Posted on Fri, Sep. 04, 2009

 

Coral Gables Gazete - link to original article

 

As of Aug. 13, with six weeks left to the end of the 2008-2009 Fiscal Year, according to official records Hernandez had already spent $623,737.34 on outsourcing legal expenses. These annual “services” were budgeted at $500,000 in the city’s mysterious budget category called “Non Departmental Expenses.”

By George Volsky
georgevolsky@aol.com
                                    
For the third consecutive year, outside legal expenses of Coral Gables Attorney Elizabeth Hernandez will have a substantial deficit which adds to the woes of the cash-starved city. As of Aug. 13, with six weeks left to the end of the 2008-2009 Fiscal Year, according to official records Hernandez had already spent $623,737.34 on outsourcing legal expenses. These annual “services” were budgeted at $500,000 in the city’s mysterious budget category called “Non Departmental Expenses.”

By Sept. 30, when the current fiscal year ends, Hernandez’ expenses for outside legal services (her regular budget is well over $700,000, of which she personally gets more than $300,000) could reach $850,000, if not more. In FY 2007-2008, she overspent $180,189.12, and in FY 2006-2007 she over-budgeted by $504,844.14, the documents show. Therefore, her office’s three-year deficit spending could reach more than $1 million, the largest of all departments. Hernandez herself is the highest paid city employee: Her salary, benefits and “add-ons” are almost twice the size of what Secretary of State Hillary Clinton receives.

The budgets of the city departments – except of the city clerk and of the city attorney – are supposedly closely supervised by the city manager through his finance director. They have to be strictly adhered to, as Finance Director Don Nelson told commissioners at a recent budget workshop.

But for years they never were. Under David Brown, practically all departments, especially those headed by his favorites, were brazenly undisciplined, fiscally and administratively. Annual budgets routinely, and perhaps purposely, had over 30 unfilled positions, money which formed a slush fund of sorts. That cash was used by Brown to cork up large fiscal leeks and to pay for such expenses as his junkets, his infamous wining and dining and, on one occasion, a birthday cake for himself.
 
The operations of Hernandez’s office, on the other hand, under city regulations are said to be supervised by the commission which hires and can, by the three votes, fire the city attorney. While City Manager Patrick Salerno has ordered his deputies – not strongly enough according to most observers – to tighten their belts (this week city’s Code Enforcement section receives new costly electronic equipment), Hernandez has run her shop without fiscal restraint. As far as anyone can recall, not one commissioner – let alone Mayor Don Slesnick – has ever expressed concern about the cost of her operation, about the amounts she asks the city to pay law firms, indeed about the wisdom and professionalism of initiating extremely expensive legal actions.

According to many legal experts, under Hernandez as its attorney Coral Gables has become extraordinary litigant. Clearly, some lawsuits are forced upon the city, requiring professional response and thus outside experts — Hernandez has not been known to participate in legal work of even medium complexity. But in numerous cases, under her direction and without the commission’s voicing any worry about cost and outcome, the city has doggedly litigated, when most prudent course would have been to settle.

One such major case involved former purchasing director Carmen Lezama. After a lengthy and, experts opined, useless and bitter legal battle, Hernandez was forced by the insurance company to surrender and pay a large settlement fee. Another example, noted in the current fiscal year, was the losing American Legion case, which Hernandez pursued, many thought, unwisely, and on which Coral Gables spent in this FY $22,000.
 
The case of the Coral Gables Country Club, involving Granada LLC, the club’s former managing company, cost the city this fiscal year so far $218,000, adding to at least that much in  2008 and 2007.  Because the litigation has a long way to reach the courtroom, the final cost could be astronomical. James Crosland, Hernandez’s hand-picked labor lawyer has billed the city thus far in this fiscal year $220,000. Again, his total for 2008-2009 fiscal year could be much higher come Sept. 30, and nobody knows who supervises his work.

