The Numbers Game.
While we were concentrating on signs and free speech here in Satellite Beach, talk concerning the city’s budget began to explode within our quiet, sun drenched community late last week.
The issue is the marked difference between the proposed budget as presented to the City Council for approval on July 23, 2012 and the revised budget as presented to the Council for consideration starting on August 8, 2012.
However, as we started to write this, we began to wonder if something else even greater has happened.
It all started when we went to look at the budgetary procedures for the city. These procedures can be found in the City Charter under section 6.3. While it may be possible that there are additions to the charter that would govern the budgetary process, we could not find any such additions or changes.
We recognize that we are treading in deep water here because there are a lot of intelligent people in the city, and we wonder why we are the only ones who are seeing this. If we are wrong, please tell us and we will correct our understanding, but for now we are going to go with what we know.
Sec. 6.03. Budget.
(a) City manager’s proposed budget. No later than the first regular city council meeting in August, the city manager shall present a proposed budget to the city council for all operations of city government for the next fiscal year. In addition to any other(s) the city council may request, the proposed budget shall contain the following components:
(1) The city manager’s budget message explaining the important features, financial issues, policies and proposed policy changes, and objectives of the proposed budget;
(2) A budget summary presenting an overview of sources and amounts of anticipated revenues and expenditures; and
(3) A detailed budget presenting the specifics of all anticipated revenues and expenditures.
On July 23, 2012, the City Council met in a special session to approve the millage rate for the city. In addition, the Council approved a calendar for the budget process. The Council is within the law to do so as long as it meets certain “hard dates” within the Charter.
The information within the packet presented to the Council had broad strokes for the proposed budget. The council also appeared to have a more detailed accounting of the budget. In fact, they’d have to as this is the only way to satisfy section 6.03(a).
If the requirements of section 6.03(a) are not met, the City Council cannot proceed with the next step in the process:
(b) City council’s proposed budget. After considering and revising the city manager’s budget as it deems necessary, the city council shall adopt a proposed budget and determine tax requirements under that budget.
We read this to mean the Council cannot set a tax (millage) rate without first approving the proposed budget.
As the Council voted to approve the millage rate, the proposed budget set by the City Manager is adopted and it moves onto the next step in the process:
(c) Public hearing. The city council shall hold a public hearing on its proposed budget at the first regular city council meeting in September, or at such other time as the city council may approve. Notice of the hearing shall be provided as required by law. All members of the public shall have the opportunity to be heard on the budget at the public hearing. After the public hearing, the city council may amend any part of its proposed budget except for expenditures required by law or debt service.
But a curious thing happened on the way to 6.03(c). Following the meeting of July 23rd meeting, Councilman Gregg Billman sent an email to interim City Manager Ayn Samuelson.
In the email, Billman states several things that we find questionable.
First and perhaps most importantly, he laid the responsibility for changing the budget to reflect totals and numbers he wants at the feet of Samuelson.
We can find no authoritative support for this action. According to the City Charter, it is the City Council who must now change the budget after a public hearing on the budget. As we sit in the process right now, the proposed budget has been accepted by the City Council. In addition, the millage rate has been set based on that approved budget.
As we said, we cannot see any support that allows the proposed budget as approved by the Council to be changed before public comment. Even then, it is the City Council that must make the changes – not the City Manager.
We may be wrong on this. There very well could be additions to the City Charter or other laws controlling this process of which we are not aware. So let’s assume the Billman email is legal in directing Samuelson to trim the budget.
Samuelson made more and deeper cuts than her initial proposed budget and came up with a “revised” budget.
The numbers are radically different:
The first column of numbers is as the budget was proposed to the City Council on July 23,2012. The two right hand columns are from the revised budget.
As you can see, the Police Department lost $167,000 in funding. We have received emails as to what this cost cutting would entail, but without proof positive we will not speculate. The Department of Public Works’ funding was cut by $76,649. Once again, we have received some information on how these cuts will be implemented, but without proof, we aren’t going to put the actual cuts out there.
While we are having difficulties with Billman’s actions, we should note the department heads recommended these cuts as well. Some people have said the department heads had to make the cuts otherwise they would be facing a vengeful Council may or may not be true, but the purpose of the “Department Heads Recommends” column within the budget is to let the public and the Council see there was a conflict.
There are those within the city who wish to oppose these cuts. The problem we are having in opposing the cuts is that it is hard for us to fight for that which the department heads will not. Some have said the department heads of all affected departments may not say anything for fear of their jobs. We disagree with that assessment as the department heads we know are of such integrity they would not put their own interests above that of the citizens of the city. If departments believe they cannot fulfill their duties given the budgetary constraints, the people of Satellite Beach will listen. If the City Council does not hear the concerns of the department heads, they will hear the people’s voice.
