July Winds Down

I'm heading out on vacation, digging deep into the ancestral roots. It's an epic journey, starting in Long Island City, the neighborhood in Queens, NY where I was born many years ago. I will actually being staying there because the hotels are a 1/3 of the price in Manhattan and I want to visit some relatives in Queens. Then I head to Ireland for a cousin's wedding. But I'll be back and snarking by August 10.

In the meantime, I thought I would give a little plug to the new restaurant that opened next to the Food Giant. It's called Kabobji, and it's not surprising that it serves Middle Eastern food. It's good, very good.

I ordered Beef Kafta Pita Wrap from the lunch menu,for $6.49. It was delicious, fresh and well seasoned. If you would like to check out their menu, it's the same as their North Miami Beach location and you see it by clicking here.

The place itself is clean, modern and pretty well decorated. Since it only opened Tuesday, the service was still a bit spotty but any new place has that and the manager was quick to apologize for the delay.

I miss Edy's, the predecessor in this space, and still long for the Bagel but it's nice to see a new, high quality casual dining place here in North Bay Village.

It worth checking out. In the meantime, try not to let the commission spend too much more money and I'll be back in 12 days or so. I will be checking in.

Kevin Vericker
July 30, 2010

The Budget Workshop That Wasn't

This should have been a long thoughtful post on the implications of the proposed budgets as presented last night. It can't be. We didn't learn much.

The presentation last night was not worthy of the subject at hand.

The interim city manager was apparently ill and the presentation was handed off to the new police chief, Robert Daniels, on short notice. Chief Daniels acquitted himself admirably. He did not attempt to speak to what he did not know, spoke clearly and precisely to what he did know which was the important part about the impact of the cuts on the police, and forbore the obnoxious and ignorant stream of consciousness speechifying put forth by one of our long term residents.

From the commission, neither the former vice mayor, Rey Trujillo, nor the current vice mayor, George Kane, were there to listen to the concerns of the assembled citizens. Now that was probably to the good, since Rey Trujillo likely would have introduced more positions to double pay as the North Bay Village Trujillo Tax continues to consume our dwindling resources and George Kane, like the cast of the Jersey Shore, prefers to be paid for his public appearances. But still the absence was notable.

From the police side, the news does not look good. If the current tax rate is maintained, there will be a layoff of 5 police officers and dispatch will be eliminated. With a .5 increase in the millage, that number should drop to 3 police officers with dispatch maintained.

If the tax rate millage is increased from 4.2772 to 4.7772, then the layoffs are less severe. But the effect of the tax increase will be felt exclusively by the longer term homeowners. Cliff Friedland (aka Mr. Penelope Friedland) summed it up well when he commented that a millage rate increase is "against the spirit of the Homestead law."

Now beyond the fact that two of the architects of the cash crisis, Trujillo and Kane, did not show up, there were some critical pieces of information missing.

• There was no revenue sheet included. That is there was no clear statement that showed the anticipated revenue and the assumptions for next year. You can't present a budget without that. Every household knows that you need to see the income before you can decide the spending.
  
  
• The budget is not expressed in services. If the police are cut, what can we expect for response time? What is the response time now? How does response time differ between local dispatch and county 911? We need to know this and I hope this information is available to us for the next workshop.
  
  William Bratton, former police chief of NYC and widely credited with the crime reductions of the 1990's there, famously said that every manager at McDonald's knows what the workload will look like for each shift and can immediately show the statistics supporting the staffing decisions. Our police department can do the same.
  
  
• There was nothing quantifiable about the non police layoffs and personnel changes. We don't know what services will be cut in operations and planning. There was a discussion of outsourcing the sanitation. What if we outsourced finance and code instead? These are scenarios that have to be presented.

The citizens who showed up last night were ill served. The crisis resolution should not depend on one man; every experienced city professional should be able to discuss these questions; Chief Daniels two weeks into his new position did better than we could have reasonably expected but the people around him, who brought him in, left him hanging out there.

The next budget discussions are:

August 12 at 4:30 PM in City Hall with the Citizens Budget and Oversight Commission. It's a public meeting.

Probably August 28 for the second budget discussion which I hope will be done seriously.

Then the two commission meetings in September to agree the final budget.

Kevin Vericker
July 29, 2010

Budget Meeting Tonight July 28 at 7:30 PM

The full commission will be meeting tonight, Wednesday, July 28 at 7:30 PM, to discuss the plans for the 2011 budget. Most of the topics regarding the budget seem arcane and highly technical. That's because they are. That doesn't make them less critical to understand for the average North Bay Village.

