Conversation with a Firefighter / Paramedic

Throughout our analysis of the county budgets, we have been somewhat critical of Fire / Rescue. We observed that the growth of their budget (even adjusted for service area size) was significant over the last 8 years, and the firefighters in the county are compensated more than 50% above the national average from the Bureau of Labor Statistics.

How much should we be paying for a well equipped Fire and EMS service though? This and related issues formed the basis of a recent dialog between a county firefighter from south county and TAB in a comment thread attached to one of last year’s postings.

Our correspondent argued that “bringing the emergency room to the patient” is expensive, and successful outcomes require multiple vehicles and staff to respond. Fighting fires or dealing with medical emergencies is skilled and dangerous work, deserving of pay and benefit premiums. Comparisons with the private sector are unfair, given the unique nature of the work, and so much has changed in the last 8 years in both equipment and expectations, that growth in unit costs are justified.

For our part, we considered the dangers inherent in some private sector jobs and how those are compensated, aspects of the 48 hour work week versus private sector expectations, and the studies we have performed comparing PBC Fire/Rescue to peer groups.

Both points of view have compelling aspects, and we thought the TAB readers would find them interesting. The threads are reproduced here – you be the judge. Are we being unfair to PBC Fire/Rescue?

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The thread begins with a response to the conclusions in “Palm Beach County Pay and Benefits – How Much is Enough?“.

