Another Go at the Sales Tax on Tuesday
The proposal for a county sales tax increase is back on the agenda, Tuesday March 11, postponed from the December 17 meeting by a 4-3 vote. (See Item 5G1.)
In December, there was consensus that the proposal was a “potpourri” or grab-bag of small projects lumped togther to utilize the $110M a year that a .5% increase would bring. It’s reincarnation is still a grab-bag of small projects, but they are limited to infrastructure and spending for Parks and Recreation was removed. Since the total hasn’t changed, the net effect is to add MORE road projects to the proposal. The largest of these is a line item for “resurfacing – 7 years @ $12M/year” for $84M.
A noteworthy aspect of this proposal coming out of George Webb’s Engineering and Public Works Department, is the condition that 40% ($44M per year) is to be shared with the municipalities for wherever they would like to spend it. However allocated, this would represent a sizeable amount relative to most city, town and village budgets. (Note- this sharing is required by the authorizing statute for sales tax surcharges).
As for Engineering and Public Works itself, the $66M / year retained in this proposal would more than double their $53M current budget.
It should be said that road projects have gotten more of their share of cuts over the last few budget cycles, as the enormous half a $Billion (with a “B”) Sheriff’s budget gobbles up an ever larger percentage of the county tax revenues. Adding $66M to E&PW from a different revenue source would seem to be a questionable action.
The December proposal was allocated differently – $44M for the School District, $40M for the county (including Parks and Recreation), and $26M for the municipalities. The school district did not want to play in this though – rumor has it that a separate sales tax increase will be brought forward by those folks. In the revamped proposal, E&PW decided to just keep all the money for themselves.
This proposal should be considered within the overall background of county finances, not in isolation. Property Appraiser Gary Nikolits is projecting a 6-7% increase in taxable valuations this year. Even with some reduction in millage (which we think is justified), there should be sufficient property tax revenue to start addressing infrastructure maintenance that has been deferred over the last few years. When you build a road, you should plan to maintain it – this is one of the natural and expected functions of government. That spending was diverted to other priorities is a management failing – not a justification for a new tax.
A serious proposal for a sales tax hike could be justified if it was revenue neutral – ie. offset the $110M in new revenue with an equal reduction in ad-valorem tax. That is not what is being proposed. Instead, it is still George Webb’s “wish list” of work he’d like to do but was unable to justify in the normal budget process.
If this were actually to get on the ballot in November, particularly next to a School System increase (“it’s for the children!”) and the re-authorization of the taxing district for the Children’s Services Council (“It’s also for the children!”), then a betting man would wager that it will go down in flames. Perhaps they all will, as the taxpayers do not sense that their money is spent wisely today.
Overlooking the Obvious? Observations from the Palm Tran Connection Workshop
Good summaries of the 2/28/14 BCC workshop to discuss the future direction of Palm Tran Connection were written by Joe Capozzi in the Palm Beach Post and Andy Reid in the Sun-Sentinel.
We are generally in support of the direction given by the Commission to:
- Pursue multiple contracts in lieu of a single-source vendor, since competition will enhance responsiveness and flexibility.
- Bring dispatch in-house – this may not be quite the salvation for which BCC voted….see below.
- Purchase the vehicles for lease back to the vendors. We see the opportunity for flexibility cited as well as cost savings.
- Free rides on fixed route service for ADA/TD qualified.
- Explore the future use of vouchers and taxis to enhance/expand capability.
But something appears to be lacking in the conclusions drawn in much of the coverage and discussion of Palm Tran Connection and the poor performance by the current vendor, Metro Mobility. That ‘something’ which seemed apparent throughout the workshop was ‘county oversight and accountability‘. The various reasons for perceived unacceptable service were listed dispassionately and without any chagrin or admission of responsibility. Many of these ‘issues’ did not require BCC direction but could or should have been accompanied by firm action plans .
