County Budget Update – July 5
The next county budget workshop is Monday, July 11, at 9:30AM. Because of a “scheduling issue”, the BCC action to set the maximum millage rate that was scheduled for July 19 has been moved up to the 7/11 meeting. We expect the County Administrator to ask that this be set to rollback, currently estimated at 4.89 (about a 3% increase in tax rate). The majority of homestead property owners would see a larger increase of course, because their valuations are still catching up.
TAB opposes a tax rate increase of any size and is calling for the millage to remain at 4.75.
Public comment begins at 10:00 but you should be there at the start of the meeting if you plan to speak. Later in the week we will publish a call to action for TAB coalition partners. Please consider making your thoughts known to the commissioners, either in person at the meeting, or by email or phone prior to next Monday.
Since the June 13 meeting:
1. New estimates of property valuation show a smaller decline that Administrator Weisman sees as $3M more in tax revenue than expected. Consequently, he now calculates “rollback rate” at 4.89. There is also an expectation for $2M more in revenue from other sources (sales tax and revenue sharing).
2. The Sheriff, who is expected to see a reduction in FRS pension costs of $18M, has objected to the county trying to “share the wealth” and take some of that savings for the county department budget. Bob Weisman has conceded the point and estimates that his shortfall will increase by $12M as a result.
The June budget package at flat (4.75) millage, had a $45M gap versus 2011. $15M of this was from valuation decline ($588M in taxes versus $603M), and $30M from declines “elsewhere”. The Revenue chart on page A-2 only identifies $14M of the “elsewhere” – notably $4M less in interest income, $10M in “other BCC revenue”, and a little more than $1M less from the Sheriff, offset by some small revenue increases in other areas.
Where is the rest of the “budget hole’? We asked Budget Director John Wilson to clarify the $45M, and he gave us this data:
- $15.470M – loss of tax revenue at current millage rate of 4.75
- $9.066M – decrease in one-time funding sources (available funding from existing capital project funds)
- $4.902M – decrease in other revenues (primarily interest income)
- $6.953M – reduction in beginning balances brought forward in Palm Tran, County Transportation Trust Fund & Court Tech. Fund.
- $2.687M – increase in new capital project funding
- $5.184M – increase in General Fund transfer to D/S Funds (additional issue and loss of one-time funding)
- $.781M – increase in non-department operations – primarily due to reduction in indirect cost allocation
We are still a little fuzzy on the fund transfers and one-time funding sources, but he assured us that it would be explained in the July budget package which will be available prior to the 7/11 meeting. The new package is not available on the county website as of this writing, but has been delivered to the commissioners. We will publish our analysis of it shortly, and make any adjustments to the TAB proposal that would be called for.
As of now, the TAB Proposal remains:
- Maintain the county-wide millage at 4.75
- Take the majority of cuts from PBSO, not the county departments
- Take action to reduce the inventory of county property and reduce the debt
*Note: The TaxWatch study that relates to item #3 is in draft. We hope to share some of its findings in the near future.
Scare Tactics
Once again, the Post’s Rhonda Swan takes on the silly games that permeate the annual county budget process. In First, cut the scare tactics, she highlights the yearly practice of proposing cuts to popular programs, simply to turn out the interest groups to oppose the cuts, knowing full well that the Commissioners will restore them.
TAB explored this game last month in The Kabuki Budget. We believe the practice is cynical, and one of the reasons that people have lost respect for government at all levels.
Ms. Swan ends her editorial with this thought: If county commissioners want to dispel public misconceptions about the budget, they should direct staff to present proposals that are realistic.”
Indeed.
A Commissioner Takes on “Exigent Operational Necessity”
The Palm Beach Post is looking out for the taxpayer.
Last week we mentioned that Rhonda Swan raised the issue of the county’s interpretation of “exigent operational necessity” as it applies to the PBSO Career Services Act in an editorial.
This week, Jennifer Sorentrue brings it up in the context of the Sheriff’s budget dispute with the county, and quotes Steven Abrams: “It would seem to boil down to whether our current budget situation qualifies, Commissioner Steven Abrams said recently. “I personally believe it does.”
