CRUNCHING THE BUDGET CRUNCH!
For the past three or four years our city revenues have been dropping like a rock and the end is not in sight. Every year our City Manager has been directed by our City Council to come up with a budget that doesn’t result in loss of services, doesn’t raid our surpluses and lowers overall city taxes, (by keeping the same tax rate in the face of lower valuations). Such a mandate although politically attractive, if followed over several years, can be financially disasterous.
The Manager has followed a policy of no raises for employees, (past two years) and attrition, (not filling positions when vacancies occur naturally. So far, he’s been able to fulfill the political mandate, but at a considerable cost to employee morale and efficiency. No real changes have taken place in the organization chart. In other words, the same number of departments and the same number of Directors exist today, each with fewer people working under them. In fact, there are now about 23% less Indians with the same number of Chiefs. We haven’t heard about any work saving system changes taking place either. We sure must have been fat three or four years ago.
This year, if we keep the same tax rate as last year, 3.4742 mils per $1000 of valuation, we are faced with the prospect of spending $1,685,000 more than we take in from the tax levy, intergovernmental transfers and other traditional sources of cash. This is a similar deficit to the one we faced last year and only marginally more than the one we faced the year before that. The Council’s response seems to be to ask the Manager to pull more rabbits out of the hat, lower taxes by holding the same rate and make little or no demand for structural and systemic changes that will create permanent solutions to a permanently lower tax base.
To date, the Manager has shrunk the deficit by recommending some no-brainer measures and some controversial ones as well. He has even suggested the possibility of adding a point or two to the mill rate, a subject that has been termed the third rail of Gulfport politics. The following is a look at the no-brainers, the controversies and some suggestions for a more pro-active involvement by the Council in solving the problem of falling revenues.
The absolute no-brainers for reducing the deficit are: 1.) Transfer Payments in Lieu of Taxes, (PILOTs), from our so-called Enterprise Funds into the General Funds. By taking $250,000 from the Sanitation/Recycling Funds, $200,000 from the Utilities Funds and a whopping $475,000 from the Marina Fund, the deficit is reduced by $925,000 down to a more manageable $760,000 (Reserves for repairs and replacements at the Marina will have to come out of Penny for Pinellas Funds to make such a large contribution from the Marina possible); 2.) Outsourcing lawn mowing to a private contractor at an annual saving of $115,000 , (why haven’t we done this sooner), that further reduces the projected deficit to $645,000.
As we have stated in the past, we continue to believe that in an extended period of falling property values and after two to three years of austerity cuts in spending, the tax rate must be adjusted upward so that the City can at least receive the same revenues as in the prior year. This is called adopting the “roll forward” rate that is allowed by the state without permission. We recommended that the “roll forward rate” of $3.809 mils be approved by the Council this year. We made a similar recommendation last year with the result that dozens of taxpayers, mostly from Pasadena Yacht and Country Club, showed up at a Council Meeting in strong protest. The rate stayed the same as in the prior year, revenues went down and taxpayers once again paid less. Even if the slightly higher “roll forward” rate is approved this year, taxpayers will be paying substantially less City real estate taxes than they did two and three years ago. We think the “roll forward” rate is even more of a no-brainer this year than it was last year. It’s application will cut about $200,000 off the deficit. The deficit would now be down to about $445,000.
Now for the more controversial suggestions already made by the Manager. The first is a 12.5% increase in Sanitation and Recycling User Fees which would result in about $170,000 in deficit reduction. According to DPW testimony, this would put Gulfport in the middle of the pack of surrounding city rates rather than near the bottom. We generally agree with this suggestion, although we feel that the “roll forward” rate increase is less regressive, (has less impact on the poor). Selected increases in General Fund user fees such as programs at the Rec. Center, Senior Center, etc. could result in a deficit reduction of around $50,000. We object to this random approach unless and until a thorough cost/benefit analysis has been completed. Some adjustments could be made in the area of out of town services where it has been reported that certain of our out of town rates are lower than the in town rates for out of town service recipients. If we accept the Sanitation and Recycling User Fees increases, our deficit would now stand at about $295,000.
