Sad News: Coral Gables Pension Fund Contribution

As per cggazette.com

The city actuary told commissioners the fund not met its assumptions for eight of the last ten years so therefore, “…future contributions will be much higher than the 50 percent of payroll you’re currently looking at.” Tierney then added, “Hate to be the bearer of bad news, but unfortunately you’re likely not to have seen anything yet in terms of term of a big contribution number.”

It looks as if Coral Gables citizens are in for many years of increasing property taxes unless City services are not strictly controlled.

The Pension Mess

Almost unbelievably the Commissioners appear to be surprised at the depth of the financial crisis caused by the financial mismanagement and indifference of the Commissioners to the hugely growing liability of the pensions. As cited by online Coral Gables Gazette (cggazette.com)

As a percentage of payroll, [it was] reported that Coral Gables’ pension contribution is double that of the state average (23 percent). “We’re not even close,”…

Coral Gables City Manager Pat Salerno cited the pension crisis as rationale for his tough stance in his first go-round of Coral Gables labor negotiations.

“As long as the (city’s) pension cost is where it’s at or anywhere near it, the city will not be in a position to give you wage increases,” a poised Salerno told the police officers assembled in the commission chambers. “Eventually the pension costs are going to undermine the financial pinning of this city. We’re there now.”

Salerno then offered a stark assessment of the city’s current financial state. “We’d like to be give wage increases. I would love to be able to offer residents greater services. Professionally I can’t recommend it. Not when the city is in financial peril.”

Salerno faulted the pension for the budget crisis the city now confronts, calling the system “uncontrolled”.

“People are retiring with pensions in some cases 54 percent more than what they were earning when they were here. Some changes have to be made. That’s the situation we’re in.”

Concise List of Coral Gables Government Failures—Please List the Sucesses

The following may be found in today’s Coral Gables Gazette

Letter: To jog mayor’s memory, here’s what we know

Posted on Sun, Aug. 30, 2009

Once again, our rude and arrogant mayor Don Slesnick (in the Aug. 25 commission meeting) characterized his detractors and the concern of residents as charged by “misinformation”.

In response to the city’s email “Straight Talk”, I replied “One big problem the city has is not admitting to any mismanagement or bad decisions, and everyone knows there have been plenty of them. As long as the city externalizes all the blame for the current situation, it will have no credibility with the public, and the public will continue to be angry and reactive.”

So, to jog Slesnick’s memory, what we, the public, know about:

1. The failed annex project.

2. Overpaying for the “Blue” building and then having to make extensive renovations.

3. The street closure by City Hall

4. The B&Z scandal, and extensive payments to the nonworking Margaret Pass, including a car.

5. Unanswered questions about the JCC building deal.

6. Supporting Manager David Brown despite his:
a. Falsifying records.
b. Corrupting a city employee in his cover-up.
c. Unwarranted advancement and promotion of his mistress who was observed publicly screaming obscenities at the manager on a city street (an offense for which termination is appropriate).
d. P-card scandal and costs of his drinking and dining.
e. Sexual harassment suit
f. Writing himself a $25,000 walk-away bonus.
g. Withholding information from the Commission (such as how much in arrears was the Country Club of Coral Gables on rent and taxes).
h. Failure to oversee (Country Club manager) Granada LLC
i. “Handshake” agreement in the Museum Project
j. Questionable relationship with the management of the Biltmore Hotel

7. Failure to deal with the wage/benefit/pension system when the writing was clearly on the wall that it could not be sustained. (And why are some employees getting life insurance?)

8. Failure to audit, supervise, or provide oversight to departments such as B&Z, I.T., Finance, and the city attorney.
a. Uncommon numbers of lost/unavailable/nonexistent financial records (such as in re the Biltmore Hotel).
b. Highly questionable expenditures and poor record keeping (IT)
c. Building and Zoning Dept., enough said. Troubled a long time.
d. Outsourcing much legal work plus failure to prevail. (And why is our attorney in the Granada LLC suits primarily a bankruptcy attorney?)

9. The financing of the museum project is unclear as to the city’s involvement.

10. The extensive use of monies from the Sunshine State Fund which avoids the need for taxpayer approval of projects.

11. The number of city fees quietly increasing, such as the business tax, permits, and parking fees. These are occurring despite a proposed large millage increase.

12. Multiple fiascos involving the Country Club of Coral Gables (a publically-owned facility) including financing errors, the allowance of illegal and unethical practices by the management, and absence of oversight.

13. That no one in this administration has said “Gee, I goofed on that one.”

There is more, but I’ve said enough to make the point. Hope this ”refresher-course” will help the mayor’s recall.

Katherine de Blij
Coral Gables

More STRAIGHT TALK (II) from the City Government

The following is the latest Straight Talk message from the government that challenges information coming from citizen groups such as the Coral Gables PAC

Since publishing the first edition of Straight Talk on August 5th, some community publications and groups continue making statements that are simply not true. Misinformation is never valuable to residents, the Commission or the future of this City. In this second edition of Straight Talk, we address misinformation and provide residents the facts.

