STRAIGHT TALK from the City of Coral Gables

Please find the text of an email received on August 5 from the City of Coral Gables. The text is as follows:

August 5, 2009

Separating Fact from Fiction

FROM YOUR CITY GOVERNMENT

Tough times. Difficult choices. Significant needs. A challenge no doubt. But it is a
challenge the City of Coral Gables can meet if financial common sense and
responsibility prevail. Make no mistake, Coral Gables, like virtually every city in the
United States, is coping with financial problems caused by the dramatic downturn in
the economy, among other factors. This year is probably the most challenging for
cities in a generation. The unpredictable and ever-changing economy has taken a toll
on residents and, in turn, Coral Gables has suffered with revenues plummeting.
Several steps were taken to cut costs this year. The City laid off employees,
implemented a hiring freeze, and instituted a freeze on discretionary spending and
capital purchases, but more was needed. Until recently, Coral Gables had
approximately $9 million in reserves to handle emergency situations such as
hurricanes and other unexpected events that can burden the City financially. In order
to make it through this fiscal year, the City has had to utilize nearly all its reserves to
balance the current budget, all but eliminating the general operating fund safety net.
The proposed budget mirrors the belt-tightening that citizens are making in their
daily lives and they should expect the same from their government. There are many
factors affecting next fiscal year’s budget (October 1, 2009 – September 30, 2010)
and as such, a multi–pronged approach is being utilized to steer the City through
these extremely challenging times. The solution must be balanced to preserve the
high standards, quality of life and beauty that make Coral Gables a special place and
helps support our property values. The City Commission and staff have not lost sight
of their role as stewards of the public interest. In doing so, we will ensure that all
options remain on the table as we pilot city government through these uncertain
times.
Recently some community publications and groups have made statements that are
simply not true. Misinformation is never valuable to residents, the Commission or the
future of this City. Here atStraight Talk, we feel it is important to address
misinformation and provide residents with the facts.
Fiction: The City is proposing a 27% property tax hike.
FACT: The current millage rate is 5.250 per $1,000 of taxable value and the
preliminary rate is 6.243, a 1 mill increase. This does not mean the City Commission
will adopt that millage rate in September at the Budget Hearings, but it does
establish the maximum rate which can only be reduced. Because of an overall decline
in property values, the millage rate necessary to generate the same amount of
property tax revenue as the current fiscal year is 5.537. The difference between
5.537 and the preliminary rate of 6.243 is .70 mills, a 13% increase. It is the City’s
goal to hold any millage rate increase to a minimum. Most cities in the County
including Miami and Miami Beach have increased their preliminary millage rate for
next year. Out of the total amount of property taxes you pay to the Miami-Dade
County Tax Collector’s Office, 38% is directed to the Miami-Dade County Public
School System, 32% is directed to Miami-Dade County, 27% goes to the City of Coral
Gables and the balance is sent to the state.
– – – – – –
Fiction: 40 low-salaried or part-time employees are being cut.
FACT: A total of 64 positions are being cut. It should be noted that 20% of the full-
time positions proposed for elimination come from management, professional and
technical employees, yet this group makes up only 15% of the total workforce.
Among the high-ranking positions being eliminated are an Assistant Chief of Police
and an Assistant Public Works Director, both second in command in their respective
departments.
– – – – – –
Fiction: City expenses are out of control.
FACT: The City’s proposed budget slashes expenditures by approximately $9 million.
The budget calls for a 5% cut in salaries for all employees and a significant reduction
in benefits, an unprecedented move in the City’s history. We are unaware of another
community in South Florida cutting salaries more. It is worth noting that employees
in management positions have not received a cost of living adjustment since 2007.
Despite the significant reductions in expenses and necessary fee increases, the City
may have to lay off more employees, including police officers. Currently, 55 cents out
of every dollar spent from the City’s general operating fund goes toward public safety
(Police and Fire Departments). The proposed budget calls for a total of 828
employees, that’s fewer employees than the City had a decade ago.
– – – – – –
Fiction: It is much more financially sensible to tier salary reductions: Cut salaries by
5% for employees making more than $35,000; 10% for those making more than
$80,000 but less than $130,000; and 15% for employees making more than
$130,000.
FACT: A tiered salary approach would create inequities in the City’s pay plan. This
suggestion reduces the differential between higher-ranking and longer-term
employees and those they supervise. Increasing the percentage of reduction for
higher paid employees wrecks havoc with a sensible pay plan designed to reward
experience, expertise and responsibility. For example, under the aforementioned
tiered concept, a supervisor making $80,000 would now be paid $72,000 and a
subordinate with a salary of $78,000 would make $74,100; that’s more than the
supervisor they work under. Likewise, under this problematic approach, employees
with seniority could be paid less than those with fewer years of service to the City.
This is one of the reasons no other city in Florida, that we are aware of, is pursuing
tiered salary reductions. Approximately 85% of City employees are represented by
unions with collective bargaining agreements in which case the City does not have
the ability to simply make unilateral changes in salaries.
– – – – – –
Fiction: The City is cutting part-time employees. This measure is not economical
because these employees do not receive benefits.
FACT: The City is reducing the number of employees in a prudent manner. For
example, as part of the proposed budget, the City is cutting six full-time sanitation
workers with benefits and adding one part-time sanitation worker without benefits.
Remaining employees will work harder and smarter to get the job done.
– – – – – –
Fiction: The proposed fire fee will cost homeowners $96 a week.
FACT: The fire assessment fee is proposed as a flat $50 annual fee per residence. The
fee would be dedicated to fire protection services. The City is working on developing a
hardship exemption for seniors with limited incomes.
– – – – – –
Almost every municipality in the country is struggling with the same issues affecting
Coral Gables. This City must strike a balance of continuing to provide vital services to
the community while keeping costs down. Unlike businesses that cut costs by
providing self-service features, Coral Gables should not become a self-service city.
Among the vital services the City provides are Police and Fire protection. All City
departments have slashed their budgets and many dedicated employees will be laid
off. The proposed budget goes right to the root of the problem and provides
solutions. The decisions are difficult but they must be made to ensure that Coral
Gables emerges from this national economic crisis with a foundation for a better
future.
In a nutshell, the City is faced with the predicament of significantly diminishing
revenues, rising expenses and a fiduciary responsibility that this City must not back
down from: meeting the needs of citizens, all the citizens of Coral Gables — no
matter where you live, no matter what your income is, and no matter the particular
circumstances of your lives.
The City is committed to making the community proud of how our continued
dedication to the heritage and tradition of Coral Gables adds value to our citizens; to
being an organization that residents can trust and believe in and one that you can
admire for the good we do and the future direction towards which we steer.
– – – – – –
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Please visit the City of Coral Gables website atwww.coralgables.com
or call the Office of Public Affairs at 305-460-5205.

About Stephen E. McGaughey
International consultant in economic development programs and projects

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