The process will break down into roughly two categories, short term and long term. There is overlap but a useful way to look at this is short term refers to the revenues and expenditures to keep the city functioning day to day in fiscal year (FY) 2011, while long term refers to the development efforts to stabilize and improve the city in the future.

Short Term: by now, I think everyone who has been paying attention knows that North Bay Village is predicted to drop 26% in ad valorem tax revenue, the second worst decline in the county. Homestead had the worst. Overall values have fallen, new sales are lower than they have been in years, according to Trulia.Com there are 258 units for sale in various states of foreclosure, homes bought during the construction boom have been significantly reduced in value. This drop is likely to result in at least a 20% reduction in money available to the city to keep running.

Local services, principally the police but also maintenance and other city services, will be reduced, and taxes on homesteaded older homes will probably rise. The question tonight is what services and how much will be the new taxes be.

Three of the five commissioners, Rey Trujillo, George Kane and Dr. Vogel, have demonstrated a scandalous lack of fiscal discipline and these three constitute the majority.

George Kane saw nothing wrong with proposing and lobbying for a personally profitable deal to move city hall to the Lexi, a move that will bring zero value to the NBV taxpayer, but entitled him to a commission. This action remains endorsed by our full commission, all five members, since not one has offered even a token resolution of disapproval.

Rey Trujillo's impulsive actions of firing then doubling the cost, have brought the current strained budget to the breaking point. The North Bay Village Trujillo Tax is hurting us now and if it continues, will drives us to bankruptcy.

Dr. Vogel has sadly gone along with these shenanigans.

These guys need watching to make sure they get it right. They have not demonstrated that they understand fiscal restraint in a relatively tight situation. It's going to get worse as the revenue deteriorates.

Long Term-We are in this mess for two big reasons. Our tax base is out of balance. We rely too heavily on one source, property taxes. Over 70% of our revenue comes from property and relatively minuscule 10% from businesses. This model is unsustainable. We can see it now. A downturn in property values has a dramatic effect overall on the revenues.

The second reason is that North Bay Village's biggest current investment, the police department, is not controlled for spending. You know all the examples.

The commission again needs watching since they have shown little inclination to bring the PD back to reality. A simple cut of $350,000 ordered by the commission has not been met and this does not bode well.

I think the same troika does not get the balance between the short term and the long term. If you remember the firing of Matt Schwartz, these three spoke in glowing terms about Schwartz's ability to create the critical capital projects that we need to keep us out of the exact sort of dilemma in which we find ourselves. It was clear that they did not find building the future nearly as important as their current annoyance with the CM, over the police, at least publicly.

Finally, and of grave concern to all of us, remember that there is somewhere over $30 million dollars about to flow through North Bay Village. We already know that we have a vice mayor who sees no ethical conflict in helping himself to a profit out of city funds; we know that our city commission does not consider this worthy of censure; we have a former vice mayor who feels entitled to double our expenditures every time someone displeases him. This does not bode well for proper oversight.

Two bright spots in all of this are the new police chief, who is showing clearly that he understands the need for fiscal and departmental discipline, and the interim city manager who is trying mightily to pull all of this together to a comprehensible presentation. Two alone are not enough to keep the tide in check though. Citizens have to be there. It's our money.

Kevin Vericker
July 28, 2010

CFD Mailing on the North Bay Village Trujillo Tax

A special shout out goes today to the Citizens for Full Disclosure who forwarded this article from today's Miami Herald North Bay Village Contracts With Second City Attorney.. I am often at odds with the CFD over specifics but I am pleased that they are sharing this information with the community. If you did not get the email, click on the link to view the article.

In the same email, there was another Herald article about the taxes North Bay Village proposes a higher tax rate for next year. The article presents the information about the maximum TRIM and its effects very concisely. Again, well done and thanks for getting this out there.

I do have one small complaint with the first article( North Bay Village Contracts With Second City Attorney..). Quote from the article - "At a June meeting, Commissioner Reinaldo Trujillo ordered the interim city manager to negotiate the terms of Geller's firing." Trujillo didn't "order". As a commissioner, or even in his former post as vice mayor, he does not have that right. Only the commission by majority vote can order something from the city manager. I know this is a quibble and I am sure Trujillo believes he did indeed issue an order, but he has no such authority.