We know of one, perhaps two other commissioners who also differ with County Attorney Denise Neiman’s interpretation of the statute that “it is not necessity until the county is out of money”. Or, in the words of Ric Bradshaw: ‘The county would have to be “almost insolvent” before he could freeze employees’ pay, in his view. “If I was to freeze the pay plan, the union could come in here and take me to court,” Bradshaw said. “You can’t just violate the law because you want to.”
Will the commissioners push the issue? – we really hope so. The time has come for the Sheriff to tighten his belt like everyone else in the county – including the county staff who haven’t seen raises in quite a while.
For Jennifer’s excellent article, see: Palm Beach County, sheriff at odds over raises
Exigent Operational Necessity?
Writing in the Palm Beach Post on Friday, editorial writer and columnist Rhonda Swan makes the case that salary reductions for government employees in these troubled times are justifiable – even for administrators like Bob Weisman who takes home $251K / year.
She is also the first in the local media (to our knowledge) to raise questions about the Sheriff’s plan to give raises to the newly unionized civilian employees of PBSO. Citing the protection of the “PBSO Career Service Protection Act” – passed in 2004 to prevent a reduction in benefits for sworn law enforcement and corrections officers, Sheriff Bradshaw claims it now applies to the civilians.
The escape clause in the bill, “exigent operational necessity” has in the past been interpreted by County Attorney Denise Neiman as meaning “the county is out of money and the reserves are gone”. Ms Swan suggests an alternate view – that the Sheriff can invoke “necessity” within PBSO in light of county forced budget cuts. An innovative interpretation and we applaud the concept.
For the entire article, see: Administrators not immune
TAB is referenced in the article for our study on county pay and benefits.
Should the Sheriff be Subject to the Ethics Ordinances and the Inspector General?
Over the last few years, Palm Beach County has taken a great leap in establishing ethical standards and implementing a watchdog function that is helping dispel the reputation of “corruption county”. First, by ordinance, the County Commission and staff included themselves under the jurisdiction of a Commission on Ethics, and the Office of Inspector General. Then, in November of 2010, 70% of the voters supported a charter amendment to extend the umbrella to the 38 municipalities of the county, and the Solid Waste Authority brought themselves under it by inter-local agreement. By May of this year, the new ordinances (including a Code of Ethics and Lobbyist rules) were fully implemented.
There are still pockets of county government that are exempt from all this however. The school board is considering the question and may take the plunge at a later time, but the Constitutional Officers (Sheriff, Clerk, Tax Collector, Supervisor of Elections, Property Appraiser, County Attorney and Public Defender) are specifically excluded. The most significant of these of course is the Palm Beach Sheriff’s Office with its 4000 employees and $500M annual budget.
TAB believes if it is good for the county and cities, it should be good for the Sheriff, particularly given the wall that exists between PBSO and the public regarding disclosure of information. Very little financial (or other) information is readily available for scrutiny, and Chapter 119 (Open Records Law) procedures are needed to obtain anything not specifically mandated for disclosure under statute.
Just as the SWA took this step voluntarily, it has been proposed that the Sheriff enter into an inter-local agreement with the county to become part of the county ethics process. To this end, Chairman Karen Marcus formally requested that they do so.
“No Way, No How” was the synopsis of the 9 page response.
Responding for the Sheriff, Colonel Joe Bradshaw in the department of Legal Affairs, explained that they asked for a legal opinion from the General Counsel of the Florida Sheriff’s Association, R.W Evans. In Mr. Evans opinion, the “…County Code of Ethics cannot be applied to the Sheriff under any circumstances, because the investigation of law enforcement and corrections officers is preempted by Florida Law. Further, any oversight of the Sheriff’s Office by the Commission on Ethics and the Inspector General exceeds the County’s authority and improperly encroaches upon the constitutional office of the Sheriff.”
Based on this opinion, Colonel Bradshaw concludes “.. the Sheriff cannot enter into an interagency agreement with the county to extend the jurisdiction of the Palm Beach County Commission on Ethics and the Inspector General to the Palm Beach County Sheriff’s Office.”
In Mr. Evans response, he notes that “This issue is critically important to FLorida Sheriffs..” and that this is “.. the position of the Florida Sheriff’s Association of which I am General Counsel.”