There was also a payment of $1,500 for “services” to a law firm that employs an attorney who earlier this year represented Hernandez before the Miami-Dade County Commission on Ethics, in a private matter. Hopefully, the unexplained charge involves city work; the question which will be resolved when her office provides particulars of the “services,” public records requested more than two months ago.
 
There are several large payments made by Hernandez to firms for “general professional services,” a vague description which offers no hint as to what Coral Gables residents have paid for.

There is one bizarre charge: Hernandez paid $536 to a lawyer apparently to observe the commission’s meeting, a large sum given the session’s limited entertainment or educational value.

The city’s budgetary “Non Department Expenses” category is also bizarre: it began in  fiscal year 2008-2009 with $1,018,500 and ended  with $1,927,000. At a recent budget workshop, Nelson did not explain what that extra $900,000 was for. In the current FY – as in FY 2009-2010 “Non Department Expenses” appropriation of  $1,628,000 – there is other unexplained expenses: $200,000 for “Other Professional Services,” $25,000 for “Other Miscellaneous Expenses,” as well as $20,000 for “Other Grants and Aids.”

The strangest of all, for the first time ever and also without elaboration there is $355,000 for “Employee Sick/Annual Leave Payments.”  Fiscal discipline demands that expense be included in the wage part of each department’s budget.

Letters to the Editor - link to original

The Miami Herald – Sept 2, 2009

Tell us it was a misprint or perhaps a belated April Fool’s joke. In a recent Home & Design’s How Does Your Home Compare, the real-estate taxes on a home in El Portal that sold for $232,500 were listed at $11,866. Another home in North Miami sold for $595,000 with taxes at $21,264. But a home in Bal Harbour, which sold for $1.3 million, had taxes of $7,668. Bal Harbour gets, by far, superior services and schools than El Portal and North Miami, so why are the taxes so drastically different?

Two of the homes had no previous sales listed, so the argument that the homes were taxed based on previous sale prices cannot apply. In another recent How Does Your Home Compare a home in South Miami that sold for about $300,000 listed taxes of more than $11,000 a year. These taxes are a mortgage payment by themselves, particularly when considering the lousy pay scales in Miami-Dade County.

These exuberant taxes go to districts with low-rated schools, cities with poor services and a county that pays low-ranking administrators the kind of salaries deserving teachers can only dream of.

It is this outrageous and immoral taxation and cost of insurance that are driving the middle class out of South Florida. If this doesn’t change there will soon be long lines of cars on 1-95 heading north for good.

RAYMOND FIGUEROA, Biscayne Park

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Coral Gables Gazette – link to original article

Posted on Mon, Aug. 31, 2009

 

Salerno: City ‘in financial peril’

At the end of a contentious seven-hour impasse hearing Aug. 31, the Coral Gables city commission made the police an offer: Contribute five percent to the pension or take a five percent pay cut. The proposal, coupled with an overtime cap of 300 hours as opposed to 600 and other assorted cost reductions, will save the city more than $1.5 million, less than half the amount in concessions it sought. If police union members approve the contract covering the period between last October and next month, it will cost police officers on average $160 per week.

The sultry summer day started out with a well-organized protest on the steps of city hall by more than 150 police officers and sympathetic members of the Teamsters, which represents the city’s general employees. Equipped with bull horns, the demonstrators chanted, blew whistles as passing cars honked as a sign of support. Former Mayor Dorothy Thomson, who later spoke on the police’s behalf, said a demonstration of this kind was without precedent. “Never was there a protest while I was in office,” said Thomson, the mother of a police officer. Then things really heated up as the protestor moved inside for the impasse hearing.

In a commission chambers packed with union members that also spilled out into the halls and down the stairwell, the police made their impassioned case that they were being punished for city hall mismanagement.

“We are here today because of other people’s mistakes and mismanagement,” Fraternal Order of Police (FOP) Lodge 7 President John Baublitz. “Being upfront and honest about mismanagement over the years obviously did not do us any good.”