A few examples:
Chaotic dispatching and adherence to schedules was impacted by several issues
- Drivers unable to locate the rider – going to wrong location or lost in a community
- Riders without appropriate ‘personal care attendants” thus driver leaving the vehicle to assist the rider into the appointment location
- Driver waiting for a facility to open (eg rider can’t get in)
- Riders who can’t be left alone due to their disability
Only Commissioner Berger seemed to question the lack of required personal care attendants. Everyone else seemed to take for granted that these were missteps by Metro Mobility. If an ADA or TD qualified rider needs a personal care attendant then the County, who handles the qualification process, should have confirmed that such an attendant accompanies the rider. To have a driver take on 1) liability 2) leave the vehicle unattended 3) abandon schedule in order to perform personal care functions is certain to impact all of the other riders. Is there something in the regulations that absolves the rider (or the County in the qualification process) from responsibility for their part of the bargain?
There is a difference between door to door service and a driver replacing the companion role. As was pointed out in the meeting – if the rider were able to take fixed route service – they would be dropped off and that’s it. Even a taxi doing door to door would not wait for place to open etc. So perhaps the biggest issue to the level of service is that the drivers are going beyond what can reasonably be expected.
Taking vehicles out of service to accommodate school trip requests (primarily Charter schools)
Commissioner Abrams rightly questioned that the PBC School system isn’t involved in this. And is it not obvious that if vehicles are taken out of a route that service and schedules will suffer? Once again – these are decisions that were made by the County and not Metro Mobility.
It was perceived that bringing dispatch in-house (recommended by staff, consultant and voted unanimously by commission) would solve the above issues. But one could ask – what will change? The County staff was responsible for oversight in any case – so if policy changes are not made to solve these problems, in-house dispatch will not alleviate the problems.
Poor state of equipment
Commissioner Vana did her own investigative work to confirm the poor state of equipment and raised the alarm over conditions. But why was that necessary? Was not the administration responsible for oversight and inspections? Purchase of the vehicles by the county may result in savings, which is great! But this does nothing to solve the vehicle maintenance issues. Periodic inspections by the County will (and should have been) vital to assessing compliance with legal and contractual obligations for vehicle maintenance.
Need for a strong and specific contract
Several times during the workshop the need for a strong contract (or contracts) was mentioned by staff. OK – whose fault is it if there wasn’t one in place already? Surely not the vendor’s….
Administration has made management changes and they clearly may have been warranted. But until the County takes full responsibility for the current state of affairs – dramatic improvement in Palm Tran Connection performance may be a long time in coming.
Best Practices in Transportation for the Mobility Impaired
While researching our article “Growing Government in Giant Steps: A County Takeover of Palm Tran Connection?”, we encountered an excellent reference for best practices in ADA compliance for public transportation.
See “Innovative Approaches for Increasing Transportation Options for People with Disabilities in Florida” – published by Center for Urban Transportation Research and sponsored by the United States Department of Health and Human Services, Administration on Developmental Disabilities, the Florida Developmental Disabilities Council, Inc. and The Able Trust, in 2010.
The above paper analyzed approaches throughout the country – and Chapter 3 highlighted Best Practices. Many communities used a combination of fixed route incentives, door to bus-stop (ADA required), vouchers with approved taxi and transportation companies, and volunteer drivers – all incorporated to provide maximum flexibility, improved access and lower cost per trip and allowing for increased ridership as well. Customer satisfaction was also improved by 24/7 access that taxis provided and ability to make same-day reservations.
Amongst those best practices highlighted in Chapter 3:
Vouchers: Implementing voucher and volunteer programs – especially in rural areas where there is limited public transportation; allowing vouchers to be used to pay mileage reimbursement to volunteer drivers; using taxi or volunteer vouchers for return trips from dialysis treatment to reduce wait times
Provider selection: Contract with multiple providers – annually conducting reviews and requiring participating transportation companies trained in ADA requirements, first aid/CPR, background checks etc.