But such concerns aside, the fact that the CFD sent this information out confirms my long held belief that we want the same things for the city - fiscal responsibility, transparency - even when we disagree on the means. Good job.

Kevin Vericker
July 27, 2010

Slander, Libel, Gossip - It's Campaign Season

Since I started this blog in January, there is a standing offer to turn over the blog for other people to post their points of view. Now it's not an open offer. I put three conditions I consider reasonable on the offer.

• The posting needs to be signed.
  
• Any information presented as factual must be verifiable.
  
• It may be edited for clarity but only after those edits have been agreed by me and the poster.

This offer was and is open to all. I particularly welcome such postings from people who don't agree with me, of whom there are several. The only person who took me up on this offer was Tim O'Regan who wrote about his experience when he was proposed to be interim police chief. You can read that post by clicking here in case you missed it.

Last week, there was a second submission, by someone with whom I often disagree. (Oh, what the heck, let me put in an exclamation point, two in fact.) !! I want this and I think the readers (300 per week and rising) do too. After reviewing the submission and offering suggested edits for grammar, spelling and clarity, there was one sticking point. Something damaging about an individual was stated as fact. The problem is that there is no way to prove or disprove the statement, nor is there any legal way for the writer to know the truth.

I responded to the request asking that this one sentence be removed since it fit the legal definition of a libel, that is a damaging, unproven assertion printed about an individual. Not an interpretation but an unsupported fact. I do check with a lawyer on these issues, paid for out of my own pocket, and he was quite clear that this should not be published without either a source named or a document. After some back and forth, the poster did not comply, I could not verify the information with the target of the information, and the original poster requested that I not publish his submission.

I am respecting that, although I am not bound to. Later this week, maybe tomorrow, I will frame the arguments in the post about what constitutes suitable qualification for holding public office in North Bay Village. Probably after that, I will write about what's happening now as we enter campaign season and the race for mayor starts out ugly. But right now, I am just writing about my deep disappointment that even simple discussions about North Bay Village politics so quickly degenerate to unwarranted mudslinging.

Dialogue and strongly voiced disagreement matter, and I encourage the readers to send their own views, as long as they conform to the conditions above, but no made up stuff or stuff you can't prove.

This is probably as good a time as any to remind readers on the comment policy. I don't allow anonymous comments and you need to have a Google account to comment here. I didn't want to do that originally but the comments quickly degenerated to personal insults against people not even in public life, threats of physical retaliation and incoherence. There are a lot of places that enable this - LEOAFFAIRS.COM for one but not here. So if you want to comment, get a Google account and be open about it.

Kevin Vericker
July 26, 2010

Tax Rate Changes (Warning - Long Post)

President George Bush (the first one - usually referred to as "Bush The Elected" to distinguish him from his son, who was appointed in 2000.) famously said in 1988, "Read my lips - no new taxes." As the economic effect of massive deficit spending in the Reagan years weighed the country down, Bush The Elected had to back off from that promise and raise taxes during his term. There are still many who think it was breaking this promise that cost him the 1992 election.

For what it's worth, I disagree with that view. People understand that conditions change and that taxes change to match them. Government has a role, a big one, in economic recovery and during hard times it can counter-intuitively have to raise taxes. During the Clinton years, when the American economy saw the greatest growth in history, the Reagan stimulus tax cuts (You thought this was the first stimulus?) were allowed to lapse and the country saw record growth while the deficit was on track to zero out in ten years. Well, we know what happened next.

On January 8, 2008, North Bay Village had its own "No New Taxes" moment when the commission voted to maintain total taxes at the then current rate as a matter of policy. Resolution 2008-1 was passed 4-0 by Oscar Alfonso, George Kane, Rey Trujillo and Joe Geller, with Paul Vogel absent that night. This resolution was never repealed and very well may remain in effect in July 2010.

We know times changed and this week the commission took the first step in setting the millage for 2011. The commission voted 3-2 to set the maximum millage rate at 5.9. The current millage rate is 4.277. Now the word maximum is very important here. It is not the new millage rate but the upper legal limit that the city can work with for budget purposes. It's not likely to be the new millage rate. I believe that number is decided in September.

With a 26% decline in property values, our tax revenues will most likely fall below a sustainable level in 2011 without some raise. Given the lack of financial discipline on the dais, with Rey Trujillo, George Kane and Dr. Vogel spending money we don't even know if we have like it grows on magic money trees, the tax raise will probably be higher than it should be.