Some of the most blistering and pointed criticism of the administration came from one of the most decorated police officers in the city’s history who spoke on the FOP’s behalf. Jeff Vance who retired in 2001 said, “How are supposed to feel when corruption and scandal have seeped into nearly every part of City Hall and little or no action is taken other than make huge payouts from the city coffers? A perfect example of the Finance Director (Don Nelson), Time after time mistakes are made, overpayments, shortfalls on the budget and computer systems that don’t work,” said Vance. “The Narcotics Unit of the city (police department) handles millions and millions of dollars. It was counted, deposited, put in evidence, wire transfers and seized, all without scandal. Had we made the mistakes the Finance Department does, we would all be in prison.”

The police also asked esteemed civic activist Roxcy Bolton to speak on their behalf. After asking Mayor Don Slesnick to “rethink” his attitude regarding the police, “our first line of defense,” Bolton said she would “…pray for this city commission to do right by the police.”

The city based its case for the imposition of $3.3 million in cost reductions on the arguments that police were already well compensated and that the city was unable to afford anything else. Jim Crosland, the city’s lead labor attorney, disclosed that Coral Gables was “obviously in a precarious financial condition” and the “employee paychecks are now being funded out of what reserves we’ve got.”

Crosland likened the city to a cash-poor family that “…lives in a great house but can’t afford groceries.”

The city’s attorney said Coral Gables police officers were relatively well-compensated in comparison to peers in the region, citing overtime and add-ons as generous pay enhancements.

But it was the city pension attorney and actuary’s sobering reports on the employee retirement fund that troubled elected officials the most. Attorney Jamie Lynn reminded the commission the city’s projected 2009 pension contribution of $24.3 million is approximately 500 percent more than it was in 2000 and called the current level of pension contributions “simply not sustainable.” He added that since 2005, the contribution has represented more than 45 percent of payroll costs.

Lynn silenced the room with his disclosure that the fund’s benefit obligations currently exceed its assets by $168.5 million. In 2001, the deficit was $15.1 million. “Even in the good years, you (the city) had (actuarial) losses in the pension plan,” explained Lynn. “Pension contributions are only going to get worse.”

City Actuary Mike Tierney offered further insight into the pension’s woes. While Tierney said investment losses incurred by the city’s fund in 2008 were just slightly than averages for public pension plans, the assumed rate of return was 7.75 percent. This means in order for the plan to recoup the loss, the actual return will have to exceed 12.44 percent over the next six years. “In the absence of that, we are going to have to pay up,” said Tierney. “And unfortunately…in the experience in the current year just about to end is that there are significantly more losses. Rough guestimates it will another $40 million. So in the last two years we can be looking at a market shortfall over $100 million.”

Tierney explained that the fund also incurred significant losses due to raises larger in actuality than projected. He said that over the last 10 years, raises averaged 37 percent higher than anticipated. In 2008, the pension lost $14 million, more than its market losses, due to raises greater than assumed.

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.”

As a percentage of payroll, Tierney reported that Coral Gables’ pension contribution is double that of the state average (23 percent). “We’re not even close,” he said.

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.”

Commissioner Chip Wither agreed with manager’s concerns. “The pension has become the big black cloud,” said the elder commissioner. “No one ever anticipated that people would be retiring with 125-140 percent of their salary. My focus today is on pension reform.”

In a rare admission, Mayor Don Slesnick conceded the commission had neglected trying to resolve the retirement fund conundrum far too long.

”Our biggest mistake was not reforming the pension,” said Slesnick. The mayor then recited several examples of waste and mismanagement lobbed against the city during the hearing but said, “If you add up all those things… all that pales, pales in the light of the $25 million (the city contributes annually to the pension).”

Faced with dwindling revenues and property taxes, Coral Gables commissioners voted to pass ordinances that will allow them to establish fire-rescue related fees.

