Sales Tax Proposal Sent Back for More Info

During a long meeting that stretched from before lunch until 5pm, the Board of County Commissioners yesterday deferred action on staff’s sales tax proposal, sending it back for more information.

Commissioners Valeche, Burdick and Abrams all wanted to see things slow down while the proposal is fleshed out. They did not want to see ballot language as of yet, rather the next session should discuss the unknowns of the proposal, including:

– What is the project list from the cities and School District?
– How would funds be distributed among cities, Cultural Council, county, schools?
– What it looks like without the Cultural Council projects included?
– What does the Hospitality Industry think of it?

While no one wanted to shut it down, they are clearly not ready to move on it. Some concerns expressed were that the proposal had expanded way beyond the original infrastructure funding, encompassing new construction projects, equipment for the Sheriff, and other items. Commissioner Abrams worried that the “Christmas tree” could tip over from all the ornaments.

Regarding the proposals from the Cultural Council – illustrated by a procession of over 10 museum directors, zookeepers, theater managers and the like, some of the projects go way beyond what you would expect from public funding, including architectural enhancements to the exterior of existing buildings to make them more trendy.

We will wait and see. We have listed objections to the plan as it is currently known. We expect that the devil is in the details though, specifically:

– Will the cities give up some of their share to fund CC projects?
– What will each of the 39 municipalities do with their share? Will any reduce their ad-valorem?
– What effect will this have on the county Ad-valorem budget process this year?

Regarding the Fire/Rescue sales tax proposal, there were too many questions about the enabling statute to move forward at this time. In particular:

– It is unclear what happens if sales tax revenue exceeds needs – can the surplus be spent on non fire/rescue projects by the county or cities? – It needs a statute change or AG opinion.
– What would be the process for collecting and distributing the cash, and how could ad-valorem be adjusted after trim notices are sent – Tax Collector Anne Gannon came and listed some of her process issues with it.
– What does Fire/Rescue administration (ie. Fire Chief Collins) think of the proposal. (The proposal is being brought forward by the IAFF union, not Fire/Rescue management).

We will keep you posted.

Some of the organizations with whom we have spoken, are also in a “wait and see” mode. Many believe there are real infrastructure needs, but many of the add-on projects give them pause.

For the Post story on the meeting, see: Action on Sales Tax Issue Delayed.

Final Hearing on FY2016 Budget, 9/21

Next Monday, the Commission will take their final vote to set the county-wide millage rate at 4.7815, unchanged since 2012.

Out of the $63M tax increase, the $775K that they did not commit to new spending will be rolled into reserves, ready for use to increase the BDB subsidy and other priorities that didn’t make the budget proposal.

This is how the budget compares to last year:

	2015	2016	Change
County-wide	$667.3M	729.9M	+ 9.4%
Library	$41.5M	45.0M	+ 8.4%
County Fire Rescue	$196.6M	214.8M	+ 9.3%
Jupiter Fire Rescue	$17.6M	17.7M	+ 0.6%

Keep these large increases in mind as you contemplate the coming push for raising the sales tax to pay for “infrastucture” projects that should have been addressed in the normal budget process.

Palm Beach County is not Wisconsin

On Tuesday, a sea of yellow shirts packed the commission chambers. None of the shirt wearers, who are members of IAFF local 2928 as well as employees of County Fire Rescue, took the podium to speak. That wasn’t why they were there. As acting union President Ricky Grau spoke in favor of “three men on a truck” and accused the county of understating the amount of reserves they have to spend, the sea of yellow shirts were there to send a not so subtle message to the commissioners.

What was the issue that brought out the troops? They objected to the action taken by Chief Steve Jerauld and Fire Rescue leadership in April to reduce the staffing on some EMS vehicles from three to two under some circumstances. This has reduced the amount of paid overtime. The Chief has assured the Commissioners and the public that in no way had public safety been compromised by this move. The savings are estimated to be $7.8M per year. Although no vote was taken, and only Karen Marcus and Burt Aaronson spoke strongly in favor of restoring the three man crews, staff took that as marching orders and agreed to spend the extra money.

