Why does downtown look so bleak?
The obvious answer is “Way too many boarded up stores.” But there are secondary problems as well. Too much litter, graffiti and shabbiness, panhandling and loitering are all concerns that create an uninviting environment. The CRA is betting that addressing the secondary problems will make it easier to recruit new business to the empty stores. We’ll see.
One of the strategies the former city manager used to balance the budget was to divert as much CRA money as possible into the over-spent General Fund. As part of this project, the Downtown CRA has been paying the City’s General Fund some $187,000 annually and supposedly getting in return “enhanced services” to clean up downtown. Despite these enhanced services, downtown remains essentially shabby. The once lush landscaping is littered with cigarette butts, crumpled papers, and bits of plastic. Earlier this month, the CRA made the decision to restructure its “enhanced services,” since the annual $187,000 wasn’t working. Enter Block By Block, a national company active in 39 cities across the country.
In a word, it’s privatization. We’re skeptical, as are many of you, about turning over city functions to private concerns. At the same time, if a city is not able to perform satisfactorily, other approaches must be explored. Fortunately, in this case, there will be no pink slips for city employees. Chuck Ellis, the City’s Parks Director has informed us: “There are no layoffs due to the Block by Block services. Our staff will continue to pick up the trash and oversee the median maintenance.”
Instead of paying the City $187,000, the CRA will pay $153,000 to Block by Block to pick up litter, clean out tree wells, paint, mulch, power-wash sidewalks, and perform other maintenance tasks. In addition, Block by Block will assist with “quality of life” issues like panhandling and loitering. Its mode of operation is to coordinate its work closely with a city’s regular services so as to augment but not replace them. This is a new approach for Hollywood. If it doesn’t work, the CRA can terminate the contract.
With this company, the CRA expects to get the full-time services of four workers to be hired and supervised by Block By Block. CRA staff has informed us that qualified Hollywood residents will receive priority in hiring. To start, these workers will be scheduled from 7 AM – 3 PM, but their hours may be changed as needed. They will wear a uniform that identifies them as “Hollywood Ambassadors.”
We’re supposed to get a cleaner, snappier downtown. No more cigarette butts in the tree planters. No more plastic bottles in the gutters. No more graffiti and dirty sidewalks. And above all, a more welcoming environment for new business as well as residents and visitors. Let’s hope so! Time will tell.
State Senator Sobel – who in 2009 sought and was granted a $30,000 interest-free, non-recourse loan from the City of Hollywood to renovate 5,000 square feet of office space for her use – has suddenly expressed great concern with the City’s finances. She’s requested that the State of Florida audit Hollywood’s finances and her request has been granted.
“Sobel appeared at a meeting of the Joint Legislative Auditing Committee in the Capitol to ask for the audit, citing the city’s declaration of a state of “financial urgency,” a recent 11 percent property tax increase, lucrative pension and health benefits for city employees and overly optimistic revenue projections.
Sobel questioned the work of Munilytics, an Illinois-based financial consulting firm hired by the city. She also questioned the city’s administrative set up, which she said separates the city’s budget and finance departments, resulting in accountability problems.” excerpt from Miami Herald, Oct. 3, 2011
Senator Sobel appears not to have understood the Munilytics report she questions. She states as one of her concerns a problem the City corrected months ago after Munilytics raised it — the need to separate budget from finance functions. Since the Munilytics report was issued in mid-June, the City has gone to great lengths to put its financial house in order.
It will be interesting to see what State oversight can bring to Hollywood’s financial situation. Let’s hope it will be helpful. We suggest the State auditors begin by reviewing the 2009 loan made to Sen. Sobel herself for office renovations — an expenditure category that does not appear to be allowed State Senators for their district offices. The solution reached was to categorize her loan payments as “rent.”
Despite this fiction, the bottom line here is that the City has allowed the Senator to repay the $30,000 renovation loan over time, while excusing her from paying any rent for the use of City office space. The rent forgone could have provided a City employee salary.
We opposed this transaction back in 2009. In part we wrote:
We think it is fiscally irresponsible for the City Commission to commit $30,000 taxpayer dollars for office renovation in these harsh economic times. Many Hollywood residents have lost their jobs, and even their homes. Which of them would not welcome a four-year no-interest $30,000 loan from the city?
Link to full Balance Sheet 2009 post.
