Hollywood’s Great Neighborhoods Challenge
Our City’s economic decline is visible everywhere. City staff has pondered how we can accomplish dramatic and positive change, given the City’s very limited financial resources. That’s where the Great Neighborhoods Challenge comes in — a 120 day city-wide property improvement contest, with cash prizes, that begins December 1, 2011.
It’s a collaborative effort among the City, residents, business owners, and organizations with an interest in working together to make all Hollywood neighborhoods better. For purposes of this contest, Hollywood is divided into 15 geographic areas that cover the entire city. The Challenge has both a private and a public property component.
Private Property Challenge
The City has launched this four-month Challenge to inspire property owners to take a fresh look at their home or business to see what exterior improvements would spruce up the property. Not only individual homes, but also condos and other multifamily buildings as well as businesses are eligible to enter the Challenge. Tenants, also, may participate, provided their landlord agrees. Perhaps a fresh coat of paint is in order, or the landscaping needs attention. What about cleaning out that carport, or removing that broken-down fence? What can you do to add some curb appeal to your property? Only exterior improvements visible from the public right of way are eligible.
Enter the contest, make the improvements between December 1, 2011 and April 1, 2012, and you may win a prize. Thirteen prizes will be awarded to the winners in each participating geographic area that submits a minimum of 25 improved properties ($2500, $1000, and $500 as first, second, and third prize, plus $100 gift cards for ten honorable mention winners). The prize money is coming from the City’s Tree Fund (or from the CRA if a winner’s property lies within CRA boundaries). As a Challenge participant you’ll get to know your neighbors, improve the look of your neighborhood, and help raise its property values, as well as having a shot at the prize money.
Prior to December 1, each of the 15 areas will be organizing a Neighborhood Action Committee (NAC) to coordinate the Challenge and line up at least the 25 participants the NAC needs to enter the contest. Hopefully more than the minimum will participate in order to achieve a greater impact in the neighborhood. Until the NACs are organized, you can express your interest in participating and/or get more information about the Great Neighborhoods Challenge by calling the City of Hollywood’s Community Development Department at 954-921-3381 or visiting its website.
Public Property Challenge
Each NAC that achieves the minimum 25 improved privately owned properties is also eligible to submit a design for improvements to a publicly owned space in its neighborhood. The Public Space Challenge has three or four winners city-wide. The City will do the work on the winning designs.
The rules for the Great Neighborhoods Challenge and much more information about the contest is available on the Department of Community Development’s website.
HOLLYWOOD SPECIAL ELECTION – IMPORTANT – SAVE JOBS!
WHAT: Pension Referendum
WHEN: Tuesday, Sept. 13, 2011
This is no time for voter apathy. Our city has a budget crisis that could lead to bankruptcy. As a partial solution, the referendum proposes reducing future pension benefits for members of each of the three unions in city government: General Employees, Police, and Firefighters. These reductions would save the City some $8.5 million and set the City on a more sustainable course for the future.
Note: the referendum would not touch any pension benefits employees have earned to date; only future benefits would be subject to new rules if the referendum passes.
We are voting YES on all three referendum questions. We believe a YES vote will save jobs, maybe hundreds of them in the long run. It will also prevent astronomical tax and fee increases in the years to come for both residents and businesses.
Think about it. The City is strapped for money. The unions have cited as cause of this budget failure a number of wasteful, unwise expenditures the City Commission has made — and we agree with most of these (WiFi, water tower decor, mega developer incentives, excessive severance package for former city manager, etc.). We’ve spoken out against WiFi and excessive developer incentives for years, not just after the fact but before these spending decisions were even made.
More unwise expenditures the unions don’t mention are the excessive pension concessions to the unions themselves. We’ve spoken out against these, too, for years. They’ve been a major contributor to the City’s financial meltdown. Hollywood’s pension costs have skyrocketed about $30 million in just eight years Look at the trend line:
This situation cannot continue without huge tax and fee increases in years to come. And who are we asking to pay these taxes and fees? New census data show that almost half of Hollywood households are designated “low-income,” and foreclosure rates here are three times more than nationally.