May 10, 2011 2:10 pm	Split the two careers (Firefighter / Paramedic) into two separate careers. Paramedic Firefighters are what’s known as “Dual Function” positions. Across the country there are fire rescue agencies that are not Advanced Life Support – Paramedic / Transport capable services. So when doing an analysis / comparison across the country, are you comparing apples to apples? And for the sake of argument, if your one sided / prejudiced bar graphs and charts are correct, after having digested all of the factors such as the one above: ….. When you’re comparing salaries and benefits in South Florida to the rest of the country and you’re asking “Why are we paying more?” …. Could one also interpret that to mean: “Why are we taking better care of our first responders, than the rest of the country? … They should be following our lead” ????
May 11, 2011 12:32 am	These are all good questions, but comparisons to other jurisdictions can be misleading. For example, the Town of Palm Beach just settled a contract with their firefighters. What was arguably the best pension deal in the county (3.5% accrual compared to 3% in FRS) is now one of the worst. Will that change their level of service? How important is a pension plan in retention and hiring in this economic environment? I guess we will see, but since there are few if any jurisdictions hiring at present it may take a while. That town took this action because the current plan was not affordable. All around the country are examples of county and municipal contracts that promised more than could be delivered, even with a good economy. Now we have FRS reform, but the deal is still very much better than in the private sector. Palm Beach Gardens is about to renegotiate their Police and Fire contracts. While the outlook is not as severe as in Palm Beach, it will still mean take-aways. How much should a firefighter be paid? Compared to what? Should it be 4 times what a teacher makes and one and a half times a Sheriff’s deputy? Why is that? Is a deputies job less dangerous or less skilled? Are teachers not contributing as much as firefighters? How do you answer questions like these? In the private sector, the worth of a job is easier to determine. An employee contributes to the bottom line of the company in a measureable way and can be compensated directly. Salesmen earn commissions based on sales. Professionals are compensated for the intellectual property they create. If the company gets into trouble the workers are laid off. The company’s earnings depend on the performance of their employees. In the public sector, everything and everyone is a cost center. Public sector employees create no wealth or generate profit. They use resources taken from the private sector to deliver services to the public. In the case of local government, police and fire are important, basic functions, but the proportion of available resources spent on these services are not spent on others (like teachers or bus drivers or accountants). One could argue that we need police more than we need parks or streetlights. Should all the resources be used for public safety? The average compensation (salary and benefits) for a private sector worker in Palm Beach County is somewhere around $60K, and that worker is not likely to have a defined benefit pension. County staffers make a little more than this, teachers a little less, but both have good pension and health plans. In PBSO the average compensation is about $100K, but for Fire/Rescue it is $150K. Either special risk employee can retire at an early age on a high percentage of their salary, and then go start a different career. That private sector worker is paying some of that $60K to fund the salaries of the public sector workers who have better job security, higher pay and benefits, and likely work fewer hours. Is that an equitable arrangement? Will it last? Public sector employees, particularly those in strong unions, have had a pretty good run in the last decade, and it is not likely that they will lose too much in the retrenchment that is coming. It took the current economic crisis to shine light on where the tax dollars are going. Perhaps now there can be an open dialog about pay and compensation. Florida is is much better shape than other states. By looking at states like California or New York (or countries like Greece or Ireland), we can get a glimpse of where this is going if we don’t come to grips with it.
May 13, 2011 1:01 am	I’m sorry, I guess I’m just having a hard time digesting the assumption that the Town of Palm Beach is in, or headed towards dire financial straights. And when you’re talking about a “Arguably best pension deal in the county” one has to remember that it was just a few short years ago that the town of Palm Beach pay and benefits for their firefighters was below that of the city of Riviera Beach firefighters. Compare the socio-economic make up, and property values between these two municipalities, and explain how this could happen? So …… coming from that type of history, then going to what you describe as the best pension deal in the county, for s short period of time, and then they pull the rug out from under them, it’s a hard pill to swallow. Your argument / comparison between Police, Firefighter, Teacher, and asking why aren’t the Teachers and Police making what the Firefighters make, is somewhat pitting two blue collar careers against the one. My answer to that would be that the teachers and the police should be brought up. 10 Police officers in Florida have been killed this year alone, and we’re only 1/2 way into 2011. If you can show me a private sector job in Florida that’s as dangerous, and they’re not making what Police officers and Firefighters are making with pay and benefits, then I’d have to say that that private sector employee is getting screwed. There’s a reason why the two careers – Police Officer and Paramedic Firefighter are called “High Risk” ….. Aside from the obvious high risk as far as physical injury / trauma / death, there’s the long term health – high risk, with regards to disease exposure, hazardous material exposure, and finally physical and mental stress exposure. So, think about that when you find yourself wanting to continuously compare the Private Sector – Low Risk, to the Public Sector – High Risk. The Firefighters work a 48 hour work week. (Town of Palm Beach’s imposed contract, tacks on an additional 8 hours, forcing them to work a 56 hour work week now) …. So when you’re comparing the high risk workers to the private sector, and you’re saying that the high risk workers “Likely work fewer hours” and ask is this “Equitable” ?? ….. I believe that the private sector is still putting in a 40 hour work week, so how does one derive 56 Vs. 40 as “Fewer Hours” ?? ….. If you’re working off the assumption that Paramedic Firefighters work one day on, two days off, you’re mislead. 24 hr shifts mean that you start at 07:00 A.M. on Monday, and at 12 midnight you begin working your final 7 hours on Tuesday. So, you’re working two days on, one day off. And once again, you’re working a 48 hour work week. (8 hours more than the 40 hour worker) The Town of Palm Beach also referred to what you describe above regarding Firefighters retiring at a young age, and can go on to work another job. I will ask you this …… Do you think that it’s fair that you ask your high risk employees to put in 30 years, and pay them a salary and benefits that are built on the premise that they should find themselves another job after they’ve retired from a 30 year career faithfully serving their community in a high risk position? Lets talk about the job a little. Paramedic Firefighters today, are not exposed to what Firefighters were exposed to years ago. Firefighting equipment and procedures have gotten a lot safer and more advanced over the years, but the amount of firefighter fatalities has stayed steady. This is because the materials used in modern day construction, and furnishings, are not made with the “Ordinary Combustibles” of yesteryear. Buildings and furnishings today, burn hotter, faster, and give off more toxic fumes / gases, than ever before. So …. even if we’re fighting fewer fires than yesteryear, reciprocally the decrease in quantity, is made up for in the increase in quality. The town of Palm Beach’s town manager used the 90% Vs. 10% ammunition. (90% Emergency Medical Service Vs. 10% Fires) ….. I forget what point he was trying to make, if in fact he even had a point, but if he was trying to discount the dangers / the risks, think about what I just described above. Also think about the dangers and risks that the Emergency Medical Service part of the equation entail. This is the part where most likely your private sector workers will tell you “You can’t pay me enough to do that !!”. And that includes blood, feces, urine, saliva, vomit, ect. …… Diseases with many syllables. You get the drift right? ….. We deal with this stuff in an uncontrolled / unsterile environment. It’s when we get to the Emergency room at the hospital, that’s where it gets sterile, and de-conned. So …… 25 / 30 years of working on 2 year olds who jump up and down on their bed at night and get caught up in the window shade cord and strangle them self to death, but not right away because we pull out all the stops, and go the extra mile to try and revive them, with the distraught mother bouncing off the walls behind us. Or trying to revive them after they’ve been pulled out of the backyard pool where they were submerged for over 6 minutes and not breathing, or trying to revive someones 90 year old grandmother, pulling people out of twisted car wrecks, out of canals, lakes, ponds …. Pulling people out of landscaping shredding machines after they’ve been torn to pieces, the drug over doses, the psychologically impaired, the suicides, the domestic disputes, the false calls, and on and on and on. Yes, 25 / 30 years of that ……. And then thank them for their service and tell them to go get another job. Nice
May 14, 2011 11:05 am	You have several main themes here, so let’s address them one at a time. First there is risk, comparing public sector “high risk” to private sector “low risk”, and the wage and benefit premium that is “fair”. There is no doubt that being a firefighter involves risk – as a matter of fact, most analysis considers that job as the 13th most dangerous in the nation, with 7 deaths per 100,000, right behind police officers with 16 per 100K. I am not in any way minimizing the risks you mention. However, the most dangerous 11 jobs in the country are all in the private sector, from fishing (#1, 129 deaths per 100K, $30K/year), logging (#2, 116 per 100K, $31K/year), on through farmer/rancher, structural construction worker, sanitation worker, pilot, roofer, coal miner, merchant mariner, miller, and power line installer. If you check the BLS numbers you will see that most of these occupations make considerably less than firefighters in PBC. Then of course there is the military. As a veteran I can tell you that most soldiers and sailors are not in it for the money. The special-risk class in FRS originally had a specific purpose. At inception it was intended to provide an equivalent pension at 25 years that a regular-class employee would get at 30, reflecting the physical demands of the job. This was achieved with the initial special-risk accrual of 2% / year (compared to 1.6% for regular-class). About 10 years ago, this was upped to 3% and made retroactive, and parity was replaced with significant premium. The current system, combined with 3% COLAs and the ability to spike the final earning years with overtime and bonuses allows many in that class to soon make in retirement, more than they made when working. Not a bad deal, wouldn’t you say? From your comments, you are not painting an accurate picture of the “private sector”, where the norm now is a 401(k) plan rather than defined benefit one, if you get a pension at all. If you are one of the 21% who do have a conventional pension, typically you can retire at 65 or after 30 years with about 1/3 of your salary. If the position is salaried (also known as “exempt”), which applies to most management, professional and clerical jobs, you don’t get overtime but are expected to work more than 40 hours a week to stay competitive. Most people in high tech jobs (my experience) routinely work 60 hour + weeks under significant stress and typically need to be available 24×7. There are very few jobs in government (except at very high levels) that expect this of their employees. The private sector is also at a disadvantage in job security, health benefits, sick time, vacation, and other aspects that are routine in government jobs. Regarding the 48 hour workweek – yes, two 24 hour shifts do add up to 48 hours, but having 5 out of every 7 days off provides flexibility that most jobs do not offer. It is not unusual for firefighters to spend their off-shift time working another job or running a business. Nationwide, I think Kelly days are the exception and most shift rotations result in 56 hour work weeks. You raise the issue of the 90% EMS versus 10% Fire. (I think the county number is 87%). What is relevant here is not the risk involved on the call but the economics of how the call is answered. In jurisdictions with separate (and/or private) EMS, a medical call is answered with a single unit with the relevant equipment and trained staff. In the county, it appears that EMS calls are answered by both EMS and Fire equipment. I don’t know if this is policy or not, but I have observered that calls are answered with multiple vehicles. Each has a minimum 3 person crew, including a Lieutenant (EMS) and a Captain (Fire). There may be a valid reason for this, but it is not the way a private EMS company would respond. There is a national debate over the size and scope of government, and the recession has been shining a bright light over the advantages that government employees now have over the rest of us. There was a time that lower salaries were the price of absolute job security and better than average benefits. No longer. Compensation in the public sector has made great advances over the last decade and is now considerably superior to similar work in the private economy, reaching almost double at the federal level for equivalent positions. Where salaries have not advanced, benefits – particularly pension benefits have lept ahead, placing burdens on the future cash flow of state and local governments. This is partly due to the private sector losing ground in the recession while government has stayed the course, but that is about to end, as governments are also going broke. Watch California for a glimpse of what may be the future. Florida and PBC may be in better shape than most, but it is time that these matters were discussed openly.
May 14, 2011 4:12 pm	Good information. But I’m still having a problem understanding your point. Let’s start with your first paragraph that lists occupations that you say are more dangerous than the career of a Paramedic Firefighter, and then you list their salaries, as comparatively much lower than a Paramedic Firefighter in Palm Beach County. Once again, your point? …. I’m assuming that you’re suggesting that the salaries for these “Higher Risk” jobs, are fair. That a logging company, or roofing company that turns a pretty good profit, should in turn be able to pay their employees $15.00 an hour? And out of that $15.00 and hour, that employee should be expected to carve out their own pension investment, their own medical insurance, and get small incremental raises that do not keep up with the cost of inflation? …. There is most likely a lot of statistical data that would either skew your numbers, or possibly show that there’s maybe a logical explanation why the number of fatalities in these professions are so high. Like maybe the turnover rate because these workers go on to find better / higher paying jobs, which increases the revolving door – turn over rate, which increases the lack of experienced workers who’ve been on the job longer and the safety value of this, I don’t know. I do know this … I grew up on Long Island, and there’s a Merchant Marine Academy in Kings Point, Nassau County. You make mention of Merchant Marines above, in your list of comparative occupations that are as you infer, more dangerous than that of a Paramedic Firefighter, and are making less. Before I left New York in 1982, Merchant Marines were making somewhere in the area of $90,000.00 a year. Not too shabby, wouldn’t you say? …. I also would say that FP&L linemen are making a pretty good living as well. Just to mention a couple. I won’t even get into the amount of continuing education credits, and continuous ongoing training required for the Paramedic Firefighter, after the training and education required to get certified in both disciplines, Vs. other private sector occupations that you’re making comparisons to. I have a high respect for veterans. Thank you very much for your service to our country. My father was Army. The Korean theater. After he was released from the service, he was able to buy a nice home for our family with his V.A. loan, and for the rest of his life there were other various benefits that my father was afforded because of his 4 year stint in the military, including V.A. health care benefits. That 4 year stint also included room, board, clothing, and food. I am in no way discounting his