Lake County, Florida - Feb. 25, 2010 - Lake County Commissioner Jimmy Conner (Florida) is the only one awake and asking questions about fiscal issues in the Board Meetings - he has been asking tougher questions than "why are we paying for new DVD's for libraries" these days. His short article is at the bottom of this page. I go to most Board meetings, and you really wonder whether 3 of the Commissioners, including Linda Stewart and Elaine Renick EVER READ the agenda backup documents regarding fiscal issues, or even understand the concept of controlling costs like any $400-million corporation would. This is especially important when they don't have a Controller, and
the interim County Manager is an attorney, not a professional Administrator.
In this case, Jimmy was correct to ask for an investigation how the County bought a $35-million radio system without budgeting for the annual maintenance charges, estimated to be $1.6-million.
One of the fiscal weaknesses of government "fund accounting" systems used by the County as well as the School District is that they may have separate funding for capital expenditures and thus they may tend to approve them without a process to ALSO budget for maintenance or related staffing costs. For example, if they get a grant to build a fire station, do they HAVE A FORMAL SYSTEM to also calculate and figure out HOW MUCH it will cost to maintain as well as staff the fire station, and also set aside funding for those costs starting in the period when the building is ready to occupy? It doesn't seem to happen, so thanks to Jimmy for raising a big enough issue to get investigated. Although the Motorola Radio system was funded before I started this blog, there were numerous sources that told me it was a sole source contract because the Manager selecting the system didn't want any other system. One citizen told me that a competing system would have been significantly less, but it was not even formally reviewed. (this is hearsay information - I have not researched the actual minutes of meetings, etc.).
So, not only should the County Manager review this situation, but also the Capital spending process to ensure that every single spending request includes accurate cost estimates for maintenance and staffing, and if approved, those costs need to be also approved from the General fund and inserted in line items for budgets so they are not conveniently forgotten.
Here are two examples of this I have encountered elsewhere:
- In Iraq, the US Military constructed a $35-million prison designed to follow US prison methods. They didn't get agreement with the Iraqi government about staffing costs or that they would even use it. It became a famous case in Federal screwups in Iraq, documented at www.Sigir.mil because the Iraqi government refused to staff it or pay utilities, etc. because it cost so much more than their own standards for prisons. So, it sits in the desert, vacant to this day, except it was probably looted.
- The US Government reconstruction program in Iraq spent some $22-billion PLUS on reconstructing war torn Iraq - most of the funds were spent on capital projects like renovating schools, building water systems, etc. There were not budgets for maintenance or training of maintenance staff. In 2005, it became clear that the Iraqi's did not have a "maintenance" culture, and were used to just replacing anything that was broken, or they always had maintenance contracts from their German or French vendors. So, many pieces of equipment, including SUV's (ran out of oil because they weren't checked or maintained), $10-million generators, etc failed. The US Government had to reorganize budgets and just in the water sector alone they canceled contracts to budget $60-million in maintenance contracts just to maintain the equipment that still ran. (I was there, and investigated the reporting systems that tracked that info).
So, the lesson learned is that if Government managers and officials want to gain credibility, they have to be professional about the way that Capital projects are funded, and ALWAYS ensure that any capital expenditure also includes a review, cost forecast and budgeting for operating costs like maintenance and staffing.
Note to Jimmy: You might also want to look at the planned expenditure for that $7-million building for the disaster operations committee - do any budgets also include the funds for utilities, maintenance, and the extra people they will want to permanently assign to that building.
Keep asking those questions, Jimmy!
vj
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From Jimmy Conner's Website HERE - look at the Feb 25 entry
Commission Seeks Inquiry into
$1.6M Radio Maintenance Fee February 25, 2010 At
the request of Commissioner Jimmy Conner, the County Commission voted
unanimously to seek an inquiry into the $1.6M annual maintenance fee for
the $35M Motorola radio system. Conner wants to know if the maintenance
fee, which will cost $16M over a ten year period- almost half of the
purchase price- was fully disclosed to the Commission at the time of
purchase. Conner
also wants to know why the appropriate maintenance fee was not budgeted
for expenses that will be incurred this fiscal year. At least one
Commissioner said the maintenance fee was not discussed during the
purchase, something Conner says is essential. "One
of my stated goals is to improve the manner county government does
business and to increase accountability," said Conner. Conner
said he will withhold final judgment until the county manager and
county attorney complete their inquiry.