In the opinion, several Florida Statues and case law are cited, pointing out that the Legislature has drawn a protective moat around law enforcement agencies which excludes interference from local elected officials in any way. In a sense, PBSO is “above the law” as far as the county is concerned and no public influence on PBSO is possible without changes in Legislation. We see this time and again – if the county asks the Sheriff for budget cuts he threatens to go to Tallahassee to overturn them. If existing benefits are questioned, the “PBSO Career Service Protection Act” is cited. There is effectively no local control over the Sheriff’s office save the ballot box.
Given the above, is there no other choice but to accept the opinion of the Sheriff’s Association? The voters of Broward County did not think so, and recently passed a charter amendment with 72% of the vote, placing their constitutionals (including the Broward Sheriff) under the County Code of Ethics. To date (to our knowledge), this has not been challenged in court on constitutional or other grounds, although Palm Beach County Attorney Denise Neiman has stated that Broward has crossed the constitutional line and a challenge would succeed. We shall see.
So what can be done about this? There are groups out there that are critical about the way PBSO spends taxpayer money (among other things – see pbsotalk.com). We have no way of knowing if information from those sources are accurate, but much of it appears to come from insiders. In fact, there is currently no outside oversight of PBSO such as the Office of Inspector General brings to other parts of county government, and we think that is a dangerous situation.
We support Chairman Marcus’ call for an inter-local agreement with PBSO. If there are legislative roadblocks then we should work through them with the delegation. We should also have a serious discussion of charter changes which would tear down the constitutional barriers to public oversight of PBSO.
For the full text of Colonel Bradshaw’s response to Karen Marcus, including the opinion of the Florida Sheriff’s Association, click HERE.
New County Grassroots Organization becomes TAB Coalition Partner
TAB welcomes its newest coalition partner, the Palm Beach County Tea Party. The group, formed by past leaders of SFTP that want to go in a new direction, was announced on Tuesday, June 21, and will initially have chapters in Jupiter and Wellington.
Local issues will have a more prominent role with the new group, including the county budget. In a question and answer video, group founder Pam Wohlschlegel said regarding the county budget: “We need to be fiscally responsible and part of that is budget cuts. Our founding group feels very strongly that the TAB proposal has a lot of good things in it and hope that our commissioners will accept it.”
For more information about the newest TAB partner, click HERE.
Genesis of a Collective Bargaining Agreement
On June 16, at the Chief Herman W. Brice Administrative Complex on Pike Road, negotiators for County Fire / Rescue and the International Association of Fire Fighters (IAFF local 2928) met across the table to reach agreement on a new contract which will replace the current agreement expiring in September.
As it was a public meeting, advertised on the county meetings calendar, and we at TAB are interested in how public employee union contracts are negotiated, we decided to attend and observe. There has been very little public participation at these meetings in the past, and when we arrived there were no seats anywhere but at the table, but they very graciously found us some. Chief Jerauld told us later that occasionally, fireman who may not agree with the union position will attend the meetings, but public participation is rare. That was disappointing to hear. Much of the budgets of Fire / Rescue, PBSO and other county agencies are driven by personal service costs, mostly established in these multi-year collective bargaining agreements. If we as citizens want to influence the way our governments spend our money, we should be willing to attend these meetings and understand how the contracts are set.
For our part, we were impressed with the professionalism displayed on both sides of the table, and the respect the sides showed to each other. For the first hour and a half or so, the attorney for management walked through the lengthy contract, pointing out changes from previous versions. A lot of the sections at issue related to work rules and compensation arrangements that need practitioner context to fully understand. Three items that we found particularly noteworthy though were:
- Elimination of employee performance reviews. The implication was that the current system does not achieve anything so it is better to scrap it altogether.
- A 22% reduction in starting salary for new employees. It was said the it was an attractive enough place to work that high starting salaries are not needed to attract recruits.
- A 3% employee contribution for insurance. This compares to 10% in the county departments.
On the latter two there was silence from the union side of the table and it is safe to say that did not mean concurrence. Several times, the phrase “unreasonable in the current times” was used to explain why a benefit was being reduced. From our limited perspective (and not having copies of the document we have not seen the new salary grid), it appears that the Fire / Rescue management is making a good faith attempt at bringing their contracts into line with economic conditions, and we find that encouraging.
When the document review was complete, management and the public (us) left the room so the union could confer privately. After about 10 minutes, word was relayed that the meeting was ending and would continue at a later date to be determined. For whatever reason, they needed more time to consider a response.
