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August 27th, 2007
NOTES
1. Na, na, na, na, we told you so. Bert Fish Hospital property tax rip off seems to have gone up 4% AND YOUR TAX FOR THEM EXCEEDS WHAT THEY TOOK IN LAST YEAR. Look at your TRIM Notice! It also exceeds this year's inflation. We could not discover when and where they held budget meetings, but as we said over the last few months, what the administrators and Board of Directors do best at Bert Fish is tax the public for every nickel they can squeeze out of them. We went on the web site a few times and found no notice of budget meetings and of course no budget, so that you could compare the administrators' grand salaries and benefits. All we know is that they seem to consider their fiduciary duty to be to themselves, rather than the taxpayer, and do not even make an effort to reduce your property tax burden. We wonder, do they have a line in the budget for another $400,000+ contribution to the CRA to build them a parking garage? Perhaps there should be another hospital in town that could set a standard for what appears to be run away budgets. Remember, they were chartered to use tax money for indigent patients only. Now that they are back in a relationship with Blue Cross, and since a hefty portion of what the insurers pay includes a contribution for indigent care, you would think they could significantly reduce their property tax rates. Furthermore, the Board is appointed, not elected, and to the Shadow that is taxation without representation.
2. Audit the RCC operation. We mean a real audit to determine how they are spending the money collected from the three participants, and not just an audit of a point in time. It is only good business to do so. The Shadow does not trust an operation that over billed by more than 20% in the last two years, and would like to find out what the City is getting for our tax money. It is very hard to accept that we are "getting more bang for the buck" out of that service, when the other cities in the neighborhood are going with the County. In April, even our own esteemed Fire Chief said going with County dispatch would save money but at the cost of "local control." We will buy "local," but hardly would call what we have done in the past as one-third managers, "control." The best we can hope for in the future is that the new city managers of New Smyrna Beach and Edgewater will do a better job than their predecessors. Could we please hire an auditor other than Brent Millikan? Is there no one in Volusia that is competent to audit public entities? We think so, what about Mr. Fager, he is a CPA. To the Shadow, that would be an independent auditor.
1. With the campaign season upon us, we were surprised that rumors are already flying that campaign contributions are flowing to the candidates in rivers of greenbacks. They must report their intake by September 6, so until then you must wait and see what they have garnered from their supporters. Want to make a bet that most of the lawyers in town will contribute to all candidates. After all, why would twenty five percent of Barbara Herrin’s war chest, the no-growth queen, have come from lawyers, real estate developers, and brokers? We are always surprised at what these big contributors expect to buy ----access and influence? But that is not so bad from a candidate that publically opposes everything you stand for.
2. So, the summer tourists and condo owners have gone home from their summer holidays. At least so far the downturn in real estate here is mainly only economic, but a short sighted group of City Commissioners want to add a political dimension that will not only cut back future growth but is certain to ensure economic stagnation forever. With very little additional effort, we could be a backwater like Edgewater or would it be better to suggest that we could change our name to “Deadwood.” Why be Pikers and limit all construction to four stories when we could set a 35 foot limit.
DEAR JOHN
We know of the limited resources available to John Hagood, the City Manager, and to his inability to get all of the important letters written that he would like to send. So we decided to help him and provide him drafts that will simplify his tasks and free him up for important.
Memorandum
August 27, 2007
TO: The Mayor and Commissioners
FROM: John Hagood, City Manager.
From my perspective, the City budget is in deep "kimshi." The old ploy used for years to distract the taxpayers from the real issues has not worked. Remember, we tried the ramps at Pioneer Trail. Then the Ordinances affecting the Beach, but people are still talking about our failure to cut spending. The film-flam effort to make it appear that cutting the millage
rate was a real effort to cut spending has also failed. This strategy has been exposed as a phony and we are accused of deliberately trying to mislead the public.
As I see it taxpayers have caught on to all these avoidance tactics, and there is now no way for the City to hide the fact that we are neither cutting taxes nor addressing the big ticket items. We tried to do business as usual, but just because the News Journal has as usual given us a free pass, there are other voices in the community, such as the Hometown News, that are now pointing out that we are not doing what we were elected to do. Even the moribund Observer may wake up.
Please let me at least defer building the fire station on Third Avenue. An analysis by some of the real estate people familiar with construction costs say that we can totally refurbish the Columbus Avenue Station for less than $25,000, including three all new leather Lazy Boy lounge chairs and a new flat screen television. As a caveat, they did say that if we treat it
as we did the costs for fixing up the Pavilion on Flagler; it would be more than $25,000
If we do not address the fire department issues, we will go bankrupt when our overpaid city fire department personnel retire with pensions we can not afford. Please let me reduce these pensions to fair but affordable levels.
