and some on the commission has been sorely lacking, I won't discuss that issue here, as it is a subject for another upcoming article.

Schemes to defraud citizens of an intangible right to honest government services and irrational spending in a recession by public officials runs rampant at all levels and must be stopped. It's only the beginning…Government needs to completely slash their budgets like the rest of us have had to do, but this should not come as a surprise to anyone who understands the problem.

Our budget process is in full swing and as such, I recently requested answers from our new City Manager to some questions that I had, and some that I was asked by my constituents, such as "What is your plan to control overall spending? I'd like to see you propose an across the board 10% cut in operating costs on paper. Easily done...Send me a proposal." No reasonable response or attempt to control spending has been given.

I also asked "Are there any pay raises scheduled for employees?" The response was that a '2.5% merit increase has been budgeted based on satisfactory performance. A lump sum longevity increase of $1,500 has been budgeted for 34 employees who are at the top of their pay range.' Although no Cost Of Living Allowance was budgeted this year, my concern is that if the money given is a merit raise, why is it given to 'satisfactory' employess, those who are expected to do their jobs and do it well?

The proposed 2010 budget reflects only a a 1% reduction in discretionary operating costs in the General Fund (see page 11 of the budget) yet the proposed 2010 budget shows a 5% increase. The 2008-09 budget showed an 18% increase on top of a 5% police increase for a total of 23%. To reach a 10% reduction level in discretionary or operating costs spending would possibly require an additional $867,000 and may have service level impacts. What services? Who knows, but any cuts would certainly not impact the 'feel good' programs liked by the majority on the Commission. Instead, any cuts proposed and subsequently implemented may indeed impact essential services that are there for health, safety and welfare reasons.

At the August 11th workshop we discussed, at length, whether to continue funding the Broward County Transit program rather than discuss much more important items such as the extreme pension fund losses and how to ensure that the pension fund is fully funded. If this is the desire of the Commission to review non-priorities and waste excessive amounts of time on mandatory and required city services, we would have to establish additional workshops to review the budget proposal and what other 'services' would be reduced. The problem is, we are already looking at September along with having no mid-year budget review of '09.

An ominous storm cloud is gathering monthly as governments try to pay for the lucrative pension promises made to their employees. And these clouds are not just over a few city skies. They are virtually everywhere. Government employee pension funds across the nation are in a crisis. The Cooper City Police and Firefighters' pension funds alone had net losses of $2.1 million and $1.3 million respectively for FY 2007-08. However, BSO, not the City, is responsible for any losses as part of our merger agreement. You still pay for that, so don't be mislead. The Cooper City General Employees Pension Fund had a net loss of $1.9 million, on top of a $4 million loss. This is clearly a national, systemic problem. In fact, American taxpayers are exposed to a total of more than $350 billion in combined unfunded government pension liabilities just this year alone.

Commissioners still need to pull out their red pens. It's clear that the majority's budget choices reflect personalities, non-priorities and past incompetent budget behavior. Just look at the steep climb in spending per the Finance Director's charts! Spending such as $12K for Commission travel, and city attorney costs of almost $400,000 when the reason given by Commissioner De Jesus to hire long time friend of the Mayor, and neighbor to Commissioner Curran was “to save money” is disgraceful, and disingenuous.

I feel that our local government must change their ‘Spend it or lose it’ attitude and they must immediately tighten their belt like all of us have had to do in the recent past. The question that all of us should be asking is “What does this proposed 2010 budget specifically do?” We just don’t know. There is a severe lack of backup material and an apparent lack of fiscal responsibility in the air.

The departmental and fund comparisons are budget to budget, rather than the 2010 proposed budget compared to actual numbers for 2007 and 2008, and the easily, but not provided projected year-ending 2009. What this means is that we are comparing estimated 2010 to estimates in the budgets for 2007, 2008 and 2009. This is a poor and misleading practice as there is no reason to use the estimates for 2007 and 2008 because we have the actual results for 2007 and 2008.

Some commissioners and residents think that this budget proposal is well done and a fantastic presentation. I disagree. It is almost a trivial exercise to provide a very close estimate for how 2009 will end up. As of now, the staff should have 10 months of 2009 numbers already on the books. They know their run-rate numbers for Year-To-Date. I think that the City Manager should have these numbers, and he should provide them so that we can estimate our budget a little better than trying to make a 'best guess' at it.

It is standard management practice to request budget and expense estimates from departments all throughout American businesses. The City knows, or should know almost to the dollar, what each department expects to spend vs. the run rates through 9/30/09. This would be a much better and much more accurate method than using budget estimates made as much as a year ago. The Manager gave us numbers that he very possibly knows are incorrect as to the real world (the 2007 and 2008 budget figures) and, so far, he refuses to estimate the year-end 2009 numbers when he easily can do so.

So, in essence, the commission and the public are given comparisons that mean little to nothing in terms of actual budget experiences, facts and trends. Somehow or another, we all need to be comparing actual numbers to requested departmental budgets as much as possible, otherwise, we are just comparing one guess to another.

