PB Guest Post by David Singer: A Titanic Budget
Following was posted as a comment. SDM thinks you should read it and give Mr. Singer’s analysis some thought. SDM has not done a thorough review of the budget yet, but we would add one point. We hear that the council is considering adding another two police officers that staff did not request. SDM Wonders: Should we be spending reserves on recurring costs that the village’s professional police chief thinks is unnecessary?
There’s an old saving that goes something like “if water is coming into your boat faster than you can bail, you better have a life jacket handy.” After a five hour review of the budget I would seriously recommend that all Palmetto Bay Residents find the closest boating store.
If the budget passes in its current form it will be reminiscent of the Titanic with Village Manager Ron Williams acting as Captain Edward Smith and the Village Council sitting in boat chairs playing musical instruments as we taxpayers drown.
Let me give you some quick facts regarding the 2013/2014 budget:
- The budget plans to deplete the reserves by $6,300,000 to cover operating and capital deficits. The reserves at the beginning of the year: $15,600,000; and at year-end $9,300,000. This equates to a whopping 40% decrease.
- Total revenues the Village of Palmetto Bay collects from real estate taxes and other sources of income is projected to be $16,700,000. They are planning on spending $23,000,000 so the deficit runs at $6,300,000, which equates to an operating deficit of 38% of total income – this is a big red flag.
- Personnel expenses of Village’s General Fund have increased from $2,800,000 in 2011/12 to an estimated $3,700,000 for 2013/14. This is a huge increase of 32% in two years. Another big red flag.
- Operating expenses of the Village’s General Fund have increased from $8,000,000 in 2011/12 to an estimated $9,700,000 in 2013/14 – a substantial increase of 21% in two years. Need I say red flag again?
- Individual departments within the ever-bloating Village of Palmetto Bay bureaucracy have increased their expenses alarmingly in last two years. Leading the pack is the Finance Department which is up an inconceivable 75% (that is not a typo) from 2011/2012 to 2013/14, Parks & Recreation up an unbelievable 43% from 2011/2012 to 2013/2014 and Planning and Zoning up a mind-boggling 42% from 2011/2012 to 2013/2014. Can we get red flags in bulk?
- There is no set-aside in the budget for repair or replacement from any assets of the Village which will need to be replaced or repaired at some point. This poor planning has the potential to bloat the deficit further with unplanned expenditures and tax increase for all Village residents.
- There is no budgeted expense for the settlement proposal for the Palmer Trinity Litigation which will be voted on next week. Cash and non-cash expense are estimated to be $800,000. I don’t even know what to say about this – the leading point of contention and divisiveness in our Village over wasted expenditures, which has been discussed ad-nauseum, has not been budgeted.
- The Finance Departments budget has increased so much that 40% of the Finance Director’s salary is now being allocated to the Special Revenue Budget to hide the increase from the Finance department’s budget. The Director’s salary is not Special Revenue. A Finance director using accounting tricks to hide what he doesn’t want seen is a gigantic red flag.
- The budget does not include an additional $3,000,000 that the Village Manager and the Parks department will ask the Council to spend on capital projects. These could increase the deficit to a gargantuan $9,300,000 from the already alarming $6,300,000.
Last week I had the chance to sit in a five hour meeting with Council Member Tim Schaffer and Vice Mayor John DuBois during their review of the budget with Finance Director Desmond Chin. You could feel the tension in air.
After the meeting I was told by one of the Council members that he preferred not to micromanage the Village Manager’s budget. My question: then who will? Who will protect the residents of Palmetto Bay from this fiscal iceberg?
The plain and simple truth, without theatrics, is that the Village cannot continue to be run this way. I can assure you that Village will have no other choice but to raise our taxes and fees if they continue on this path. Described above are alarming percentage increases and deficits amounting to millions of dollars more spent than collected (certainly not earned.) Millions of dollars don’t come out of thin air for municipalities; they come one way or another from the pockets of those of us who earn a living. If drastic action is not taken to rein in this wasteful, expansive, profligate spending, then we will all feel the pinch. Otherwise, I hope everyone knows how to swim.