Look, the financial staff did everything you told us to do and we failed to convince anyone that you were really cutting spending. If directed to do so, we can provide a real spending cuts by the budget meeting on September 12.
John
FLASH
The Volusia County Sheriff’s Office has determined that beginning next year, they will buy Chevrolet Impalas as pursuit vehicles, and Ford Expeditions in those few cases where SUVs are justified. SEE the LINK that shows a comparison of, performance, cost, resale, maintenance etc. for those vehicles considered by the Sheriff’s Office in making this decision. Will the New Smyrna Beach City Commission please read this report and do the same, and replace the Grand Marquis and Tahoes from this year’s budget with Chevrolet Impalas or Ford Expeditions in those few cases where SUVs are justified. Moreover, we mean justification, not just Pagano’s double talk!
“Best Blog of the Week”
(Edited for grammar and punctuation)
A POTPOURRI OF CITIZEN COMMENTS IS
AGAIN PROVIDED THIS WEEK IN ORDER
FOR YOU TO GET IN TUNE WITH THE
MOOD OF OUR READERS
* Hope our New Smyrna Beach City Leadership and Developers all take a good look at the newly revamped Dairy Queen. It sure goes to show that not everything in the City has to be 100 feet tall or fill the lot with a building. Congrats, to Dairy Queen and thanks for being a good neighbor, and hope your reopening does or goes exceptionally well for you all.
* Another UC rate increase coming? That's the way it always happens. The taxpayers always get the bad news AFTER the election! I wonder what they plan on giving the fire department this year? I bet we will find out the day after the election! Cindy R will get a promotion and a 10 percent raise! Randy has already made up his mind on how he will vote! No kidding!
* With Jeanne Short lot Diesen, there are two choices: One, she is helping her DC lobbyist firms clients loot the UC. Two she is the most incompetent UC board member in the history of the city? Either justifies her not being reappointed.
DIESEN LOST THE MONEY
AND WE MAY LOOSE OUR UTILITY!
All documents related to the massive losses at the Utilities Commission have been reported by the Utilities Commission Auditors, Brent Millikan, and are available at the Utilities Commission office. At the end of 2003, the Utilities Commission telecommunication division posted a profit of $525,803. When Jeanne Diesen was appointed to the Utilities Commission in late 2004, the telecommunication division showed a profit of $245,414 for the year. After Diesen was appointed, and management changes were made, the Utilities Commission initiated a number of steps changing the strategic plan of the Telecommunication business. These changes were put in place and by yearend; the telecommunication division reported a loss of $862,562. In 2005, the Utilities Commission telecommunication division reported a loss of $3,570,425. In addition to this massive loss, the Utilities Commission pushed back $2,708,593 of 2005 expenses into 2004 and restated 2004 losses. In 2006, the Utilities Commission reported its third massive telecommunication division loss of over $2,205,606.
In summary, and to provide some perspective, prior to Diesen’s appointment to the Utilities Commission the telecommunication division showed a cumulative profit of $771,217. After Diesen’s appointment, the Utilities Commission telecommunication division incurred a loss of over $9,347,233. Source documents available to the public for inspection are Utilities Commission financial statements and audits for fiscal years, 2004, 2005, and 2006.
Just the facts:
1. The coming rate increase will make UC second highest in the state. There are 37 Electric Utilities in the state of Florida. Prior to Diesen’s appointment, Utilities Commission rates were below the average and ranked in the lower half of rate comparison. Their rates are currently the forth most expensive in the state. In addition, the fuel and purchase power fund has a negative balance of $2,284,237.65. In other words a third round of rate increases is on the way. Once the rate increase is approved, UCNSB rates will be the second highest in the state, and by far the highest in central Florida.
2. Improper use of fuel adjustment funds. The Utilities Commission transferred $1,100,000 from the fuel fund to capital and raised the fuel adjustment to the customer. This is not allowed under the rate tariff. Capital projects are funded from rates not fuel funds.
3. Are the missing proceeds from the sale of land west of I-95 being used to keep UC checks from bouncing? Acreage west of I-95 was sold for approximately $2,800,000. Proceeds from the sale were to pay debt that secured the property. Where is the money?
4. Fiber fiasco. An operational state of the art fiber optics system, totally paid for, was shut down. Developers were paying 100% on the cost of conduit for the fiber. Profits from the system were to offset taxes.