I created a large spreadsheet which I will share with anyone who wants it if you email me at nbvrbc @ gmail.com (remove the spaces, I don't want bot mass mailings) to show the effect of the following on three comparable houses bought at different times:

• House 1 purchased in say 2000 valued at $200,000 and currently homesteaded
  
• House 2 purchased in say 2007 valued at $500,000 and currently homesteaded.
  
• House 3 purchased in say 2007 valued at $500,000 and not homesteaded.
  

Assumptions for the first scenario are that Miami-Dade raises the county millage rate by 12% as reported in the Herald this week, that North Bay Village raises the millage rate to the maximium of 5.9, and that the two owners who bought at the top of the market ($500,000) have their values reduced by 26% and the owner who bought ten years ago has the assessed value increase by 3% as per Florida Homestead Law, still below market value but a raise.

The assumptions for Scenario 2 are the same except the North Bay Village millage rate is set at 4.95, which is just below the middle and about where I expect it will end up.

Constants for both scenarios are that the NBV Debt Service Millage rises to .8326 as it must by law.

Scenario 1 - NBV Raises Millage to 5.9

• House 1 will see an overall increase total tax of 15.14% in 2011 (+$490)
  
• House 2 will see a decrease of total tax of -20.23% in 2011 (-$2014)
  
• House 3 will see a decrease of total tax of -17.42% in 2011(-$1,889)

Scenario 2 - NBV Raises Millage to 4.9

• House 1 will see an overall increase total tax of 10.64% in 2011 (+$344)
  
• House 2 will see a decrease of total tax of -23.44% in 2011 (-$2334)
  
• House 3 will see a decrease of total tax of -20.83% in 2011(-$2259)

Now remember, House 1 increased value (3%) and increased millage, while Houses 2&3 dropped value by 26%, which is why the lower millage increase brings them even more dramatic tax relief.

Again, if you write me, I will send you the spreadsheet in Excel or OpenOffice format and you can run your own numbers through. The one thing I will ask is that if you find an error in the calculations, let me know.

My Opinions - I warned you it would be a long post and if you've read this far, you've gotten the point and if you are thinking "I could live without this part." I won't be offended if you leave now.

On Resolution 2008-01 and "No New Taxes" - I hate this kind of resolution. It hobbles government, is never something you see in well run companies (Imagine a corporate mission statement: We Vow Never To Raise Prices No Matter.) and is generally meaningless. Had I been writing this blog in 2008, the whole commission would have heard about it. Never make a promise that you can't live up to.

My concern about this at the moment is that without repealing 2008-01, North Bay Village may once again be open to expensive lawsuits and challenges as it is not clear that without the repeal, the commission has the right to set a combined millage rate above the January 2008 level. It's a stupid resolution anyway.

On the political positions of the commission - Kane, Trujillo and Vogel got it right when they voted to give the city maximum flexibility in creating the budget. Rodriguez and Alfonso got it wrong. And I'm glad it passed. I think most NBV taxpayers, not all, agree with that.

Alfonso has remained consistent on the subject of keeping taxes flat, so he gets some political points for that consistency. Kane and Trujillo lose some for having voted for this when it looked like no big deal and then not acknowledging that they were wrong and stating that in future they will consider the implications of such pandering more closely.

What we've learned - When I hear people say about the property bubble, "Who knew?", or "There was no way to predict this.", I feel like smacking them. I don't smack them but I do lose respect instantly for them. In 2006 and 2007, we all knew that it was fantasy. We didn't want to know as our property values made us feel really rich and a lot us got in the game, hoping to get out before it fell, many borrowed large sums against phantom equity, banks goaded us on, and we didn't want to know. Like all gamblers, the ones who timed their departure right made money, but for the rest of us, the house won, as it always. Anyone with a high school level grasp of economics, statistics and history knew it wouldn't last.

There were never enough people to buy all those condos that we approved. The city looks like crap now with looming, empty buildings, 7525 E. Treasure Drive alone looks like the third world.

We do need to learn from this. The basic lessons of not gambling more than you can afford to lose still stands. Our government should not rubber stamp all construction projects. Our commission should not hobble us with resolutions that restrict the government from responding to new circumstances.

And the next time a politician says "No new taxes.", don't listen to whatever follows.

