As the budget process proceeds to its climatic end on Sept. 28, I thought about how we got to the mess we are in. In my opinion, it boils down to a failure of the City and the City Commission to hold the line on costs while continuing to spend with abandon on non-essential programs in the face of a recession and dwindling income.
And that assessment actually goes all the way back to the fall of 2008.
As I began reviewing the past year, it struck me that a lot of folks have been trying to get the commission's attention over the excessive spending and city costs for more than two years, all with apparently little result.
And despite the fact that housing boom burst in 2007 and that other governments, including the state government, were holding down personnel costs and not awarding cost of living raises, we were continuing to do so with "business as usual" free for all spending, including cost of living raises and dispensing tax money to special interest groups.
We continued to disregard reality and continued to fund non-performing programs such as the golf course and water taxi, despite ample evidence that they were losing money using the age-old excuse of the "grant" shell game. We have non-income producing property all over town and other parcels that we refuse to properly manage or demand a market value return for the taxpayer's benefit.
We sat and watched pension funds lose money in the stock market and allowed the unfunded liability to grow, an albatross around the neck of every current and future city taxpayer.
Instead of applying appropriate management oversight, we've forsaken zero-based budgeting and continued to fund everything as a status quo. We're relying upon increased taxation to solve our money problems.
As they did this, they defended their position as either constrained by state law or covered by a union contract, all in a "right-to-work" state with no binding arbitration. So, much like Rome, as the elected ones fiddled, the City of NSB started to burn.
On the other side of the ledger, they proposed starting the 2008-'09 budget year with more than $10 million in reserves; the product of the over taxing during the real estate boom years. But when Bouchelle Island resident Bill Koleszar appeared on the scene, convinced the commission to averti a tax increase and hold the millage rate to that of the previous year, the administration went in a different direction.
Then-City Manager John Hagood, instead of cutting spending, went to the reserve trough and used over $1 million to balance the commission-approved budget, instead of making meaningful spending cuts. Throughout budget year 2009, neither the commission nor either one of Hagood's successors took any steps to reduce the deadly increase of pension costs nor those associated with bloated staffing and salaries in general, the largest component of the city budget.
Citizens during the budget reviews of the summer of 2009, continued to demand reductions and some, including this blogger, presented suggestions and plans for cost savings. Mine was met with disdain from the police chief and absolutely no action from the commission or city manager, despite the fact that it could have saved over $250,000 without reducing first-responder staffing at the street level.
Instead, the commission approved eliminating five patrol officers, reducing street-level manpower in favor of retention of over-staffing at the police command level in the form of four commanders for a 50-person department.
They made little or no downward adjustments to pensions, salary schedules, or staffing and virtually no adjustments to the union contracts. It was business as usual again in NSB. And this, despite the belt tightening in some neighboring cities. As mediocre as it was, even Volusia County did some belt tightening.
Meanwhile the reserves continued to dwindle as they provided an easy alternative to real belt tightening. They then tried to end run the awarding of the auditor bid by changing the rules at the end of the process, but were constrained by the public sun of an open meeting.
The new auditor came to town and went about revealing many of the accounting irregularities of the past. The previous auditor was auditing himself as his firm had been the auditor since anyone can remember, an unhealthy situation from about any point of view.
One of the issues the new auditor's raised was with the inclusion in the reserves of the non-performing bond that was issued to cover the golf course renovations; the auditors removed it from the reserves and thus the reserves shrank by $3 million.
On top of that, the city officials have finally admitted they not been paying the bond off (translate that to fact that the golf course has not been paying the bond off) but rather only paying the interest. Such creative accounting tends to support their view that the golf course makes money.
That would not work in my household budget or in yours. So the reserves dwindled again. With property values continuing to decline, the election campaigns of 2009 focused on reduced spending and no tax increases.
In fact, two of the new candidates, Mayor Adam Barringer and Commissioner Judy Reiker repeatedly promised they would reduce spending and not vote to increase taxes. Other new candidates entered the race and for the first time in recent history there was a series of true debates as opposed to the non-confrontational speech parties of before.
Candidates had to state their positions over and over and respond to questions from Henry Frederick of NSBNEWS.net, and the public in a series of debates, in front of video camera that recorded every comment. These videos were posted on NSBNEWS.net so all could have an opportunity to see and hear what the candidates said even if they could not attend.
Special interest groups poured funds into the campaigns and the election mail effort was enormous and promises were now made in writing. Close to $70,000 was spent between the two mayoral candidates; an enormous amount of money for an election seeking the votes from about 16,000 registered voters.
Two first-term incumbents lost, Mayor Sally Mackay and Commissioner Randy Richenberg, lost to Barringwer and Reiker, respectively, essentially for their failure to reduce taxes and hold the line on promised spending and cost cutting.They were soon dismayed as the promises were broken and the usual giving away of taxpayer money continued, but more about that later.
The year started with a deficit looming on the horizon and yet the spending continued. Special interest groups salivated at the opportunities presented to them by the newly seated City Commission and lined up for their slice of the pie. Citizens were dumbfounded and could not believe that they had turned over the government again to the tax and spenders. That is enough for this time around and I will pick up here with the fall of 2009 forward in my next blog.