Trip Rate/Rider Selection: negotiated fixed price trip rates with local taxi operators; Reduce or require no co-payments for dialysis transport; allow participants to schedule directly with participating providers
Billing Oversight: Focal point/administrator for the entire network; smart cards or close monitoring of voucher budget – enhanced by fixed flat rate negotiated w taxi/transportation companies; have driver and rider sign vouchers to document that trip was actually made
Funding: Use FTA funds for mobility management services, technology. Use savings from voucher program to expand service areas. Actively pursue support from charitable organization, non-profit and community groups and foundations.
Growing Government in Giant Steps: A County Takeover of Palm Tran Connection?
Now that the county has decided to end the relationship with Metro Mobility Management Group a year from now, a serious proposal has surfaced to bring the operation into the government – with county-owned vans and equipment, and with county employees with their higher salaries and generous benefits.
If executed as described, it would require the hiring of 416 new county employees, a 7% growth in total staff and a 72% growth in the Palm Tran Organization.
By staff’s estimate, the county would need to purchase 241 new vehicles, and build new facilities for administration, fleet storage and maintenance. In addition to $43M in capital investment, the annual costs for labor and operations would be $34M – 23% higher than today’s $28M with the Metro contract.
How could this possibly make sense?
To understand the thinking, you first have to acknowledge that operations under the Metro contract over the last year have not been smooth. Vehicles in service are older and more worn-out than promised, customer service problems have persisted, and the experience of the elderly and disabled riders has not met expectations. Commissioner Shelly Vana, to her credit, has pushed for changes after going out and experiencing using the service herself. The promise of the Metro contract was for acceptable service levels at lower cost than the previous vendor – a bar that has been difficult for the vendor to achieve.
What is Palm Tran Connection?
Palm Tran Connection delivers about 820K trips a year to a ridership of approximately 13K individuals who are eligible through either the federal Americans with Disabilities Act (ADA) – an unfunded mandate affecting entities that otherwise provide public transportation (700K trips and 11K riders) or the state’s Transportation Disadvantaged program (123K trips and about 2K riders). TD riders are 90% subsidized by state funds. Using the current year’s $28M budget, the cost per rider is over $2000 per rider, and the average cost per trip is $34 (calculated by dividing the $28M budget by 820K trips/year).
Although there are federally defined requirements for eligibility (ie. what qualifies as “disabled”), it is not strictly a welfare program as riders must pay a fare to use the system, currently $3.50 per trip (about 10% of the cost). If you work the same numbers for the Palm Tran fixed route system, it is not too much different. ($87M fixed route budget divided by 12M trips is $7.25/trip – making the $1.25 average fare with discounts about 17% of the cost).
So what are the real issues?
We will stipulate that Connection provides a needed service to the county’s disabled population, and as long as the county is in the public transportation business, the service is required under the ADA (although the county does exceed requirements by providing service beyond the “3/4 mile from fixed route” demanded by ADA.) The problem is to provide a reasonable level of service at a reasonable price.
Privatization of county functions where it makes sense has been a long-term goal of TAB, as there is body of evidence that suggests that the private sector, particularly when operating in a competitive environment with an incentive to maximize customer satisfaction at the lowest cost, is best suited to delivering a needed service. A government agency, by its nature, is often hampered by other conflicting considerations (eg. politics, union demands, special interests, etc.)
The current Connection system is a hybrid. The contract is sole-sourced, and part of the function (customer service, scheduling) is performed by the government as the county places itself in between the riders and the provider. The vendor’s customer is the county, not the riders.
How much different would it be if multiple vendors could provide the service, perhaps in smaller service areas than the county as a whole. Companies and drivers could be regulated much the way taxi and limousine services are today. By introducing customer choice into the mix, with the county subsidy delivered through a voucher system, the customer service levels would improve – much as they do in any competitive area.
Private sector competitive based solutions for service delivery versus government run enterprise is an age-old question, usually decided along ideological lines. Given the political makeup of Palm Beach County and those who represent their districts, I would expect the “government run” position to have an edge in this discussion. Before taking that step though, we would hope that the Commissioners consider that de-privatizing Palm Tran Connection is most likely an irrevocable step. Regardless of future changes in ridership level (2014 is projected to be 9% less than 2013) or customer needs, a new 416 person county organization with significant capital assets would be here to stay.