Make no mistake, Coral Gables, like virtually every city in the United States, is coping with financial difficulties. This year is probably the most challenging for cities in a generation. The dramatic downturn in the economy is not the only factor that has significantly affected the City’s budget. Two years ago, the Florida Legislature mandated that cities reduce their property tax millage rate per $1,000 of taxable value. Coral Gables reduced its rate from 6.15 in fiscal 2006-2007, to 5.25 in fiscal 2007-2008. This change took effect just before the real estate market collapsed. In addition, the homestead exemption doubled from $25,000 to $50,000 for the current fiscal year 2008-2009, which further reduced revenues. Those three events, coupled with the present state of the economy among other factors, are what led to the current financial situation.

With so many factors affecting next fiscal year’s budget (October 1, 2009 – September 30, 2010), a multi-pronged approach is being utilized to steer the City through these extremely challenging times. The proposed budget mirrors the belt-tightening that citizens are making in their daily lives and they should expect the same from their government. 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.

Fiction: Cut spending by $10,000,000.

FACT: The above statement implies the City has not made any cuts. The City of Coral Gables’ proposed budget for fiscal year 2009-2010 already slashes expenditures by approximately $9 million and includes the elimination of 64 positions. Since the initial budget proposal on July 1st, additional cuts have been proposed for a total decrease in spending in excess of $10 million.

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Fiction: The proposed budget is now over $150,000,000. Almost double the annual budget… when the present Commission and Mayor took office.

FACT: The proposed budget for the upcoming fiscal year is $150,506,535. To calculate any increases in the budget over the years, it is appropriate to remove the total amount of Capital Expenditures as the figure varies widely from year to year. An analysis of Operating Expenses without Capital Expenses for fiscal year 2009-2010 yields a total Operating Cost of $136,831,535. The total Operating Cost for fiscal year 2000-2001 was $82,258,365. The budget has increased $54,573,170, or 66% over nine years. However, the real scenario emerges when you factor in the Consumer Price Index, which rose 27% over the same period of time. The Consumer Price Index adjusts for inflation and must be considered when comparing costs over long periods of time. Once the CPI is taken into account, the budget for the upcoming fiscal year represents a 39% increase from 2001 or 4% per year. Including Capital Expenses would yield a larger increase but does not portray an accurate picture of the budget.

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Fiction: We have non-performing departments throughout the City. Look at the Planning Department. It is useless and costs us MANY MILLIONS. Public Works is a monumental waste of money.

FACT: The Planning Department’s total proposed budget for the upcoming fiscal year is $715,172. The Department is responsible for providing guidance on the future development of the City. Department responsibilities include maintaining and implementing the City’s Comprehensive Land Use Plan and updating of the Zoning Code and all regulatory documents. The Department also reviews and provides recommendations to the Planning and Zoning Board, and the City Commission for all changes in zoning classification, Zoning Code text amendments, development reviews, conditional land uses, lot separations, vacations/abandonment’s of public rights-of-way, subdivision/replats and Comprehensive Land Use Plan and Future Land Use Map amendments. Many of these functions are required by state law.
The Public Works Department is responsible for managing construction projects, preserving historic landmarks, and maintaining all City facilities including fountains, parking lots and street lights. The Department is also responsible for street resurfacing and sidewalk repairs and improvements, traffic calming measures and upgrades to the sanitary sewer system. The fruits of their labor are evident all around the City. The Public Works Department has a long list of recently completed projects which, for example, includes construction and landscaping of the median along Ponce de Leon Boulevard from Alcazar to Almeria Avenues, renovation of Venetian Pool, restoration of the historic DeSoto Fountain, creation of a large roundabout on Coral Way and Segovia Street to correct traffic flow, improvements to the Coral Gables Country Club, extensive renovations to Coral Bay and Salvadore Parks, repairs to damaged sidewalks, resurfacing of roads, and the construction of 16 traffic circles throughout the City just this year. The Department is now in the process of restoring County Club Prado, an original entrance into Coral Gables and one of the most photographed landmarks in the City. The department is also working on major improvements to Riviera Park and is close to completing work at the new Coral Gables Art Cinema. Construction will soon start on a new roundabout on Segovia Street and Biltmore Way.

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Fiction: Pensions of all employees must be looked at.

FACT: This statement implies the City has not taken steps to address pension costs. Major changes to the employee pension plan were already proposed on July 1st and are being considered. These significant changes, however, are subject to collective bargaining agreements and state law. The City does not have the ability to simply make unilateral changes.

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Fiction: Coral Gables laps the field with a proposed… tax hike nearly double that of the City of Miami…

FACT: The City’s preliminary rate for the upcoming fiscal year is 6.243 mills per $1,000 of taxable value. This does not mean the City Commission will adopt that rate in September at the Budget Hearings, but it does establish the maximum rate which can only be reduced. The proposed millage rate for the City of Miami is 9.06 mills. While Coral Gables’ preliminary rate increase is higher this year than that of the City of Miami, it is worth noting that our millage rate would still be 50% less than Miami’s. Out of the 35 cities in Miami-Dade County, Coral Gables has the 11th lowest preliminary tax rate for the upcoming fiscal year.

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Almost every municipality in the country is struggling with the same issues affecting Coral Gables. The proposed budget goes right to the root of the problem and provides solutions. It is the City’s goal to hold any millage rate increase to a minimum. 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.

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.