None of this discussion involves any increase in millage or other revenue enhancement, and we believe that drawing down “excessive” reserves – stipulated by all sides to be “at least” $50M is the right thing to do. We also agree with Commissioner Marcus that IF the county policy is indeed “three men/women on a truck”, then it makes more operational and fiscal sense to fully staff the positions rather than paying overtime to a reduced staff. But should a bona fide attempt by the Chief to save taxpayer money by increasing efficiency at no risk to public safety be so quickly rebuffed?

The IAFF is a political force in the county and elected officials cross them at their own risk. The Fire Rescue collective bargaining agreement expired last September and they are currently working without a contract after a year of “negotiations” that led nowhere. Both sides (to their credit) were not suggesting pay increases in this economy, yet a county proposal for a 22% reduction in starting salary for new hires was never even acknowledged by the union. To see the Commissioners buckle over a truck staffing rule before the yellow shirted troops does not bode well for any substantive discussions in the future.

Fire Rescue funding is headed for a showdown when the reserves can no longer be tapped. As some cities are near their millage caps, the Fire Rescue millage has been flat since 2010 and revenue has trended down with property valuations. Spending on the other hand, mostly driven by escalating personal service costs built into the existing contract, contines to rise. Something has to give. We think the overly generous pay and benefits (compared to Fire Rescue national averages) need to be addressed. That is not likely in the game plan though and it would not surprise us to hear more talk of sales tax surcharges in the years to come.

Wisconsin was a wake up call to the public employee unions. Perhaps some of Governor Walker’s courage will rub off on our elected officals too.

For the Palm Beach Post editorial on the subject by Andrew Marra, see: Fire-Rescue headed for a financial emergency

Fire/Rescue Contract Negotiations – Back to the BCC

TAB members have been attending these, mostly once/monthly, negotiations since mid-June.   It was clear that little or no progress had been made in six months, and we of  TAB wondered how many more billable hours  would be spent for attorneys from both sides, sans resolution to anything.

Well – apparently, the County management team’s patience has been exhausted.  The County expected the Union to appear with a wage proposal, or at least an analysis of the County’s 22% across the board cut for new employees.  The Union said ‘No – the person who was doing the analysis had surgery and so we don’t have a response for you”.  County asked “Any movement on any of the proposals made by the County’?  “No” to that as well.  In fact, the Union said that it was very difficult to respond to 45 changes that the County wanted to make to the contract and although there has been probably some resolutions to 5-10 of these 45, that there are still 35 issues to work out.  The County attorney said he wasn’t going to get into exactly how many issues there were or remain.

County then went through 2 minor (one to two word changes) in articles 20 and 28.  County called them clarifications.  Union said these were changes, not clarifications.

Robert Norton (attorney for the county) then probed if there could be any meetings in January.  Matthew Mierzwa (union attorney) gave reasons why he was unavailable.  Mr. Norton said that “It’s clear that no progress is going to be made today”  and went on to say that he doesn’t recall any time in his career, making so little progress on a contract, and if there was a time, he doesn’t remember it.  While he wasn’t quite ready to call an “impasse”, he said that it was time to go back to the elected officials (Board of County Commissioners), to get guidance from them.  Depending on their decision, he’ll either work to get new bargaining dates or do whatever the next step is.

As a citizen and tax payer, watching twelve men waste their own (and our) time for six months, to achieve nothing, highlights why trust in government is at an all time low.

Note: the current contract expired in September.

Fire/Rescue Contract Talks Postponed for Another Month

So – where do we stand? The current contract expired at the end of September. There have been 6 contract negotiation meetings so far – of which 3 were 1/2 day and 3 were purportedly all day – or at least most of a day. Only a handful of the 47 articles (ie. chapters) have been signed-off, although most have at least been mentioned in the course of the 5 months elapsed time.