commitment, and his service to our country. So there is obviously a little more to a military salary than what some people leave out, when they’d like to pit the military against first responders with regards to pay and benefits. And once again, the argument that first responders should be brought down to military is somewhat backwards. Some would argue that the military should be brought up to what first responders make. And when you do a cost comparison between the two, with regards to all of the other benefit costs aside from just salary, I’d be interested to see how far off the two really are. Your comparison between the private sector and the public sector with regards to hours worked, and that your high tech job requires you to put in 60+ hours, and is high stress. Much respect from me to you. But my question is this, what are the risks of your high stress tech job, putting in that many hours? …. What I mean by that is, what’s the worst that can happen if you fail at any given time in your high tech position because of fatigue or stress? …. (On the job) …. The profession of a Paramedic Firefighter requires getting it right 100% of the time. Failure can mean the difference between living or dying, both for the Paramedic Firefighter, and / or the customer. Surely you can agree. Once again, your reference to 48 hours, and defining that as two days, is misleading. It’s 2 days on, one day off, and a total of 48 hours = 6 – 8 hour days. A Paramedic Firefighter must stay in a government building for 24 hours, subject to an emergency call at any time during that 24 hour period. Yes, some do have side jobs, or teach on the side, or own a business on the side. Is your point that no one in the private sector works another job, or has a business above and beyond their base employment? Your reference to the way a call is answered in Palm Beach County regarding the usage of multiple vehicles and personnel, that you compare to the private sector, as if this is a waste. What you’re failing to understand is that the level of Advanced Life Support service in Palm Beach County dictates that certain procedures are followed, and certain tools, equipment, and supplies are used to provide this advanced service. The modern day Emergency Medical Team is basically bringing the Emergency Room to the patient. This requires man power. Years ago, Paramedic Firefighters were not carrying 12-Lead EKG’s, weren’t carrying Glucometers, or using the advanced airway adjuncts, and various other tools / equipment, or performing the myriad of tests that they’re performing now. And the customer demands this level of service. If the private sector will promise you that they can do it with less, I would venture to say that they’re misleading you. A Cardiac Arrest patient who requires CPR, Electro-Shock therapy, Intraveneous lines, Airway intubation, Medication administration, and someone to document this all, with the time line, along with all other pertinent information needed for the hospital could be handled by one private sector vehicle? …. I guess that might be possible. But their shouid be at least 5 or 6 people on that vehicle, with all the necessary equipment. That would make it a pretty big vehicle. Your statement about supervisors on the different rigs (Lieutenant / EMS – Captain FIRE) ….. And how a private company doesn’t do it this way. I beg to differ. The private provider ambulance companies that operate in Palm Beach County have supervisors on most if not all of their trucks. You’re treading down a slippery slope when you compare “For Profit” against not for profit, regarding emergency services. If you really want to get into a “Waste” discussion, lets talk about municipalities that have borders against each other, and 3 fire stations all within a mile or two of each other. Each fire station covering their municipality only. How many municipalities in Palm Beach County have their own emergency services, separate equipment, separate communications, separate maintenance and supply facilities, separate purchasing contracts with weaker purchasing power, ect ect ect …… And this wouldn’t be the fault of the Emergency Service Providers themselves. This would most likely be more of a league of cities – autonomy – what’s ours is ours – identity thing. Ending question – What percentage of the Florida State Retirement system, is part of the over all state budget ?
May 14, 2011 5:35 pm	Comparison of dangerous job categories can be found at various places, including The Daily Beast, Forbes, and Business Insider among others. My rankings came from the first of these which lists the salary of a merchant mariner as $61,960 and a firefighter as $45,700 (which is approximately the Bureau of Labor Statistics national average, and much less than the $71,800 average of Palm Beach Fire/Rescue in 2009). BLS is the source for much of the information, including fatalities per 100K. The point of this is not to argue which jobs carry more risk, but to suggest that risk alone does not correlate strongly to compensation. You would hope that in a free country where both employers and employees constitute a labor market and can make free choices, that compensation would correlate strongly with the perceived value of the services provided. Risk would be a part perhaps, but not the major driver. Perhaps the PBC Fire/Rescue provides a service that is truly worth the 52% premium it gets over the national average, I don’t know. You make a good case that it is expensive to bring the emergency room to the patient, and if I was having the emergency I would be grateful for the service. In jurisdictions where the equipment and training level is less than this, (many parts of the country, presumably, given their costs), then I assume more people die before receiving treatment. It would be interesting to gather those statistics as a way of bolstering the case. I do know that in the 8 years since 2003, the Fire/Rescue budget has grown 82% when its service population only grew 26% and staff only grew by 36%. Most of the budget growth was in personal service costs, not equipment and infrastructure. The IAFF is a very good bargaining unit and deserves the appreciation of their members. It is both appropriate and expected that the union should negotiate the best deal, that is not the problem. It is the county administration and commission who sit on the other side of the table (and are supposed to represent the taxpayers) that should explain to us why our services cost more than others. This applies to PBSO as well as Fire/Rescue. County staff spending growth has been somewhat restrained in the last few years. The municipalities that still have their own Fire/Rescue services (37% of the county at present), have made their choices for various reasons. Cost would be one – the budget growth in the county Fire/Rescue exceeds that of the cities whose budgets we have examined. At the state level, as at the county, the 2011 employer contributions for FRS were 9.63% of payroll (regular class) and 22.11% (special risk). This falls to 3.77% and 12.96% respectively, for 2012 if the governor signs SB2100.
May 14, 2011 10:57 pm	Your comparison of the career “Firefighter” vs. Merchant Mariner as it relates to a national average. Is your BLS data comparing “Paramedic Firefighters” … Or just Firefighters, as you’ve written above? ….. As I’ve said up above, one has to view the service provided as a “Dual Service”. And to get a true value based comparison between salaries of these occupations, you’d need more data than what these website’s you’re using, are providing. For the last 25 years, the fire rescue budget has been run quite fiscally responsible. Everything’s been basically paid off, without the need for bond issues and the like. This would relate to your equipment and infrastructure data. I don’t know if the municipalities can lay claim to the same. I’m assuming that the municipalities that came into the county system must have come in for a fiscal savings component. The city of Boca Raton has used their fire rescue system as a marketing tool for annexation. They promised the citizens of Boca Raton big increases in level of service, with less taxes. If you’ve read the local newspapers in the last few years, I don’t think their taxes have remained stagnant. Your right about health / life risk data not being the only analysis that should be made. Your numbers regarding population and staff growth, as it relates to this discussion prompts me to ask you, has “Demand” remained stagnant? Has the call volume gone up or down? …… In an area that has a population fluctuation that widely goes up and down as it relates to tourism and snow birds, and the population that travels through the major highway arteries of Palm Beach County, can you get a true picture of how many human beings are physically in this county and need to be protected at any given time, and does your data reflect this? All of the occupations you use as your safety / salary comparison, how many of them require college credit training? ….. I believe the pilot, and merchant marine categories are pretty much the only ones. So yes, there’s more than just the safety factor to consider. Have you done any studies that would show that if the municipalities that represent the 37% which have kept their own fire rescue services, would benefit as a whole by consolidating into one department? ….. Do you have any charts that would possibly show over lapping with regards to fire stations from several different agencies, that are basically on top of each other? Several agencies with their own multi-million dollar communications set ups? Their own multi-million dollar training facilities? …. You say that these municipalities have made these choices for various reasons. You’d probably be best served by examining those reasons first, before going after the lively hood of your first responders and their families. Your last statement didn’t answer my last question above. What is the FRS percentage of the total state budget?. Another question: What is the median price of a home in Palm Beach County at this time?
May 14, 2011 1:36 pm (Edit)	So many questions. I sense our world views are so divergent that any agreement on these issues would be improbable. So here is an offer – make your case that the 52% premium is justified, or that it is misleading or incorrect. Or make the case that the extra spending saves lives and that the PBC EMS performance far exceeds the peer group. We will run your article as a feature story and distribute it to the TAB mailing list. But be forewarned – it is a tough crowd that leans towards the view that county spending has been excessive. But we are rational people and will give it a fair hearing. You can send it to: info@pbctab.org
May 15, 2011 6:04 pm	Yes, lots of questions, and lots of factors to be considered before making informed opinions / informed decisions. As far as tough crowds go, there are a few here in Palm Beach County. One of those is a crowd that is probably the biggest demand of the Fire Rescue / E.M.S. system. That would be our elderly population here in Palm Beach County. And the odd thing about these customers, as it relates to your argument here, is that a lot of these people are “Homesteaded Out” …. Which means they pay little to no taxes, yet use the system extensively. One can almost draw a comparison with your argument of why are we paying the Paramedic Firefighters X amount of dollars, and what are we getting for our money? … With … Why are we paying for this system, yet the people who use it the most, are not? ….. But I seriously doubt you’d wanna go up against that crowd, no matter how tough your crowd is. And the ironic twist here? —> I would venture to say that there’s a strong possibility that a lot of these elderly residents of Palm Beach County, are parents of the tea party people who would attack the first responders as over paid.
May 16, 2011 5:50 am	Making my case is easy. Include everything I’ve talked about above, with this ……. In the past 25 years, I can personally assure you that there are at least 4 human beings, 4 tax paying citizens in Palm Beach County, that went into what’s called “Ventricular Fibrillation”, which is a cardiac condition where the heart stops beating and begins to “Fibrillate”, (Which means that the heart that normally has one dominant natural “pacemaker” of it’s own, fails to be the dominant one, and little pacemakers all over the heart begin vying / competing to take over and become the dominant one – Basically.) that the Paramedic Firefighters who immediately applied the EKG monitor and made the diagnosis of this life threatening heart problem, applied the defibrillation paddles to the patients chest, performed the defibrillation, which basically sends a large electric shock and depolarizes all of those little pacemakers in the heart at once, with the hopes that the dominant pacemaker will take back over and lead the heart into beating normally again … worked … and got the heart beating normally again, the Paramedic Firefighters were then able to quickly administer medications through an intravenous line that they initiated / established, and were able to administer medications carried in their box to sooth / relax the heart (It’s gone through a traumatic event here, and is still irritable and could quite possibly go right back into ventricular fibrillation), administer oxygen to the patient for the very same reason, and these 4 human beings regained consciousness before arriving at the Emergency Room, and were released back to their families several weeks later, with no residual, neurological deficits. So there’s at least 4 human beings in Palm Beach County, (That I personally know of) that I would challenge you to ask they and their families: “Are Paramedic Firefighters worth what we pay them?” Now those are just a few examples of people that have been brought back “After” crossing the thresh hold of deaths door step. (That I personally know of) ….. Let’s talk about the hundreds, if not thousands that I personally know of, who have been stopped “Before” crossing the thresh hold of deaths door step, by Paramedic Firefighters in Palm Beach County. A few of these conditions would include, but not limited to ……. The heart conditions that are extremely dangerous, and require other intravenous medications, or electro-shock therapy, to treat the problem and either stabilize it (With Oxygen), or correct it, prior to entering the Emergency Room. The condition known as “Congestive Heart Failure” or simply “C.H.F.” … (This is where the side of the heart that is relied upon for dispensing the oxygenated blood from the lungs, to the rest of the body, begins to slow down / fail, which then causes the blood to back up into the lungs, basically causing the patient to now drown in their own fluid.) where the Paramedic Firefighters quickly apply oxygen, initiate an intravenous line, administer a medication they carry in their box called “Lasix” which works in the kidneys to drain the fluid that is built up in the lungs, thus allowing them to breathe normally again, prior to entering the Emergency Room. The Diabetics who are in what’s called “Insulin Shock”, this is where their blood sugar levels are dangerously low, and the Paramedic Firefighters would know this because they have equipment that immediately tests their blood sugar level, and are able to immediately establish an intravenous line, and administer a medication in their box called “Dextrose” which is a medication that is basically brings their blood sugar level back up to non life threatening levels before entering the Emergency Room. The drug over doses (Accidental or Intentional) where Paramedic Firefighters are able to immediately establish an intravenous line to administer a medication they carry in their box called “Narcan”, which treats Narcotic over dose and brings the heart back to a normal rate / rhythm, brings the blood pressure back up, brings the patients level of consciousness back up, …. once again, before entering the Emergency Room. Just these three examples, which are just three of many other life threatening conditions that Paramedic Firefighters are trained and equipped to handle, are examples of hundreds if not well over a thousand, that I can personally attest to, that your Paramedic Firefighters have saved from crossing over the thresh hold of deaths door step in the last 25 years. So ….. If you were to gather up all of these patients and their families, and ask them if Paramedic Firefighters are worth the money they’re paid, I would venture to say that the majority of them, if not all of them would say yes. Well worth it, and then some. There are just a few examples. Then, as part of your analysis / as part of your information gathering, to make an informed / balanced / non biased opinion, and advice to your elected officials, I would challenge you to ask Paramedic Firefighter peer groups (Both private and Public providers) around the country basically the same question, but slightly modified. ………. “Do you think that Paramedic Firefighters in Palm Beach County Florida, are paid a fair wage that’s equitable to the cost of living / cost of buying a home in Palm Beach County?” …… Sorry …. A lot of questions, a lot of information. But the web page here says: “Speak your mind, tell us what you’re thinking.” ….. Please feel free to share all of this with your tough crowd. Thank you for your time. Over and out.

