Fire / Rescue Contract Talks Continue

The July meeting of the negotiating teams for the 2012 IAFF contract did not move the ball very much, at least as far as we could see. As the meeting wrapped up, Chief Jerauld proposed holding additional sessions prior to the scheduled one on August 17 as there is a lot to do and little time to complete it.

More observers for the public attended this session, including TAB members, a reporter for the Palm Beach Post, and a representative of the Office of Inspector General. As this was anticipated, the county moved the meeting to a larger conference room at the Pike Road Headquarters.

The meeting consisted of much discussion of several draft agreements that had been prepared, and numerous “side agreements”, referenced by page number or paragraph position. None of the observers had copies of the referenced documents so it was difficult to follow. (We have asked for copies of all the materials prior to the next meeting). Much of the 3 hours were interrupted by “caucus time” when all the participants left the room for each side to confer among themselves – one of them 45 minutes in length. When we asked, it was explained that the referenced “side agreements” were contract modifications that were negotiated since the last contract was signed. None of these (or the current contract proposals) are available on the county website, but they are public documents which we will seek.

The major proposal by the county – reducing starting salary for new employees by 22%, was not discussed. It is our understanding that a counter-offer by the IAFF consists of an agreement for no raises for the next three years (subject to renegotiation if economic conditions improve), in return for retaining the existing starting salary of about $50K.

As described in Andrew Marra’s editorial “Cut these Alarming Salaries“, the problem is the existing salaries, which are approximately 50% higher than the national average and unaffordable in the long run without significant tax hikes or reduction in staff. Cutting the starting salaries would help, as would eliminating raises. If both were done, it may at some point bring Fire / Rescue Compensation down to earth. It would take a long time to do so however. There is nothing that we have heard in these current negotiations that will solve the problem near term, and choosing between starting salaries and wage freezes is a false choice. Both are needed, at a minimum.

We will continue to report on these negotiations as they progress.

District 7 Charter Review – July 29

Higher Tax Rates in our Future

On Monday, the county commission voted 4-3 to set the maximum millage at 4.8751, which would be a 2.6% increase over 2011. Maximum millage is the number that may not be exceeded when public hearings on the budget resume on September 13.

Following back-to-back increases totaling over 25% in the last 2 years, the commissioners had directed staff in February to create a budget that did not include a tax increase. This would have resulted in $12M less tax revenue collected because of still declining property values, but was offset by cost savings of $25M from reform of the Florida Retirement System (FRS) by the legislature. Other factors however, including reduced interest income and fund balance issues, resulted in a shortfall estimated at $40M and led to a proposal of cuts to popular programs.

Commissioner Aaronson, who is known for ongoing support for raising taxes on others to pay for services in his district, assured us that “it is only a starting point”.

Like Groundhog Day (the movie), the budget discussion plays out in a similar fashion year after year. A low or minimal rate increase is presented, combined with cuts sure to bring out the supporters (Palm Tran Connection, Nature Centers, Financially Assisted Agencies). A “reasonable alternative” that raises tax rates “just a little” for “pennies a day” is offered by Administrator Weisman, and after several hours of public comment, mostly by beneficiaries of those programs, the commissioners vote in July to set the “maximum millage” to the larger figure. Then, in September, after 8 weeks of “trying” to find additional savings, the commissioners decide they have no choice but to adopt the maximum as the final tax rate. Then the cycle begins again. Any guess as to how this will end this year?

To their credit, Commissioners Marcus, Abrams and Burdick voted against the higher tax rate. Paulette Burdick, in her first budget season as a commissioner, attempted to actually set priorities – facing down PBSO CIO George Forman over further cuts to the Sheriff’s budget, yet supporting continued funding for the financially assisted agencies.

Accepting the higher rate were commissioners Aaronson (no surprise), Taylor (who didn’t think 2.6% was significant), and Santamaria. None of these were surprises as they had made no moves toward the lower rate in the June workshop.

The more curious vote was by Shelley Vana, who at first seemed to be seeking additional savings (efficiency, etc) to prevent the tax hike, but voted for it anyway. Like Aaronson, she said it was a starting point and they can “try” to find additional savings before the September sessions. Actions speak louder than words commissioner. Don’t expect any credit for rhetoric.