 

BY ELAINE DE VALLE

EDEVALLE@GMAIL.COM

 

Miami Herald – link to original article

 

AUGUST 29, 2009

Despite the heated pleas from some in the audience, the Coral Gables City Commission on Tuesday laid the groundwork for two new fees related to fire-rescue service.

The first, a fire assessment fee, will cost homeowners $50 a year. Commercial and institutionals users will pay per square foot and be assessed according to how often they call for service.

The fee is expected to raise nearly $2 million for the city.

The second fee, for fire transportation, will charge residents if the city’s fire department whisks them away to a hospital. These fees would range from $360 to $616, depending on frequency of use and degree of life support involved.

The fire transportation fee is expected to raise another $450,000 next year.

City Manager Patrick Salerno has proposed the fees as one of several measures to raise revenues in a city budget tightened by the economic slowdown.

Commissioner Ralph Cabrera, who voted no on both fees but who also said he dislikes the transport fee, said he could find the $450,000 to take out of the budget elsewhere.

“Public safety is one thing that goes on beyond any other fee like trash and parks and any other ridiculous fee we have out there,” he said, adding that he felt people paid for police and fire out of their property tax dollars.

But Salerno told the commission that the city’s proposed $150-million budget relies on the adoption of both fire fees.

“These dollars are already included in the budget and would have to be made up by other fee increases, other tax increases,” Salerno said, reminding them that police officers had just gone to the dais to protest a proposed 7.5 percent cut in pay.

“We had the police here urging we consider their plight. Without those dollars that are here today, we would have a greater hole to climb out of,” Salerno said.

He said increasing the tax rate to pay for these services would cost more than the $50 fee for those who own homes valued at more than $300,000. The city has already proposed increasing the millage rate for next year’s budget; budget hearings begin Sept. 8.

The transport fee would be a new cost for residents.

The city would not go after people who didn’t have medical insurance or who would pay the fee out of their own pocket because of health insurance deductibles, Salerno said.

“They would still get a bill — Medicare has certain regulations and we don’t have the ability to not charge a particular group of individuals,” Salerno said. “They would receive a bill. To the extent they can pay it, they would. We would not aggressively pursue collection of people without insurance.

“And we would know who does not have insurance.”

Cabrera, an insurance benefits consultant who said the insurance companies would raise premiums and pass the cost along to the customers, was less thrilled: “So, in essence, we will subsidize this program with the insured, whether they pay or their insurance company pays, someone will pay and they will subsidize those that will not pay.”

Salerno said he would look at it differently: “Today, anybody who is paying insurance, whether it is private insurance or whether it’s through the employer, they are already paying in their premium for this benefit. Who is losing out in this regard is the city.”

Cabrera said residents “are already paying for this benefit because of the property tax they pay in Coral Gables and that pays for basic services.”

Residents and taxpayers who spoke against the fire assessment fee, which can only be applied toward fire rescue services and not the city’s general operations, said the same thing.

Activists Richard Namon and Charlie Girtman called it a hidden tax. Girtman said the city had to make better use of its ad valorem taxes so it wouldn’t need the fee.

 

“If we didn’t have to pay $2 million for this municipal building, we wouldn’t need $2 million for fire,” Girtman said referring to the city’s estimated cost — added to grants and private donations — of the Coral Gables Museum, which is under construction and will house the city’s archives and its historic preservation department.

“Does that make sense?” Girtman asked. “I urge you not to do this.”

Danielle Blake, a spokeswoman for the Realtor Association of Greater Miami and the Beaches, also asked commissioners to vote down the ordinance.

“We don’t believe this is the right time in this market to impose any new fees like this,” Blake said.

Vice Mayor William Kerdyk was concerned about the impact on commercial property owners. Commercial properties would be assessed approximately six cents per square foot.

“It’s the tenants that are going to have to take this absorption and right now everybody is hurting,” Kerdyk said.