Observations: The meetings continue to be stylized. These are not negotiations in the common usage of the word. One side’s attorney (typically management) describes the change sought from the current contract. The other side’s attorney (typically the union) says ‘yes’ or more likely ‘no’. Occasionally there will be a few words of correction or acknowledgement from the 6+ representatives on each side. But more often, not. After several articles are discussed, the meeting breaks up in order that the sides (typically the union) can ‘caucus’. They come back and say ‘no’ and do not offer a tangible counter-proposal. There is no real discussion. There don’t seem to be minutes from prior meetings so topics are re-hashed. The difficult topics – eg pay plan, have not yet been broached.

Having come from only the private sector (with professional/white collar, hourly/blue collar, management/non-management) experience, negotiations on anything usually began with a summation of what was/wasn’t agreed to previously, and significant discussion would occur amongst those with the power to negotiate. Points of agreement would be compiled, points of disagreement would be clear and then, if necessary, the meeting would break up briefly to come to closure on a particular point. Perhaps what we’re observing is typical of all public sector negotations, we really don’t know. It does seem to be very inefficient to rehash the same things multiple times without at least noting what points were at issue.

Perhaps the problem is that the process is being observed. When we asked one of those who was present at the last contract talks in 2009 if this was “typical” of the process, it was suggested that our presence may be having an effect on the meetings. As one of the commissioners has told us on several occasions, government works best when it is being observed. Since this is the first time (to our knowledge) that members of the public have attended a Fire/Rescue union contract negotiation, perhaps the normal “give and take” of the sessions is being inhibited by the fact we are reporting what we observe. Think how things would change if these meetings were televised!

Is inefficiency necessary to good government? When not conducted in the sunlight, would a contract negotiated between a union and management that used to belong to the union have the same outcome? The taxpayer does not sit at this table. Neither does any commissioner, the elected taxpayer’s representatives. All we can do is observe and report.

Joking during the last meeting, when the scheduling of the next round was discussed, the union attorney suggested that it be on Thanksgiving Day because all would be paid extra to do so. What they did decide to do was to schedule the next round of meetings for November 22 and 23rd, the Tuesday and Wednesday of Thanksgiving week, a time when many members of the community are traveling or spending time with family. Maybe they expect to have a clear field on those days.

Fire / Rescue Contract Talks continue on Wednesday

Contract talks that have been ongoing since June for a new three year contract with IAFF local 2928 will continue this week. Three all-day sessions are scheduled for Wednesday through Friday, from 10:00AM to 5:00PM in the Everglades Room at the Chief Herman W. Brice Administrative Complex on Pike Road.

The last meeting was somewhat contentious as reported by Mike in “F-bombs Fly at Fire/Rescue Negotiations“. Given a month has passed, we wonder if the IAFF attorney has been able to cool down.

The meetings are open to the public and TAB plans to attend. Given the time involved, we are asking coalition partners and interested members of the public to help us in monitoring these meetings. Send us a note at info@pbctab.org if you can devote a few hours to a public service by sitting in on a portion. They are not recorded, nor are detailed minutes kept (to our knowledge). The only way to see what transpires is to physically attend.

To get an idea why these meetings are important, see Andrew Marra’s editorial in the Sunday Post: End the payroll paradox

Here are some resources that may be helpful:

• Marked-up Contract Proposal
• September Meeting: F-bombs Fly at Fire/Rescue Negotiations
• August Meeting: Little Progress in the IAFF Contract
• July Meeting: Fire/Rescue Talks Continue
• June Meeting, Genesis of a Collective Bargaining Agreement

Tax Rate Proposal Still Too High

The current proposed millage on the table for the 2012 budget is $4.79 per thousand dollars of valuation, up 0.8% from the $4.75 of last year. With declining valuations, that millage would collect $596M in taxes, $7M or about 1% less than last year. An “alternative” offered by Bob Weisman differs by about $700K – hardly worth mentioning.