If the referendum is defeated and savings can’t be achieved from reducing pension costs, the City says it will have to cut salaries and lay off workers to achieve the necessary savings for the coming fiscal year. Salaries were already cut significantly earlier this year so this would be a double whammy. Reducing future retirement benefits seems the better course to us but if the unions don’t agree, voter approval is required and that’s why we have the upcoming referendum. This referendum gives voters a direct voice in how the City will handle the current budget disaster: (1) pension reform, or (2) no pension reform and more salary cuts, employee layoffs, and service cutbacks instead, not only now but in future years also.
Infuriating and disheartening as reducing retirement benefits can be, we still think the unions would be wise to reach a negotiated settlement with the City rather than pinning their hopes on defeating the referendum. The unions may well succeed at sinking the referendum. Then what? Wouldn’t the subsequent shift to salary cuts and pink slips be worse for the rank and file than a less costly retirement plan?
We believe defeating pension reform will cause much more hardship on the employees than approving it, especially those at the lower end of the pay scale who need every dollar of their salary to make ends meet today. The City has provided each union leader the amount of savings that would have to come from pay cuts and/or lay-offs should the referendum fail. We have copies of this information. If you’d like to see it, let us know and we’ll send it to you.
To see the exact ballot language and more information about what is being proposed, visit the city’s website at this link.
If you wish to vote by absentee ballot and have not yet requested the ballot for this election, you must contact the Supervisor of Elections Office immediately. The absentee ballot request form may be filled out online from the SOE website at this link. Or request it by phone 954-357-7055.
Be sure to vote. This is no time for voter apathy in Hollywood.
Slush Funds?
In response to our April 24, 2011 post on the City’s use of enterprise funds to balance the budget, the City’s Finance Director, Matt Lalla, wrote to Commissioner Blattner, justifying the practice.
While the practice is not uncommon, as Mr. Lalla states, we do not believe it is justifiable for a well-managed city. Both views are posted below. You decide.
| Matt Lalla Finance Director City of Hollywood This version of the “Balance Sheet” newsletter is, in my opinion, a little misleading. The amounts transferred out of the City’s enterprise funds to the General Fund represent payments for Administrative Service Charges and Payments in Lieu of Taxes (PILOTs). These payments are imposed on the City’s enterprise funds in order to reflect the true and complete cost of these operations. These payments are made to recapture General Fund support services provided to enterprise operations in the form of: general management (from the City Manager’s office), legal services, accounting, payroll, human resources, risk management, bond financing, cash management, etc. In addition, these payments have been reviewed and accepted by the City’s auditors and do not reflect some sort of accounting that is less than factual (as implied in the newsletter). If the City did not recapture the cost of such support services, then the City’s taxpayers, through the General Fund, would be subsidizing the rates imposed by the City’s enterprise operations. This situation would certainly be deemed unfair for City residents. As I am sure you are aware, the recent water and sewer rate increases have nothing to do with administrative service charges or PILOTs. Recent (and future) water and sewer rate increases are necessary to support the Public Utilities capital improvement program in order to replace an aging infrastructure and comply with regulatory mandates. FYI, these types of charges are not unique to Hollywood and are a common practice in most jurisdictions…. |
Balance Sheet
Mr. Lalla simply amplifies the techniques by which the city has balanced our budgets for years. The question is whether diverting water-sewer-garbage fees is the best method to raise the funds necessary to run the city. The use of enterprise funds in this manner creates a burden on those least able to pay and prevents those more able to pay from taking a tax deduction. (Real property taxes are an itemized deduction on the federal income tax form. User fees are not.) Let’s look at the Payments in Lieu of Taxes (Mr. Lalla’s PILOTs). Agreed that the water, sewer, and public works facilities sit on city owned land and do not pay property tax. If we’re going to charge them a payment in lieu of taxes, why don’t we charge parks and rec for all of the buildings and fields on city land?–or for that matter any other facility on a city owned parcel. The obvious answer is that enterprise funds differ because they are cash generators of income that can be raided. Let’s take a quick glance at the Administrative Service Charges made against these funds. Each enterprise fund has its own budget and most conceivable administrative costs are covered in its operating budget. Why then should the General Fund remove millions from the enterprise funds for unspecified “administrative costs.” Double dipping? Mr. Lalla states as justification only what is legal and convenient, but not what a prudent well-managed city would do. Isn’t it time to eliminate old practices that merely disguise the problems instead of trying to justify their continuance? Instead of raiding the enterprise funds, the City should supplement the General Fund through better bargaining and streamlining operations. Any shortfall should then be covered by raising the millage rate. |
April 23, 2011
Fees for City Services: Hidden Tax
We’ve recently learned that the City has used for other purposes many millions of dollars Hollywood residents have been paying for water, sewer, and curbside trash pickup and recycling. In short, we are over-paying for these services and the excess money is being used to balance the city budget.
