Thursday, September 26, 2013

Millage Rate Up 14%, Everyone Gets a Raise, Services Cut

Last night, the commission settled on raising our taxes 14.9% while approving a budget that only cut currently unfilled positions, that eliminated the PAL program as is the annual custom, gives every village employee a raise except for the interim village manager, has no money budgeted for lawsuits, and is guaranteed to be blown within three months of adoption.   The vote was 4 to 1.  

Couple of highlights from the budget:

  • To make the budget, the village once again decided to pretend that nobody sues us over our weird coding, inconsistent law enforcement and poor personnel management.  So thinking positively, they approved a budget that contains no money to defend or settle lawsuits against the village.  Since in the real world, meanies sometimes sue us, the first lawsuit will knock this over.
  • Drastic cuts were made to positions that don't exist currently so they are definitely still not there.
  • The interim village manager cut his own salary by $600 per month and cut his benefits pretty much out.  That would seem  noble but if we decide for a permanent village manager who is not him, we have to restore this, about another $40,000.  So, win?
  • Cost of living raises are handed out all around.
  • Sadly, for the fourth year in a row, the police will not be presenting the PAL program.  It could have been funded out of the recreation services reserve but you know, the chief.

The meeting was called to order at 6PM, more or less.  The budget was intensely questioned by Commissioner Chervony and Mayor Kreps, as well as many members of the public.   The manager very clearly laid out the dire consequences of our previous years' decision to spend $1.2 million in reserves down to nothing - we're broke.   

At 7:40 PM - Vice Mayor Eddie Lim spoke about how this is really a moderate increase, which it is for him since his 2012 tax bill for NBV was $148.33 and now will be ~$170.  He did note that it makes him sad that seasonal plantings on the causeway are going away and wondered if the reserve number was wrong.   He was assured it was not and lapsed back into silence at 7:44 PM.  

At 7:44 PM - Commissioner Duvall noted that legal had not cut their budgeted amounts.   Foreshadowing.  After a 1 minute discussion, she yielded the floor.  

At 7:45 PM, Commissioner Gonzalez complimented the budget, said something about $30k in fireworks and fulfilled his duties as a member of the dais.  

At 7:46 PM, Mayor Kreps asked about the cuts to dispatch, explained that the sad urchins of North Bay Village look forward to the village Cristmahanawanzika holiday party all year long, said tough toenails on the PAL, and said something about flowers.  

In a sweeping rhetorical flourish she read the Village Mission statement and goals.  Did you know it's a village goal to be a "Beautiful, Quaint Village on the Bay"?   I didn't.   I wonder how we'll know when we've reached that goal?  

So what took up most of the nearly 3 hour meeting?   

About an hour was presentations on the budget from the manager and staff.   The rest were questions and objections from residents.   

These can easily be summarized into the following:

  • Why are you raising taxes?  Answer:  For the last 2 years we spent the reserve without regard to consequences.  
  • Do you have a plan to keep costs under control for next year?  Answer:  No but the commissioners have high hopes.  
  • Why has there been no accountability from the police chief on the $1 million he mispent from the police budget?  Answer:  What?  You want to cut response time?
  • Do you have any explanation for why the huge misspend in the last 2 years?  Answer:  That's not positive.  
I have left out the one commissioner who voted against the budget and tax increase, Richard Chervony.   Of the five, he spoke the longest, questioning the wisdom of spending money on equipment that can't be used, concerns about the sponsoring a scholarship pageant when we can't pay our own bills, promotions in the PD and a host of other specifics.  As is the custom on the dais, he was ignored.   He's not shiny and positive.   

So after an exhausting nearly 3 hours of not listening to residents, ignoring requests for measurement and proof,  congratulating themselves on a not job well done, they passed the budget that they all know will not make it through the quarter and decided to bag the regular commission meeting which was only in place to engage residents who want to help the city by serving on boards.  