5. Lack of needed technical expertise. New customers are not allowed to obtain service from the Utilities Commission operational wireless internet service installed in 2003. At last report, Diesen has this service in her home. A new wireless service was installed at a cost of over $250,000, but was never made operational. The Utilities Commission offered the system for sale and received a bid for around $3,000.
6. Payroll out of control. Staffing levels for high paying middle management personal have been increased, yet the Utilities Commission had paid out $2,631,478 for outside personal services.
7. Hidden upcoming rate increases. Over one million dollars has been transferred from electric funds to water/wastewater accounts to defer rate increases in those utilities.
8. City Commission & public not provided complete budget. The Utilities Commission proposed 2008 O&M budget presented for City approval is a summary, not a detailed budget, and is comprised of only 12 pages. Details of all proposed expenditures have not been provided, even though we are concerned that not all of our City Commissioners would understand it.
The Shadow is seriously concerned about the statements of fact and trends identified above. Sources for the data presented and its analysis are provided for those of you willing to make the effort to confirm them. Reserve and rate stabilization funds, whose purpose was to prevent such rate increases as we have seen over the past year or so, were depleted. Rather than restoring positive cash flow from the telecommunication division it was terminated, rather than restore the fiber system to an operational status, needed assets were sold at a considerable loss. Purchase power contracts were not negotiated to our advantage. As we see it, everywhere you turn there is evidence of actions and events perpetrated by the UC that benefit Bell South and FPL, rather than our ratepayers. Unless this decimation of the UC is stopped, we fear that a ratepayers and or employees’ riot may ensue as they realize the potential for job loss, especially the purchase power gurus asset loss, and further increases in utility bills.
POLICE BUDGET-14% cut
We have reviewed the police department’s 14% reduction budget and are suggesting an easier way to achieve the spending cut requested by the City Manager, and not fool around with Chief Pagano’s self-serving proposals that he argues would cut services. We only need to identify about $700,000 from his current $5+ million dollar budget. We do not agree that his suggestions would materially reduce services; this is the mantra of almost all of the Department heads, when any of their excessive management structure is questioned. The Shadow's solution is simple, elegant and reduces the overpaid and excessive management side. One chief, three lieutenants, four sergeants, and four detectives would remain for a police force of 48 sworn officers. Even if the sergeants are not supervisors, the management span of control remains one to 60 for the Chief, which is about what a military police platoon lieutenant is expected to command, about a one to 20 ratio for lieutenants, which is about half of what a gunnery sergeant is required to command, and about one to ten for sergeants, which is normal. Port Orange has nine detectives for 56,000 people and interestingly so do we with our population of only 22,000.
We recommend that patrol zones be reduced by one. Edgewater with the same population as New Smyrna Beach patrols two or three zones while, we patrol four. Having two less vehicles on the road 24/7 would do nicely. That is between three and four fewer patrol officers, four pursuit vehicles, and possibly one less SUV. This solution alone is only about 50% of what is needed, but since it is unlikely that our sleepy little town needs more than two zones, it would result in no real loss in public safety.
Looking at Chief Pagano’s submission, it understates all of his identified savings by about 60% because he does not include benefits in his calculations for each of the salary numbers used in his memorandum. Reducing the traffic component by half would take care of the whole shebang if combined with reducing zones by one, and would not leave us unprotected. In addition, we do not understand why sergeants can not perform traffic duties.
Finally, we are of the opinion that loss of the Dare or Pal officer will not particularly reduce public awareness or protection. Were we more crime ridden before they appeared on the scene? Can anyone quantify the loss in public awareness or protection that would ensue if these jobs were abolished? We think not, but would consider the information. How about just adding these duties to the position descriptions of the Chief and three lieutenants, they are, or should be, management.
TELL US IT IS NOT TRUE REVISITED
We published the following article on July 19, 2007 because we felt the procedures were violative of good government and, if true, they represented an even further defiance of reasonable behavior on the part of government bureaucrats---particularly the Chief of Police. Of course, we did not expect an answer, but then again we thought that sunshine was the democratic disinfectant, and, if true, having exposed the risk of repeating such actions would stop future violations. That was a rational thought, but not here in New Smyrna Beach. Remember, this is the town where the head of the Golf Course Advisory Board told the Commissioners that they should continue to pay the greens keeper $85,000 of our money despite the fact that his hiring was contrary to The City’s personnel policies.
