Will We Have To Sell City Hall?

August 29, 2010 1 Comment

From a quite prominent legal scholar.

Bankruptcy is not limited to individuals and business firms; under U.S. law, even a city can be declared bankrupt; and this happens occasionally. In one Illinois town, the bankruptcy judge ordered the sale of city hall to satisfy creditors’ claims. U.S. states cannot be subjected to bankruptcy proceedings, and neither can the federal government, or the governments of other nations. But that doesn’t mean that a state or nation can’t be insolvent. Insolvency is the condition; bankruptcy is a method of treating the condition.

via Is the Federal Government Broke? Posner – The Becker-Posner Blog.

Filed under Coral Gables, Finance

Teamsters Local 769 vs the City of Coral Gables

August 21, 2010 Leave a comment

This coming Monday at 9am the City Commission, in an Impasse Meeting, will take up the failed negotiations with the International Brotherhood of Teams Local 769, who represent employees of the City of Coral Gables, and are unable to reach agreement with the city over a series of proposed salary and pension concessions.

In a talk before the Ponce Business Association, Mr. Mike Scott, Local President of the Teamsters Local 769, gave the views of a group of city employees (excluding police and firefighters who have their own contracts) who he represents.

The head of the Teamsters Local indicated that a required mediation process between the union and the city has failed; and the union will not accept the city’s proposals that includes an increase to 10 percent in pension contributions, a change from a rule of 70 to a rule of 80 to join the DROP and an across-the-board reduction in salaries

The view of the Teamsters is that the employees included in their negotiation should not have to take a larger concession than the police or the firefighters are taking.  The firefighters made a volunteer contribution of 5 percent (and as I understand it is compensated in later years by an earlier participation in pensions, which rough equals the value of their 5 percent contribution), and the police will negotiate a new contract later.

The problem with the Teamster’s representations is that, since the firefighter and police contracts are not up for negotiation at the same time, the other employees will not accept concessions unless the police and firefighters are treated the same.  This is a classic Catch 22 in which none of the unions want to begin the process of concessions.

It is urgent that the city start a process of reductions in salaries and pensions, and it should begin now with the employees represented by the Teamsters, although this may be painful for employees.

The ultimate beneficiaries are the taxpayers who cannot live with the huge pension liabilities that we have to pay now and in the future.

Filed under Budget, Coral Gables, Employees and Unions, Finance

Coral Gables’ Budget: No Relief from Personnel Salaries and Pensions

August 19, 2010 Leave a comment

Let’s take a look at the trends of personnel costs in the last three or four years with the number of positions cut from 875 in 2007-2008 to an estimated 791 in 2010-2011.  We have a city with fewer employees being paid more on average–this is not a formula to reduce pensions and other benefits.

  • Total personnel costs fell by about 6% in the period 2007-2010;
  • But personnel costs per employee increased by 4%;

In the Police Department

  • Total personnel costs are being reduced 4.67% in 2010-2011.
  • This is the first real proposed reduction in the personnel budget for police in three years, and the number of staff positions has fallen by 3.41%.
  • Average police salaries are reduced by an insignificant amount of 1.3%.

For the Fire Department

  • The total personnel budget is being reduced by 3.74%,
  • The number of staff is being reduced by 1.34% and outlay per firefighter increased by 2.43%.
  • Only two Fire Department positions have been eliminated in four years.

A look at the Public Works Department

  • Personnel costs are being reduced by 13.51% in fours years,
  • The number of staff is cut by 14.86% in three years (but very little in the 2010 estimated budget) and
  • The average position costs is increased by 1.59%.

Regarding the Development Service Department

  • Staff numbers have fallen from 70 to 63, or a 10% decline,
  • The personnel budget is expected to fall by only 2.2% in four years,
  • And average staff costs are expected to increase by 8.66%.

In the Information Technology Department

  • Personnel costs are the same as they were in 2007 after rising for two years,
  • The number of staff has been reduced by 6.25% in four years,
  • Average staffing costs have increased by 6.6% in four years, another department in which average employee costs have increased

Filed under Budget, Finance, Taxes and Fees

Are We Blasé About “Misusing” Public Funds

August 17, 2010 Leave a comment

Thanks to the Miami Herald yet another misuse (misappropriation) of public funds has been reported for the City of Miami.  The so-called “misuse” (this reminds me of the term “misspoke”) of public funds is in fact institutionalized corruption that has been going on for years in this example.  It is not hard to guess that this sort of “informality” in the use of public funds is a county-wide problem.

One may also wonder whether these problems would ever have been discovered without the oversight of federal authorities.  Apparently, Miami-Dade citizens tolerate the misappropriation of public funds as a normal  part of the everyday business of government and of doing business with the government.

In a stinging report, Auditor Victor Igwe, backed by an opinion from the state attorney general, said the city tapped into even more restricted money — this time, $9.47 million in gas taxes — to fill gaping budget holes.

…the city shifted the money to the general fund to balance its plummeting checkbook, an improper practice that has been used in the past to mask deeper financial woes. The money went to operate street lights.

The city is already under federal investigation for the questionable transfers of millions in Impact Fees and other restricted funds, but this is the first time the use of gas taxes was found by auditors.

…the practice of tapping into the Local Option Gas Tax has been going on for nearly a decade.

Read more: http://www.miamiherald.com/2010/08/16/1779039/auditor-mimai-misusing-millions.html#ixzz0wt1KhbIR

Filed under Coral Gables, Finance

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