Some Alternatives
Some alternatives to a total government-run Connection provided by staff include partial moves such as in-house dispatch, in-house takeover of service in Belle Glade only, and having the county own the vehicles and leasing them to the vendor.
We think allowing competitive service delivery, a voucher system, expediting the growth of existing transportation companies who wish to enter this space would be a rationale alternative as well. In areas that need to be served for which there is little competitive interest, a sole-source vendor should be sought, much like the existing model. Providing incentives for the mobility impaired to utilize the fixed route system is also desirable.
Many government entities face similar challenges, and a number of best practices have emerged. Please see “Best Practices in Transportation for the mobility impaired.”
BCC to Discuss $29M in Spending Reductions
At the Tuesday, May 15 Commission Meeting, agenda items 5a2 and 5a3 deal with an “efficiency audit” performed by consultants Gerstle, Rosen & Goldenberg at the request of county administration.
The audit found areas of significant savings, both in county operations and in the constitutional offices (except the Sheriff who evidently refused to answer any of their questions), estimated in the range of $29M. They looked in four areas: operating efficiencies, outsourcing, staff reductions, and additional sources of revenue. (It appears that only the outsourcing will be discussed in 5a2, and 5a3 addresses efficiencies regarding the constitutional offices).
These savings involve the elimination of 921 positions, mostly through outsourcing, and the bulk of the savings comes from reduction in benefit obligations.
With the county facing a potential $15M shortfall in the 2013 budget to be discussed at the first workshop on June 12, searching for areas to reduce spending is sorely needed and this study is an excellent move in that direction. Staff should be commended for both commissioning the study and for bringing it to the board for direction.
We are not overly optimistic that this initiative will be warmly embraced however. Already, the counter-arguments have begun. Chairman Vana says “My goal was never to try to get rid of a million people”. OFMB Director Bloesser warns that “it was unlikely that many of the findings could be put into effect before the budget year begins on Oct. 1”. Clerk Bock says that the proposed savings in her office are “incorrect and irresponsible”.
Nevertheless, this is the kind of direction that TAB has been calling for for several years, and we ask partners and supporters of TAB to attend the Tuesday session in support of the consultants proposals, or communicate your views to your commissioner.
The full content of the report can be found in the attachment for item 5a2 and the initial reactions are captured in the Palm Beach Post: Consultant: Palm Beach County can save $32M with 1,000 job cuts, add $3M with rate hike.
Yet Another Taxing District?
Palm Beach County property owners are taxed in many ways. We pay separate tax rates for our cities, for our schools, and for the county government. We also pay for the county libraries, the Health Care District, the Children’s Services Council, and a variety of inlet and water management districts. If we live in the unincorporated areas we pay separately for Fire/Rescue.
Now there is a proposal to create yet another tax district – for the Office of Inspector General. Why this and why now?
It is raw politics.
Some Background
The Office of Inspector General was established in 2009 by the County Commission in response to the grand jury report investigating “Corruption County”. With many commissioners and lobbyists serving jail terms for abuse of the public trust, it was a correct response, and much effort went in to making the office “independent”. Hiring was performed by an independent selection board. Removal required the votes of the entire selection board plus 5 of the 7 commissioners. The budget was floored at an amount .25% of the contracts that vendors have with the county, and could not be reduced without 5 votes of the commission.
In 2010, a ballot initiative asked the voters if the IG jurisdiction should be extended to the 38 municipalities, with a proportional increase in funding to come from those entities. 72% of the voters agreed and the result was codified in the county charter after a six month effort by an ordinance drafting committee. The committee was composed of representatives of the county, the League of Cities, and the public, but much of the discussion was contentious. The cities objected mainly on two grounds – that the scope was too broad and that the purview of “waste, fraud, abuse and mismanagement” needed to be narrowly defined to limit what the IG could investigate, and that the funding formula based on a LOGER estimate of contract activity constituted an illegal tax. The ordinance draft did pass by a majority vote.