I suggest that all of you ask your Commissioners and the City Manager to re-submit his comparisons using actual '07 and '08 numbers, estimated year-end '09 actuals and proposed '10 budget numbers. I have done so with no response, which is nonfeasance in my humble opinion. I am trying to obtain for my constituents, a much more responsible budget for 2010 that is more in line with the economic recession, current and future hardships being faced by many, many Cooper City residents. As such, it's very obvious we are not hurting for money, but we are indeed spending way too much.

A 'balanced budget' is simply not my idea of prosperity. Costs of Police & Fire are up, along with costs associated with our utilities infrastructure. We must make further deep cuts regarding waste and unnecessary spending in the proposed upcoming budget in order to put even more tax dollars back into the pockets of our families, businesses and employees. We must drastically reduce the extreme operating costs of our local government and increase its level of customer service. No one person or party can claim to have all of the answers. In the end we all must work together, residents and this administration alike, and the people must get what they have long demanded government to do...Be fiscally responsible with their hard earned money.

Another thing that is critical, is that government must focus on results, not politics nor process. And I know that if we all work together, we can succeed. I invite all of you to the budget workshops and public hearings (posted here) and I implore you to give valuable and much anticipated input throughout the entire budget approval process.

Let me know what you think our budget priorities should be. The Commission cannot satisfy everyone’s concerns, especially in this economic recession, but your concerns on what should and should not be spent and/or cut are very important issues to me. Just as important are your concerns of where local government waste or inefficiencies are occurring. If you have any concerns to convey toward your elected officials, please be as specific as possible. Comments such as “Don’t hurt the bus program” are not going to give us specifics on what to propose in our upcoming budget meetings.

At the heart of the local government budget and pension crisis is a set of incentives that encourages elected officials to make decisions in which they don't have to bear the consequences for. Since your elected city and county officials will not immediately bear the costs and consequences of the budget and employee benefit increases that they are responsible for and supported, there is no incentive for them to show future fiscal responsibility and restraint.

At the end of the day what we should be doing is simply our job...public service. In this process, we've got to ensure that our tax dollars are spent very wisely and only on the bare necessities...needs, not wants. Budgets should reflect the desires and relevant issues of the community, not that of those in power. As I stated in my public commentary, politics must be completely eliminated from the budget process. We need open, honest government in Cooper City. We require and demand a Commission that works together for the will of The People!

As long as the Mayor and individual Commisisoners remember that we all serve The People, and we work together to do what is right, putting aside our continually ensnaring and petty personal, negative and political differences, the goals of prosperity that all of us share and dream of can be achieved right now. A house divided cannot stand. In public service, it is always important to remember, we serve our boss “We The People”.

Contact your Commission members and city staff, and demand that they cut discretionary spending for this upcoming budget. Otherwise, your taxes will continue to increase...
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Wednesday, August 12, 2009

Cooper City Commissioner challenges multi-million dollar ‘hi-tech’ water meters as excessive and unnecessary spending

For Immediate Release Contact: Commissioner John Sims
August 12, 2009 Cell: 954-445-6997

Cooper City Commissioner challenges multi-million dollar ‘hi-tech’ water meters as excessive and unnecessary spending

Commissioner John Sims displaying an example of
Cooper City’s Multi-million dollar water meters

Cooper City, FL – Cooper City District 1 Commissioner John Sims released a statement today saying that “Cooper City residents cannot afford to spend an assumed $4.7 million dollars on new electronic residential water meters that will take more than 15 years to recover the costs.”

“Our residents are hurting financially, and many have lost their jobs or have seen their incomes drop substantially. For the Cooper City Mayor and Commission to even consider spending four-plus million dollars at this time on unnecessary, hi-tech water meters is a travesty and an insult to our employees, residents and business owners. We should be looking to cut spending, to cut unnecessary programs and to give back excessive, surplus revenues to our stakeholders in the form of tax cuts. We should not be increasing discretionary expenditures in a time of economic concern. I would question such a large expenditure at this point in time when it is not a priority, who would benefit from the project, and who would lose their jobs. It makes no sense at all to fully implement this project in our fiscal year 2010 budget”, Commissioner Sims said.

The City Manager, Mr. Bruce Loucks, is recommending converting all of the city’s water meters to a high tech meter that use a wireless network, possibly eliminating the meter reader jobs. If in fact the jobs are truly eliminated, and not simply transferred to another area, it would take decades to recover those salaries over the costs of the new system.

Although no cost to benefit analysis, efficiency and performance or collection rate data justification has been provided by city staff to date, Commissioner Sims said the initial loan amount for the project is estimated to be approximately $3.2 million.

Allowing for an average annual interest percentage rate of 5.5%, the total equates to about $4.7 million for the hardware, not including future maintenance, replacement and non-warranty expenditures. The city may or may not be able to receive a low interest bank loan to fund this massive project. If not, the total interest rate may indeed be much higher, pushing the cost upwards and possibly above $5 million.

Commissioner Sims has urged all Cooper City residents and business owners to contact their elected officials and the City Manager, asking them to reduce or eliminate any and all unnecessary or discretionary spending at this time. He further stated “Please call your Mayor and Commissioners and tell them ‘no’. We need less spending, not more. I ask you to attend the upcoming Commission budget meetings and voice your concerns about the rising and excessive costs of managing your local government” Sims said.

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If you would like more information about this topic or to schedule an interview, please contact Commissioner John Sims.

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