Csaba Kulin takes a hard look at the 2013 budget for the City of Hallandale Beach and is VERY troubled by the ominous numbers and spending trends he sees. We need to "do more with less."

Above, where so very much of the damage is done to taxpayers and business owners of this city thru faulty financial decisions, bad judgement about public policy, and an almost complete lack of old-fashioned oversight: Hallandale Beach City Hall. April 17, 2012 photo by South Beach Hoosier. © 2012 Hallandale Beach Blog, All Rights Reserved

My friend and fellow Hallandale Beach and Broward County activist Csaba Kulin has taken a hard look at the 2013 budget for the City of Hallandale Beach, and he's VERY troubled by the ominous numbers and spending trends he sees. We need to "do more with less."

August 12, 2012

Dear Residents of Hallandale Beach.

On Monday and Tuesday, August 13 and 14, 2012, starting at 4:00 P.M. in Room 257 at HB City Hall -not in the Commission Chambers- extremely important budget negotiations will be taking place that DIRECTLY affects you and your family's financial well-being and quality of life in this city for the next 20-30 years. In short, our future.

I strongly urge you to personally attend these meetings in person and let your own voice be heard, because we know from experience that if the Commissioners are left to their own devices and biases, common sense and logic will rarely if ever intersect in these budget proposals.

I suggest that if at all possible, you try to read as much of the documents the City Manager has provided, as they are very good, but since it's several hundred pages long, I'll attempt here to highlight the most important sections of each area.

If Mayor Cooper follows the published agenda, City Manager Crichton will present and the City Commission will review the Proposed 2013 Budget on Monday.

After that, the City Manager will present for PUBLIC discussion, the three MAJOR INITIATIVES (Item 6A):

1. The issuance of a $56.7 million 20-30 year bonds to finance the Parks Master Plan recommendations, the new Main Fire Station and the Post Office Acquisition.

2. Proposed Natural Compressed Gas (CNG) Project.

3. Community Partnership Grants: Best Practices, Grant Management and Accountability.

PROPOSED BUDGET.

REVENUES. The General Fund revenues are projected to go up from $46.2 to $51.2 million, a five (5) million or 10.9% increase. The increase is due to a slight increase in property values and new construction. Total revenues are projected to increase from $79.5 to $85.9 million, about $6.4 million (8.1%).

EXPENSES. The General Fund expenses are projected to go up from about $51.9 to $57.8 million, a $5.9 million or 11.4% increase. Total expenses are projected to go up from $91.5 to 95.5 million, about a $4.0 million (4.3%).

Yes, almost $100 Million to run a city of our small size and population: 4.2 square miles, under 40,000 people.

Per capita spending of somewhere under $25,000 a year per resident.

I don't know about you, but I and my neighbors have long thought that we were not getting a dollar's worth of quality service for a dollar's worth of taxes. We are most certainly NOT getting $25,000 of value a year.

USE OF RESERVES. The City has budgeted over the past number of years Reserves or “rainy days funds” to finance the shortages between income and expenses. The amount ranged between $3.7 million in 2006 to $7.9 million in 2012. Most years the actual use of Reserves was less than budgeted. 

Last year the City budgeted $7.9 million and will use $4.8 million of the Reserves. Next year the City budgeted $6.5 of the $21.8 million Reserves, leaving the City with a total balance of $15.2 million. The City estimates that in 2014 we will use another $7.0 million, and in 2015, that we'll use another $7.0 million leaving the City with only a $1.2 million Reserve.

In 2016, three short years away, the City will have ZERO Reserves and will not be able to cover out expenses (see page 16).

To make matters worse, this budget, as far as I can see, does not include the additional $4.2 million “Budget Notes”.
In future years the City would have additional annual expenses operating the new parks ($1.7 million), payments on the $56.7 million bond issue (about $3.0 million).

After all, you don't just buy something like land for a park and open the doors. You have to carefully maintain it, yet it's common knowledge throughout this City that they've consistently done a poor job for years of properly maintaining the City's largest park, Bluesten Park, and yet that's only two blocks away from City Hall. That sort of myopic mismanagement is NOT an encouraging sign.

Why should we count on better results in the future from the same people who have been shown themselves to be chronic under-achievers for years?

COMMENTS: You may question why in today’s economic condition, the City’s expenses have to increase by 11.4%. One of the main reasons is that the City is adding 26 new full-time and 22 part-time employees costing the City $1.8 million dollars. Staffing level goes from 449 full-time equivalents (FTE) in 2012 to 492 FTE in 2013. That is 33 FTE higher than last year.

Our motto should be “do more with less” and we go the other direction.

As you may know, we will soon have a a new Marina on Three Islands Blvd. (3 P/T employees) and a new lifeguard program (10 full-time and 15 part time employees), but the City also added 16 other employees to the City’s payroll.

The result of the City's years of over-staffing and under-performance is that we now have the following frightening facts staring at us: the average cost of each City employee has gone from $58,592 in 2003 to $104,861 in 2013.

That is an amazing 81.83% increase. 
If the financial management of the City is allowed to continue as it is now, the residents will see a significant increase in property taxes in order to pay for the mismanagement of our City.

MAJOR INITIATIVES

ISSUANCE OF BONDS. The City Manager Recommends that the City issues $56.7 million 20-30 bonds to pay for the park Master Plan recommendations, the new Main Fire Station and to purchase the Post Office property.
The City already paid for B.F. James, Joseph Scavo and South Beach Parks, so why does the City want to borrow that $8.0 million if is all paid for?

The North Beach Park is paid by the developer who leased it. Both of those items add up to about $10.0 million. So the bonds should actually be about $46.7 million.

There two types of bonds available. General Obligation Bonds (GO) and Revenue Bonds (RB). The General Obligation Bonds require that the voters approve the issuance of the bonds. The survey recently commissioned by the City said that only 36% of the population is willing to pay $10 to $85 per $100,000 valuation to fund parks. The City Manager does not want to spend money on an election therefore she does NOT recommend General Obligation Bonds.

Interestingly enough, City Manager Crichton neglects to mention that the City is already paying for an election in January 2013.

The Revenue Bond does not require a vote of the residents. The City pledges the income from the improvements to pay off the bonds. A good example would be Turnpike bonds -it's paid off using the actual tolls collected. In our case, we do not receive a lot of revenue from parks and the City pledges the revenue from property taxes to pay off the loan.

In my opinion, the City stretches the spirit of a revenue bond, but that has never stopped our City Commission.

Needless to say, the City Manager recommends the Revenue Bonds approach, and forget about asking those pesky taxpayers to weigh-in, since you can never be depended on by them to be a “Rubber Stamp” anyway.

NATURAL COMPRESSED GAS (CNG) PROJECT. This is a environmentally-friendly proposal, but even the attached study questions its feasibility. I do not think our City should be on the “bleeding” edge of this project. We need to have a lot more economic study information as to actual costs and payback numbers. It is important to further investigate the project.

I hope this will help you understand the issues facing the City and you will realize the importance of attending Monday’s meeting at 4:00 P.M.

I am attaching a spread sheet with 2003 to 2013 employee costs, count and comparisons. Also you will find the links to the supporting documents provided by the City.

http://www.hallandalebeachfl.gov/files/08132012%20Additional%20Information%20for%20Fiscal%20Year%202013%20Budget%20Workshops%20Special%20Meetings.pdf

http://www.hallandalebeachfl.gov/files/2012-08-13-Supplemental%20Items.pdf

HBBudget2003-2013Personel.xlsx 32K   View   Open as a Google spreadsheet   Download