In 2011, after the IG began her work with the cities, the opposition began. Many cities passed local ordinances adding the definitions that were rejected by the drafting committee. A narrative was established that complying with the IG would be prohibitively expensive to answer their questions and fix any problems found. “The people did not know what they were voting for” became the operative justification for the opposition. Finally, in a major strike, 15 of the 38 municipalities filed a lawsuit claiming that the funding mechanism is illegal under Florida law, and refused to remit their obligated funding. Funds already provided by the municipalities that were not party to the lawsuit were sequestered by the County Clerk. A crisis in funding was at hand.
Recent Developments
On Tuesday, 3/20, a lawsuit “settlement proposal” negotiated by County Attorney staff was brought to the Commissioners. Under its terms, the cities would collect a contract fee of .25% levied by the county on their contracts, to be used for IG oversight of only those contracts. Contracts that predated 6/12 would be excluded, as would a long list of exempted contracts including large ones like FPL, waste collection and all federal grants. The IG office estimated that acceptance of this settlement would gut 60% of their budget, effectively limiting their oversight of the municipalities. After a large number of members of the public came forward urging rejection of the settlement, the commission voted 7-0 to reject it and move on to mediation.
On Monday 3/26, a joint meeting was held in the West Palm Beach City Hall between the County Commission and the representative of the municipal litigants. It was an august collection of the most senior public officials at the local level. While all professed to “support the IG”, and that the lawsuit was “just about the funding”, an objective observer could conclude that an independent Inspector General with free rein to investigate in the cities was not universally embraced.
Commission Chairman Shelley Vana correctly summarized that the intention of the ordinance is to provide for IG independence by having the governing body NOT control the IG budget. Mayor Muoio and the others see that as the crux of the problem – how can you be responsible for a budget if you can’t set the level of spending on a line item. Why, if the economy is bad, we may just decide not to fund the IG at all in a given year! Control of the IG budget is control of the office – just what the ordinance is intended to prevent.
During this meeting, West Palm Beach attorney Glen Torciva suggested an independent taxing district as the way out of the dilemma. Let both the county and the municipalities wash their hands of the funding issue and let the people decide. Of course a new taxing district would have to go on the ballot – perhaps this November. This is perfect for those who believe “the voters didn’t know what they were voting for” in extending the IG to the cities. Instead of asking “.. should we have an IG?” as in the 2010 question, we will ask ” .. should we pay more taxes so we can have an IG?” Maybe then the 72% of the voters who wanted to meddle in the affairs of our elected officials will think twice.
If you have any doubts about the motive here, consider Mr. Torciva’s statement to the Palm Beach Post:
Commissioner Burt Aaronson, a supporter of the concept, added (with a smile):
The creation of the Office of Inspector General and the Ethics Commission has gone a long way to correct our reputation as “Corruption County”. This latest attempt to neuter or eliminate the office proves that we still have a lot of work to do. The roughly $3.5M OIG budget would be equivalent to a 0.03 millage rate on our $120B property valuation – hardly worth the effort it would take to collect it. The current LOGER system is an accurate, reliable way of measuring local economic activity and establishing a fee for IG services. Whether a fee is actually charged to a contract or not, it is a reasonable way to both estimate and bill.
We think the county and cities should find a way to make it work and drop any attempt at forming a new taxing district.
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
Reduce Govt Overhead, Not Essential Services: BOC, Constitutional Officers and particularly the Sheriff
Editor’s note: This post was sent as an email to the County Commissioners and Constitutional Officers by Dale Gregory on June 13, 2011.
PALM BEACH TAB PROPOSALS:
I support in concept the proposals of the Palm Beach TAB advocated at the June 13, 2011 Budget Workshop.