For example, in each of the three most recent fiscal years, over-charging for water and sewer allowed the City to take over $6.7 million annually out of the Public Utilities Enterprise Fund, placing it instead in the General Fund. Fees we paid for curbside trash pickup and recycling have also been removed from the Sanitation Enterprise Fund to beef up the General Fund, just under $1.5 million this year, and more in prior years
We’ve been thinking about the use of the Enterprise Funds as a means to subsidize and balance the City budget. First, what is an enterprise fund? In government accounting, a fund that provides services to the public for a fee that makes the entity self-supporting. Hollywood has five such funds: public utilities, sanitation, stormwater, golf, and parking.
We understand that Florida law does not prohibit such transfers from Enterprise Funds. But we ask ourselves if this is a prudent and logical budgeting method, is it fair, and finally, is it ethical? We conclude that the answer to all these questions is “no.”
We are burdening water users, for example, with an inflated cost in order to camouflage the real true financial straits of the city. This means financially struggling homeowners may have their water shut off for failure to pay what amounts to an invisible tax that inflates the cost of the water they use. This situation not only violates the basic principle of open, transparent government, but creates an unfair and hidden method of taxation.
Political expediency can no longer be tolerated in lieu of factual accounting. Inflation of the water and sanitation costs to accommodate budget failures is something we also cannot tolerate.
The City’s revenues face additional erosion for the next several years because of the economic climate. This is not good news. But we believe that citizens are entitled to a factual statement of the true budget shortfall and how much of an increase in the millage rate along with cuts in employee benefits will accommodate revenues for at least the next three years.
Thousands of other US cities have similar if not worse situations. The economic downturn just hastened the inevitable. This is not shameful, but it will be so if city management and our elected officials continue to ignore the inevitable.
July 25, 2010
Property Tax Squeeze
Background
Our annual property tax bills include the taxes we must pay not only to the City of Hollywood but also to numerous other entities including the county, public schools, water management district, children’s services council, etc. This article concerns only the portion of our tax bill that is determined by the City.
The Hollywood City Commission is responsible for setting how much tax we pay each year to help fund city operations. The city also assesses each property owner a proportionate share of the annual repayment owed on the voter-approved General Obligation Bond (GOB) for parks and public safety.
City Property Tax Rate
The City Commission took a big step on July 21 by setting 6.7100 as the maximum rate we can be taxed to fund city operations in FY 2011 — the fiscal year that begins October 1, 2010. This is the so-called “not to exceed” millage rate.
Before the commission makes a final decision on the rate, it will hold two public budget hearings in September. The first one is set for Wed., Sept. 15, 5:30 PM, at City Hall. While the Commission could adopt a lower rate, it is not likely to do so because the “not to exceed” rate is insufficient to cover projected expenditures.
| City Millage Rates | 2010 – Actual Rates | 2011 – not final |
| Operating | 6.0456 | 6.7100 – ceiling |
| GOB debt | 0.2919 | 0.4268* |
| Total Tax Rate | 6.3375 | 7.1368 |
| *The debt millage must cover the annual GOB repayment which has not substantially increased. The need for the higher debt millage rate in 2011 is based primarily on Hollywood’s plummeting property values. | ||
Impact on Tax Payer
Whether your 2011 tax bill will be higher than last year’s bill depends on how much the Broward County Property Appraiser has lowered your taxable property value. The greater the loss of your property’s taxable value, the more likely your tax bill for 2011 will not exceed last year’s. The higher millage rate multiplied by the lower property value could hold the line for your taxes.