Another controversial recommendation is the transfer of $300,000 out of the General Employee Pension Stability Reserve. A transfer of about $200,000 was recommended for last year. While we are impressed and gratified that we are one of the few cities with a fully funded pension fund, we do not have enough information to endorse this approach to deficit reduction. It may appear to be a safe move this year, but we believe that there may be better alternatives. Even if such a transfer is feasible, wouldn’t it be fair to say that its use should benefit the employees in the form of a minimal wage increase?
Since we maintain a Reserve Fund of about $4,600,000, there is a temptation to balance the budget or fund a wish list of projects or programs annually. The Reserve fund is especially vulnerable because an arbitrary recommended reserve rate of 25% of the annual budget has been set as a minimum around the state. It should be noted that our Reserve Fund has been slowly shrinking over the past few years. We object to raids on the Fund if there is any other alternative. The general recommendation of a 25% reserve minimum may not hold true for Gulfport since we are a waterfront community with vulnerable infrastructure and valuable waterfront assets especially prone to storm damage. Yes, we have insurance, but insurance never covers the whole loss. Expectation of state or federal aid after a major storm may not be valid given the financial straits we are all in. We may be at or near the minimum reasonable balance for Gulfport’s Reserves.
Perhaps the most controversial of the Manager’s recommendations is to outsource our police 911 and dispatching services at an overall saving of about $275,000, including associated IT costs. While we see some merit in the overall concept, we feel that more study is required before we take this irreversible leap. Unlike other recommendations, this move would permanently dismantle a service and infrastructure we have come to expect. The Chief’s reasoned objections as found in Meeting Minutes and on his website provide sufficient reasons for caution and further study before such a drastic move is made.
While the Manager made vague references to further staffing cuts as a possible way to reduce the deficit, he showed little enthusiasm for this approach and gave no specific examples of such possible cuts. We believe there is a serious potential for overhead cost reduction with no affect on services by eliminating the IT Department and outsourcing most, if not all of the required IT work to an outside contractor. Given the continuing recession and low levels of development activity, we have one too many Planners in our misnamed Community Development Department. We also believe that an enhanced Code Enforcement Program can produce sufficient revenues as to be revenue neutral. Other systems and management changes that have been suggested in the past by our readers can produce significant savings and should be considered. We believe the Council should request a full report on these and other options before grappling with the more controversial options to eliminate the deficit.
In a future article we will explore some outside the box recommendations for cutting overhead costs and increasing revenues including the areas mentioned above.
If the Council has enough political courage to endorse a roll forward tax rate, 12.5% increase in some service fees and some of the less controversial changes listed above, we are faced with a deficit of only $295,000. By moral persuasion, the Manager should be directed by the Council to produce the maximum potential cuts through reorganization, system changes and layoffs before taking the short-term expedients of abandoning taxpayer services and raiding important reserve funds. We think it is possible and the right thing to do. All it will take is good and courageous leadership.
Big Dog: “In a future article we will explore some outside the box recommendations for cutting overhead costs and increasing revenues including the areas mentioned above.”
Big Dog, please define how you are using the pronown “we.” Who is the “we” you are referring to? Big Dog? The GulfportWatchdog entity? The GulfportWatchDog community?
GulfportWatchdog supporters?
Thanks!
An old saying says, “You can get it right, you can get it fast or you can get it cheap; pick one.”
Thanks Big Dog for your excellent and comprehensive discussion of Gulfport’s financial reality.
As for good and courageous leadership from the city’s mayor; well, good luck on that.
Council member Henderson commented that the $ 25K of non-tax dollars required to move ahead on a money making mooring field was a luxury which should not be done now. I recall no similar concern for the estimated $ 30K of tax dollars required to put a rather ugly sign a long way from any of the entrys or exits from the city. Where was the environmental outcry for suggested removal and possible move of the large oak tree which now stands in the way of the goofy looking sign?