REDUCE GOVERNMENT OVERHEAD, NOT ESSENTIAL SERVICES
I am appalled at the County Administrator’s appeal to emotion by proposing to increase Palm Tran rates, reduce life guards, and the like. I pray that you will vote “NO” on any increase in taxes or reduction in essential services! This applies to the Sheriff’s response that he is going to reduce essential staff if the BOC doesn’t approve his budget demands.
In 2010 Martin County implemented a one day per month furlough (unpaid day off) as a means to balance their budget. The County has also reduced staff levels. Has Palm Beach County used this as a tool to balance the budget?
I have volunteered on a number of initiatives in Palm Beach County and learned early on: If the County Administrator doesn’t take a personal interest, forget the initiative no matter how much it may benefit the community.
If the County Administrator could effectively collaborate with the Constitutional Officers we could dramatically improve the efficiency of government operations. Examples include sharing information technology, telecommunication services, purchasing, human resource administration, real estate planning, logistics, and other back office functions.
There are similar collaboration and shared services opportunities between the County, Palm Beach School District, South Florida Water Management District, Children’s Services Council, Palm Beach County Health Care District, Library District, Port of Palm Beach District, municipalities, and nonprofit organizations. Trust me, it works. Take a trip to Martin County to learn more.
Collaboration is happening elsewhere in the United States, and taxpayers are benefiting immensely. Unfortunately Palm Beach County’s reputation of corruption and insider deals impedes such collaboration. County Administrative leadership is not a “poster child” for advocating trust, shared values, and change.
Elected officials need to leave their ego’s at home and start thinking about being better stewards of the combined “spend” of taxpayers – state, county, schools, municipal, and other taxing authorities. This includes Constitutional Officers.
COUNTY ADMINISTRATIVE LEADERSHIP
Most private sector and nonprofit organizations would not tolerate strategies that have been proposed by the County Administrator. The most successful organizations would make changes at the top to transform their culture and develop a winning strategy to achieve organizational objectives. Early 20th century thinking simply doesn’t work in today’s world.
If the Administrator cannot develop a strategy to balance the budget without increasing taxes while maintaining all essential services, the BOC should find someone who will.
SHERIFF:
I recently talked to a Commissioner from another Florida county. I explained how the Palm Beach Sheriff appears to ignore the Palm Beach BOC, operating without sufficient checks and balances. I was told that this would never happen in their county….. that the BOC would force the issue.
You were elected to serve the residents of Palm Beach County. This includes a fiduciary responsibility to manage the use of all of our tax dollars. It is time to put the Sheriff on notice: Cut expenditures and maintain service levels. This includes freezing compensation of all who are not part of collective bargaining agreements. If the Sheriff has the option to appeal his issue on funding to Tallahassee, go for it. It is time to break the mold.
Legislative Update – 5/5/11
As the Legislature winds down the session, there has been much progress on the bills we have been tracking that relate to county budget issues. The following is a status:
Pension Reform
SB2100/HB1405 having emerged from conference on Friday May 6, has been sent to the governor. From the House bill, the plan adopts the 3% employee contribution and retirement eligibility of age 65 / 33 years for general class and age 60 / 30 years for special risk. From the Senate bill it eliminates cost-of-living adjustments for accruals accumulated after July of this year. The DROP program, eliminated in both underlyihg bills, was retained in the compromise, but the interest rate was reduced from 6% to 1.3%. One feature that appears to be new is the redefinition of “average final compensation” from 5 years to 8 years, which will reduce the base upon which a pension amount is calculated. The provision in the House bill to restrict new hires to a defined contribution plan only did not survive.
We estimate the savings for the county to be about $48M in the first year, based on the “employer contribution” section of the bill. See Pension Reform – the Final Bill for the details of the analysis.
Smart Cap
CS/JSR958 State Revenue Limitation, also known as “Smart Cap”, was sent to the Governor on May 4. Placed on the 2012 ballot will be a constitutional amendment that replaces the state’s current cap based on personal income growth, to one based on population and inflation, similar to Colorado’s TABOR. It differs from TABOR in one important respect however – the cap is based on the previous year’s cap, not on revenue. This has the effect of preventing the “ratcheting down” effect that can happen when revenue declines in a recession, and prevents unanticipated or undesired reductions. The cap can decline though, if inflation is negative or population shrinks.