TAB is planning to follow the progress of this contract and will attend the followup meeting when it occurs. Stay tuned.
Marathon Session for First Budget Workshop
Last evening, starting at 6:00pm, the first steps in the annual county budget dance were performed before a large audience. The meeting did not end until around 11:00pm
County Administrator Bob Weisman, along with OFMB chief Liz Bloeser and Budget Director John Wilson, explained the high points of the 4.75 millage $588M tax proposal, and explained why he’d really like to see it raised to “rollback” millage of 4.922.
While Weisman maintained there were no “Washington Monument” cuts and all were feasible, several commissioners pointed out that many of the “green page” cuts were in areas that were both visible to the public and in areas that would raise significant objections from the public. Commissioner Abrams went so far as to point out that the “green pages” even contained service impact notes listing the dire consequences that were about to befall the county as a result of taking the cut. If the expectations were so dire, then why take these particular cuts? He referred to the comments in the budget document as “advocacy” and we couldn’t agree more.
After a brief pitch by Supervisor of Elections Susan Bucher, requesting more money to “compensate” for the new law limiting the length of early voting (shorter time means she needs more facilities, equipment and overtime – who knew?), Sheriff Bradshaw went through his budget presentation.
The Sheriff made some interesting claims.
Much has been made of the growing percentage of the county budget that goes to PBSO – we estimate their portion the ad-valorem equivalent county-wide budget is now 59%, up from 46% in 2003. Not so fast, says Sheriff Bradshaw. If you look at the core operation of the agency, removing the aspects that are state mandated or are county responsibilities (the jail, crossing guards, etc) – his spending is only 25% of the county budget. We find this argument interesting but not very relevant.
Another claim has to do with the way the county is accounting for the “savings” from the retirement system (FRS) changes passed by the Legislature. (TAB estimates the savings to be about $20M for PBSO, $15M for the county departments and other constitutionals, and $11.6M for Fire/Rescue). Don’t call them “savings” he says – it is simply a change in rates that he will now use to calculate his budget. The change in rate from last year amounts to $18M by his calculation and he takes it directly off his budget. The county contends that this amount should be “shared” with the county departments – it is a windfall from the state that needs to be used to fill their overall budget hole. Since the Sheriff, with many “special risk” employees gets a much bigger “savings” than the county with “regular risk” classes, he should “share the wealth”. In this one, we believe the Sheriff occupies the moral high ground, and the FRS “savings” that occur in PBSO should stay in PBSO. After all – it is a net budget reduction.
This is a serious dispute that will need to be resolved before a clear view of the flat millage budget can emerge, and it appears that both sides have dug in their heels. There are other issues as well, including the $5M credit the Sheriff wants to take for FRS savings he will realize in the period before the new budget year on October 1.
The way the county allocates their FRS “savings” is much more convoluted. Complicating things is that the county staff is divided up between departments that are not funded by ad-valorem taxes (eg. airports) and those that are fully or only partially funded by tax dollars. Our estimate of $15.4M savings is reduced to a little less than $8M that can be used to offset the ad-valorem levy according to Budget Director John Wilson.
Even so, this $8M plus the Sheriff’s $18M in “savings” ($26M total) should be more than enough to plug the “hole” between the $603M adopted tax of FY2011 and the $588M that flat millage will collect in 2012. John points out that there are other “holes”, like decreased interest earnings that make the actual “hole” $45M, so cuts are necessary. Unfortunately for us TAB analysts, none of the budget materials provided to the public provide the documentation necessary to see the whole picture, but John has promised to provide us with what we need shortly. Watch this space.
With the conclusion of the Sheriff’s budget, public comment began. As with most budget meetings, we saw a parade of supporters of the various programs on the chopping block. By our count, there were about 40 speakers. Three spoke to keep the rates low for Palm Tran Connection, one to restore manatee protection, 5 for the nature centers, a couple for community revitalization, four for Small Business Assistance, and ten for victims’s services. The support for the latter was quite moving as victims of rape, shootings and other mayhem came forward to tell their stories. Given that the amount of the cuts to Victims services is a relatively minor $320K or so and 4 positions we would guess they may get restored. All of these areas amount to a couple of million out of $25M in cuts, so we will see if their advocacy will prevail. Other constituencies in jeopardy (eg. lifeguards, FAA) did not turn out at this meeting.