Pension Reform – the Final Bill

On Friday May 6, the conference committee put the final touches on FRS Reform and sent SB2100 to the Governor. Although it is not as far-reaching as the Governor wanted, it is significant, both in the precedent it sets (employees must now contribute to their pensions) and in the budget savings for both the state and the counties that participate in FRS.

The conference staff analysis summarizes the highlights of the bill as:

• All FRS members must now contribute 3% of their earnings to the system.
• For pension dollars accrued after July 1, 2011, the Cost of Living Allowance (COLA) of 3% is eliminated. (This is grandfathered in the bill in 2016, which leaves it up to a future legislature whether it will be restored. Sort of like the “Bush Tax Cuts”.)
• For participants who enter DROP after July 1, interest accrues at 1.3% instead of 6.5%.

Additionally, for those who enroll in FRS after July 1, 2011:

• “Average Final Compensation” (AFC) is the average of the highest earning 8 years (not 5).
• Vesting occurs after 8 years (not 5).
• Age and service requirements change to age 65 / 33 years (not 62/30) for regular class and to age 60 / 30 years (not 55/25) for special risk class.

To calculate the budget impact to the county, we must refer to the “employer contribution” section of the bill that starts on page 180 of the final conference amendment. The contributions are 3.28% of gross compensation for regular class, and 10.21% for special risk. (This compares with 9.63% and 22.11% this year).

That’s not the end of it though – the final amendment adds a section to “address the unfunded actuarial liabilities of the system” with an additional employer contribution of 0.49% and 2.75%, starting July 1 for regular and special risk, respectively. This amount then bumps up to 2.16% and 8.21% in 2012.

Taking these figures and applying them to our database of county employee compensation, finds that the county-wide savings in the first year would be $48M ($98M including the schools) and $26M in the next year. The first year savings breaks down as follows: $15.4M in county staff, $20.6M in PBSO, and $11.6M in Fire/Rescue.

The Florida Association of Counties has done a similar analysis state-wide and calculated that the savings for all counties would be $615M in the first year.

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

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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

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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

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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

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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

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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.

Smart Cap – Good for the State, Good for the County

The Florida Legislature is moving forward on a constitutional amendment for the 2012 ballot to limit state spending to a “growth factor” tied to inflation and population growth. A previous attempt in 2009 had included county and municpal governments in its scope, but that has been omitted this time.

We think it is still a good idea however, and could be implemented for Palm Beach County as a Charter Amendment. TAB plans to argue both for and against the various proposals coming forward during the charter review process. Since a Smart Cap is not likely to be proposed by the Board themselves, we want to raise this proposal now so it can be discussed and perhaps gather momentum.

This article examines the effect a smart cap would have had on the county if it were in place since 2003. The conclusions are:

• The FY2011 ad-valorem equivalent for the county-wide departments is 15% less than a cap would have allowed. This is good and reasonable. It was achieved however, by significant reductions over the last three budget cycles, coming off a peak in 2008 that was 7% over cap, and a record of exceeding the cap in all but the last two years.
• It would have greatly restrained the growth in PBSO and Fire/Rescue, as their FY2011 ad-valorem equivalent exceeds what the cap would have allowed by 32% and 19% respectively. Since both of those organization’s budgets are primarily personal service costs, the existence of a cap would have limited the salary and benefit enhancements that were granted in the lucrative collective bargaining agreements that are now such a drag on the county budget.
• If a cap were to be imposed, it could be crafted in such a way that emergency overrides are possible.
• Although we are not enthusiastic about the overuse of federal grants for local projects, a county “Smart Cap” would not interfere with the use of such funds.
• There is precedent – both Duval and Brevard counties (and possibly others) have caps in place today.

For these reasons, we would very much like to see a county version of Smart Cap on the 2012 budget as a result of the Charter Review.

What is Smart Cap?

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Senate Joint Resolution 958, introduced by Senator Ellyn Bogdanoff and approved by the Florida Senate on March 15, would place a constitutional amendment on the 2012 ballot to limit the growth in spending at the state level. House Joint Resolution 7221, an identical bill, has passed out of committee and is pending a floor vote.

Unlike a previous attempt at a Florida “Smart Cap” (SJR1906), introduced by now Senate President Mike Haridopolis in 2009 and applying to county and municipal governments as well, the current iteration would apply only to the state budget. It’s provisions (summarized in the staff analysis) are:

• Replaces the existing state revenue limitation based on Florida personal income growth with a new state revenue limitation based on changes in population and inflation
• Requires excess revenues to be deposited into the Budget Stabilization Fund, used to support public education, or returned to the taxpayers
• Adds fines and revenues used to pay debt service on bonds issued after July 1, 2012 to the state revenues subject to the limitation
• Authorizes the Legislature to increase the revenue limitation by a supermajority vote
• Authorizes the Legislature to place a proposed increase before the voters, requiring approval by 60 percent of the voters

It should be noted that the “revenue” that is capped is subject to some exclusions. It does not apply to Medicaid funds, revenue necessary to meet bond requirements, federal grants and some other revenues. The amendment would replace the current cap which is based on personal income. Currently, 32 states have some kind of statutory cap on spending.

Palm Beach County Smart Cap

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On the county level, a “Smart Cap” could be instituted through a Charter Change amendment on the 2012 ballot. Would this have much effect on the budget?

TAB has pointed out that the county budget overall has grown “11 times population growth and 3 times the rate of inflation” from $1.2B in 2003 to $2.1B in 2011. This tracks spending growth though, and is partly funded by revenue that under the state rules would be exempt such as federal grants. It also includes “fee for service” revenue that varies with the services requested, and other revenue that is department specific. For simplicity, we have chosen to look at the effects of a “Smart Cap” by analysing the “ad-valorem equivalent” amount at the department level. This number is the difference between the spending proposed by a department (appropriations), and the revenue it receives from specific sources like grants or fees, and is paid for by a combination of ad-valorem taxes and other “ad-valorem equivalent” revenues such as the sales tax.

The revenue cap at the state level is based on a “population and inflation” model, and sets the cap at last year’s revenue limit plus a growth factor. The growth factor is computed by combining inflation represented by the consumer price index (CPI) and the state population as used in other measures. In other states, most notably Colorado’s “TABOR”, the Taxpayer Bill of Rights, the cap was applied to the previous year’s revenue. Since revenue declines during a recession, this caused the cap to “ratchet” down and caused more spending reduction than was anticipated or desired. It was suspended for a period of time by the legislature to allow the economy to equilibrate. The Florida proposal does not have this problem since the growth factor is applied to the previous year’s cap – not the revenue collected (after a multi-year startup phase).