Really, they decided to table everything until October, except for one thing - a dramatic whirlwind of North Bay Village crazy.  I'll cover that in the next  post.  

Kevin Vericker
September 26, 2013

Thursday, September 19, 2013

Hope Is Not A Strategy - Positive Thinking Is Not Governance

The commission met on Tuesday night and North Bay Village is now on track to raise the current millage from 4.7772 to 6.2 or so. That's a 31% increase.  

The rise is inevitable because our village is not really governed in any true sense of the word.  For two years, the commission has been hitting the reserve accounts to cover everyday expenses, so much so that it went from $1.2 million at the beginning of fiscal 2012 to around $300,000 at the end of 2013.   

Not once during that time, did the mayor or most of the commissioners say, "We need a plan."  Not a better plan, any plan.  

The manager's presentation was direct, understandable and grim.  We're on the road to broke unless either the millage goes up or spending goes down.   And while some spending is going down, others are going up and there's no plan.  

One resident asked why there was no accountability for the nearly $1 million wasted by the PD when two cops were fired and then reinstated.  

Others wondered about looming retirement payouts.  

My contribution was to suggest that at a minimum the village should put performance measures on the money so we can see if we spent it to produce what we wanted.  My examples were:

  1. Add a performance measure to the money we are giving to Treasure Island Elementary School.  State that we expect them to improve at least one letter grade from a C to a B or no more money in 2015.   
  2. Add a performance measure to the police.  State that we expect them to move us from 27th out of 34 in crimes resolved to the top 10.  
I gave several other examples.  Jorge Gonzalez never heard of such a thing, the mayor thought it would be insulting to tell the managers that we are watching how well or poorly they are doing and in a truly bizarre response, the finance department said they were using performance measures and they were in the budget.   Utter nonsense of course.  The budget has some poorly worded mission statements but nothing you can measure.  

This is the problem - after two years of spending without regard to revenue and with no way to measure success and manage failure, the commission voted 3 - 2 to go ahead without a plan and without a view of what happens next.   

Commissioner Wendy Duvall voted "no" on the millage rate increase and on the budget, not because she thinks the money will grow on a tree but because she knows you have to manage it, and that setting and measuring expectations is the only way to do it.  

The final meeting is next week on Wednesday the 25th.   Why not show up and see why the  commission feels that it's okay to spend our money and not ask on what, or how.   Then explain it to me.  

Kevin Vericker
September 19, 2013

Friday, September 13, 2013

Tuesday at 6 PM

Here's the process.  The Commission will meet Tuesday Sept 17  at 6 PM at Treasure Island Elementary School.   This is the first of two budget meetings.  

At this meeting, they will review the proposed budget, set the millage rate and decide on what line items to fund.  This is the public's chance for input.  Really our only chance.  

After the meeting, the village staff will rework the budget and present the final on  Thursday September 25, again at 6 PM to adopt the final budget.  

While the tax rates are not set in stone, it's likely that to maintain the current level of spending, our millage tax rate will rise from 4.7772 to 6.2 or 6.3.   That's a 31% increase in our taxes.  

This Tuesday will be  the last chance to find out why we are spending 31% more for the same services.  

Kevin Vericker
September 13, 2013

Wednesday, September 11, 2013

Wh Should Have Had A Plan

From the Herald article on the county budget hearing last night:  
Gimenez’s administration should have foreseen the budget gap and made a plan two years ago to sustain the system, librarian Ellen Book said. “Now the library’s financially bankrupted,” she said.

Read more here:
The speaker was talking about the libraries but this could be true of any budget woes.  

In North Bay Village the commission has been spending out of our reserves since 2012, a completely unsustainable situation and now our reserves are down to $50,000 according to the budget memo of July 16, 2013.   

But there's no plan to get spending under control.  It seems like the only plan all along was to raise millage for the same services.   That's not governance.  That's close your eyes and think positively.

