September 22, 2010

Mr. Mayor and Citizens of Lake Worth;

As you are aware, I have held as much concern and reservation about this year’s budgeting process as I’ve held regarding the budget itself.

I strongly believe that adopting a budget that contains the many potential “land mines” as this one does can be characterized as nothing short of irresponsible, shortsighted and at the very least, politically expedient for certain members of this Commission.

This Commission has failed to grasp the reality of our true economic position by continuing to operate with a “business as usual” mindset, as opposed to a more appropriate “all hands on deck” strategy of reducing or eliminating local government spending at every level, increasing revenues in a thoughtful and equitable way and crafting a financial plan that speaks to realistic economic growth worthy of guiding our city through at least the next 5 years.

As the current City Manager has long since declared a state of “financial urgency” for our city, she insisted that the primary way to craft an adopted budget for this year was to do so at the expense of our city employees and retirees by cutting benefits and stripping contracts in a way, we are told, that will move the city forward.

While I agree that thoughtful examination of contracts as well as pension reform are absolutely necessary, I have come to strongly disagree with the method and manner of which it has been proposed and offered to the commission for consideration.

The problem is, we can’t have it both ways…we cannot insist on one hand that we are broke, then use it as the primary means of forcing contract and pension concessions, while on the other hand, devote what many might perceive as the lion’s share of our collective time and energies on crafting a beach casino redevelopment plan that few in the community believe is, or should be, a top priority for our city, while all the while recognizing we are certainly in no financial position to undertake. 

In fact, to illustrate my point about our weak financial position for funding a beach casino project, we need look no further than the fact that this relative low priority project is to be funded primarily with accumulated utility profits…profits that have never, ever, once been considered as a potential source of offering financial relief to our financially burdened utility customers during these most extreme of economic times…

Frankly, the attitude of this commission is that, when it comes to our utilities and subsequent profits, let’s view them as what commissioner Mulvehill proudly refers to as “our cash cow” and spend it as we may.

The following are just a few of the specific concerns I have regarding the budget and the budget process;

• The City Manager had committed to begin the budget process much earlier for better results, however she stated in the waning days of the beach planning stages that she was unable to devote much time to it due to the emphasis on the beach project; hence the process did not begin as early as maybe she would have preferred

 

• The budget document placed a heavy emphasis on a narrative approach (as supported by the ICMA); that notwithstanding, the actual document narratives were often inconsistent with the revenues and expenses contained within (it was determined later that the narratives were often written well before the number crunching actually commenced, and in my opinion, was not the correct approach to employ)

 

• A glaring unrealistic initial misrepresentation of parking revenues at the beach for purposes of crafting a economic model sufficient for financing the beach rehabilitation project (excess of $1 million per year), which in turn led to the ill fated initiative of charging for parking downtown, (only to learn then that the city really doesn’t know which lots are actually available for placing parking meters in to begin with...this demonstrates the obvious hast to make the numbers “work” to achieve a specific agenda or result)

 

• The recommendation of red light camera implementation for the same reason as the downtown parking fee initiative above 

 

• Funding of a housing initiative that is clearly not necessary or supported by the citizenry and and is deemed unnecessary in the wake of the $23+ million NSP2 Grant awarded to the CRA

 

• Failing to fund the Internal Auditor position as prescribed in our City Charter and suggesting that we do not need someone else to point out additional issues or concerns (wasn’t it a previous internal auditor that found an unauthorized expenditure of hundreds of thousands of dollars?)

 

• Implementation of an unnecessary OMB department which is perceived largely as part of a larger attempt to model Lake Worth government in the like image of Largo; which in the end is much more about style, rather than substance

 

• The obvious lack of emphasis / discussion regarding collection of upward of 50 plus million in monies owed to city (utility bills, code fines & wastewater revenue for example)

 

• An unwillingness to “recognize” or even verbalize that our total budget is actually larger, not smaller ,than years past (Chart 11, Page 27 of budget document);  yet the attempted messaging around the budget process  was that we were reducing the size of government, when in fact, we were actually growing government in Lake Worth

• Aggressively pursuing contract concessions, pension reform and the like with the immediate “hatchet” approach rather than that of a more “surgical” strategy that could potentially be phased in over a few years, allowing for greater levels of thought, preparation and transition while greatly reducing the potential for expensive litigation

 

• Lack of a formal presentation from the FAB and the subsequent ability of the commission to interact accordingly causing additional rise to the idea that this body was constituted simply to apply a “rubber stamp” to the process and final result; and let’s not forget the city administration's concerns that were expressed over individual city commission members addressing the FAB during their budget review deliberations

 

• My strongly held belief that gross misrepresentations of information and facts may have been used as a means to influence acceptance of this budget

 

• Minimal effort to construct a thoughtful five year budget projection / document coupled  with even less interest in verbalizing the critical financial state the city will be in within 24 months

 

• The city manager’s long standing assertion that she has limited staff resources to provide 100% of the information requested by commission members allowing  for better understanding

 

• Of course, excessive reliance on utility related streams of revenue to fund the above line items

 

• This budget was conceived and drafted based on a series of significant “what if scenarios” rather than the requisite “what is scenario”…in other words, budgets should be created around what we absolutely know to be true, what we actually have and what is practical to do vs. what we might have or might wish to achieve in the future…

Also, and to my point regarding my concerns about the “what if ”     vs. the “what is" scenario, let me remind you that the city manager herself has publically stated that even this budget may be adopted, the reality is that many adjustments / amendments will have to be made during the next year and that the city will immediately experience nearly a $3 million dollar shortfall for the next fiscal year.

These, ladies and gentlemen, are but a few of my concerns regarding this year’s budget proposal.

Let me also state, that in the end, I believe we will come to find that this year’s budget process wasn’t as much an exercise for positioning our city for long term financial health as much as it was an exercise in political expediency designed to catapult the current commission majority and the city manager through this year’s municipal election cycle.

For those commission members who may disagree with my assessment of our current budget and long range financial situation, I would respectfully challenge you to help prove me wrong by committing to engaging an independent consulting firm to holistically analyze our city’s finances to affirm in one way or another that our city is in fact been utilizing its assets and “cash portfolio” in a manner consistent with the positioning of Lake Worth for a stable, sustainable financial future.    

 

Thank You.