That being said, we want to return to the Billman email.
We find several things that are opinions and subjective. As to the woman who said her husband made less than the head of the Rec Department, that is something we believe should be addressed and we shall do so now.
We have known and worked with Kerry Stoms for a long time. The only emotion we have ever seen her wearing on her shoulder is one of being tired. She has always greeted us with a smile and “what do you need?” The Rec Department is what it is in many ways because of her. She works tirelessly for much more than 40 hours per week and if paid hourly instead of on a salary, her pay check would be far above that which she takes home now. So to the woman with the engineer husband, when your husband works 60 – 65 hours a week, has developed a department that is perceived as the best in the county, and affects tens of thousands of people, get back to us.
We do not doubt there are people in the public sector that are over compensated. That does not mean all pubic workers are over compensated. Comparing an engineer’s pay with that of the head of a department within in the city is comparing grapes to basketballs. Billman should know better and at least try and compare apples to apples and not rely on sheer jealousy of a person’s pay.
The “buy back” of unused sick leave is a dual edged sword. If you totally eliminate the buy back program, people will simply use the sick days whether they are sick or not. In a city of limited employees, you have now set up the situation when employees are not present will rise. Councilwoman Denan complained during the July 18, 2012 City Council meeting she had tried to reach Code Enforcement for three hours without success one afternoon. Half of the department was out on vacation and others were out in the field doing their jobs. If people think that type of situation will not increase as people are out of the office more and more because they are “sick,” we have a nice bridge in Brooklyn we can sell them. It is true that many private corporations have eliminated buy back programs, it is also true the practice is making a comeback, as companies see it as a moral booster. It is a changing dynamic in companies these days. We would rather pay for unused sick days at a reduced rate per day then to have to pay overtime to cover the missed work. That is just us, however.
Billman also reminded Samuelson she should implement recommendations offered by the Citizen’s Advisory Panel for Efficient Government (CAPEG.)
We went looking for what these recommendations may include. Using the CAPEG’s Final Report, we made the following chart of recommendations offered by the CAPEG. The first column is the section and the page number within the CAPEG’s reort under which the recommendation found in the second column can be read. The recommendation as given in the second column is taken word for word from the CAPEG’s report except where we use brackets to insert wording clarifying the purpose of the recommendation. The third column answers whether the recommendation offers any direct budgetary considerations. For example, if the CAPEG recommended the elimination of an item or program, that would directly reflect in the budget. To explain why that would be important, the fourth column shows whether the recommendation was “further study” on the issue. While it is true the results and findings of a study may result in savings if implemented, “more study” usually means additional costs – not savings.
The results are startling and in our opinion, disputes Councilman Billman’s contention there are savings in the CAPEG report as it sits now. That is not to say the CAPEG does not have ideas that most likely will result in savings. The implementation of those ideas will result in savings in the budget at the end of the year and not in the proposed budget because the CAPEG cannot and does not offer any dollar amounts along with their recommendations.
Given this summary, it is hard for us to see how Samuelson can implement budget reductions directly associated with the CAPEG’s recommendations. As we said, the CAPEG report mostly calls for more study, and even if after various studies found there would be savings by implementations of different policies, those savings would be seen at the end of the year. At best, the savings would be included within the proposed budget for next year.
It is our opinion that budgeting in the hope more study will yield practical ideas that may result in savings is reckless and irresponsible.
We want to take note of this paragraph in the Billman email as well:
Please do not force council to make decisions for you as the past city manager did. I supported your selection because I believe you to be a no-nonsense business professional who can make the tough decisions.
We have read this several times and it sounds a great deal like a threat to us. If anyone can come up with a different meaning, we would love to hear it.
We know that we are not experts in budgeting and we could be reading the budgetary process incorrectly. We will accept the criticism if we are wrong. However, even if we are wrong on the process, we believe from the Billman email forward, we are on fairly solid footing. We will stand by our assertions in that half of our post.
Finally, we should acknowledge there is an email being sent around attributing a quote to us where we say:
“What I don’t understand is the basis for Billman telling Samuelson to cut more than $200,000 from the budget.
Section 6.00 of the City Charter provides the budgetary process and for the life of me, and cannot see any authority that would allow him to tell Samuelson her budget needs to be cut.
The really odd thing is that Jim Beadle is excused from the budget meeting on the 8th. There won’t be anyone there other than a few good people that can say “this was wrong.”
Depending on how bad this is, the meeting on the 8th could be a bloodbath”.
We want to acknowledge the quote attributed to us is accurate. We said it and while it may be a little “tin foil hatted,” we are truly worried about the upcoming budgetary meetings as many people feel the process has been subverted out of the view of the public. It was only the sharp eyes of some people who are smarter than we are who brought this to light. We salute their diligence.
