Little Progress in the IAFF Contract

The “negotiations” between Palm Beach County and the International Association of Fire Fighters, local 2928 have now been in progress for three months. With the exception of some minor cleanup in the text, there has been no agreement on anything. The major issues of starting salary (the county wants a 22% reduction) or employee contributions toward health insurance (3%) have not even been broached in the public meetings.

Seemingly minor issues, such as posting the seniority list on the intranet rather than on bulletin boards give rise to heated discussion, complete with implausible hypotheticals and the predictions of dire consequences. The county proposal to allow internal raters on promotional boards is treated by the union as if it was a wholesale rejection of a merit system for one of abject cronyism.

Yet with the exception of one heated exchange between attorneys over the “impasse” of qualifying overtime on a weekly rather than daily basis, the discussions have been cordial. The only problem is that they have accomplished absolutely nothing.

TAB volunteers have sat through these meetings, joined at various times by members of the press and a representative of the county Inspector General’s office. While the meetings have been about as exciting as watching paint dry, the way they have been conducted has been instructive in how public sector unions maintain their control over the functions of government.

Why this lack of progress?

The county, for their part, have proceeded in a workmanlike manner. Led by Attorney Robert L. Norton and Chief Steve Jerauld, their 6 member team has put their cards on the table in the form of detailed modifications to the existing contract document and walked through it in painstaking detail for the union representatives. They showed up for the meetings on time, and have been reasonable in the representation of their position. Of course their negotiating position is modest – other than the reduction in starting salary that affects nobody currently represented by the IAFF, there is no attempt to pare down the salaries and luxurious benefits enjoyed by current employees. The county team appears to be serious about completing the negotiations in a timely manner, and have tried multiple times to get additional meetings scheduled to expedite the process.

The union on the other hand, seems content to let the talks drift along. Led by Attorney Matthew J. Mierzwa, they have avoided agreeing to anything, even minor changes in wording. They showed up an hour late for the August session, a public meeting that had been on the county web calendar for quite a while, claiming “miscommunication”. (The county team was there on time, as were the observers). In the first meeting, halfway through the first “caucus”, they abruptly terminated the discussion and did not return until the next month’s meeting. One of their team of nine negotiators made the incredible statement that he had not read major sections of the county proposal because “he knew he wouldn’t agree with it”.

It appears to an outside observer that the county wants to conclude a new contract and the IAFF does not. Why would that be?

The contract expires at the end of September. The new county proposal contains new hire salary reductions, benefit cost sharing, and other things that disadvantage the union. The union version omits the reductions but does agree to forgo across the board salary increases in the new contract, subject to the condition: “Should the assessed value of properties in Palm Beach County or total revenues for Fire Rescue increase during the term of this agreement, the Union may reopen this Article for further negotiations.”

Maybe they want to run out the clock the way Congress does on major legislation. Perhaps they feel an improving economy will strengthen their hand. It is hard to say.

Although it is early to speculate, what if no agreement were to be reached? In that case, resolution would follow the rules of Florida Statutes Chapter 407.403 – “Resolution of Impasse” which involves mediation by a special magistrate. You may recall that this was a step in the resolution of the Fire/Rescue contract in the Town of Palm Beach. Ultimately it fell to the city council to impose what was a significant setback to the IAFF in that town. In this case, it would fall to the County Commission to impose a settlement.

The process continues in a planned all-day session on September 14, unless the proposal for four additional meetings requested by Mr. Norton is accepted. It should be pointed out that all participants in these discussions (6 for the county and 9 for the union) are being paid by the taxpayers. The attorneys of course are generating billable hours.

Two TAB Coalition Partners Organize Phonebank to oppose Tax Rate Increase

Is there really a swing vote who will decide if our tax rates are increased this year? It is possible.

During the July budget workshop, the vote to raise the maximum millage to rollback (4.8751) was 4-3. Commissioners Abrams, Marcus and Burdick voted no to the increase and all had good reasons to avoid a third hike in so many years. Commissioners Aaronson, Santamaria, and Taylor voted for the hike. They also gave reasons that are not likely to change in September.

Which leaves District 3 Commissioner Shelley Vana. Her votes on tax increases have been mixed, voting against the 14.9% hike in 2009 but supporting the 9.4% increase in 2010. This year, she voted to raise the maximum millage to keep “options open”, but suggested that there were more savings to be had and she would like to keep the tax rate unchanged when it comes up for the final vote in September.

After the July budget hearing, TAB sent the following in an email to Commissioner Vana:

In response, and to her credit, she got in touch with us and made a convincing case that there was another $12M to be had and she just might “.. be the fourth vote ..” for flat millage in September.

We found this encouraging, but we also know that there are powerful interest groups in the county for continuing programs and taxes that speak very loudly to the commissioners. Those who do not want to see a tax rate increase are rarely heard. More to the point, it is the citizens of District 3 that should matter the most to the Commissioner, not any of the special interests, or even TAB.

Along these lines, two of TAB’s coalition partners have decided to reach out to the constituents of District 3 and educate them on the 2012 budget, and their Commissioner’s role as the potential “swing vote”.

The recently formed Palm Beach County Tea Party, with chapters in Jupiter, Wellington and Boca Raton will join forces with the South Florida 912 which meets in Palm Beach Gardens, Wellington and Lantana. Each of these groups is organizing a phone bank to contact District 3 citizens and ask them to make their wishes known to Commissioner Vana. They believe that many of the citizens would oppose a third year of tax rate hikes. If so, perhaps they can help the Commissioner find the additional $12M in cuts it will take to not raise our taxes again.

TAB applauds this effort and believes it is a new approach to broadening the county budget discussion beyond the commission chambers and the pages of the Palm Beach Post. It may turn out more attendees at the budget hearings who oppose another tax increase. At a minimum, it will have educated a larger group of county residents about the way their taxes are set.

If you would like to assist one of these organizations in their effort, you can contact them as follows:

Palm Beach County Tea Party: action@palmbeachcountyteaparty.org

South Florida 912: action@southflorida912.org

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.

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.

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