Gulfport magic math prevails.
Henderson wants his light shrouds on Tangerine before he will vote to give Banno $35,000.00 for a beach stage. How come he didn’t hold the new sign hostage?
Some time ago rainbow energy made comments in the Slum City discussion that have relevance to the budget challenge. Though more quality of life oriented the concern for just what sort of place Gulfport is and will become pertains
Mtober has more than once alluded to need for a
city wide vision process. I agree.
Hard to acheive a goal if you cant define it.
Gulfport seems to flounder under poor leadership with no objectives or goals.
It may be that shabby and economically depressed really is the majority comfort level. If so the choices are few. You can spend your life swimming against the tide for no gain. You can get into a depressive funk and stay there. You can acknowledge the effort is a waste and just enjoy the day. You can do a better job of selecting a place which is a better demographic fit.
Rainbow Energy-The “we” I used in the articles is the editorial we. I speak for no one but myself. Sometimes I talk to lots of people when researching an article and when we’re in general agreement I slip into the “we.” My bad.
Kim Chi,
You’ve listed the paths one may chose in life when seeking to change “the-way-be-always-have-done-it” syndrome. It looks as if some of us may be preparing ourselves for a wall of intimidation and harassment if we try to promote positive changes in Gulfport,as we prod the powers-to-be to be pro-active in regards to city code enforcement and the removal of trash in the alleys and streets. Gym Fish noticed a code violation citation on Nancy’s property. Interesting timing. Did code enforcement drop their two-complaint requirement and use their time to go after one of the nagging, nit-picking messengers?
The official plan for the City, though they rarely refer to it is the “Community for a Lifetime” outline. See Gulfport on the List: http://www.communitiesforalifetime.org/comm_list.php
The Council and Manager wanted to be recognized as designee and committed to follow the guidelines.
what to do…da captain of the Community …Freddy…is bad cabbage.
@rainbow-Check with Nancy- there was no citation nor violation.
To Jim Greenwald a tag on a door would signify a code violation.
My neighbor just called to let me know that the tag on my door was to let me know that there has been a theft in my neighborhood. It is after all in the Marina district.
So Mr Greenwald is still in Gulfport, you will be a good miss when your gone Jim.
A tag on my door usually signifies a pizza promotion.
From what I read in the crime statistics people in the marina district should be happy to arrive home and find they still have a door. It has become an embarrasment to have first time visitors arrive by way of 49th Street or Gulfport Blvd. Several have expressed concern and fear of what they saw en route. That is the reality on the east edge of Gulfport. It is a sad statement on where this town is and is headed.
Is Mr. Greenwald a Gulfport or California resident? Has he escaped or is he here among us? Who is John Galt?
Why the negativity on the thirty plus thousand dollar sign? Dead or homeless oak trees are a small price to pay for this jewel.
Put a couple wooden horses and a pipe organ on the thing and open it up as another free ride.
Give some thought to the grand opening ceremony. Which present or recently past (passed?) politician, dead, near dead or merely inept will be honored by their name emblazoned on the thing. A bronze plaque or a less formal but more budget sensitive spray painted piece of organic plywood?
With the Gazebo near by, pharmaceutical transactions could continue regardless of weather.
Run the trolley up to Williams Park and round up some sign riders to introduce them to diverse Gulfport.
Too bad the city did not install those benches; could have become affordable housing.
Really jazz up the welcome area by establishment of a tent city on the much under utilised expanse of Clymer Park. O.K., just because you can’t park on it does not mean you can not live on it. The friendly, civic minded neighbors would surely host any overflow.
Another option would be to set up artsy and festive multi-colored well lit barriers at each entry to this sleepy burg with chummy “Keep Out” greetings.
You don’t always get what you pay for.
@ seaurchin* Gym is still in his house?