“I’ve always been very supportive of the fire department but I have some concerns.”

Firefighters argued that they needed the fee to upgrade their equipment and training.

“If you don’t fund the fire department, people die,” said Deputy Chief Dan Thornhill, who is also treasurer of the Coral Gables Firefighters Association.

“Lives are lost. Property is lost.”

Thornhill said the department was operating at a “bare minimum” as far as training and equipment. He said the city’s back-up apparatus for high-rise fires is a 1988 fire truck.

“Most people don’t know that. If we have a fire fee in place, we can project and anticipate when we can get some new equipment,” Thornhill said.

“You have to give us the tools.”

Roxcy Bolton and Vince Damian, president of the Coral Gables Citizens Political Action Committee — which has scheduled a protest of the fees and budget proposals in front of City Hall on Monday afternoon — were not convinced.

“This is an attempt to pull something over the citizens of Coral Gables,” Damian said, who noted that the city’s proposed $150-million budget is nearly double what the city’s budget was in 2001, when three of the five commissioners first took office.

“There has been some reckless spending. This is part of it,” he said, adding that his father was a New York City firefighter.

“I don’t want anything taken away from the firefighters,” he said.

He said commissioners should increase the tax rate rather than institute a new fee.

“Stand up and be honest. Say I’m a commissioner in Coral Gables and I spent your money and I will raise your millage rate and be responsible for it,” Damian said.

Mayor Don Slesnick turned the microphone off after Damian had far surpassed his allotted three minutes and called for a five-minute break.

When commissioners returned, they passed the ordinance allowing them to establish the fire assessment fee if they choose to do so at the public budget hearings in September.

They then passed the fire-rescue transport fee ordinance, which also allows them to implement that fee if they decide to next month.

Coral Gables commissioners voted to raise the tax rate to offset a budget shortfall caused by lower property values and higher costs.

 

BY ELAINE DE VALLE

EDEVALLE@GMAIL.COM

 

The Miami Herald – link to original article

 

July 10, 2009.

 

Coral Gables property owners likely will pay more taxes next year — up to more than $500 for an average-priced home — to help offset an approximate $10-million shortfall in the city’s budget.

City Manager Pat Salerno proposed three different tax increases at a budget workshop Wednesday, ranging from $5.65 to $6.245 per $1,000 of taxable property. The current tax rate is $5.25.

Commissioners voted on publishing the $6.25 figure. It doesn’t mean they will go that high when they set the final tax rate in September, but since they cannot go higher than the published rate, they wanted room to maneuver.

The average assessed value of a Coral Gables home in 2009 was $571,388; property taxes on that home would be $2,739 at current rates, after the $50,000 homestead exemption. At the $6.245 proposed rate, taxes on that home would be $3,255. At the $5.65 rate, taxes would be $2,945.

Cities across South Florida are facing budget shortfalls due to higher costs and lower tax bases stemming from falling property values. The result: higher tax rates or substantial cuts in services are anticipated as the budgeting season begins this month. Last week, the county reported a decline of $23.4 billion in 2009 countywide taxable value, or a 9.5 percent decrease when adjusted for new construction.

`IT’S HUGE’

In Coral Gables, the tax base has dropped by about $1 billion, or a 7.5 percent decrease from 2008 to 2009, when adjusted for new construction. Finance Director Don Nelson told commissioners the city’s losses would be $3.5 million higher if last year’s tax rate remained in place.

”It’s huge,” Nelson said.

To help balance the budget, the city is laying off about 40 of its 827 employees through job eliminations, including seven police department positions, 10 in public works and 11 in public service.

Residents also are likely to pay more for nearly everything. Among the fees discussed:

• Garbage pick-up — which is proposed to go from $610 to $685 a year, and expected to generate an additional $800,000.

• Parking on both street meters and in public garages, which would raise another $645,000.

• A fire-assessment fee of $50 per household.

