PB Guest Post by David Singer: Bluffing with the Parks Card
An interesting aspect about poker is that it’s not always the individual who holds the best hand that usually wins the game; it’s the individual who knows how to bluff best. Such was the case Monday night’s (9/9/2013) Village of Palmetto Bay budget meeting.
When a majority of the Council voted on and informed Village Manager Ron Williams that he was going to have to cut approximately $1,000,000 from his already bloated budget, he responded, with nothing less than a perfect poker face. He said he would be forced to close all the Village parks for the year.
It was a great bluff and unfortunately it was Councilman Tim Schaffer who bit it hook, line and sinker and folded on the Council’s requirement of a balanced budget. Game over. In an instant with Tim’s uneducated vote, the Village Manager was given authorization to spend 2,500,000 “chips” of Village’s reserves during 2013/2014.
Prior to the Village Manager’s winning hand, Ron Williams went on record saying that the Village of Palmetto Bay had balanced the budget for 2013/2014. Well, I just happen to be a lowly CPA, but even I know that when there is an operating deficit of $2,500,000 and that deficit uses reserves to pay for red ink, the budget is far from balanced.
What the Village Manager asserted was at best a boldly misleading statement to the Mayor, Council and the Village Residents. With the exception of John Dubois, the Council bought another bluff by the Manager and another poker hand was lost. Well done Mr. Manager, well played.
Let me review some quick facts about the budgets because apparently the Village Manager has never presented one in a way in which he doesn’t have an increase each and every year.
Total general fund expenditures in 2011/2012 were approximately $12,000,000. This included all Village operations and parks to be open and operating for business.
This year the Village Manager has called for total expenditures of approximately $14,500,000, an increase in two years of $2,500,000 or 21%. When asked by the majority of the Council to cut his budget by $1,000,000, only a 13% increase over 2011/2012, the Village Manager stated all the parks would be required to be closed.
Do you notice the discrepancy, do you see the bluff and do you sense the scare tactic?
If you look further into the details of the budget, the parks were running in 2011/2012 at an expense of $1,700,000, and were open and operating. Park expenses requested on the 2013/2014 budget are $2,500,000, an increase of close to 50%. What park expenses could have increased that much?
That is just the parks budget and barely addresses the finance department’s 75% operating expense increase in two years or numerous other departments that have increased their operating expenses by over 50% in the same two year period.
What is happening that these costs are increasing so much?
The Council needs to demand from the Village Manager an answer as to why it was possible to run the Village in 2011/2012 at $12,000,000 without the depleting reserves and without parks being closed versus the $14,500,000 requested for 2013/2014.
In addition, the Manger needs to explain why every department has increased operating expenses over 50% in a same two year period.
At this year’s reserve burn rate, how long can the Village survive before we have increased taxes and service cuts? Why does Ron Williams insist on managing with smoke and mirrors and not answering questions with facts rather than using scare tactics?
The facts are pretty obvious: the Council needs to start overseeing the financial aspects of the Village Manager’s position. The Council needs to be educated on the budget, understand when the Village Manager is bluffing and call for a balanced budget before dire financial consequences affect the Village.
It is absolutely irresponsible to run any organization with operating deficits each year. Before long, the Village will be required to lay-off staff, close parks, reduce services, and increase taxes as reserves dramatically disappear.
Someone on the Council needs to step up and call the Village Manager’s bluff or the residents of Palmetto Bay will all be holding a losing hand.