At the same time, we are sick and tired of this. It is not that we think previous councils did not make mistakes for which they should be held accountable. It is not that we think this council should be replaced at this time. What we are sick and tired of is that just as we see the community coming together, something like this happens. Just as the rhetoric starts to die down, something like this rears its ugly head.
Frankly, we are sick and tired of being sick and tired.
Hoecakes has presented us with a fine column today – even masterful.
I was aware and puzzled when the City Council held a meeting to set the millage before they had passed a budget. It seemed upside down to me. Mike Crotty, previous city manager, had been reducing the staff in significant amounts before he left his job. I was very pleased when I saw a paper that showed they had reduced the budget without the need for further staff reductions.
Just recently I saw that the Police Department had received a superior rating in an evaluation. Then I saw the bombshell about the new budget that decimates the police department, despite the fact that the budget had already been cut and balanced.
I don’t remember the sequence of events. I learned of Billman’s email to the City Manager on July 24 in which he gave marching orders for her to further reduce the budget. This letter should upset everybody, including Billman’s supporters. He is telling the City Manager to further reduce the budget, but that exceeds his authority. The City Manager takes her orders from the Council, not from any individual council person. In this case his letter carries extra weight because the City Manager was previously part of Billman’s campaign staff.
Very few people, probably including Council members, understand the procedures within the city charter. Hoecakes great contribution is to shine light on the council’s present actions that violate the Charter.
Hoecakes exercises too much restraint when he observes that the department heads made the recommendations for major reductions in their department. His feeling is that they have too much integrity to bow to pressure from the City Manager and would be willing to put their jobs on the line for their own beliefs. I disagree. There is no point in falling on your sword when the result is already a foregone conclusion. The Council has 4 persons of a like mind so anybody’s job is in peril if they do not cooperate.
There are additional interesting things in Billman’s letter to the City Manager He tells her under threat implications not to force Council to make budget decisions that the Charter places upon the Council – not the City Manager. To support his theory that city staff are overpaid he brings up anecdotal information that a city employee makes more than someone’s engineer husband. Some people call themselves engineers when they are not, and like all positions, some people are very poor at what they do.
In the past I have appeared before council to ask that the Council take good care of the employees. My thought was that if your employees are the best paid you will eventually get the best employees and the upside of that is that you make the city the best in the county. I think Satellite Beach is the premier address in the county. Billman theorizes that employees are overpaid but will remain at their job because of economic conditions if their salaries and benefits are reduced. Good people go to where the best jobs are.
I have lived in Satellite beach for 48 years. I am proud of the services and benefits we have accrued. I love the Schechter center with its basketball court, and our beaches and all the access points to the beach. I grieve for what is happening to our town. I am too old to take any significant part in stopping the ruin of our town. If it is possible to get a circuit court injunction against a process that is illegal by our charter I will participate in any legal action that ensues.
Mr. Hinton,
It is, as always, a pleasure to hear from you.
A couple of things….
First, thank you for the kind words on the post. It is appreciated.
Secondly, I’d like to address this point:
Your contention is one that we have seen echoed many times over the past few days.
I don’t think department heads proposing a different budget is “falling on one’s sword.” The allowance for a different proposed budget is part of the budgetary process. Similar processes take place around the world in companies every day.
The purpose of the two columns is to allow a department head with a specific knowledge of costs to be balanced against costs presented by another person with knowledge of other departments. For example, if a department head were to propose a budget with “X” amount of dollars for 100 employees, that cost could be examined in light of the comptroller (City Manager in our case) saying “comparing departments, your salary calculation is too low (or too high.)
You are correct that in many cases, it can be a foregone conclusion that the budget will go one way or the other, but at least the discussion took place. In this case, the discussion never took place. Instead what happened was the people of the city gave approval to a tentative proposed budget and millage rate, only to have that budget be revised.
If we are not going to stick with the budget used to set the millage rate, then why have that part of the process at all? By that I mean we currently allow have a duplication of the process. The tentative proposed budget is viewed and is used to set the millage rate which is reported to the county’s office of the Property Assessor. We are now “locked in” to that rate, except we aren’t locked in. The millage rate can go down, or it can go up but there is a cost to raising the millage rate incurred from the Property Appraiser’s Office.
So instead of taking one vote and one approval of the City Manager’s budget, we get what happened here – a pseudo approval of a budget and millage rate.
It’s wacky to say the least.
A. Afterwit.
Mr. Afterwit, I can address some of your comments regarding the budget process.
1. There are no additions to the City Charter regarding budget procedures. All such procedures are addressed in the section (6.03) of the Charter you cited.