From a TAB perspective, those of us who spoke against the tax hike were outnumbered by those seeking program dollars. While it is difficult to get working people to attend a morning meeting, we hope those of you who did not attend were able to send email or other communication to let your voice be heard.

Those who did speak for the lower tax rate, included Jack Borland, Francisco Rodriguez, Mel Grossman, Pam Wohlschlegel, Carol Hurst, Victoria Thiel, Dionna Hall, and Fred and Iris Scheibl.

For the next 8 weeks, TAB will be refining the argument against the higher rate and attempting to increase citizen awareness and involvement in the budget process.

Next Fire/Rescue Contract Negotiation Scheduled

At the initial meeting between County Fire/Rescue and the IAFF on the 2011 contract, the county proposed a 22% reduction in starting salary among other changes. (See Genesis of a Collective Bargaining Agreement) The union response was deferred to the subsequent meeting which has now been scheduled for July 19.

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NOTICE OF PUBLIC MEETING
PALM BEACH COUNTY FIRE RESCUE
Contract Negotiations

Please be advised that a Contract Negotiations meeting between Palm Beach County Fire Rescue and the IAFF Professional Firefighters/Paramedics of Palm Beach County will be taking place on:

July 19, 2011
9:00 a.m.

This meeting will take place at the Palm Beach County Fire Rescue, Room 101/102, 405 Pike Road, West Palm Beach, Florida 33411

(NOTE: This location has changed as of July 12 – it was to be held at the Trauma Hawk hanger on Southern Boulevard)

Palm Beach Post Takes on Fire / Rescue Pay

Fire / Rescue compensation is an issue we have been following for quite a while. A year before TAB was formed, several of us were involved in the campaign against the special sales tax to fund Fire / Rescue, and excessive compensation was a key argument against giving them their own revenue source outside of BCC control. Earlier this year, we conducted a salary survey of county employees (See How Much is Enough?) and were quite amazed to see the real data – that Fire / Rescue far exceeds the county staff and even PBSO in pay and benefits.

Jennifer Sorentrue and Adam Playford take on this issue in the Palm Beach Post this week, with their own look at the county compensation data. See More than half of county’s fire-rescue employees earn more than $90,000

TAB is quoted in the article, which mentions that the county contract with the IAFF expires this year and is currently being negotiated. Join us as we attend the next meeting on July 19 as the union responds to the county’s proposal for a 22% cut in starting salary. See Next Fire/Rescue Contract Negotiation Scheduled

County Budget Update – July 8

The next county budget workshop is Monday, July 11, at 9:30AM at 301 N. Olive, WPB in the 6th Floor Commission Chambers. Because of a scheduling issue, the BCC action to set the maximum millage rate that was scheduled for July 19 has been moved up to the 7/11 meeting. We expect the County Administrator to ask that this be set to rollback, currently estimated at 4.8751 (about a 2.6% increase in tax rate), or higher. The majority of homestead property owners would see a larger increase of course, because their valuations are still catching up.

TAB opposes a tax rate increase of any size and is calling for the millage to remain at 4.75.

Public comment begins at 10:00 but you should be there at 9:30am for the start of the meeting if you plan to speak. Please consider making your thoughts known to the commissioners, either in person at the meeting, or by email or phone prior to next Monday.

Since the June 13 meeting:

1. New estimates of property valuation show a smaller decline that Administrator Weisman sees as $3M more in tax revenue than expected. Consequently, he now calculates “rollback rate” at 4.8751. There is also an expectation for $2M more in revenue from other sources (sales tax and revenue sharing).

2. The Sheriff, who is expected to see a reduction in FRS pension costs of $18M, has objected to the county trying to “share the wealth” and take some of that savings for the county department budget. Bob Weisman has conceded the point and estimates that his shortfall will increase by $12M as a result.

The June budget package at flat (4.75) millage, had a $45M gap versus 2011. $15M of this was from valuation decline ($588M in taxes versus $603M), and $30M from declines “elsewhere”. The Revenue chart on page A-2 only identifies $14M of the “elsewhere” – notably $4M less in interest income, $10M in “other BCC revenue”, and a little more than $1M less from the Sheriff, offset by some small revenue increases in other areas.