Fifteen spoke in favor of the submitted, flat millage budget. These included Fred and Iris Scheibl of TAB, Meg Shannon of Tea Party in Action, Shannon and Doug Armstrong, Ed Fulop, Victoria Thiel and Dr. Richard Raborn of South Florida 912, Phil Blumel of RCCPBC, Mayor Gail Coniglio of the Town of Palm Beach County Budget Task Force, Pat Cooper of the PBCA, Dick Clyde of the PB City Council, Dionna Hall of RAPB and several others. Other TAB coalition partners who could not attend the meeting but sent emails to the commissioners included Hal Valeche of Taxpayer Action Network, Mayor Dan Comerford and Councilman Chip Block of Jupiter Inlet Colony.
At the end of the meeting the commissioners discussed what they had heard. Although they did not vote or take positions on the budget proposal, by their comments we would assess commissioners Abrams, Marcus and Burdick as leaning towards accepting the flat millage budget, and commissioner Aaronson as wanting to raise the millage. Commissioners Santamaria, Vana and Taylor seem to be hedging their bets at this time.
For media coverage of the meeting see: Palm Beach County Commission balks at cuts — or raising taxes in the Post, and Palm Beach County’s proposed spending cuts prompt citizen backlash in the Sun Sentinel.
The next step in the budget process is the workshop on July 11 at 9:30am. There is also an off-site retreat for the commissioners where budget strategy and objectives will be discussed. That will be held on Thursday June 30 at 10:00AM at the Lake Okeechobee Outpost in Pahokee.
BIZPAC Review:County budget a Weisman trick-expect tax increase
The Kabuki Budget
Yesterday, the county released the budget package for the June 13 workshop. While this preliminary document is lacking in detail (it doesn’t show the department rollups or make it possible to assess what the FRS savings were), it is predictive of the course of debate.
To their credit, the Board of County Commissioners directed Administrator Weisman and staff to prepare a budget this year with no tax increases. The submited budget meets that requirement. However, Mr. Weisman states in his cover letter that he wants them to approve a tax increase “to reinstate some of the less desirable budget cuts”.
Let the dance begin. Anyone who follows the county budget hearings knows how this works. The administrator wants to spend more. Some board members agree, some don’t, but they first need to listen to “the people”. Within the county, there are well organized special interest groups that are reliable and can be expected to come out and argue passionately for their slice of the pie. These groups include riders of Palm Tran and the Palm Tran Connection, the county lifeguards, directors of charitable organizations that get handouts from the county (Financially Assisted Agencies), the Cultural Council, and (when the Sheriff’s budget is threatened), lots of folks in PBA shirts and PBSO boosters from the Sheriff’s neighborhood programs. It used to include former Drug Farm residents, but they lost the fight last year.
Guess where the cuts come in the submitted budget. From these groups of course! Does anyone expect that the board will listen to groups of people in wheelchairs and not restore funding for Palm Tran Connection? Or turn away 150 young lifeguards who feel their way of life is threatened by closing pools? My guess is that these funds will be restored and the only reason they were offered up is to perpetuate “the dance”.
Of the $21.5M of specified county department cuts in the cover letter, the bulk comes from social service (including FAA), Palm Tran, ERM – including manatee protection, pavement and traffic signal repair (EPW), parks and recreation (pools and lifeguards), animal control, youth affairs and victim services. These are designed to sound “draconian”. Strangely enough, the detail provided shows actual increases in two of the areas – Palm Tran sees an actual ad-valorem increase of 25% ($3.9M) in its subsidy due to declining revenue, and Engineering & Public Works (EPW) grows by 10%. Nowhere in the submission can you find the amount saved by FRS reform (we estimate it to be $15.4M).
Likewise, the Sheriff (who asked for a 4% increase in his budget) is being told he will get a $22M cut. On Monday we will probably hear that this will result in the removal of patrols around the largest senior centers and other “constituent sensitive” areas, resulting in catastrophe if the money is not restored.
We could try to second guess the Administrator on where the cuts “should” be taken (we all have our anecdotes about waste and inefficiency), but that is hard to do without an insider’s knowledge. Instead, we say – go ahead and restore the funding to the squeeky wheels – but do it in a budget neutral manner. For every dollar restored, there needs to be a dollar cut somewhere else. The millage needs to stay at 4.75.
Do the right thing.