No one knows more than our Commissioners how desperately Hollywood needs to stabilize and improve its neighborhoods and its corridors. Yet when our elected officials had an opportunity earlier this month to reduce the number of pawn shops on 441, they let us down.
The City Commission, in a 6-1 vote, approved a pawn shop’s request to build a new building on 441 at Duval Street now that the shop’s current location a little further south is being taken by eminent domain for 441 widening. City staff recommended against approval as did the Planning and Zoning Board. Both informed the Commission that there are already 12 pawn shops on a six-block stretch of 441 and here was a chance to eliminate one. Approving this pawn shop was the Commission’s first development decision for the “new” 441 corridor.
What was striking about the pawn shop proposal was its full court press led by Hollywood lobbyist Alan Koslow and the champion Broward County lobbyist George Platt. In hasty nonspecific disclosures before the public hearing began, every commissioner announced a prior meeting behind closed doors with “the applicant,” but none disclosed whether it was with lobbyist, pawn shop owner, or operator. Not one member of the public spoke in support of the pawn shop and several spoke against it.
Only Commissioner O’Sheehan took the obvious principled position against the proposal. Commissioner Blattner approved it, seeming to be angling for improvements to a pawn shop on Stirling Road owned by the same company. Commissioner Russo said the new 441 pawn shop would be a “beautiful building.” We are quite certain that Commissioner Asseff would never have approved a pawn shop in her district. Nor is it likely Commissioner Furr would approve one in his district. Both of them have been fighting blight. But they were willing to put it on 441, as were Commissioner Sherwood and the mayor.
We are left with these questions:
1. Why do Hollywood’s elected officials think so poorly of our City that a new pawn shop becomes a desired development?
2. What can we do as a City to raise our sights and recognize once and for all that we deserve better and can actually achieve it?
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.
Financial Troubles in Hollywood
My candle burns at both ends. It will not last the night; But ah, my foes, and oh, my friends – It gives a lovely light.
Edna St. Vincent Millay
Shocking financial revelations about city finances have alarmed Hollywood residents, business owners, and employees alike. The city’s unchecked borrowing and spending that began years ago has run its course: reserves are long gone and red ink is spread across the budget. The city’s funds are so low that it no longer has access to the debt markets. Should we have hurricane damage, instead of borrowing money for cleanup costs pending FEMA payback, the city will have to find the funds somewhere in its own budget. While many other Broward cities have millions of dollars in reserve accounts, Hollywood has saved nothing for a rainy day.
The big question now is whether Hollywood voters will approve restructuring city employee pensions. A pension referendum is in the works for mid-September unless the unions ratify pension reductions before then, which seems unlikely. The main problem here is that city commissions for years, right up until this year, have promised employees pension benefits way beyond what the city can afford. One of the most burdensome is a city guarantee of 6% (in some cases 8%) interest on public safety retiree accounts for 15 years after retirement.
The Interim City Manager pulls no punches. She says the city will have to “operate under a very different business model moving forward if we don’t accomplish pension reform and savings. Where else can you get a guarantee of 6% return on your money …with the City underwriting the amount even when the market tanks? We have been solving our financial problems by increasing borrowing rather than cutting costs and we can no longer afford it.”
The “very different business model” would likely entail the outsourcing of basic city services and massive layoffs of employees. The unions have taken the position that the city is using scare tactics to cut salaries and pensions. We’ve been watching city budget decisions for years and have written about these problems many times. In 2009, we noted the investment return on the firefighters pension assets was only .86%. The city’s contribution that year was $9.1 million, up from $7.6 million the previous year. When the market tanks and pension investments are down, the city is obligated to make up the difference. Already we have many more firefighter retirees than we do active firefighters. An arrangement like this is clearly unsustainable.
In short, combined with the economy, our elected officials have brought Hollywood to a financial crisis. Problems of this magnitude do not spring up over night. We’ve had a slow build-up, year after year, for at least a decade, with one irresponsible decision following another, the cumulative impact slowly building to today’s crisis point.
Why have our elected officials, with the support of the city manager, year after year continued to approve more and more benefit increases? For more than a decade, the police and fire unions have worked hard to elect commissioners who would vote for this largesse. Their off-duty members would leaflet the large condo buildings the night before the election, using building access that was not available to candidates they did not support. While benefit increases were a political calculation for many of our elected officials through the years, others seemed unaware of the fiscal impact of their decisions and not even curious about it.