Where is the rest of the “budget hole’? We asked Budget Director John Wilson to clarify the $45M, and he gave us this data:

• $15.470M – loss of tax revenue at current millage rate of 4.75
• $9.066M – decrease in one-time funding sources (available funding from existing capital project funds)
• $4.902M – decrease in other revenues (primarily interest income)
• $6.953M – reduction in beginning balances brought forward in Palm Tran, County Transportation Trust Fund & Court Tech. Fund.
• $2.687M – increase in new capital project funding
• $5.184M – increase in General Fund transfer to D/S Funds (additional issue and loss of one-time funding)
• $.781M – increase in non-department operations – primarily due to reduction in indirect cost allocation

 

We are still a little fuzzy on the fund transfers and one-time funding sources, but he assured us that it would be explained in the July budget package.

Now that the package is available, we are still trying to understand it. We are also having some difficulty in bridging our analysis of the 2003-2011 period with 2012, since the budget package is in a different format than last year, and the section “Comparison of Revenues, Appropriations, Net Ad Valorem Requirement and Positions by Department” has been omitted. This section was important to us because it has appeared mostly unmodified in all the budgets since 2003. Now we are dealing with apples and oranges. The OFMB folks assure us the data is there, just spread around between different sections, and (in some cases) between the June and July packages. If we can unravel this Chinese puzzle, we will update our multi-year tracking charts in a future article.

We are adding another point to the TAB proposal. Since the “$45M gap” (now closer to $40M) is related to starting fund balances and interfund transfers, we think it is appropriate to consider using some small amount of reserves to avoid a tax rate increase. In 2006, Florida TaxWatch pointed out that our unreserved fund balances (then 71% of revenue) far exceeded our peer counties and were remarkably high. Today, the levels have come down some but we are still far above Orange, Hillsborough and Miami-Dade, and slightly below Broward. The balances are a significant multiple of a “prudent miminum” of 15-20% of revenue. Consequently, we are adding “Utilize undesignated reserves to fill a one-time budget hole”.

The TAB Proposal:

1. Maintain the county-wide millage at 4.75
2. Take the majority of cuts from PBSO, not the county departments
3. Take action to reduce the inventory of county property and reduce the debt
4. Utilize undesignated reserves to fill a one-time budget hole.

*Note: The TaxWatch study that relates to item #3 is in draft. We hope to share some of its findings in the near future.

Notes and Feedback From June 30 Commission Workshop in Pahokee

I was not able to attend the entire Commissioner Workshop on Thursday in Pahokee, but the following are my notes from the discussion:

Programs identified as potential areas for budget cuts by Robert Weisman and the Commissioners:

• 4-H
• Children’s programs
• Park services
• Drug & alcohol treatment / recovery
• Consumer Affairs
• Pools
• Life guards at the beach
• No increase in funds for economic development
• Events at County amphitheatres

The Commissioners expressed concern and would prefer not to reduce these services.

Feedback to Mr. Weisman and the Commissioners:  Drop the political jargon and start cutting overhead.  Rather than considering a “small” tax increase, your strategy should be to create a budget surplus.  The economic issues we are facing will not go away in a year or two.  A budget surplus is not a pipe dream.  It is possible if you have the will…. And you do not need to reduce services that are valued by your constituents.  Just eliminate waste:  Insist that Mr. Weisman increase productivity, eliminate positions that do not create direct value for constituents, and find synergies between Mr. Weisman’s responsibility functions.

You should also make peace with the Constitutional Officers.  They are the Commissions peers, not Mr. Weisman’s peers.  The Chair of the Commission should take the lead to open communications and build trust.  There are massive synergies that can be achieved through shared services of information technology, fleet management, real estate management, procurement of commodities, logistics, telecommunications, and other support functions.