The original article is reprinted in full below:
TELL US IT IS NOT TRUE
We know the City Commissioners voted to overpay a golf course employee who was hired without posting the position, at a grossly inflated salary level, and not even submitting an application for employment until months after he was “hired.” Well now, we hear that the police department has purchased a K-9 dog from a friend of one of the Commanders, that the dog was purchased without competitive bidding, and that the dog when purchased, was ill. Please tell us it is not true!
Rumors also abound that Sergeants are making improper evaluations on infractions, and that a review of charges made against the reports filed would disclose preferential treatment and a deliberate effort to downplay the infractions. We have seen this before. Please tell us this is not true!
The City has a number of lawsuits pending. The City Attorney files a report at least once annually, and in one of the reports, at least one suit discussed is against the City and a number of police officers. Attached, as a PDF is the page from the City Attorney's report. Like all lawsuits, there is no ability to state how it will end at this time, but some of the rumors circulating do seem to suggest that the insurance company may end up losing the case. Please dispel the rumors that a man with a concealed weapon permit was arrested only after a certain Commander insisted that he be arrested after the investigating officers on the scene had decided to not arrest him. Tell us the rumors are not true!”
Well the police department is allegedly at it again, sole sourcing purchase of a dog from a vendor who is purportedly a friend of Commander Drossman. If you want to see what is available if the police department puts out a request for purchase, Google, K9, for sale---only about ten pages of ads from suppliers that guarantee the dog's health. The last one the City bought from Drossman's friend is said to have been sick. Please tell us that this is not true that the new purchase is from a friend of the Commander without seeking bids from the world of dog trainers and vendors. IT is true that legally a purchase of less than $5000 may not require a bid, but buying from a Commander’s friend does not look so good.
JEANNE DIESEN'S SECRET RATE INCREASE
or Diesen's Trick for Reappointment
(Click to enlarge)
Jeanne Diesen wants to be reappointed to the New Smyrna Beach Utilities Commission, despite her miserable track record as the progenitor and leader of gross mismanagement at the UC over the last three years. Most recently, she and her cohorts have been concealing the fact that we were undercharged on our utility bills for fuel adjustment charges and the cost for borrowing money to avoid a rate increase that would occur just prior to the appointment process, and to the possible defeat of one of her two principal sponsors, Commissioner Lynn Plaskett. This is a clear deception, because she and her supporters have manipulated the under collection of fuel adjustment charges that must be paid for from funds to be collected with a rate increase as soon as they think they are home free. I.e. when she is re-appointed, and Lynn Plaskett is re-elected. The Shadow considers this as disingenuous, not in the best interest of ratepayers, and done solely for political reasons. It is time for you to speak up, do not let this happen!
Together with Kevin Para and Richard Spangler, she has squandered more than $15 million dollars of UC funds; spent hundreds of thousand dollars trying unsuccessfully to place blame her predecessors. As you are aware, your electric rates have skyrocketed and there will be another rate increase, if her plan is successful. Please take note of her other accomplishments---ending the telecommunications business which was beginning to show positive cash flow shortly after she was appointed, stopping the implementation of a fiber optic system, both of which benefited Bell South (A client of her consulting firm Davis O’Connell) (LINK). Millions of your dollars have been transferred to Florida Power and Light though disadvantageous contracts for power purchases, (Another client of Davis O’Connell). Diesen’s disclaimer about her relationship with the lobbying firm of Davis O’Connell is like the piano player in a bordello claiming he does not know what goes on upstairs!
The Shadow is of the opinion that Plaskett and Richenberg are mouthpieces for the Diesen/Barck North Peninsula political bunch, sometimes referred to as the “Girls,” and that they are trying to convince Commissioner Jack Grasty to vote with them to reappoint her. Gracye Barck, Diesen’s long time pal, has written an e-mail SEE LINK designed to pressure him, by raising the specter of an FBI investigation. The UC has requested an investigation by the FBI. However, the request was made a considerable time after the FDLE found no cause for action, and after a forensic auditor reported no evidence of wrong doing by the previous management. Neither did Brent Millikan, the long time lapdog auditor for the UC and the city. If there was, no charges were filed by the FDLE, the State’s Attorney, the City Attorney, or the UC Attorney. The Shadow sees this as a witch hunt and continued decimation of the UC. The only thing Barck knows about the so-called investigation is what Diesen tells her. Barck's innuendo at this time is simply garbage. If there is an investigation by anyone, it should be of Diesen’s conflicts of interest and her H & R Block Overseas Account. Last, any Commissioner who votes for Diesen’s reappointment should consider how the voters would respond in the voting booth with their high utility bill in hand. We went from one of the lowest rates in Florida to one of the highest in less than three years.