At the September 13 preliminary hearing, commissioners Abrams, Burdick and Marcus voted against the rate increase and were in favor of further reductions in the Sheriff’s budget. At $467M, it is down slightly from last year, but not as much as the estimated $19M he is saving from pension reform which requires contributions from employees for the first time. The other four commissioners (Aaronson, Santamaria, Taylor, Vana) declined to challenge the Sheriff in any way, and thus there were not enough votes to even discuss this prospect.

There are three major components to the county budget – county departments, Fire/Rescue, and the Sheriff’s Office.

In the last 9 years, the county departments grew fat on the rising real estate bubble, but have cut their tax requirements significantly since the peak in 2007 and are now only about 3% over what they were in 2003.

Fire Rescue grew and stayed high (up 70% since 2003) but this year they are not increasing the tax rate and have reduced spending by about $4M. They are also negotiating in good faith with the IAFF to avoid across the board raises in the next contract and reduce starting salaries 22%.

PBSO on the other hand, at almost $400M, is almost twice the county department’s ad-valorem requirement, up from close to parity a decade ago. (See graph below) There is very little the commissioners have been able to do about this balloon in public safety spending. At the first hint of cuts, the Sheriff threatens neighborhood groups with reductions in patrols or the closing of a substation and they bring enormous political pressure on the individual commissioners. As an independently elected constitutional officer, the Sheriff has autonomy in how he spends his budget, but the county commissioners are empowered to set his bottom line. Typically, no commissioners have seriously challenged the Sheriff, but this year we see a change. Newly elected commissioner Paulette Burdick does not seem to be afraid to ask the right questions and suggest that the Sheriff share the cuts with the county. Neither does commissioner Abrams. Commissioner Marcus, not too much of a PBSO critic in the past, has joined the other two in challenging the PBSO budget this year, to her credit. What is the matter with the other four? If there ever was an economy that called for across the board cuts, including in PBSO, this is it.

We call on Commissioners Aaronson, Santamaria, Taylor and Vana to think about the Taxpayer this year and show a little spine.

Only $5M in additional cuts are needed to avoid a rate increase.  Cut the $5M from the Sheriff’s budget (1.25%) and you will be done.   PBSO has become unaffordable at the current level.

We stand by the TAB Proposal for 2012:

• Don’t increase the tax rates
• Take the remaining cuts from the Sheriff
• Sell off unused property
• Use reserves where necessary

F-bombs Fly at Fire/Rescue Negotiations

TAB has been attending the meetings between County Fire/Rescue management and IAFF Local 2928 since they began four months ago (See Genesis of a Collective Bargaining Agreement, Fire / Rescue Contract Talks Continue, and Little Progress in the IAFF Contract.)

We had been advised that the meetings tended to be raucous and filled with stunts and theatrics on the part of the union, but in three meetings we saw none of that. While very little progress was made, the tone of discussion was professional and cordial.

Apparently, that has all changed now.

The latest meeting was Wednesday, 9/14, starting at 10:00am. After about an hour in which the county proposed that a group of sections that were not particularly controversial be approved as a package, the union began a private caucus that lasted about an hour. Since the caucus is private, members of the public are excluded so we went into the conference room next door. This wasn’t far enough evidently, as one of the negotiators suspected we could hear them through the wall and asked us to go farther away.

We returned at the conclusion of the Caucus for 10 minutes only as they spoke briefly to the county and went back into caucus for the next two hours. We were not able to return at that time, but a member of one of our coalition partners attended the afternoon session and sent us the following report. Evidently, the negotiations are taking a different turn. We are speculating that the union attorney has been restrained in his language up to now because there was always a woman present.

Fire Salaries Frozen in Martin County

Martin fire-rescue workers forgo raises in contract approved by County Commission

Tuesday, August 23, 2011

STUART — Martin County’s 300 fire-rescue workers will not receive raises in the next three years under a contract approved Tuesday by a divided County Commission.

That, combined with additional givebacks could total as much as $460,000 in savings.

Read the entire story by George Andreassi in TCPalm HERE

Little Progress in the IAFF Contract

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

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

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

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

Why this lack of progress?

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

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

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

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

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

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

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

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