Kevin Vericker
September 11, 2013

Monday, September 9, 2013

Blamestorming - A Game The Whole Village Can Play

"Blamestorming" was a popular slang word in corporate circles in the 1980's.  It refers to after the fact discussions of what went wrong and the group's attempt to put the blame anywhere but where it belongs.  Right now, we are blamestorming in North Bay Village and the consensus is "blame the lawyers."  That's easy to do.  As a class, lawyers are not popular people and frankly often a pain in the posterior, particularly when they do what you tell them to do even though they told you not to do that.   

We have two sets of village attorneys - one for labor and the other for all other village business, Weiss Serota, the other village business attorney is catching the heat right now.   A good part of that is because the labor attorney have not yet submitted their invoices so they look good but I think that will change when we see the price tags.   Let's talk about Weiss Serota.  

Their duties fall roughly into three broad areas:

  • General government and advising the village on legal issues.
  • Defending the village during legal battles.
  • Reviewing and advising on code issues.   

There's more but those are the main areas.   They charge us for the general government work under their contract and there has been little concern about the fixed price fees for that segment so I'm not discussing that here.  It's the other two areas that we need to examine.  

Our legal bills are high.  Too high.  There's no serious argument that they are not but to understand why, it's important to look at what caused them to be so high.  

In the first instance, defending the village in the myriad of lawsuits falls roughly into two categories - the completely avoidable and the nuisance lawsuits hoping to score a win.  Our village has done a terrible job at this.   

The great bulk of the legal overruns can be brought down to two personnel cases where two police officers were fired and appealed the firing. In each case, the arbitrators found against the NBV police administration and ordered the fired officers' reinstatement, meaning that the village had to provide full back pay and pay all the legal expenses.  This has accounted for close to a million dollars, some of which went to the village lawyers for their work but the bulk did not.  

In the first case, the arbitrator found that the testimony of the NBV police involved in the complaint was so unreliable and changeable that the arbitrator could give it no credence.  That's a huge flag.   

Regardless of the merits, if the testimony is so untrustworthy, then it's time to take a hard look at the PD and figure out how to fix it.  But that didn't happen.  There has been no one held responsible.   

In the second case, the grounds were so weak and so clearly politicized that no one believed there was a chance of winning.   Police chief Daniels should not have started this case, certainly never pursued it and is singularly responsible for the nearly $500,000 of our taxes that it cost.  

Both of these cases, which make up the bulk of the overrun, fall into the "completely avoidable" expense category.  Fun fact, in the second case, an officer is suing the village because his feelings were hurt and the chief named him "Officer of the Year."  See "score a big win."  

To blame the lawyers for this is simply a diversionary tactic.  Daniels owns this and our commission owns Daniels.  

Now in the next area, Code Review, there's a real problem.  Our code is obsolete, out of date, disjointed.  Each request for business permit, each new house with a slight variance, each building, is a struggle between the requester and the  village.  Coding and licensing considerations need to include federal, state, county and village regulations often at odds with one another, and the village code is designed to extract a maximum amount of money from small businesses.   

The cost of these Code Reviews is high and the money is passed through from the requester to the village planners, engineers and attorneys.  It's a low margin business for all concerned.   It should and could be much clearer and simpler.  

But that would take action on the part of the commission.  Action that they have been stubbornly refusing for years.  While it is a low margin business for the planners and attorneys, it has been a high margin business for some members of the commission in the past and remains a honey pot for campaign contributions and personal improvement.   

There is no excuse for our commission not clarifying the coding, not innovating with single step permits, fixed pricing on licenses, transparent code compliance and other simple steps that other municipalities have successfully implemented.  There are reasons for not doing so but they are purely political and sometimes financial benefit for sitting commissioners.  

So when they say "blame the lawyers", understand that the wool is being pulled over our eyes.   The lawyers only have the power to conform, not create, and until we the residents take the real responsibility by insisting that our government spend our money correctly, hell, just blame us.  

