It is pretty rare for Orlando Sentinel commentator Lauren Ritchie to criticize Lake County officials, but she did it below in the two part series regarding the County Commission hearings about budget reductions. Part two of her series will not appear until this Wednesday, the 18th.
Basically, in part one, Ritchie complained that social programs were being cut, but not County staff, railing at the size of the six person public relations department (which create a great website!). I happen to like visiting the Trout Lake Center for talks and cultural events, and when Ritchie said the County staff was not planning on any internal cuts, but only to outside agencies like Trout Lake, I got fired up.
Ritchie DID make a very good point - most County proposals were NOT CUTS in spending, but just maintaining current spending levels and cutting social services to outside organizations, plus the use of an excess, hidden reserve for health insurance costs. In a period where County investors (i.e. taxpayers) are going though financial grief, the County staff seems unwilling to incur any cost reduction pain like the taxpayers are going though. That is like Merrill Lynch giving millions in bonuses to staff when their business has failed.
Some interesting points for taxpayers to remember and remember to ask the County Commissioners (based just on the information in Ritchie's article):
1) Apparently the County staff has OVER charged taxpayers for $11-million in expenses for health insurance because they exceeded actuarial estimates for internal health insurance charges. That is a major blunder. I once worked at Nissan Motor Corp. and we found the same thing, but their overcharge was only $1-million, which was bad enough. Why did the staff overbill taxpayers by $11-million? This needs investigation. Does this situation mean the staff has other hidden "reserves" not disclosed to the Commissioners or the public??? The overcharges should be used to fund a millage rate rollback, not go to cover staff unwillingness to set realistic budgets. Additionally, that means that earlier budget hearings could have resulted in rollbacks, but staff hid this overcharge and retained the cash.
2) The assumptions for the new budget specify that "Constitutional officers get the same amount of cash as this year". First, most Constitutional officers have never had an operational audit by the County auditor. Why doesn't the Commission budget 90% of last year's expenses unless the offices undergo a detailed operational audit to ensure they are efficient, economical and effective. Are all programs effective? If not, reduce the Constitutional officer budgets. Does the taxpayer need all those clerks in the office when there is a reduced demand for buying cars, which reduces demand to get license plates and pay sales tax?
3) Why wasn't projected expenses for employee health insurance discussed. If costs increase more than the rate of inflation, why wasn't there a discussion to increase employee co-payments for insurance claims to make up the difference? (The School District has the same problem - health insurance went up 17%, AND THEY MIGHT HAVE PAID IT or another large increase without increasing employee co-pays to offset the increases like a business would.)
4) Why wasn't there a discussion of renegotiating ALL contracts that the County had.
5) Why didn't the County have a public process to collect cost reduction ideas from the staff and public like the School District did?
6) Staff assumptions include "the property tax rate stays the same". WHY would they think so, or that they will get the same revenue, when property valuations are falling like a rock and foreclusures are removing properties from the tax rolls.
7.) Another staff assumption was that "The county doesn't have any new debts...). There wasn't any discussion of renegotiating current debt. For all County debts for bonds, etc. they should be aggressively renegotiating payments and rates to reduce cash flow needed. Since interest rates are falling in many markets, are there some debts where rates are falling, but staff is not telling the Commissioners or public, thus putting the difference into hidden reserves? These reductions should fall right to the bottom line and used for millage rollbacks, not being retained for hidden reserves.
8) ALL construction projects should be slowed down or deferred. There was no such discussion (according to Ritchie's account, since she said the staff only had two cost reduction recommendations - use the excess health insurance reserves, and cut back on financial support for outside service providers.).
Hey, I look forward to Ritchie's recommendations on Wednesday, and I might have more of my own by then.
vj
orlandosentinel.com/services/newspaper/printedition/sunday/lake/orl-lritchie1509feb15,0,3179115.column
OrlandoSentinel.com
COMMENTARY
County plan to balance budget no profile in courage
Lauren Ritchie
COMMENTARY
February 15, 2009
First of two parts.