To see the effect had Smart Cap been in effect in 2003, we can compute the growth factor from that year’s budget forward to 2011, and compare it to the actual budget growth that occurred. The results show that while PBSO, Fire/Rescue, and the Supervisor of Elections all grew much faster than a cap would have allowed, the countywide departments are now comfortably 15% under what the cap would require. Bob Weisman has always maintained that his growth was “less than TABOR”, – and it was, if you only look at the endpoints. You just have to separate his budget from the others to see it clearly. The 8 year trend is shown in the following chart. Unfortunately, the overspending in the early years resulted in a cumulative overspend of about $50M.

The following table illustrates what the FY2011 budget (ad-valorem equivalent) would have been had Smart Cap been in place since 2003. The “Growth Factor” is computed by combining the change in CPI and the change in service population for the period 2003-2011, and is 28.4% countywide. Fire / Rescue has expanded their service area during the period from 641,000 to 807,727 by taking over municipal departments, so their growth factor of 52.5% reflects that change. Likewise, the Library system has grown their population by about 13% during the period, now providing service to 28 of the 38 municipalities for a growth factor of 37.2%.

The Sheriff has also grown the PBSO service area during the period by taking over law enforcement duties in Pahokee, South Bay, Belle Glade, Royal Palm Beach, Wellington, Lake Worth, Mangonia Park and Loxahatchee Groves. We did not adjust the PBSO growth factor however, because unlike Fire/Rescue, they are funded from county-wide ad-valorem taxes and the change in service area is offset by specific contract revenue from the towns and cities that have been absorbed. Corrections, court protection and law enforcement infrastructure (crime lab, SWAT, etc.) are funded by all county taxpayers.

	2003 Ad-valorem Equivalent	Growth Factor	2011 Cap	2011 Ad-valorem Equivalent	Exceeded Cap By
County-Wide Departments	$208M	28.4%	$267M	$226M	-15.4%
Fire / Rescue	$113M	52.5%	$172M	$205M	19.2%
Library System	$26M	37.2%	$36M	$38M	6.4%
Constitutional Officers
Sheriff	$236M	28.4%	$303M	$400M	32.0%
Clerk *	$31M	28.4%	$39M	$12M	-69.2%
Property Appraiser	$14M	28.4%	$18M	$18M	0.0%
Supervisor of Elections	$5M	28.4%	$6M	$11M	83.3%
Tax Collector	$4M	28.4%	$5M	$4M	-20.0%

Note: The large reduction in the Clerk’s budget is a result of conversion of some ad-valorem items to a fee basis in 2005.

The eight year growth in spending has shown that portions of the county, including the county-wide departments and the constitutional officers (except the Sheriff and SOE) have been responsible in adjusting their budget appropriate to the size of the county population and consistent with price inflation. It should be noted however, that until the valuations began to decline after 2008 there was not much evidence of restraint.

We will examine the relationship of spending to the cap on a year by year basis in an upcoming article.

PBSO and Fire/Rescue on the other hand have grown way out of proportion, and most of the increase has gone into salaries and benefits for those covered under collective bargaining agreements. It is time to rein this in, and a Smart Cap Charter amendment is a way to do it.

Put Smart Cap on the ballot in 2012 and let the people decide.

The 2012 Budget – a Very Preliminary Analysis.

Although the first budget workshop is a couple of months away, and the department rollups won’t be done until next month, there are some inferences that can be drawn from the environment in which the budget is being prepared.

• Property values are expected to decline by 6%, but some new construction will offset that and the county is using a 5% decline as a working number. Since the 2011 valuation was approximately $127B, the 2012 number would then be $120.7B.
• The record $522M of intergovernmental (federal and state) revenue in the 2011 budget will likely be less this year – grants to local governments are under pressure both in Washington and Tallahassee.
• Expenses are rising in some areas – particularly in personal service costs. Step raises, longevity bonuses and other aspects of the existing collective bargaining contracts will add to the budget this year, even if most staff do not get raises.
• Revenue from non-ad valorem sources (eg. sales, bed, gas taxes) could also decline given the level of economic activity.

County staff expects to see about a $60M shortfall from these factors if the millage is not raised. Currently, county-wide millage is 4.75, yielding $603M, and the Fire/Rescue MSTU millage is 3.4581, yielding $179M. County Administrator Bob Weisman has signaled on several occasions (at the commissioners “off-site” retreat, and again at the 4/12 BCC meeting) that he would like to see rollback millage adopted, which by our calculation would be about 5.00 county-wide, a 5.3% increase. Achieving rollback would require about a $30M cut from the expected rollup. No millage increase, as previously noted, requires $60M in cuts.

At the off-site retreat, a majority of the commissioners requested that the first pass at the budget have no millage increase and directed staff to provide the list of cuts that are necessary to achieve it. TAB has some ideas in this area.

What is “realistic growth” in spending?

First, it is necessary to say that we believe holding the countywide millage at 4.75 (and the Fire/Rescue MSTU to 3.4581) this year is the proper decision. We have tracked county spending and tax collections from 2003 through the current year, and compared it to changes in county population and inflation – an objective measure of “appropriate” spending growth. During that time, gross spending (appropriations) has grown 11 times the population rate and 3 times the rate of inflation, and it continues to rise – an unsustainable trend. Ad-valorem requirements on the other hand, declined slightly in FY2010 and fell by about 6% in FY2011. This spending increase at a time of decining tax collection was possible because the spending was propped up by large infusions of intergovernmental revenue, including the federal “stimulus” known as the “American Recovery and Reinvestment Act” (ARRA). The $522M infusion in FY2011 compares to $239M in FY2009, a 218% increase in 2 years!

Note that we expect a reduction in intergovermental revenue this year – reflecting new realities in Washington and Tallahassee. County estimates of these amounts are overly optimistic however (see graph below taken from the Final FY2011 County Budget assumptions).

From 2003 to 2011, inflation measured by the consumer price index was about 21%. Population growth was about 6% overall. Combining those numbers would imply that a “realistic growth” figure for the county budget would have been 28.4%, not the 65% that spending grew, or the 40% increase in ad-valorem requirements. These numbers are the combined requirements of the county-wide, fire/rescue, and library taxing units, and aren’t completely fair since Fire/Rescue in particular serves only about 63% of the county and saw its service population grow 26% over the 8 year period. The Sheriff provides primary law enforcement to about 56% of the county, but any variations in PBSO service area is accounted for in the revenue received from those areas, and the entire county foots the bill for the Sheriff’s ad-valorem requirement. We are refining our P&I model and will have a better analysis as the budgets are developed.

It should be noted that for most of the last 8 years, the adopted tax (millage x valuation) was considerably less than ad-valorem requirement (see graph below). This reflects a spending down of reserves. As this is a management action divorced from either spending or taxation, we are using ad-valorem requirements for analysis, except where millage is discussed.

So from where would the $60M in cuts come? Much would come from Tallahassee in the form of FRS reform, courtesy of Governor Scott. Although the legislature has fallen short of where the governor wanted to go, the bills (HB1405 and SB2100) require an average of 3% contribution by participants in the FRS pension system (which includes all county employees). Pension reform is a complex area, and there are many differences in the bills (see Pension Bills Ready for Conference), but each bill contains the 2011 employer contribution as a percent of salary, which allows an estimate of the potential savings to the county. By our calculations, using employee salary data, this reform will save between $23M to $40M for the county ($16M – $30M against county-wide ad-valorem requirements alone). It also will save $28M-$39M for the school system.

Group	Number of employees	Average Salary	Scott Proposal Savings	SB2100 Savings	HB1405 Savings
County Staff	5,731	$45.9K	$13.2M	$11.9M	$8.5M
PBSO (general risk)	1,808	$53.0K	$4.8M	$4.4M	$3.1M
Fire/Rescue (general risk)	208	$85.0K	$0.9M	$0.8M	$0.6M
Schools	20,986	$41.3K	$43.3M	$39.3M	$27.9M
TOTAL (contr.)	28,733		$62.2M	$56.4M	$40.1M
			Governor 2% accrual
PBSO special risk	2111	$77.7K	$20.3M	$13.6M	$6.5M
F/R special risk	1303	$88.6M	14.3M	$9.6	$4.6M
TOTAL (accr.)	3414		$34.6M	$23.2	$11.1M
TOTAL (both)	32,147		$96.8M	$79.6	$51.2M
Schools Only	20,986		$43.3M	$39.3M	$27.9M
County Only	11,161		$53.5M	$40.3M	$23.3M
Copyright 2011, Palm Beach County Taxpayer Action Board

Further cuts could come from the areas identified last year in the “blue pages”. TAB had identified approximately $31M in cuts that could have been taken in these programs. Since PBSO is a larger (and growing larger) part of the county-wide budget, we believe that the Sheriff should match any cuts taken by county staff, perhaps even exceeding them as our preliminary calculations of population and inflation measurements show PBSO has grown much faster than the growth of their service population would require.

As the budget develops, we will be refining the TAB position.

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.