Kevin Vericker
September 9, 2013

Friday, September 6, 2013

Going Broke - Gradually

Hemingway wrote this in The Sun Also Rises:
“How did you go bankrupt?" 
Two ways. Gradually, then suddenly.” 
That's how it goes.  Nobody goes broke overnight - not a person, not a business, not a city.   The warning signs are there and ignored.  The small decisions taken without consideration and then the big panicked decisions are made too late without time to think.   Detroit went bankrupt and nobody was surprised.  Too many companies to count have done so in exactly that way.  

Which bring us to North Bay Village and the TRIM notices.  You've seen by now that the proposed millage rate caps at 7.5, up from 4.7772.  Nobody believes it will go that high and is far more likely to settle around 6 to 6.1.  Still, that's a 27% increase in property taxes at a time when most entities are holding steady.   

That's a steep increase and the city has to ask why.  Are we getting 27% more value?  The answer of course is no, we are not.   The only reason this increase is happening is because of a series of small decisions taken without consideration that have eliminated our reserve and destroyed value.  Those decisions include:

  • Nearly $1 million over 2 years spent pursuing two cases in the police department where virtually everyone agreed that the 2 fired officers would prevail in the courts, as they did.   
  • Approximately $200,000 in non value added spend to pay for the move of city hall from a facility that it should never have been in to begin with and severance pay for a village manager who didn't work out.  
  • Over $100,000 on a retirement that was not planned for.  
Add to these some of the ongoing small spend decisions such as $3,000 for our commissioners to attend a four day conference in Orlando that mostly consists of vendors trying to sell their services, little stipends like iPad's which in this day and age are a luxury since smart phones can do the same things and other costs and you see a commission that does not get that the habits of economy and value need to start at the top.  

It is important to look at why and there is no escaping that the vast majority of the money spent for no value is with the Police Department.  The PD is about to lose the nearly $1 million dollars they get from the Federal Law Enforcement Trust Fund, yet continues to maintain an expensive separate detective bureau whose primary function is to support the DEA.   I've already mentioned the $1 million lost on the personnel cases.  The chief needs to be accountable for his decisions and so far the commission has not held him to any standards at all.  

Now we're probably stuck with the tax increase of 27% and that's that.  But what about next year?  What steps are in place now to prevent another 27% tax increase?   I think our interim manager Frank Rollason is the right guy and will do his best to extract value for money spent but unless and until our elected representatives actively engage in demanding accountability, setting standards and practice the habits of  economy themselves,  it won't happen.  

The first budget hearing is September 17 at 6 PM.  We need to show up.  It can't just be the same people saying the same things.   

Kevin Vericker
September 6, 2013

Wednesday, September 4, 2013

Back from Vacation

L'Shana Tovah.  A sweet New Year to all my Jewish friends.  Like so many things, the Jews got this one right.  The real New Year for anyone who ever attended American schools is the beginning of September and it's a right time to appreciate the gift of time and seasons.  

I just got back from a terrific vacation so I have been quiet for the last two weeks.  Nothing like the California coast with fresh morning fog and highs in the 70's to recharge.  

September of course is also budget season.   By now we've received the TRIM notices showing the 7.5 cap.  That's a lot of math, and make no mistake, a millage increase is a tax increase.  If our village millage goes to 7.5, that's a 56% increase in taxes.   It probably won't go that high, more likely it will settle around 6.1, a 28% rise in taxes and don't forget your house taxable value goes up as well under Save Our Homes.  

The question that the commission and residents need to ask is are we getting value for our money spent?  

A lot has been made about legal bills going over budget, and they have, but nary a word on the dais about why they went over budget and that answer is simple - the police chief spent it and it produced nothing.   This is a problem. 

It needs to be front and center in every discussion about the budget and it needs to be dealt with honestly.  

I will be posting more about this and look forward to hearing your thoughts on the subject.  

Kevin Vericker
September 4, 2013