Cruzan Amphitheater losses – If you have not attended concerts at Cruzan you should:

• Great entertainment which is often sold out…. Hmm…. Maybe we should raise the ticket price?
• The prices of concessions are similar to that charged at a Dolphins game.  The quality of the product and service is substandard.  Needs quality and price gouging oversight by the County + check to make sure that the County is receiving a fair share of the concession revenue.
• Alcohol sales are incredible, with literally wheel barrels full of beer carted throughout the venue.  Sounds like fun for boomers…. But at what cost on the road after the event?  Checking ID’s: right!  Interestingly, I’ve never seen a sobriety check point on Southern Blvd after an event. I guess we want to make sure that the vendors don’t get in trouble.

Mr. Weisman:

• We are not going to reduce staff.  Layoffs will be avoided.
• Cut the Sheriff’s budget….. no further cuts in his budget
• Questions value of drug and alcohol program, given low success rate

Feedback to Mr. Weisman:

• The County Administrator and Commissioners have a fiduciary responsibility to reduce staff when work volumes decline.  There is also a fiduciary responsibility to establish best in class processes, training, and technology to advance productivity while at least maintaining current levels of service to the public.  You should ask an unemployed homeowner whether he/she believes their tax payments should be used to retain County employees that are not required or could be laid off without a significant change in the quality of service delivered to the public.
• Any position that is not directly involved in meeting the needs of the public should be subject to elimination.  The County Administrator should be a role model by taking a voluntary salary reduction, requiring all employees (and encouraging constitutional officers to do the same) to take one unpaid furlough day per month for the entire budget cycle. Martin County instituted such a program some time ago:  Reduced operating expenses by between $1 and 2 million during the fiscal year (approximately 900 employees).  Feedback from their employees was mixed, but I understand that most agreed that they would rather reduce their compensation than layoff massive numbers of employees.  By the way, Martin County also reduced their staff levels during this same period.
• Drug and alcohol programs:  Mr. Weisman should talk to the people that manage these programs to learn that relapse is the norm.  Many people relapse more than 10 times before recovery.  Of course, he should review the effectiveness of the County program and consider alternative means of delivery (private sector) to insure that cost and quality is effective.

Commissioner Taylor:

• Inspector General is spending $3.4 million even now that we have ethics policies
• Need to replace break walls
• Need to rebuild bridges
• A tax increase to balance the budget is insignificant:  $.04 per taxpayer per day….. Most will accept it rather than reduce service levels.

Feedback to Commissioner Taylor:

• Palm Beach County has a national reputation that will not easily be overcome.  Our reputation is a significant disadvantage for job creation and economic development.  I am thankful that we have an Inspector General.  It is up to elected officials to demonstrate that they can be trusted.
• If increasing taxes is “not that big a deal”, then reducing the expenditures to balance the budget is “not that big of a deal?”
• I understand you have a survey at your website asking people if they would rather reduce services than increase tax rates.  There should be a third option:  Don’t increase taxes and maintain current service levels.
• I agree that infrastructure like aging bridges and break walls are important.  This should also be taken into consideration when the County evaluates new infrastructure, including parks, community centers, and the beaches.  A question that needs to be addressed:  Can we afford the upkeep cost of infrastructure?

Performance Measurement

This is a great topic.  I have reviewed Mr. Weisman’s recent performance measurement report provided to Commissioner Marcus.  The information included in the report is solely units of activity, not performance.  Performance measurement should track productivity, cost per unit, and quality of work (error free work flow – rework is very expensive) of the most important aspects of a person, department and/or organization.  In the private sector such measures are called key performance indicators (KPI’s).

The Commissioner discussion included comparing groups like to Sheriff’s Office to other municipalities. Benchmarking should only be based on best in class, and it should not be limited to government comparisons.

Prepared by Dale Gregory

Boca Raton, Florida

July 1, 2011

County Budget Update – July 5

The next county budget workshop is Monday, July 11, at 9:30AM. Because of a “scheduling issue”, the BCC action to set the maximum millage rate that was scheduled for July 19 has been moved up to the 7/11 meeting. We expect the County Administrator to ask that this be set to rollback, currently estimated at 4.89 (about a 3% increase in tax rate). The majority of homestead property owners would see a larger increase of course, because their valuations are still catching up.

TAB opposes a tax rate increase of any size and is calling for the millage to remain at 4.75.