Salerno said the proposed $150.8 million budget had ”many, many moving parts” and that commissioners had never dealt with a budget that had so many new measures at once. He sent notifications last week to people who were identified for possible layoffs, including Assistant Public Works Director Ron Van Eyk; a video production assistant; a staffer in the planning department; two in parking; and three in building and zoning.

WAGE CUTS

The remaining employees will be asked to take a 5 percent wage cut or contribute 5 percent more to their pension, easing the city’s pension contribution, which is about 20 percent of its operating budget and has been ballooning.

Mayor Don Slesnick said that he felt the cuts had been spread out so that not one stakeholder was holding more of the burden.

‘I, for one, will not vote to reduce any employees’ benefits or reduce any numbers if we don’t spread the responsibility,” Slesnick said. “We are all responsible for this city. Every constituent, every resident. We are all residents and employees are part of the family and if we don’t spread this and all share responsibility, we can’t do it.”

 

Dozens of police officers showed up at the Gables commission meeting Tuesday to protest a proposed 7.5 percent pay cut.

 

The pension — which comprises 45 percent of the city’s budget.

 

… someone who worked for the city for 20 years to 68 percent of his or her salary, rather than 60 percent

 

 

 

BY ELAINE DE VALLE

EDEVALLE@GMAIL.COM

 

The Miami Herald – link to original article

 

August 26, 2009. 

 

While the matter was not on the agenda for Tuesday’s commission meeting, dozens of Coral Gables police officers showed up at City Hall on Tuesday to show their distaste for a 7.5 percent pay cut proposed by the administration.

Wearing T-shirts that read, “My life isn’t worth 7% less,” the officers stood side by side as their president gave a short speech after Mayor Don Slesnick spoke.

Coral Gables Fraternal Order of Police Lodge No. 7 President John Baublitz said he couldn’t be too specific because the city and the union are at impasse over contract negotiations, meaning the commission will make the decision. That could happen as early as next week.

Coral Gables, like many cities, is contending with a budget shortfall due to lower property tax revenues. City Manager Patrick Salerno has proposed a 7.5 percent salary decrease for members of the police and general employees union and a 5 percent salary cut for firefighters. The firefighters union voluntarily took its 5 percent pay cut in a contract signed this summer.

The police union is still negotiating with the city.

“We know the mayor and commission will do the right thing and keep the citizens safe,” Baublitz said outside City Hall. “These cuts will decimate the department.”

Baublitz said the cuts would not allow the Gables department to compete with other agencies across the county. The Gables department provided the fourth best pay and benefits from 16 police agencies in the county five years ago, he said.

“Now we are 13 out of 16,” he said. “Every other department in the county has a better retirement plan. If they do the cuts they want to do now, we won’t be able to keep anyone. All the young officers with less than 10 years on the force, they’ll have to leave.”

Salerno scoffed at that notion.

“We lose officers now. People leave for family reasons, for positions they think may be better,” Salerno said, acknowledging that turnover might increase.

“I certainly would not want to lose police officers. However, this is, in many respects, an ability to pay issue on the part of the city,” Salerno said. “What we’ve asked for is for the police to make a pension contribution. They are the only bargaining unit that does not contribute.”

Other employees, including firefighters, have contributed 5 percent of their pay to the pension — which comprises 45 percent of the city’s budget — for at least four years, the manager said.

“That’s just simply a situation that is not one that is sustainable over the long term, and it needs to be addressed,” he said, referring to the pension being nearly half of payroll costs.

He said the union representatives did not present any financial terms at the meeting last Friday, but sent a fax to the city’s labor attorney, James Crosland, on Friday afternoon. The union asked for the multiplier on the pension to be 3.4 percent, rather than 3 percent. The change would allow someone who worked for the city for 20 years to 68 percent of his or her salary, rather than 60 percent.

“This is not a time to be asking for increased pension benefits,” Salerno said. “In these particular times, I am not aware of communities giving increased benefits.”