2. The millage rate that was approved at the July 23 Council meeting is the maximum rate that the Council can impose. The Property Appraiser sets a July deadline for taxing authorities to establish this maximum rate, and he uses this number when he mails taxpayers their TRIM notices. Because of this, the Council MUST set a tentative millage rate without first approving a proposed budget. During budget preparation under 6.03(b) and (c), the Council may lower that rate, but it cannot raise it (without incurring substantial additional cost to the city). So the July 23 meeting approved a tentative millage rate to meet the Property Appraiser’s deadline, but it did not approve the City Manager’s proposed budget. Section 6.03(a) has not been violated yet, but a detailed budget as proposed by the City Manager must be presented at the August 8 meeting.
3. After the City Manager’s proposed budget is presented, Section 6.03(b) requires the Council to consider and revise that budget as it deems necessary. It is during this stage that the Council also establishes the final millage rate to support its proposed budget.
4. Your concern about Gregg Billman’s actions is well-founded. The current City Council has routinely demonstrated that it does not understand the proper role of Council, which is to act as one body instead of five separate individuals pursuing their own agendas. The City Manager has one boss, not five (and since Billman fancies himself quite the manager, you’d think he’d understand the management principle of answering to only one boss). You’ve correctly noted the language in Section 6.03(a): “In addition to any other(s) [budgets] the city council may request…”. No individual Council member has the authority to require the City Manager to do his/her bidding, and that includes Billman’s demand for the City Manager to revise her proposed budget to suit his whims. His email makes it very clear he doesn’t understand that once the City Manager’s proposed budget is presented, it is the Council’s responsibility to make adjustments, not the City Manager’s.
5. Once the Council adopts its proposed budget and final millage rate under 6.03(b), the process moves to 6.03(c) which requires a public hearing on the Council’s budget. Following the public hearing, the Council has another opportunity to amend its budget and millage rate before final adoption upon second reading of the budget ordinance (usually in late September).
6. Regarding the department head recommendations in the revised budget, do not be misled. You may rest assured that they are not willingly recommending the proposed cuts. They have been given a Sophie’s Choice in which they are being forced to make decisions that will prevent them from maintaining the levels of service they are now struggling to provide. In essence, they are being given the option of deciding which arm they’d rather have amputated. Some choice!
Lorraine Gott
Greetings Ms. Gott.
If I may, allow me to respond to your comments.
I was aware of the time restraints placed on the city by the TRIM requirements. However, the Charter allows for the City Council to set a budgetary calendar as long as the calendar meets several “hard” or “drop dead” dates. I see that part of the charter demonstrating great wisdom as it allows the City to be flexible to outside constraints but faithful to the budgetary process being open and transparent.
I see nothing that would not allow that calendar to meet both the hard dates set by the Charter and the dates set by the TRIM law.
Instead, what we have now is a process that allows what happened. Instead of the City Manager sending the budget to the Council once for their public discussion and approval, the Council can view the budget and make “recommendations” to the City Manager to revise the budget before submitting it officially. These “recommendations” can take place out of the public eye. I do not believe that is within the spirit of the City Charter.
I read the City Charter as being quite wise in mandating a specific process that allows input from all parties. That input takes place in the public forum and not through back door communications.
The current set up allowed what transpired with the budget revision to happen.
As to your comment:
Then they should not say they are recommending those cuts. It really is that simple. Are we really willing to say that if the numbers were different – that a Department Head wanted $100,000 but the City Manager said they should get $120,000 that would not be on the proposed budget? It would not be discussed by the City Council and the citizens? We would not allow both the City Manager and the Department heads to “make their case” on their numbers?
Over the past years we have seen in the private sector companies and people who have put their own jobs and comfort ahead of the public good. We recently saw at Penn State where a janitor who witnessed a sexual assault on a child not report it for fear of losing his job. As a society, we condemn those types of actions and people. The same should be true in the public sector.
There are but two choices here: either the cuts will negatively affect the public and public safety, or they won’t. That’s it. There is no middle ground.
If we have people in positions that are not willing to stand up for the people as part of an open budgetary process, we have a problem. A huge problem.
I may be naive. I may not be the brightest bulb in the pack. I may not be the sharpest pencil in the holder, but I do know this.
If we have department heads that are willing to be bullied by a City Councilcritter, we not only have a problem with the Critter, we have a problem with the department head.
Thanks for commenting!
A. Afterwit.
[...] do know there was an email from Billman to Samuelson prodding for more cuts. We covered that email yesterday. Yet as of this writing, we have seen no verifiable proof Billman directed City Manager Ayn [...]
[...] a comment here on Raised on Hoecakes, former Councilwoman Lorainne Gott wrote: So the July 23 meeting approved a tentative millage rate [...]
[...] far as the CAPEG is concerned, we covered this in our post entitled “The Numbers Game” on August 6, 2012, saying: We went looking for what these recommendations may include. Using [...]