Public comment begins at 10:00 but you should be there at the start of the meeting if you plan to speak. Later in the week we will publish a call to action for TAB coalition partners. Please consider making your thoughts known to the commissioners, either in person at the meeting, or by email or phone prior to next Monday.

Since the June 13 meeting:

1. New estimates of property valuation show a smaller decline that Administrator Weisman sees as $3M more in tax revenue than expected. Consequently, he now calculates “rollback rate” at 4.89. There is also an expectation for $2M more in revenue from other sources (sales tax and revenue sharing).

2. The Sheriff, who is expected to see a reduction in FRS pension costs of $18M, has objected to the county trying to “share the wealth” and take some of that savings for the county department budget. Bob Weisman has conceded the point and estimates that his shortfall will increase by $12M as a result.

The June budget package at flat (4.75) millage, had a $45M gap versus 2011. $15M of this was from valuation decline ($588M in taxes versus $603M), and $30M from declines “elsewhere”. The Revenue chart on page A-2 only identifies $14M of the “elsewhere” – notably $4M less in interest income, $10M in “other BCC revenue”, and a little more than $1M less from the Sheriff, offset by some small revenue increases in other areas.

Where is the rest of the “budget hole’? We asked Budget Director John Wilson to clarify the $45M, and he gave us this data:

• $15.470M – loss of tax revenue at current millage rate of 4.75
• $9.066M – decrease in one-time funding sources (available funding from existing capital project funds)
• $4.902M – decrease in other revenues (primarily interest income)
• $6.953M – reduction in beginning balances brought forward in Palm Tran, County Transportation Trust Fund & Court Tech. Fund.
• $2.687M – increase in new capital project funding
• $5.184M – increase in General Fund transfer to D/S Funds (additional issue and loss of one-time funding)
• $.781M – increase in non-department operations – primarily due to reduction in indirect cost allocation

We are still a little fuzzy on the fund transfers and one-time funding sources, but he assured us that it would be explained in the July budget package which will be available prior to the 7/11 meeting. The new package is not available on the county website as of this writing, but has been delivered to the commissioners. We will publish our analysis of it shortly, and make any adjustments to the TAB proposal that would be called for.

As of now, the TAB Proposal remains:

1. Maintain the county-wide millage at 4.75
2. Take the majority of cuts from PBSO, not the county departments
3. Take action to reduce the inventory of county property and reduce the debt

*Note: The TaxWatch study that relates to item #3 is in draft. We hope to share some of its findings in the near future.

Scare Tactics

Once again, the Post’s Rhonda Swan takes on the silly games that permeate the annual county budget process. In First, cut the scare tactics, she highlights the yearly practice of proposing cuts to popular programs, simply to turn out the interest groups to oppose the cuts, knowing full well that the Commissioners will restore them.

TAB explored this game last month in The Kabuki Budget. We believe the practice is cynical, and one of the reasons that people have lost respect for government at all levels.

Ms. Swan ends her editorial with this thought: If county commissioners want to dispel public misconceptions about the budget, they should direct staff to present proposals that are realistic.”

Indeed.

A Commissioner Takes on “Exigent Operational Necessity”

The Palm Beach Post is looking out for the taxpayer.

Last week we mentioned that Rhonda Swan raised the issue of the county’s interpretation of “exigent operational necessity” as it applies to the PBSO Career Services Act in an editorial.

This week, Jennifer Sorentrue brings it up in the context of the Sheriff’s budget dispute with the county, and quotes Steven Abrams: “It would seem to boil down to whether our current budget situation qualifies, Commissioner Steven Abrams said recently. “I personally believe it does.”

We know of one, perhaps two other commissioners who also differ with County Attorney Denise Neiman’s interpretation of the statute that “it is not necessity until the county is out of money”. Or, in the words of Ric Bradshaw: ‘The county would have to be “almost insolvent” before he could freeze employees’ pay, in his view. “If I was to freeze the pay plan, the union could come in here and take me to court,” Bradshaw said. “You can’t just violate the law because you want to.”

Will the commissioners push the issue? – we really hope so. The time has come for the Sheriff to tighten his belt like everyone else in the county – including the county staff who haven’t seen raises in quite a while.

For Jennifer’s excellent article, see: Palm Beach County, sheriff at odds over raises