Getting City Finances Under Control

 Paul Nagy

“City could face bankruptcy if public safety levy is not renewed”

“Levy loss a ’death knell’?”

     These recent headlines alert us that once again the city has not proposed any options but tax levies to a bankrupt citizenry. The cuts made by the city have been minimal and token at best.

      The city has declared 54% of our population below the poverty level. The city is over its head in Section 8 housing and intends to increase that  while confusingly claiming they are  going to reduce it by attrition 10% per year. The city needs to get out of the Section 8 business before it scandalously breaks wide open.

      The school system wants a  permanent levy.  Let’s make it three years and see what happens.  Three years is the time with our new Superintendent. If it is only a continuing levy why is it ending if this levy doesn’t pass? The fact is it is a new levy and with different terms. They want it to be without a time limit. That’s different from the present levy. They continue to insult the public’s intelligence.. Who knows what is in the future?  We have also observed that in the selection of a new superintendent the issue was mostly about how he would get along with staff instead of how he would raise grade scores. I very much liked his recent article and I’m all for him but the School Board has already put him at a disadvantage. Let’s vote this down on Tuesday and have them put it back on in a couple of months for three years and everyone will be happy. 

      The Library wants a levy. Let’s fund our library and let the other communities fund their libraries. We don’t need to be paying for West Chester and Liberty Townships libraries. We have a wonderful and necessary library. Lets keep it where we can afford it. Lets vote it down and let them come back with separate levies.

     The city wants to renew a ¼ percent public safety renewal levy,  instead let’s have a three year moratorium and explore all of the options., the County is talking tax increase and so is the State.  We can’t afford it all.

     Is there no other alternative for our city and citizens? Yes, there is, but it would take courage, integrity and a real determination to change our city for the better instead of maintaining the status quo. Let us insist that the city get back to providing the very basics for five years. Just for the record, here is an alternate plan:

     First, let our financial department come clean. Let us outsource this department. Reduce the number of funds from over sixty to something closer to the number of city departments. All of these funds have allowed for financial deception and manipulation far too long. Cincinnati has about twenty funds. The reduction of financial accounts would bring more efficiency and transparency.

     Since the city has been shrunk financially, business-wise and population–wise, let us reduce it otherwise. Let us continue to reduce it physically with demolition of residential and commercial properties that are no longer useful and make them grass areas with signs that say, “Available for commercial development. Contact your local real estate agent”.  Not grassing these plots makes the city look financially depressed. Let the professional real estate community market our properties. We don’t need city staff in the real estate business on any level.

     Let us reduce our bureaucracy to the minimum necessary to operate our city. The bureaucrats will detest this suggestion but it is necessary for survival. We can always increase the bureaucracy as the city grows again. We cannot continue the salaries, increases, pensions and benefits without further bankrupting the city. Taxpayers cannot afford it. We could outsource so many departments and operate for much less costs. Lets outsource the planning and engineering department and use the counties departments. Outsource the legal department and health departments. Most city employees live outside of the city.  Certainly we could cut back a large portion of the Administration. No one wants to suggest and do this because they fear the political consequences.  These are the times that demand integrity and courage. No one wants to see jobs cut but we have to do what other cities in our circumstances are doing.

     Let us stop unnecessary spending for pet projects for five years. We must make cuts everywhere we can. It is not time for non-productive departments like the golf courses, airport, visitors bureau, etc., to be given big tax dollars.  What they get from grants is different. For five years we could call a moratorium until the city becomes  financially sound.

Public safety is basic. But the unions and the city need to stop monopolizing our funds on salaries, increases, pensions  and benefits. We need to get real about what is affordable. Bill Becker our past Police Chief and city manager has repeatedly warned us of the public safety crisis for several years.  There are options and they are difficult. If we can’t get it under control then we need to outsource it. I’m not in favor of that  but something has to change. The unions have offered some hope in their proposals and they should be seriously considered.

     Our infrastructure is basic.  Infrastructure funds have been funneled elsewhere for years. It should be accounted for. Our streets and sewer systems have been ignored by the city. They would still be ignored  if the Federal funds didn’t come in for street repairs.  Our downtown sewer system is in need of a plan. There is trenchless technology that can repair our sewer  system that could collapse at any time. It repairs the sewer system without tearing up the streets, houses, sidewalks, etc. at half of the costs, in half the time or less.  The costs could be spread over five (or ten) years and we would probably receive some Federal help for this. It is time to get this done before it costs us a lot more than tens of millions of dollars.

