Mayor Adam Barringer's proposed Economic Development Plan for the city of New Smyrna Beach is expected to formally be presented Tuesday to the City Commission. The draft version, posted on NSBNEWS.net, sounds promising, but unless the city can get a better handle on personnel costs, including pensions, then everyone is just spinning their wheels.
In times such as these most people in New Smyrna Beach agree that steps need to be made to improve the city's financial situation. To this end we want to suggest things that can be done to improve things without causing undue pain to anyone, including those who work for the city.
The present economic situation is likely to last for a long time unless there are great changes made in the things that are now being done to “help the economy.” Therefore, doing nothing is not an option. Furthermore, declaring bankruptcy is also not an attractive option.
The first item that should be addressed is reducing the size of the city payroll. The two most painless things that can be done is to allow natural attrition to reduce the number of personnel while reducing the per person payout by reducing the various perks, overtime and other things that raise the payouts beyond the basic salaries.
This approach would be preferable to both the workforce and management over wholesale layoffs. A reduction in pay is much to be preferred over outright job loss.
Note also that if the city were to be forced into bankruptcy, history indicates that the number of personnel outside of police and firefighters could drop to between 30 and for a city the size of New Smyrna Beach.
Police and firefighters should be put on defined contribution retirement plans as quickly as is feasible. This would not only be good for the financial health of the city, but also would probably work out better for the people covered by the plan. Defined benefit or pension plans have too many problems associated with them.
To reduce the cost of health coverage, health savings plans should be introduced. Also, the personnel should be made aware that money paid out for health coverage is money that can’t be paid in salary. The city must avoid contracts that promise to pay health coverage way after retirement. Such contracts are unsustainable.
The city needs to become very hard-nosed about what projects it continues to support. There are a number of things we have going that loose money without giving much in return. City leaders should resist the natural tendency to fund “feel-good” projects that are not really necessary.
One interesting activity is the municipal golf course. Commissioner Judy Reichert has said that she can make it profitable. Since this is a bad time to sell anything it is a good time to see how much progress she can make in making the course profitable. Any progress toward profitability will help at least until the conditions for selling it get better.
With everybody suffering economically, now is a really good time for the city inspectors to become very judicious and lenient about handing out fines and penalties to people who are struggling to make ends meet. Serious problems that endanger life and health should not, of course, be ignored. However, the trivial and nit-picking should be put off for better times.
Cost reduction and efficiency cannot be achieved over night. However, the time is really ripe to start establishing a climate of economy and efficiency. Bankruptcy is a terrible thing to face.