Smart Cap applies only to state revenue, but we think it is time to examine a potential Smart Cap for the county budget – implemented as a charter change and also on the 2012 ballot.
Local Government Accountability
One bill that has been under the radar for most people is CS/SB224 – Local Government Accountability. The bill does several different things, but most notably for Palm Beach County, it will require the Sheriff to disclose more of the PBSO budget to public scrutiny, and give the County Commissioners more authority to obtain line item detail for this and previous budget years. Currently, only a Chapter 119 (open records) request has been able to obtain this level of detail on the Sheriff’s budget. Among other things, the bill says:
“The sheriff shall furnish to the board of county commissioners or the budget commission, if there is a budget commission in the county, all relevant and pertinent information concerning expenditures made in previous fiscal years and to the proposed expenditures which the such board or commission deems necessary, including expenditures at the subobject code level in accordance with the uniform accounting system prescribed by the Department of Financial Services.”
This bill was sent to the Governor on May 4.
Additional Homestead Exemption
HJR381, “Additional Homestead Exemption; Property Value Decline; Reduction for Nonhomestead Assessment Increases; Abrogation of Scheduled Repeal”, was sent to the Governor on May 4. This bill places a constitutional amendment on the 2012 ballot that will have several effects if approved by the voters, including eliminating the unfortunate circumstance that can cause your assessed valuation to increase while your actual market value is decreasing on a homesteaded property. It also caps the increase for non-homestead property to 5%.
Labor and Employment
SB830, “Labor and Employment”, also know as the “Thrasher Bill”, would prohibit state or local governments from deducting from wages, funds for political activity, primarly union dues. It also prohibits labor organizations from collecting dues, assessments, fines or penalties for the purposes of political activity without written authorization from the collectee. This is similar to measures being pursued in other states this year.
This bill was never brought up on the floor before the session ended and therefore died from inaction.
As things change with these bills, we will update this post to reflect the current status.
SWA Board Selects Babcock and Wilcox
The Taxpayers won again – just barely.
After a 9 1/2 hour marathon meeting at the Solid Waste Authority auditorium on Jog Road, the SWA board upheld their selection committee’s choice of Babcock and Wilcox to build and operate the $600M waste-to-energy plant that is the biggest taxpayer-funded project ever undertaken in the county.
This was good news for the taxpayer since on the “future value” method of comparison by SWA consultant Malcom Pirnie, Inc., the $500M B&W bid was considerably lower than Wheelabrator ($626M or 25% more) and Covanta ($779M or 56% more).
But the day was not without drama, ending as it did with a 4-3 squeaker that had Commissioners Marcus, Vana and Burdick seemingly acting counter to the evidence presented, to spurn the low bidder in an attempt to “renegotiate” a price with their preference – Wheelabrator – currently at $126M (25%) over the B&W price.
This curious move by the three would have repudiated the unanimous decision of the selection committee that was led by County Administrator Bob Weisman, their high priced consultant Malcom Pirney, Inc., and the entire SWA staff – all of which worked for months to evaluate the very complex proposals. Why would they do this? Some in the audience seemed dumbfounded as what seemed a clear decision was suddenly thrown into chaos. It came down to a union issue for Vana and Marcus – they made it clear that they didn’t like Babcock and Wilcox partner BE&K very much, having been unsuccessful in the past in trying to force the company into signing a collective bargaining agreement with a local union. It was not clear why Paulette Burdick voted this way and she offered no comment or explanation. Their motion was quickly questioned by Commissioner Aaronson who did not see the wisdom of rejecting advice of consultant and staff.