How to Calculate Your Tax Based on a Millage Rate (Mill Rate)
The millage rate is the tax rate applied to the value of your property in order to calculate your property tax liability. One mill equals $1 for every $1,000 of taxable property value.
Hollywood has two types of millage: one for city operations and one to cover voter-approved debt. The example below is based on the “not to exceed” tax rate for operations plus the estimated debt millage rate provided by the city budget office.
If the combined operating and debt millage rate is 7.1368* then your tax would be approximately $7.14 on each $1,000 of your property’s value. For example, if your property’s taxable value is $125,000, your tax would be $892 ($125,000/$1,000=125 x $7.14= $892).
*Note: Our actual 2011 city tax rate will not be finalized until after the budget hearings in September.
Impact on City Staff and City Services
We have a big problem because the 6.7100 ceiling will not generate enough revenue to cover projected expenditures. In order to balance the last two annual budgets, the City Manager used a variety of cost saving techniques including departmental consolidations, positions frozen or eliminated, unpaid furlough days, fire fee increase and more. What will he recommend this year? He told the Commission he does not recommend raising the fire fee again. But roughly $1 million more must be trimmed from the 2011 budget which is bound to be stressful for staff. The City Manager will be seeking more union concessions to make up the shortfall and/or taking a knife to funded positions and services in order to balance the FY 2011 budget.
Why, and What Next ?
Why are we in this dire position? First, according to city staff, property values in the City of Hollywood have plunged downward by over $1 billion over the last three years. Second, for a variety of reasons, Hollywood has not managed to create and maintain the kind of “rainy day” reserves that could help us to ride out the hard times. Balancing Hollywood’s budget this year is truly a high wire act.
In September, the city commission will have to decide what services to cut, what jobs to eliminate, and what our tax rate will be for the coming year. If you have recommendations or concerns, you should definitely make them known. The best way is to attend the public budget meeting on Wed., Sept. 15, 5:30 PM, at City Hall. At that time, you will be able to speak directly to the Commissioners. Also, you may e-mail your suggestions and concerns to the City Commission. To be most effective, any e-mails should be sent well before the Sept. 15 meeting.
July 25, 2010
Background
Our annual property tax bills include the taxes we must pay not only to the City of Hollywood but also to numerous other entities including the county, public schools, water management district, children’s services council, etc. This article concerns only the portion of our tax bill that is determined by the City.
The Hollywood City Commission is responsible for setting how much tax we pay each year to help fund city operations. The city also assesses each property owner a proportionate share of the annual repayment owed on the voter-approved General Obligation Bond (GOB) for parks and public safety.
City Property Tax Rate
The City Commission took a big step on July 21 by setting 6.7100 as the maximum rate we can be taxed to fund city operations in FY 2011 — the fiscal year that begins October 1, 2010. This is the so-called “not to exceed” millage rate.
Before the commission makes a final decision on the rate, it will hold two public budget hearings in September. The first one is set for Wed., Sept. 15, 5:30 PM, at City Hall. While the Commission could adopt a lower rate, it is not likely to do so because the “not to exceed” rate is insufficient to cover projected expenditures.
| City Millage Rates | 2010 – Actual Rates | 2011 – not final |
| Operating | 6.0456 | 6.7100 – ceiling |
| GOB debt | 0.2919 | 0.4268* |
| Total Tax Rate | 6.3375 | 7.1368 |
| *The debt millage must cover the annual GOB repayment which has not substantially increased. The need for the higher debt millage rate in 2011 is based primarily on Hollywood’s plummeting property values. | ||
Impact on Tax Payer
Whether your 2011 tax bill will be higher than last year’s bill depends on how much the Broward County Property Appraiser has lowered your taxable property value. The greater the loss of your property’s taxable value, the more likely your tax bill for 2011 will not exceed last year’s. The higher millage rate multiplied by the lower property value could hold the line for your taxes.