County Votes to pay 35% of cost of Convention Center Hotel

This morning, the Board of County Commissioners voted 4-2 (Marcus/Aaronson/Vana/Burdick in favor, Abrams/Taylor against, Santamaria absent) to “conceptually approve” a county subsidy of $27 Million to The Related Companies to build a 400 room Hilton next to the convention center. They also approved $200,000 from the General Fund Contingency Reserves to fund consultant and legal services to further develop the proposal.

While most would agree that a hotel is needed to support the viability of the county-owned convention center (The Marriott across the street is considered too small to support large gatherings), the fact that no private entity was willing to take on the project without this large subsidy should be a red flag. The $27M is in addition to another $8M that the planners hope to get in the form of federal “New Market” funds (which may have to come from the county also) which together make up about 35% of the total cost of the $101M project.

So what does the county get for putting up 35% of the cost of the project and the use of the county owned land?

An ownership stake or revenue sharing? NO.

Jobs? – Yes, 350 construction jobs for 2 years and 300 permanent, low-wage hospitality sector jobs. (In other words, $35M buys 300 jobs at $117K per job – and those jobs will pay about a quarter of that.)

Ongoing tax revenue? – Yes and no. The annual $2.2M bond interest on the $27M ($2.7M if on the hook for $35M) is to be a recurring expense drawn from the ad-valorem funded General Fund, while bed tax revenue from the hotel would be restricted to non-ad valorem TDC programs.

Commissioner’s Aaronson and Marcus raised the issue that they were not able to bring the Florida Association of Counties convention to PBC because the convention center support infrastructure is lacking. This may be true, but Commissioner Abrams pointed out that the much larger Florida League of Cities has come to the county many times – although to Boca Raton instead of West Palm Beach. Both Commissioner Abrams and Taylor raised issues with adding this additional burden on the budget every year at a time we are striving to reduce spending, and pointed to the drain that the Scripps subsidy is to our current budget. Of course they were not on the commission when the convention center decisions were made. Commissioners Aaronson and Marcus on the other hand (who were) have invested their reputations in those decisions and of course want to spend more money to vindicate the original move.

Many people came forward to speak in favor of this project, particulary those in West Palm Beach who will clearly benefit. The Mayor was absent, but it was said she “supports the project”. I would hope so – having all the county taxpayers fund what will mostly benefit her city is quite a boon.

The decision is for “conceptual approval” and commits only the continuance of the planning, yet it is a clear ‘GO’ signal for the project.

We believe that for the county to have a successful convention center, a nearby hotel large enough to service a capacity convention is necessary. That said, for the county to contribute 35% of the construction costs and get no direct return on investment sounds like compounding an error. You may recall that the original proposal for the convention center never projected a county subsidy for a hotel, assuming that it would be a profitable project for the private sector. We would have preferred a smaller subsidy by the county, some contribution from the City of West Palm Beach, and a return to the General Fund of some of the subsidy, perhaps by converting a portion into a loan. Although some of the $1M in annual subsidy for the convention center itself could be reduced by an improvement in business, there are no guarantees.

The Taxpayer did not win today. Thank you Commissioners Abrams and Taylor for having the courage to try to stop this train.

Public Sector Compensation – Some Perspective

With the conflict over public employee compensation raging in Wisconsin and likely to spread across the country, there are still misconceptions about how public employees are compensated (and how well), the role of unions in setting the levels of compensation, and the political aspects that typically are more significant than the economic aspects.

We at TAB believe that setting equitable compensation for public employees is as important to budget reform as finding and eliminating programs that have outlived their usefulness. Just as entitlements are the major challenge to the federal budget, state and local budgets are defined by their personal service costs.

The following is a list of facts (and some opinions) that we think will structure the debate in the coming months, both in faraway states like Wisconsin and Ohio, as well as in Tallahassee and at the county and municipal level all over the state.

• Salaries and other compensation are the largest government expense at the local level.
• Compensation dynamics are considerably different than the private sector. Providing government services is a monopoly where spending restraints (where they exist) are political not economic. Salaries are driven less by market forces than by what the taxpayers will accept.
• Conventional wisdom that “public sector = lower pay and better benefits” is no longer true. Flush with cash from the mid-decade runup in property valuations, municipal and county governments have allowed their personal services expense to far outpace inflation.
• Public sector unions have made a convincing case to local officials that they should share in the property tax windfall – both in salary today and in pensions to be paid in tomorrow’s dollars, and as long as the public wasn’t looking too closely, they didn’t feel ripped off.
• With both their employees and their unions making the case that they should “share the wealth”, and no organized advocates for the citizens, local officials have often been tempted to take the path of least resistance.
• Officials are further incented by the contributions and manpower that the employee unions can bring to their re-election campaigns.
• When local pressure is not enough, public sector unions have been very successful on the state level to get statutes enacted that constrain local governments from resisting upward pressure on personal service costs.
• It is only the current prolonged economic downturn that has shed light on how this whole system has gotten out of hand – when looking at ways to constrain spending, many are appalled and surprised at how their personal services costs have exploded, and how little they can do about it.
• State level resistance to unbounded growth in public sector compensation, initially led by Chris Christie, and followed by many more of the Republican governors and legislatures elected in 2010 (including Rick Scott) is a potential game-changer.
• Those municipal and county officials who would really like to restore sanity to public employee compensation have a small window of opportunity to get on the train before all this comes to a head this year.
• They could start by supporting FRS reform as outlined by the governor, which if enacted would save around $60M at the county level.
• Once established, FRS reform could be used as a blueprint for local pension plans.
• FRS reform is not “draconian” and would still provide better benefits than the private sector.
• For example, reduction in special risk accruals from 3% to 2% would return to the original concept – to provide an equivalent pension at 25 years for those in high stress jobs that other employees would get at 30 years.
• Another area for reform is longevity raises – this is a public sector phenomenon that provides a rapid escalation in salary, irrespective of merit or performance. During economic downturn, local governments should have the flexibility to freeze or even reduce salaries as an alternative to layoffs, just like in the private sector.
• As framed by the Wisconsin debate, the collective bargaining process by public employee unions is at the core of the problem. Pension and health care concessions in that state may fix this year’s budget, but next year (or when the economy improves) they will be back to the table to restore it. Once a mulit-year contract is in place (such as the PBC situation with PBSO and Fire/Rescue), necessary actions that would void the terms of the contract (such as a delay in raises) are not possible without justifiable economic distress – and maybe not even then.
• A similar conundrum is about to play out in Tallahassee as the legislative committees to take up the Governor’s FRS reforms are already talking about “restoring” the status quo as soon as FRS is back to 100% funding. These same legislators, many of them Republicans, have already proposed that 5% is too much, the COLA must remain, and we can’t possibly mess with the special risk accruals. We can only hope that Rick Scott stands his ground.

Only by having an honest dialog on these subjects with all parties at the table – including the taxpayer, can we avoid the train wreck that is coming in public sector finance. Luckily, many have taken up the subject and it is being discussed in the media at all levels. If Scott Walker can round up his missing Senators and pass his collective bargaining reform, many states will initiate changes in their situations that would have been unthinkable only a year ago. Even if some compromise is made in Wisconsin, a line has been crossed and the battle has been joined.

Nothing less than the economic survival of the American Experiment is at stake.

Palm Beach County Pay and Benefits – How Much is Enough?

There is much anecdotal evidence, both locally and nationally, that public sector compensation has far outpaced that in the private sector. During this prolonged period of economic downturn, there is a perception that while many are out of work, underemployed, or making do with reduced pay and benefits, the public employee gravy train just keeps rolling along.

But is this really true in Palm Beach County? Many would say it is not – that wages have been frozen, and the compensation provided is really much less than has been claimed. TAB decided to dig into the numbers and see for ourselves.

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The results may surprise you, but we found the gross pay for PBSO rank and file (total organization, sworn and unsworn, not management) and county staff to be within range of both local and national averages provided by the Bureau of Labor Statistics. Fire/Rescue on the other hand, seems to have won the public sector pay lottery, coming in over 50% above their peers nationally. When measured in terms of just sworn positions, PBSO staff and management do see a 29% premium over the national average, and a slight advantage over their local peers in the West Palm – Boca corridor.

Pension benefits are a different matter. As Defined Benefit plans go, payouts for those in the “regular class” FRS plans are good but not excessive. Of course just having a DB plan is generous – only 21% of private sector jobs are so blessed, according to the Cato Institute. For those in “special risk classes” like sworn positions in both Fire-Rescue and PBSO, the pensions are extremely generous. In a future article, we will explore the funding assumptions behind these pensions, and see what they suggest about future financial risks for the county.