City commissioners are scheduled to hear both sides at a hearing at 10 a.m. Monday in commission chambers at City Hall, 405 Biltmore Way.

Coral Gables unionized employees are being asked to take a 7.5 percent pay cut, 2.5 percentage points higher than initially discussed by city leaders.

The Miami Herald - link to original article

BY ELAINE DE VALLE
EDEVALLE@GMAIL.COM

Similar stories:

Coral Gables police officers protest proposal to cut their pay

City layoffs, wage cuts, higher tax bills likely in store for Gables

City employees in Coral Gables are being asked to take a bigger pay cut than they first anticipated.

The city manager has proposed a 7.5 percent salary decrease for members of the police and general employees union — more than the 5 percent first proposed. About 85 percent of the city’s approximately 800 employees belong to the police, fire fighters or general employees unions.

Labor attorney Jim Crosland presented the offer Aug. 5 to the Teamsters local that represents the general employees. The offer proposes either a 7.5 percent cut in wages or an additional 7.5 percent contribution to the pension.

The general employees already contribute 5 percent to the pension. The 7.5 percent cut would be additional.

The firefighters union also contributes 5 percent to the pension, but is not being asked for additional cuts because it voluntarily took a 5 percent wage cut in a contract signed this summer. The police union has not contributed to the pension; it is being asked for a 7.5 percent wage cut or pension contribution.

“We won’t agree to a 7.5 percent pay cut,” said Mike Scott, president of the Teamsters Local 769, which represents the general employees.

“Their budget documents refer to a 5 percent cut and I don’t even know if that will see the light of day,” he said, adding that his union will present its economic proposal at a meeting next week.

Part of the reason for the sudden additional wage cuts could be an additional $2 million pension liability that had not been identified at the budget workshop last month.

Instead of $800,000, as commissioners had been told they would have to pay this year, the city will have to contribute $2.8 million to the pension fund to keep it in the black.

“Bad news comes in clumps,” Mayor Don Slesnick said.

“The actuary working with [Finance Director] Don Nelson projected around $800,000 and that’s what we were working on increasing our contribution this year,” Slesnick said. “The increase was decreasing. It was still an increase, but it was decreasing.

“Now all of a sudden, the figures most recently given put the increase at $2.8 million, which is a total shock,” the mayor said, adding that the commission had “begged the pension board” to seek a new agreement with a new attorney and new actuary.

“We haven’t gotten the full story, but this is the same actuary who has given me a hard time on a number of issues,” Slesnick said.

Slesnick said he was not sure whether the salary cuts were related to the pension news.

The 7.5 percent salary cut will save the city $2.75 million — just enough to cover that $2 million extra hole and have some wiggle room, said City Manager Pat Salerno.

“It’s a combination of things. It’s what we need to do to put ourselves on a path to being able to sustain our pension plan,” Salerno said.

City commissioners cannot impose an additional pension contribution, but they can impose wage cuts, Salerno said.

“If we don’t reach an agreement, they can impose a 7.5 percent wage decrease,” Salerno said.

“Either way, the payroll check to the employee is going to go down 7.5 percent, whether it’s a wage reduction or a pension contribution,” Salerno said.

The firefighters union, which had already agreed to a 5 percent salary cut, will not be asked to make any further sacrifices, Salerno said.

“They have a contract.”

Other details of the contract proposed by the city for the general employees include a cut in future merit increases and loyalty payments given after 10, 15 and 20 years of service from 5 percent of one’s compensation to 2.5 percent.

Additionally, employees who were compensated an extra 7 percent in pay rate because they worked from 6 p.m. to 7 p.m. will now get a 2.5 percent additional compensation. And the city will fund 70 percent, rather than 100 percent, of health insurance.

The proposed contract also gives the city authority to change to the Florida State Pension system, something that has been discussed for years as the city’s pension payments have ballooned to more than $20 million a year. Any new employees would be entered into that pension.