As we see it, there are four separate areas that need our attention if the city is to move beyond this crisis: (1) management changes, (2) city elections, (3) taxpayer rate hikes, and (4) employee salary and benefit cuts.
Management
The long-time budget director and city manager have both left. We have a new Finance Director who is working hard to correct the budget errors of the past. The search for a new city manager is under way and the Interim City Manager seems determined not to perpetuate errors of the past. In short, the necessary management changes have occurred or are in the works.
Elections
City elections will be held in November 2012, little more than a year away. This election will mark the transition to staggered four-year terms, so that in the future only half the commission will be up for election at the same time. This transition is causing the commissioners from Districts 1, 3, and 5 to have an initial six-year term.
Voters will need to work much harder than in the past to get qualified people elected to public office. We must be able to count on our commissioners more than ever to set reasonable policies and spend taxpayer money prudently. We can’t continue past practices that have contributed to the present crisis. No longer can we afford a commission that lavishes money on supporters and converts loans to grants. 2012 is the year to work on electing a qualified city commission. This means citizens will have to roll up their sleeves, recruit, and support knowledgeable, high-caliber candidates. No more electorate sitting on the sidelines as so many have done so often in past city elections.
Taxpayers
An urgent need to raise Hollywood’s fund balance before the city’s credit is further downgraded has propelled the commission to propose hefty tax and fee hikes for the fiscal year that begins October 1, 2011. Although not finally approved, and subject to mandatory public hearings in September, the proposal is to raise the millage to 7.4479 (9% increase over last year). Combined with the 2004 General Obligation Bond levy of .4449, our total Hollywood tax rate would be 7.8928. This will be one of the very highest in Broward County. In addition, the city will raise the annual fire fee from $159 to $189. The proposed millage increase plus the fire fee increase represent 11% more than last year. Without question, residents and businesses will pay significantly more.
Employees
Even harder hit than residents are the city employees. They have already received pay cuts ranging from 7.5% to 12.5%. These lower salaries will be the “new normal” for the foreseeable future. In addition, as mentioned above, the commission is poised to freeze employee pensions as of September 30, 2011 and offer reduced pension benefits thereafter. If the unions don’t agree to the pension changes, the city can implement them only with voter approval in the September special referendum.
What Next?
All concerned taxpayers should pay attention to what city government is saying and doing in the days and weeks ahead. Union negotiations are expected to intensify and we hope they can be successful. If not, we will have the pension referendum. From burning the candle at both ends for a decade, we’re down to a pile of hot wax.
The Search Begins
At a workshop on July 6, the city commission discussed the process for seeking a new city manager. They decided to hire a head-hunting firm to conduct a national search. After directing staff to come up with a short list of such firms, they discussed some of the requirements they feel are important in a new manager. They talked a lot about whether to compel the manager to live in Hollywood. Some thought it essential, others expressed concern that such a requirement would limit the qualified applicant pool.
It seems to us that the important thing is not where the manager lives, but what the manager does to become informed and keep current with all aspects of our city. The manager must have the ability to take the pulse of the city quickly and get to know, understand, and value Hollywood’s diverse stakeholders. Early on, the new manager must become familiar with Hollywood’s differing neighborhoods and treat them all fairly, not favoring one area over another. The same is true for the business community — and not just the beach and downtown. Central and West Hollywood are important as well.
While the workshop was well run, the elected officials on the whole didn’t get very specific in discussing the desired qualifications of a new manager. They all want a “super-star” manager, but did not define what that means for Hollywood. We’ve thought about it and suggest the following as qualities we believe essential in Hollywood’s new manager given the current state of our city:
- High ethical and moral values
- Excellent communicating, listening, negotiating, and diplomatic skills
- Proven record of attracting and retaining high quality, experienced managers and treating all employees fairly
- The ability to identify and build support for a common vision that the elected officials, staff, and the community will get behind, so the city can move forward harmoniously
- An understanding of the importance of outreach and early discussion with people who are affected by proposed projects or ideas
- The willingness to speak the truth, however unpopular, when the well-being of the city requires it.
Some commissioners thought it essential that the new manager be able to find new revenue sources and bring in development. We believe these skills are crucial for Hollywood’s success but perhaps not the manager’s primary role. The manager’s job is to hire professional staff with these abilities and enable them to work effectively for the betterment of the city. In short, the manager should manage but not micromanage budget, development and other city staff. The manager must inspire trust and ensure both top-notch results and high ethical behavior from every city employee.
The search is now under way and expected to take several months.