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Source Materials

The conclusions we draw in this study are only as good as the source materials. We do not work in county Human Resources, and have no insider knowledge. Rather, we are using publicly available source materials, and extrapolate from those when necessary to align to subject years. The sources used are:

• County Budget Books for years 2004-2011 (“Fiscal Year 20xx Annual Budget)
• Budget detail from PBSO obtained through Chapter 119 Open Records Requests.
• Salary, Overtime, Title, Department data for each employee, maintained online by the Sun Sentinel (2009 data).
• Florida Retirement System plan descriptions
• Miscellaneous data from County, PBSO, Fire-Rescue, and IAFF websites
• Mean salary data from the Bureau of Labor Statistics

For comparisons, total compensation is based on the 2011 budget. Direct measures of gross pay are based on 2009 data in the Sun-Sentinel database and the 2009 BLS study.

Measuring Compensation

For the sake of the comparison, we divided the 11,166 county employees into the three major areas that stand alone by nature of their mission and bargaining units. These are the Sheriff’s office, County Fire/Rescue (which has its own MSTU), and the rest of the staff, including those reporting to Administrator Weisman as well as those who work for the Constitutional officers exclusive of PBSO.

Area	Employees	Personal Services Budget	% of Total	Per Employee Average
PBSO	3,919	$390M	39%	$97,233
Fire-Rescue	1,511	$226M	22%	$149,570
County Staff	5,736	$389M	39%	$67,876
Total	11,136	$1,005M	100%	$90,248

The County Budget Book defines “Personal Services” expense as “Items of expenditures in the operating budget for salaries and wages paid for services performed by county employees; including fringe benefit costs.” This is also known as “compensation”, and includes:

• Salary
• Overtime
• Special pay and bonus
• Pension contribution
• Health insurance
• life insurance
• FICA payments on behalf of the employee

These compensation costs are what an employee “earns”, or put another way, the variable cost to the county for employing the individual.

In order to compare these numbers to the private sector (or in the case of Fire and PBSO, peer agencies here and elsewhere), we would need to separate out the “pay” component from the “benefit” component, particularly since many articles written on the subject claim that it is the benefits that really separate government employees from their counterparts in the private sector. Luckily, a snapshot of what each employee was paid in 2009 was obtained by the Sun-Sentinel and made available to the public. The database provides the employees name, title, department, salary, and overtime. PBSO is in one database, and the rest is in a second, but Fire/Rescue is easily separated from county staff using the department field.

With a little programming and the magic of SQL, this data was used to extract average salary data for the three groups, and later to refine it into separate averages for “management” and “staff”. The 2011 equivalent was then obtained by advancing the Fire-Rescue average using the contracted raise amount from the collective bargaining agreement, and using a figure of 2.5% for the other groups. Combined with the “compensation” data, the result is the following chart:

We were surprised to see so much difference between PBSO and Fire/Rescue, since most external salary surveys show rough parity between the two professions. (Note: in a later look at just sworn positions, the difference was not as stark.)

To illustrate the size of each benefit category, the following chart was assembled from information obtained from PBSO through an open records request.

A Word About Pensions

For the most part, county staff participate in FRS (Florida Retirement System) Pension plans. PBSO and Fire/Rescue do as well, but many are in the “special-risk” classes that are much more generous. The basic FRS plan allows full retirement at age 62 or with 30 years, with service credit of 1.6% for every year of service and a fixed 3% per year Cost of Living Allowance (COLA). The pension amount is calculated based on the “Average Final Compensation (AFC), the average of the 5 highest paid years, including overtime and bonus.

Special Risk classes get modified formulas. Firefighters for example, can retire at any age with 25 years of service, with a full 3% service credit for each year. To see how much more lucrative that is, consider the following example:

Two employees, one a county staffer another a Firefighter, both earn and average of $100,000 for their last 5 years, and each retires at age 62 with 30 years service. The firefighter’s pension is 88% higher than the staffer. Ten years later, at age 72, the firefighter is making 21% more than when he was working, while the staffer is only making 65% of their final pay. See table.

Pension Class	AFC	Pension at retirement	Pension 10 years later
Normal	$100,000	$48,000	$64,508
Special Risk	$100,000	$90,000	$120,952

It should be noted that Defined Benefit pensions are not widespread in the private sector, particularly for those hired in the last 10 or 15 years, and where they do exist, they do not feature cost of living adjustments, being in essence, fixed annuities. Comparisons of pension benefits are complex though, and we will leave that exercise to a future article.

External Comparison

To understand if these levels of compensation are within established norms, we looked for local statistics, starting with the federal government. The Bureau of Labor Statistics published its last survey of our area for May 2009, entitled “May 2009 Metropolitan and Nonmetropolitan Area Occupational Employment and Wage Estimates –
West Palm Beach-Boca Raton-Boynton Beach, FL Metropolitan Division“. The text of the survey can be found HERE

The sample includes about 510K employed persons who have an annual mean of $42,380 in May of 2009. To map against our three county groups, we extracted the averages for Fire Fighters ($62,110), Police and Sheriff Patrol Officers ($61,310), and their respective management groups. Since the county staff has a very wide range of job descriptions, some highly specialized, we didn’t think the category “Office and Administrative Support Occupations ($31,810) did it justice, so we used the overall county mean. For county management we used the category “Administrative Services Managers”. See the results in the following table:

Area	BLS National Survey	BLS Local Area Survey	PBC Average from Salary Database	Number in group	Local Comparison	National Comparison
Sheriff Staff	$55,120	$61,310	$59,033	3278	-3.7%	+7.1%
Sheriff Mgt.	$78,580	$99,090	$102,502	490	+3.4%	+30.4%
Fire/R Staff	$47,220	$62,110	$71,840	1010	+15.7%	+52.1%
Fire/R Mgt.	$71,680	$94,600	$111,284	494	+17.6%	+55.3%
County Staff	N/A	$42,380	$41,783	4994	-1.4%	N/A
County Mgt.	$81,530	$86,720	$87,892	348	+1.4%	+7.8%

A Histogram showing the spread of salaries across our three groups looks like this:

To explain the very high averages for Fire Rescue we looked into the apparent excess of management. A database query on titles yields the following table. Note again that over a third of all employees have “supervisory” titles.

Title Group	Number in Group	Average Gross
Chief	51	$146,414
Captain	268	$116,909
Lieutenant	175	$92,433
Firefighter	809	$74,711
Other	201	$60,285

Comparison of Sworn Titles

One criticism of the study has been that a comparison between Fire-Rescue and PBSO at the organization level does not take into account the relatively large number (43%) of civilian unsworn employees in the Sheriff’s office that earn less and are not in the “special risk” FRS class. To address the issue, we went back to the 2009 database and extracted the 2,111 sworn titles from PBSO (sergeant rank and above, plus protective services, Law Enforcement and Corrections). For Fire/Rescue, we used the 1303 titles of Lieutenant and above, plus Firefighter. Given that Fire/Rescue Captains and Lieutenants deploy with their equipment as field supervisors, we equated that group with PBSO sergeants, and considered them “first line supervisors” for comparison with the BLS data. Executive management (for which there is no separate BLS category) was counted as the 51 Fire/Rescue Chiefs (4% of sworn), versus the titles Chief, Colonel, Major, Captain, and Lieutenant in PBSO (6% of sworn). The results can be seen in the following table:

Area	BLS National Survey	BLS Local Survey	PBC Mean	Number in group	Local Comparison	National Comparison
Sheriff Staff	$55,120	$61,310	$70,958	1742	15.7%	+28.7%
Sheriff Supv.	$78,580	$99,090	$100,961	242	+1.9%	+28.5%
Sheriff Exec.	N/A	N/A	$124,754	127
Fire/R Staff	$47,220	$62,110	$74,711	809	+20.3%	+58.2%
Fire/R Supv.	$71,680	$94,600	$107,240	443	+13.4%	+49.6%
Fire/R Exec.	N/A	N/A	$146,414	51

Using this criteria, the table shows that the sworn law enforcement and corrections professionals and first line supervisors at PBSO are paid at about a 29% premium to the national averages. This still pales in comparison to Fire / Rescue though, where Firefighters see a 58% premium and their supervisors about 50%. Executive management at Fire/Rescue gets a 17% advantage over PBSO.

Conclusions

From the foregoing data, we can draw some conclusions:

• County staff and average PBSO rank and file gross pay is just slightly more than the national average, and in line with the Palm Beach County urban area averages when measured on an organization-wide basis.
• PBSO management does quite a bit better than national average (+30%, both in aggregate and at the Sergeant level). This may possibly be justified by the fact that PBSO covers a large area and service population compared to peers, and likely is a more complex management challenge, although we did not have national data to compare. It is a premium that should be examined however.
• Fire Rescue gross pay greatly exceeds peer groups in the county, and are more than 50% ahead of national averages. This is pretty significant and needs to be thoroughly explained prior to the next contract negotiation.
• Although nationally (and in the county survey), police and fire agencies are paid about equally, PBC Fire/Rescue employees are compensated on average about 50% more than those in the Sheriff’s office, and their gross pay is 33% higher organization-wide (5-7% when comparing only sworn employees).
• Fire Rescue is extremely top-heavy. Over 33% of the entire organization holds the rank of Lieutenant or above. The span of control for Palm Beach County Fire/Rescue is therefore 2:1. That says every manager on average only supervises 2 people. By contrast, the span in PBSO is about 7:1 and in the county staff about 14:1. Fire-Rescue explains that each vehicle (fire or EMS, each with a crew of 3) deploys with a Lieutenant or Captain on board.
• FRS pensions for those not in high-risk classes are not excessive compared to private sector Defined Benefit plans (to the extent you can find them anymore), but the COLA is a feature that many private sector plans lack. For the special risk classes, the pensions are GOLD PLATED.