There is a lot more we could be doing but these would show serious intent and draw new business and jobs to Middletown. Can you imagine how rejuvenated our city would be in five years following such a plan?

Nagy's simplicity, while reminicent of a Merrill Wood article, probably isn't practical. I doubt there are municipalities out there that outsource much on a grand scale, otherwise we would have heard or read about them.  And the blanket blame game doesn't really get much action accomplished because he is painting with too broad of a brush.

MORE CITIES LOOKING TO OUTSOURCE SERVICES

Hoping to protect union jobs, Hollywood commissioners last year rejected a proposal to privatize garbage collection.

But when residents discovered it meant steeper fees and no bulk pickup, their outcry forced commissioners to reverse course. This year, officials are considering outsourcing police, fire, code enforcement, building and engineering services as well.

Pembroke Pines, once one of the nation's fastest-growing cities, may farm out its Building and Zoning Department because permit fees have dried up in the sputtering housing market. In response, union leaders have pleaded to save jobs by allowing the city to cut pay, benefits or work hours.

Sunrise for nearly 37 years operated the municipal Springtree Golf Club, which will be closed for renovations on June 1. But when the 18-hole course reopens in early 2010, a private contractor will likely take over its management.

As governments grapple with sinking revenues and ballooning budget deficits, the idea of outsourcing is gaining steam.

"It's the wave of the future. You will start to see more and more cities contract out," said Russell Benford, city manager of West Park, which depends on contractors for most of its services. "Now that we're in a budget crisis, obviously everyone is working hard to control expenses. . . . Outsourcing allows you to provide services for less money."

Leaders in Weston and Southwest Ranches, who also rely heavily on contractors, extol the benefits. They say because contractors perform tasks as needed, they are cheaper to use than full-time workers. And contractors' benefits are often less generous than those of their counterparts in the public sector, allowing governments to hold down costs.

However, there are drawbacks. For example, contractor John Canada lost his job as town manager of Southwest Ranches in October 2006 amid accusations of nepotism for hiring his wife and daughter as town employees. And Weston in 2007 found it would save $220,000 annually by hiring six senior managers instead of having them on contract.

"There is a tremendous amount of experimentation with privatization," said Mildred Warner, a professor at Cornell University who has done extensive research on the subject. "In some services and some places, it can yield savings."

Still, she cautions, most local markets lack stiff competition, so private companies' prices creep up over time and erode any initial savings. Also, the quality of services may deteriorate.

Public employee unions argue that ceding control of vital public services will mean less accountability to residents. They say contractors may not be as willing to respond to emergencies. And they worry that when the economy recovers, their cities will be understaffed because it can take time to collect bids and approve contracts.

Yet they acknowledge cities need to slice costs.

The union's recent offer in Pembroke Pines "is unprecedented," said Jim Sugg, the city's chief electrical inspector. "What is government here for if we're going to privatize everything?"

Some outsourcing advocates say generous benefits make in-house workers too costly.

"Some things are out of your control, like pensions and health care," Benford said. "And unions have contracts that you have to renegotiate, so you don't know what will increase through those contracts each time."

Some municipalities have turned to their neighbors for services. Fourteen municipalities from Cooper City to Weston contract with the Broward Sheriff's Office for law enforcement. And contractors have long collected trash in many areas. Hollywood treats wastewater from the eastern part of Pembroke Pines, portions of Miramar and southern Broward County, Dania Beach, Hallandale Beach and Pembroke Park.

Plantation officials say they will consider shifting more responsibility to outside contractors for park maintenance, road paving and street striping. The city already contracts out legal services and air-conditioning maintenance.

Dania Beach officials may consider contracting out services such as code enforcement and management of the Dania Beach Marina as part of the 2009-10 budget. Lauderhill, which contracts out for trash collection and some engineering and architectural services, might consider privatizing other services as well.

"It could possibly be cost-effective if you only need someone to come in once or twice a week rather than have someone here all the time," said Kennie Hobbs, the city's finance director.

Weston City Manager John Flint said with contractors, the city avoids so-called "bumping," where unionized workers with seniority retain their high salaries by displacing workers who earn less.

"I believe our model works great," Flint said. "Having competition instills a sense of loyalty for the contractor to want to continue to perform."