Lake County commissioners last week had one of those meetings they all dread -- the kind where long-faced staffers project numbers on an overhead screen and proceed, in funereal tones, to describe how they won't have enough money to run government the next budget year.
This meeting went according to the script, and the outcome was predictable.
Here's the short version:
Lake County government's general fund is the one where all the money to run the usual services -- including the budgets of the property appraiser, tax collector, elections supervisor, clerk of the court and sheriff -- is accounted for.
This year, the county expects to spend about $169.6 million. Early projections for the coming budget year say that the county will collect about $151.6 million and needs to spend $155.4 million.
Yipes! We have a math problem -- or a spending problem, depending on your point of view.
County staffers warned the commission that they would need to find $3.8 million -- and, depending on how things shake out -- maybe even $6 million or $7 million beyond that. Staffers were looking for some direction on what to cut, and they made some suggestions.
Sideways is the new down?
The projections they gave commissioners assumed:
*No raises for county employees.
*The property-tax rate stays the same.
*Constitutional officers get the same amount of cash as this year.
*The county doesn't have any new debts on which it must make payments.
*Grants to outside agencies are cut in half.
After they got chatting a bit, staffers told commissioners that the shortfall could be avoided by taking six months' worth of payments for employee health insurance out of an account where there's too much money. The county expects to have $11 million cooling its heels in the fund, which the county's actuary lists as "surplus."
Problem solved -- for now. Of course, that money won't last forever, and then hard decisions must be made. Perhaps it would be better to make them now.
Let's look at the staff's suggestions for budget cuts. Unfortunately, there is only one. That's because freezing salaries and hiring, giving constitutional officers flat-line budgets and avoiding new debt are not cuts. Can I make my household budget balance by refraining from putting in a swimming pool? Cool! In that case, I also won't remodel the kitchen.
Wrong backs bear burden
The sole suggestion that county staffers factored in to make the budget balance is to cut money to the very people who need it the most and who have never been able to defend themselves. Now, there's a profile in bureaucratic courage.
The "grants" that the county wants to hack would save $378,545, hardly a drop in a $155 million budget. It would whack children's services, recreation for youth, money for an organization that provides medical care with the help of volunteer doctors, the county's 4-H clubs, Trout Lake Nature Center and LifeStream Behavioral Center, the only mental-health center in the county and the place where the Sheriff's Office last year took 856 people who were threatening to harm themselves or others.
Oh, what a splendid idea. Let's balance the budget on the backs of children, the physically infirm and the mentally ill! They don't complain!
This is the message: Don't touch the bureaucracy of this county. It is far too important and cannot be inconvenienced.
Never mind that the county pays for 362 radio phones and cell phones -- one for every 2.4 employees; that it runs a fleet of 420 vehicles; that it pays 15 of its 871 people more than $100,000 a year when only eight of the other 1,089 public employees make that much; that it duplicates the services of at least two other public agencies; and that it employs six public-relations people whose mission is to "enhance the presence and perception of the county though internal and external communications."
Change is possible
As the Little River Band sang in 1979, "Time for a cool change."
County commissioners last week told County Manager Cindy Hall that nothing was "off the table" when it comes to budget cuts. That attitude is gutless and heartless. It is the job of commissioners to tell Hall and her staff at least in general terms how to balance this budget. That's leadership.
The first change should be in attitude. Job No. 1 for this government should be to serve the public, and right now, that goal clearly is somewhere near the murky bottom of the list. Any cut to the budget that results in a reduction of services, particularly to the powerless, ought not to be considered unless the county is absolutely desperate. It is nowhere near that.
Saving money should not be an exercise that begins with millions. It should start with nickels. This is a government whose budget has taken on a life of its own, and making changes would be difficult but not impossible.
Stay tuned for specific suggestions Wednesday.
Lauren Ritchie can be reached at [email protected]