As taxpayers, we are pleased to note that Fire/Rescue is a modern, well-equipped organization that responds to emergencies with performance that is clearly satisfactory to the community. This service is very expensive however, and one wonders if the service is so much better than the national average that it deserves a 50% premium. We very much hope that the Board of County Commissioners will require a satisfactory answer to that question during the next contract negotiations.

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Response from Fire-Rescue Chief Steve Jerauld

The following comments are offered regarding the document you provided:

• While some locales may do so, it has not been the County’s practice to look at law enforcement salaries and/or benefits when establishing compensation for Fire Rescue.
• That being said, any comparisons should be of like information. For example, the difference in the number of civilians employed by the two agencies can have an effect on the salary averages, and should be taken into consideration. Firefighting personnel work a 48 hour average work week, as compared to a typical 40 hour work week. We did not review your calculations, but it is not clear if 2011 budget figures are being used in a comparison to 2009 salary surveys.
• The conclusion regarding PBSO’s size and population served, which results in a more complex management challenge, likewise applies to PBCFR. We serve 1822 square miles from 54 work locations, including 18 cities and the unincorporated areas of the County.
• Regarding pensions, the benefits provided by the Florida Retirement System are not under the control of the County. Since it is a State system, the benefits are established by the Legislature.
• Number of Supervisory Personnel – Fire Rescue agencies deploy in a different manner than law enforcement. Fire Rescue units are frequently deployed to emergencies on a single unit basis, and as a result they are staffed with supervisory personnel. Fire Rescue maintains a Lieutenant on each Rescue unit, which in most cases is a 3 person crew. Each Engine or Aerial Company has a Captain assigned as part of the 3 person crew.

Steve Jerauld, Fire Chief
Palm Beach County Fire Rescue

Tax Collector VOIP Project – Necessity or Re-inventing the Wheel?

During TAB’s initial look at the county spending, many people mentioned to us the apparent inefficient duplication of services that exists. Each of the Constitutional Officers, to varying degrees, manage their own infrastructure for things like Human Resources, Purchasing, and Information Technology. The arguments in favor of such an arrangement are sometimes compelling – such as the unique needs of the Sheriff. In other areas it is less clear that an established (and much larger) organization within the county structure could not do the job at lower cost and with better results.

This week, an example of further infrastructure divergence was brought to our attention. The Tax Collector, having assumed the responsibility for the county-wide motor vehicle offices from the state, has decided to upgrade the phone service within that function. Currently, Tax Collector network and telephone infrastructure is provided by county ISS.

Late last year, according to County ISS Director Steve Bordelon, ISS was asked to quote the work, and did so. It came as a surpise when they learned later that the Tax Collector had signed an agreement with an outside vendor (itpointe) for the purchase and installation of the new phone system in the Lantana and Palm Beach Gardens facilities, using a Cisco VOIP solution. ISS had previously adopted an Avaya solution (Cisco and Avaya are battling each other for dominance in the business communications market) and have over 1000 VOIP handsets installed throughout the county, a good track record of performance and reliability, and a trained staff ready to support the Avaya system 24×7.

When informed of this decision, Steve Bordelon wrote a memo to Jean-Luc Caous, the “Innovative Technology Captain” for the Tax Collector’s “Technovative Services” group (titles in the Tax Collector’s office are interesting – they even have a “Goddess of Excellence and Opportunity Leadership Centre”). In it, he explained the advantages of staying with the Avaya solution and further pointed out that the Cisco system cost of $49,041 compares to an equivalent cost of $30,822 for the Avaya, with the additional advantage of leveraging the existing VOIP infrastructure.
Additionally, he said this:

Proceeding with the installation of a Cisco VOIP telephone system will result in a duplication of resources and increased expenditure of taxpayer funds. Further, we are concerned that this decision could be a precursor to converting all of the remaining Tax Collector Offices to a separate phone system and perhaps, even a separate network, which would further increase the costs of government services to the taxpayers.

In his response, Mr. Caous said:

As part of transitioning the Driver’s License functions to the Tax Collector, the state advised us that we were responsible for obtaining the equipment and services required for our operations. As such, we have contracted with various vendors to implement solutions that are aligned with the organization’s strategies. We appreciate your recommendations that were put forward at our last meeting, however we feel that the CISCO VOIP solution better fits our requirements surrounding our new Driver’s License functions. Under our established project timeline, the PGA office is scheduled to be completed January 24th, 2011. Our office is too far along in the process at this point, and we do not want to deviate from the plan, which could jeopardize the project completion dates.

In addition, as mentioned in our previous discussion, the majority of the equipment to be installed would not be replicated. The new locations we are taking over require cabling work, switches, phones, etc., to bring them into our environment. These costs would have to be paid by taxpayers, regardless of whether the costs are paid by the state or the county.

Finally, it is not our intent to acquire a separate network but to leverage the county’s network infrastructure to run the technology that best meets our needs.

So is this decision in the interests of the taxpayer and the citizens of Palm Beach County? We called each of the memo-writers for their comments.

Steve Bordelon was gracious with his time, and explained some of the history of ISS support for the Constitutional officers and how it varies depending on who was elected to the post. He believes the decision is a mistake, but acknowledges that the Tax Collector is an independent entity and is free to make their own IT decisions. However Other Charter Counties in our peer group that he has studied (eg. Orange) make better use of centralized facilities.

Jean-Luc Caous declined to speak with us and instead referred the question to Tax Collector Anne Gannon herself. She told us that they will provide documentation that makes their case, but it will take some time to do so. She indicated that part of what drove the decision was difficulty working with ISS on the concept. On the goal to move to the VOIP system, they at first were told it could not be done in an off-site building, then that it would be too expensive. Finally, although asked to quote, ISS did not provide one to their satisfaction. The project was driven by the details of the handover from the state – the Tax Collector has signed a 50 year lease on the space in the state buildings, and acquired the computer equipment, but the phone systems were to be removed and used by the state elsewhere. Having to move quickly for a January 24 opening date, they bid the project to third party vendors and were satisfied with the price and capablilty of the vendor selected to provide the phones and connect them to the county system. ISS will do the cable installation. Ms. Gannon said she will provide further background on the project later and we agreed to report on it here.

In TAB’s view, the Constitutional’s operate through sub-optimization. Each makes their own decisions about what is best for their organization and proceeds accordingly, irrespective of the investments that have already been made in county infrastructure. (There are exceptions – Gary Nikolits contracts the development and operation of the EXCELLENT and specialized PAPA database system and the printing or TRIM notices to ISS).
There have not been strong incentives to do otherwise, and bureaucracies being what they are, people at all levels would rather control their own destiny by spending their budget dollars in a way that gives them the most control over their resources.

From a taxpayer perspective – this decision sounds like a bad deal – an example of “re-inventing the wheel”. Can Cisco and Avaya systems coexist on the same network? Probably, but it has been my experience (30 years in the IT business) that it is asking for trouble. Minor incompatiblities can result in finger pointing by vendor support staffs, particularly when a rivalry as fierce as Cisco/Avaya is involved. When that happens, support costs go up and reliablility goes down. It makes sense only in the scenario that the Tax Collector is planning to totally disconnect from the rest of the county and go her own way.

That said, it is clear that the working relationship between ISS and the Tax Collector’s office needs some work. While ISS thinks the decision is wrong and the solution too expensive, the Tax Collector believes they were not getting the service they required from ISS. Perhaps avoiding sub-optimization in the future requires mediation.

We think this is an excellent example of what needs to be discussed in the upcoming Charter Review. With the enormous fiscal challenges facing state and local governments this kind of thing is out of step. Many are making the case that the smaller Constitutional Offices should really be county dependent departments (and thus use county support services). While a case can be made for the independence of the Property Appraiser and Supervisor of elections (objectivity) and the Clerk (independent audit), the case for the Tax Collector was given as “not wanting the people sending the bill to also collect the money”. (The independence of the Sheriff is more complicated and will be addressed in a later post.) Perhaps there is a middleground that can provide independence, yet still have incentives to optimize common resources at the county level. Every little bit helps.

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