I thought he might have picked up a sailboat and anchored it in the Bay to get away from Bruce….waiting to lease a mooring from the Pooper Scooper guy. Should we call Bruce and let him know Gym is home? nah, his neighbors should have that covered.
This intelligent stuff is getting real in depth. One guy talks as 4 people and answers to each of them and you others are the sidekicks. Perhaps you could all put together a comedy show and perform at the Hickman. Charge admission and donate it to the city.
I would not care to be Will either.
Big Dog, thanks for this excellent article. I propose that at the next Council meeting, we slide another chair up on the dais and give you a seat. Hell, I’d give you 2 seats, and 2 VOTES!
At the last (June 7) council meeting Dr. Jennifer Salmon made outrageous suggestions (words to the effect) that multiple vendors be considered for major projects and that the council indicate to staff that they should continuously seek out the best quality at the most reasonable cost as an obligation to Gulfport taxpayers.
You may be confused as to why such a seemingly rational suggestion is goofy.
If so, you need only consult with Mr. Henderson whose snarky comeback to those suggestions was that council (focused primarily upon Dr. Salmon) should trust staff in all things and not insult them by asking for efficient, cost effective and accountable performance. Henderson inferred council guidance to staff was inappropriate “micro-management.”
He explained all of this in what he termed his personal philosophy.
Henderson, with a history of unquestioned deference to unaccountable experts (Runnels, Hagberg and Henningsen come to mind) evidently intends to reduce council’s role as representatives of the public to mere acceptance of whatever is served up by staff. If the perception of that philosopher is adopted as the Gulfport standard we would negate the need for any sort of rubber stamp elected official.
Council, as I understand it, is tasked by the people to provide guidance to staff and to hold them accountable for quality of accomplishment of responsibilities and tasks.
For years the mayor has rejected or avoided council’s obligation to provide clear and measurable guidance to Gulfport’s city managers. Gulfport’s goals and objectives, if any, remain ill-defined. The mayor and, evidently, Henderson seem to like this decades old Gulfportism. A tough situation for any well intended city manager.
Bottom line; Dr. Salmon (along with Hastings and Banno) gets it.
Henderson and the mayor do not.
While I harbor no innate dislike of philosophers I believe Gulfport would be better served by representatives tuned more to public need than personal preference.
Mr. Hudson appears a rational actor and concerned citizen.
His involvement in city issues and effort on behalf of his ward, ward 4, resulted in measurable results as evidenced by city response to citizen call for improved curb appeal. The recent 60,000 pound rubbish clean-up is proof Mr. Hudson can stimulate action by city hall.
Hudson on council would be beneficial for his ward and for the city.
The now famous sign remains a topic of concern among the peasants who will fund it.
The suggestion it be equipped with wooden horses seems a bit extravagant. I heard a more economical and functional recommendation over coffee this week. Instead of expensive and hard to find wooden horses use the city’s endless supply of tattered and abandoned couches, love seats, Barca Loungers and other assorted curb furniture. The sign would be sort of a circular yard sale, might raise a few bucks for the general fund and could be “rotated” weekly.
People would be attracted to Gulfport from miles around to see and ride the wheel of decay. A couple of rides and they might work up an appetite, head down town and spring for a burger and an “I Survived the Wheel of Decay” T-shirt.
The city should get behind this unique attraction.
Did you get a receipt for that 60,000 pounds? How long does it take and how many man-hours does it require to collect 60,000 pounds of trash by hand? Keep in mind this was a special pick-up so it wasn’t in barrels. it also included trees, I have a 60,000 pound tree right next to me, one tree and your home free.
? Wild Couches couldn’t drag me away…???? just doesn’t have the same ring to it. ;0)
Al,
I agree with a great deal of what you say,but your use of the term staff is too broad. According to the city charter, city council’s only direct reports are the city’s clerk, manager and attorney. All other staff reports to the city manager and council is prohibited from directly supervising or directing them. The day to day running of the ciy is the city managers job, and ohly he can direct his staff.