RCC ---NEW MATH
The comments by the City Manager about the RCC service leave us skeptical beyond belief. In reviewing the out of control expenses, it is impossible to believe any of the numbers proffered by the RCC administrator, Mr. Bubb. If his defense is believable, the RCC has been controlled, or if you would prefer monitored and reviewed, by the three Mayors and three City Managers of Port Orange, New Smyrna Beach, and Edgewater. Mayor Vandergrift and Frank Roberts were either asleep at the switch or just plain negligent. We think that it was Frank Roberts’s responsibility and that he was not paying attention to something run by his buddies in Port Orange. Nevertheless, when discovered that they were being overcharged the current City Manager, with the others, imposed a 20% reduction in its budget. Some of the overcharges were fixed.
Now, we have a direct lesson that local control here did not work, and it looked like the failed effort over a three year period could arguably have cost the City half a million dollars in unsubstantiated charges. That is history! We were charged $980,000 last year and they are talking about budgeting $780,000 this year. The Sheriff said he would charge $390,000 and there is no question that there will be start up costs, but we have trouble believing they would approach $1.2 million over the next three years. We would like to see an independent audit and the RCC report submitted to the Sheriff's office for his comments. We are not convinced that response time numbers favor the RCC in comparison to that of the Sheriff's office. Chief of Police Pagano's statement that he favored the RCC may be tainted in that the last thing he would want would be to let the Sheriff's office serve any part of the City.
We have no reason to believe that the RCC will provide "more bang for the buck" than the Sheriff's office, nor do we have confidence that anyone can keep Port Orange honest, since it loaded up the staff of the RCC when nobody was looking, and charged half of their costs and benefits to Edgewater and New Smyrna Beach. Enough! Back in April Chief Hawver stated that the fire department could save money by having the County dispatch NSBFD vehicles, but that the City would lose local control.
WHO IS THE CONSIGLIORE?
We have been trying to figure out who was the conductor at the orchestrated preliminary budget workshops on the proposed budget. We think it was the Mafia's Consigliore. As we said in an earlier article, we know that after the State Legislature undercut Governor Crist, his plan for spending cuts was left to the local governments. They caused the problem in the first place, so we figured there was going to be a lot of foot dragging if you left it up to them to fix the problem. We were not astonished that the proposed City budget was an exercise in manipulating the cuts so that they would look substantial, but, in reality, were not the substantial cuts envisaged by the Governor.
But then the question became who told the City Manager to prepare that proposed budget in that form. We know that he had the memoranda from his department Chiefs and we will bet he told them what was going to be the drill for a full 14% cut---nothing in writing of course. So what happened to the real cuts, not just a little nibbling around the edges that relies on money saved by the City Manager elsewhere: to wit, the $200,000 or $300,000 at the RCC, and the $250,000 reduction in staff in his own office Now we find that there is another couple of hundred thousand in reduced overtime at the fire stations, and many other savings that he has under his hat that we did not know about. If you went to the workshops, try to remember if they discussed those already in the pocket as savings.
In trying to figure this out, we factored in the minuet danced at the last budget workshops. Voila, all of the elected officials must have been clued in, and when the great announcement was made that we, your elected officials, insist on cutting another 5% from the millage rate, all of the bobble heads nodded in unison. Our review of the tape, which we provided as a link last week, as well as here LINK, leads us to conclude that either the City Manager was engaged in some form of polling, which is illegal under the Sunshine Law, or several of our Commissioners are simply telepathic. Nevertheless, they all knew the drill and it went down as a very well rehearsed play. We were almost bamboozled into thinking that there was a 10% cut in spending on the entire $23,000,000 budget. Not so, only a lowering of the millage rate on the ad valorum supported half of the budget, $12,000,000. They already had most of that in the bag without spending cuts. The shortfall in revenue will be covered by spending reserves (taxes previously collected from you in prior years) to keep from making real cuts that if not made now can bleed the City into a fiscal abyss.
Remember, this is an election year, and campaign time is almost upon us. None of the City employees can claim that the incumbents have done them wrong---no terminations, no cuts in benefits, nothing taken from their pockets. The decisions on real cuts have been put off until next year, after this year's election.
Now who thought up this ruse, the Mayor, the Commissioners, the City
Manager, or could it be the new financial director? Moreover, who instructed the City Manager? We do not know, but it is a clever diversion, and almost worked. Pity it did not, but we think the taxpayers are entitled to know how the wool was pulled the over their eyes.