The day began with a sizeable protest on Jog Road in front of the facility, and the road was parked in for a mile from the site. The red-shirted protesters, banging on drums and waving signs in front of the facility entrance, all wore identical shirts indicating that they didn’t like B&W partner BE&K, and they “wanted jobs”. When asked which of the bidders they wanted to win, some of the protesters told us they didn’t know or care – just wanted jobs with as much pay as possible. They couldn’t tell us who the bidders were – even though their shirts clearly had the letters BE&K in a circle with a slash through it. They would not tell us if they belonged to a union – they just “wanted jobs”. Another with whom we waited in line to enter the facility, an experienced pipefitter, was more knowledgeable. He was protesting the BE&K practice of hiring skilled labor from out of state. “They are owned by Haliburton” he said – “and you know what they are like”. (Editor’s note – this was repeated by several speakers at the meeting but to our knowledge was never true. B&W was spun off last year from parent McDermott International, which has participated in some joint ventures with Haliburton.)
In the meeting, the morning was consumed by a challenge to the B&W selection raised by Wheelabrator. The Wheelabrator legal consultant presented a polished, well argued accusation of B&W bid process violations, largely a repeat of the points made (and rejected) in the selection committee meeting in March (Today, the Taxpayer Won), followed by B&W rebuttal and an hour long exposition of the finer points by SWA attorney. This was resolved after much discussion on a 5-2 vote for Commissioner Abrams motion to deny the challenge.
In the afternoon, the public comment session heard from about 50 speakers at 2 minutes each. There would have been more but word spread that the deputies at the entrance to the facility were turning people away, saying the meeting and parking lot were full. Chairman Vana asked the SWA staff to get that stopped and allowed latecomers to talk, even if they had not submitted a card. The speakers fell in several main groups – 16% wanted to stop the project altogether, 18% opposed BE&K, 29% supported BE&K, and 37% “just wanted jobs”, without indicating a preference for bidder.
Each vendor was then given 15 minutes to present, followed by questions by the board members. Some of the morning’s session was rehashed, but much time was spent on the local hiring issue, and the amount of skilled and unskilled positions each company had committed to fill with local labor. Commissioner Aaronson pressed them all for much higher numbers, much to the delight of the crowd. Commissioners Vana and Marcus challenged the BE&K representative to confirm or deny that their “business model” precluded them from hiring union labor, and referred to discussions relevant to another project. The answer was that they will hire anyone with the requisite skills, they just will not sign a collective bargaining agreement that prevents them from hiring non-union from the same trade. Commissioners Marcus and Vana did not feel that was sufficient and implied that failure to sign a bargaining agreement was equivalent to rejecting union workers. (There is clearly more to this story but a fuller explanation could not be discerned from the public statements.)
Commissioner Aaronson found the concept of renegotiating the price (the only attribute that can be discussed under the terms of the RFP) as unfair as it allows another trip to the well. He questioned Covanta on why their bid was $279M higher than B&W and received “we made a mistake” for an answer. Indeed. Commissioner Taylor drilled in on some of the issues raised earlier in the challenge, particularly the partnership relationship between B&W and BE&K, and their insurance arrangements. Commissioner Santamaria pointed out that very few environmental organizations were objecting to the plant, including some he had specifically contacted. Commissioner Abrams on several occasions brought perspective to the discussion, reminding the others that the technical differences between the proposals were slight, the costs differences vast, and the local hiring percentages in the bids actually favored B&W over Wheelabrator.
It was a thorough and long session, and when it came time for a vote, Commissioner Taylor moved that B&W be “conditionally” awarded the bid, subject to firmer statement on local hiring. SWA Attorney pointed out that the terms could not be renegotiated, so Commissioner Abrams introduced a motion for outright award and Taylor seconded. It was at this point that commissioners Vana and Marcus said they could not support that motion and introduced their own – to award Wheelabrator and renegotiate the price. There was some surprise at this, both on the board as well as in the audience. After some additional arguments on all sides, Commissioners Aaronson and Santamaria joined Abrams and Taylor and voted to adopt staff recommendation for Babcock and Wilcox and the deed was done.
Another win for the Taxpayer.