Budget Advisory Committee & Union Negotiations

After attempting to club Cape residents into submission on the UEP MWH Halliburton scam by raising the utilities rate (95% phased in over five years); the council decided to raise the millage rate. But why is all this new revenue needed?

The City is currently in negotiation with all three unions for a new contract and despite all the new souces of revenue, they are using this budget review from the “advisory” committee to club the unions into legacy concessions.

The City negotiated its contract in “good” times; and now as is the modus operandi of “management by crisis” wants to take back what it gave. Didn’t these crazy spenders realize, you have to put something away for a rainy day?

We stumbled across an internal document being used in the process: The FAC (Financial Advisory Committee) FY2010 Budget Review Presentation to the City Council.

Some of the “reviews” relevant contents in normal font, our Natterings in Italics…

Further reduction in taxable property values

Controlled growth should have been the mantra, instead of spend, spend, spend…. Now the wanton spenders have raised utility and millage rates to hide their tracks.

Approval of items that were previously scheduled for elimination:

DCD Code Enforcement Team $380K
Yet on Page 16: DCD should evaluate activities requiring permits and inspections (currently seems excessive). So yets just approve the enforcement team that was going to be eliminated???

Parks & Recreation funding from General Fund $1.385M

Public Works
Dredging of canals $637K
Road Maintenance $750K
Street Lighting $1 Million
Total $ 2.387M

Total add back to general fund $4.153M

Total add back to general fund $4.153M
Page 17 if our recommendations are utilized, the City should realize an overall General Fund budget adjustment of $3,372,284

In other words, if you follow our recommendations, we just advised you to SPEND $3.3 Million more. Simply brilliant.

The committee recommends the following:

Salary Freeze
COLA Freeze
Salary reduction across the board
Unpaid Furloughs
Reduction of Work Force
Continued Control of Overtime
Comp Time

Reduction in benefit costs through an employee contribution of $50 per month
(1786 employees x $50 x 12 months = $1,071,600)

Standardization of the leave policy across all employee groups
Reduction of hours that can be accumulated, less vacation.

Implementing an employee funded short term disability program
Not a benefit, but a program that costs the employee and furthers the cities goal of reduction of participation in the leave policy and associated costs.

Elimination of the leave buyback program
A counterproductive elimination of accumulation over 400 hours, which will make bad employees out of good ones.

Instead of saving your time and working, you are forced to take time off. Increasing overtime costs in most cases.

The idea of a 400 bank, in case of accident it fills the gap (10 weeks) till long term disability takes over.

Hire an external consultant to report to Council to identify actionable means of reducing benefit costs for FY09 to achieve an overall reduction in benefit costs from 38% to 30% overall personnel costs leading to an expected $10.1 Million savings. Cost of consultant to be borne by realized savings.

In other words, deforestation by a for profit logger, the more the hatchet man cuts, the more he earns. You eventually wind up with no trees and no forest.

Actual benefit cost as a percentage of salary for FY10 is projected to be 47.4% across all funds, which is excessive and represents an area for significant expense reduction.

This is excessive only because, contrary to public opinion, government wages are well below private sector for the same job. However, the government benefits are usually more comprehensive and cost more. Higher benefit costs divided over lower salaries will always yield a higher benefit cost as percentage of salary.

Benefits as a percentage of salaries

Police 35.6%
Fire 33%
General 22.4%
ICMA 12%

Again we see how police and fire much like the Bush administration, have milked the fear of the 9/11 terrorist attacks. What makes these groups who volunteered at a very generous rate of pay; to collect so much more than the rest of the public?

We never could figure out why anyone in their right mind would allow pensions to be based on total earnings (best five of the last ten years), rather than a straight 40 hours multiplied by the hourly rate.

This total earnings clause causes overtime abuse in the extreme. In particular during the latter part of ones career, when their wage level is higher.

In effect this is a double whammy, paying out more hours at a higher rate; and ballooning a pension (in the case of fire & police; some are collecting a higher pension than they did while working.)

This along with bloated budgets and overly generous pension benefits (100% of wage for police and fire; as opposed to 80% for rank and file) are driving many cities to bankruptcy.

Consider public/private partnerships
Expand use of volunteers
Consider outsourcing eligible services as opportunities arise

All euphemisms for sell, lease, outsource or privatize assets to FOR PROFIT orgs such as CH2MHill or MWH.

These carpetbaggers will spend the minimum to avoid maintenance and higher service levels, resulting in substandard service and the assets getting run right into the ground.

UEP Downed Again

In a 4-3 vote, the Cape Coral City Council voted to delay voting on the utility expansion project indefinitely.

A step in the right direction. Again, the recipe for future economic success is:

The city should be allowed to move forward with UEP ONLY IF:

1. NO MORE OUTSOURCING: MWH is removed and no outsource or at risk contractors are involved. The Cape does not need to spend taxpayer money to benefit Halliburton.

2. CREATE JOBS & AN ECONOMY: The project must involve city project managment & labor; we need jobs to create a durable economic base for the Cape.

This is when the City should be spending to hire and create a permanent base, rather than cutting back.

3. NO PRIVATIZATION: no infrastructure assets are sold/leased to service ANY debt.

NEVER sell or lease the rights to your most valuable asset of all, your water.

Beware of demagogue's wearing sheeps clothing...

Word has it that for a sack of gold, old "Sleepy" Sullivan would sell the city's future out from under it to CH2MHill at the drop of a hat. Say it ain't so Sully!

4. TRIM THE FAT: Deficit ridden fire & police payrolls need to be trimmed...

along with fire & police bargaining units cutting back on outrageous 100% & overtime aided pension benefits. This is what truly bankrupt's municipalities.

Fire & Police could actually benefit from major concessions being proposed by the rank and file bargaining unit. (More to come on this in our next post.)

These four steps are the Cape's ONLY way out of this economic depression. This Mayor and future council's would be well advised to heed the above advice.