Special Note - I expect as always to be bombarded with remarks about local pols and taxes. Watch for a posting coming up on the subject by someone who disagrees with me on just about everything. I am thinking Monday as there is some editing to agree.

Kevin Vericker
July 23, 2010

North Bay Village Doubles The Size Of Its Legal Staff

Trujillo Tax Update from July 21 - Last night at the very special meeting of the North Bay Village Commission, Rey Trujillo won half a battle or maybe double a battle. It's all very confusing.

The former Vice Mayor has found that our City Attorney displeases him. Naturally he wanted to fire him. But there was a bit of a problem. Our City Attorney doesn't displease everybody. His legal advice has been consistent and transparent, even when it's not good news. Especially when it's not good news. The former Vice Mayor doesn't like not good news.

Trujillo explained his actions by laying out his reasoning. This is a quote: "The city attorney has taken certain liberties with certain actions in certain cases." This leaves a little bit to be desired in terms of clarity.

Well, anyway, since it would have been stupid to have fired the city attorney on those grounds, George Kane crafted a clever compromise. Let's have two city attorneys. Joe Geller was demoted to "Deputy City Attorney" and a new firm was contracted to be City Attorney. Trujillo voted YES, along with Kane and Vogel.

Now we are paying 2 City Managers, 2 Police Chiefs and 2 City Attorneys.

We do know the cost of 2 City Managers, but still don't have a price for the additional Police Chief or the additional City Attorney.

Many budget and finance experts recommend that cities refrain from additional expenses when they don't know their current financial conditions and they don't know their foreseeable expenses. Rey Trujillo says NO to that fiscal stuff. Let's just keep on spending.

Now not all of his plans are getting passed. Last week the commission failed to pass a measure Trujillo proposed to have North Bay Village buy a lot on Harbor Island to provide parking spaces for the residents of 7904 West Drive. There's apparently a parking shortage and Rey Trujillo thought that the city should spend at least $250,000 to condemn and take over a privately owned piece of land so that some people could park a bit closer to their building.

It was never made clear exactly how much but $250,000's the figure bandied about. It sounds low. (George Kane recused himself from the dais as it was his deal and the last time he tried to get the city to pay his real estate commissions, it didn't work out so well. Click here for more information on the last land deal. ) Remember, we are heading towards at least a $1,000,000 shortfall, don't know our current deficit level and many of us are trying to figure out how to keep our cars rather than where to park them.

Rey Trujillo thought it was a good idea that every resident in North Bay Village pay an additional $35 per head or about a $100 per house to buy a few people a slightly more convenient place to park. That was too much for the other members of the commission and this ill conceived notion died an embarrassing death in front of all.

Trujillo Tax To Date:

This is the amount that Rey Trujillo has spent of our money so far.

• $127,305 to forgive the water bill at the Grand View Palace, where he lives.
  
• $57,000 in unpaid bills from the Grand View Palace
  
• $40,000 in additional legals fees to add a new City Attorney (my estimate based on $250 per hour and 40 hours per month work.)
  
• $115,000 in hiring a new police chief. (again, an estimate since there is no contract but it's probably in the ballpark.)
  
• $80,000 to pay our former city manager.
  
• $362,305 is our running total to make Rey Trujillo comfortable.
  
  $233 per household in property taxes for costs that produce nothing.
  

Last night, George Kane left early. That meant that the commission was unable to pass the plan to add a new Code Enforcement Officer and the plan to take August off for a little rest and relaxation after four months of pillaging the city coffers was not passed, so our commission will meet next month. I believe August 12 will be the day assuming that the there is not a repeat of May when coincidentally Rey Trujillo, George Kane and Paul Vogel were all unable to reorganize their schedules for a meeting.

Other Business - The commission set the maximum TRIM (property tax) rate at 5.9. More about property taxes tomorrow. It deserves its own post.

Planning and Zoning has two new members - Jorge Piedra of Treasure Island and Silvio Diaz of Harbor Island.

Still no action on the commission's part to clarify that the city is not or should not be a "Pay to Play" town. The current Vice Mayor's deal to extract $25,000 in commissions from the city, which violated the county ordinance on ethics, a finding to which he agreed and must pay the money back, goes uncensured.

And no surprise here - former Vice Mayor Rey Trujillo announced he is running for mayor. He had a free lance writer interviewing people at the meeting and talked movingly about his commitment to fiscal restraint. Campaign season is upon us.

Kevin Vericker
July 22, 2010