Battalion Chief Dan Thornhill, secretary and treasurer of the Coral Gables Firefighters Association, said he did not think the city would go back to his unit to ask for more concessions.

“We’re kind of proud as employees of what we’ve done,” Thornhill said of the fire department. “It’s something pretty significant that’s never been done in the history of our city. We went back and sharpened our pencils and did what we could and it saved them $2 million.

“Now the police and general employees,” represented now by the Teamsters Local 769 “are going to have to do their part,” Thornhill said.

Leaders at the police union, which has an impasse meeting Aug. 31, could not be reached last week. But the Teamsters’ president, who has a meeting scheduled this week with Salerno, said employees could not be asked to bear so much of the burden.

“Obviously there has to be some give from employees and we recognize that. But we need to see what management is going to contribute,” Scott said

 

Coral Gables commissioners voted to raise the tax rate to offset a budget shortfall caused by lower property values and higher costs.

 

BY ELAINE DE VALLE

EDEVALLE@GMAIL.COM

 

The Miami Herald - link to original article

 

July 10, 2009.

 

Coral Gables property owners likely will pay more taxes next year — up to more than $500 for an average-priced home — to help offset an approximate $10-million shortfall in the city’s budget.

City Manager Pat Salerno proposed three different tax increases at a budget workshop Wednesday, ranging from $5.65 to $6.245 per $1,000 of taxable property. The current tax rate is $5.25.

Commissioners voted on publishing the $6.25 figure. It doesn’t mean they will go that high when they set the final tax rate in September, but since they cannot go higher than the published rate, they wanted room to maneuver.

The average assessed value of a Coral Gables home in 2009 was $571,388; property taxes on that home would be $2,739 at current rates, after the $50,000 homestead exemption. At the $6.245 proposed rate, taxes on that home would be $3,255. At the $5.65 rate, taxes would be $2,945.

Cities across South Florida are facing budget shortfalls due to higher costs and lower tax bases stemming from falling property values. The result: higher tax rates or substantial cuts in services are anticipated as the budgeting season begins this month. Last week, the county reported a decline of $23.4 billion in 2009 countywide taxable value, or a 9.5 percent decrease when adjusted for new construction.

`IT’S HUGE’

In Coral Gables, the tax base has dropped by about $1 billion, or a 7.5 percent decrease from 2008 to 2009, when adjusted for new construction. Finance Director Don Nelson told commissioners the city’s losses would be $3.5 million higher if last year’s tax rate remained in place.

”It’s huge,” Nelson said.

To help balance the budget, the city is laying off about 40 of its 827 employees through job eliminations, including seven police department positions, 10 in public works and 11 in public service.

Residents also are likely to pay more for nearly everything. Among the fees discussed:

• Garbage pick-up — which is proposed to go from $610 to $685 a year, and expected to generate an additional $800,000.

• Parking on both street meters and in public garages, which would raise another $645,000.

• A fire-assessment fee of $50 per household.

Salerno said the proposed $150.8 million budget had ”many, many moving parts” and that commissioners had never dealt with a budget that had so many new measures at once. He sent notifications last week to people who were identified for possible layoffs, including Assistant Public Works Director Ron Van Eyk; a video production assistant; a staffer in the planning department; two in parking; and three in building and zoning.

WAGE CUTS

The remaining employees will be asked to take a 5 percent wage cut or contribute 5 percent more to their pension, easing the city’s pension contribution, which is about 20 percent of its operating budget and has been ballooning.

Mayor Don Slesnick said that he felt the cuts had been spread out so that not one stakeholder was holding more of the burden.

‘I, for one, will not vote to reduce any employees’ benefits or reduce any numbers if we don’t spread the responsibility,” Slesnick said. “We are all responsible for this city. Every constituent, every resident. We are all residents and employees are part of the family and if we don’t spread this and all share responsibility, we can’t do it.”