City Budget Squeeze
March 15, 2013, 3:28 PM
Filed under: Budget, City Staff, Residents, Taxes

A recent budget workshop for City Commissioners demonstrated that the City is recovering from its 2011 financial meltdown. Nonetheless, property tax revenues are cautiously projected to remain more or less flat for several years to come. (We’ll be watching for City staff’s mid-year revenue projections expected later this month for any significant changes in the forecast.) The City has stated its commitment to improving City employee salaries and benefits insofar as the budget can support it – a little at a time.

Working against our strapped City’s potential salary and service improvements, however, is litigation spawned by the City’s two Pension Boards.  The Police Pension Board and the Firefighter Pension Board are City Boards whose purpose and members are listed on the City’s website along with those of the 17 other City Boards (African-American Advisory Board, Historic Preservation Board, Education Advisory Board, Green Team, etc.).  But unlike the other City Boards, the two Pension Boards have the power conferred by State statute to sue and be sued.

After Hollywood voters approved the Pension Referendum in September 2011, the trustees of each Pension Board voted unanimously to sue the City in an effort to overturn the pension changes that resulted from the Referendum.

Each Pension Board pays its administrative expenses including legal fees from the pension fund it administers. Every year the pension plan’s actuary examines the plan’s financial obligations and tells the City how much it must pay into the plan.  The plan will be short whatever amount was spent on legal fees and the City will have to make that up. So when these Boards sue the City, the City pays not only its own legal fees but those of the Boards as well.

Last December, the City won a Motion to Dismiss the two Pension Board suits (now consolidated), but the judge’s ruling allows the Boards to correct their pleadings and start over. This litigation between the Pension Boards and the City is at an early stage. But already the combined legal fees of the two Pension Boards come to nearly $400,000 with the City having spent about $60,000 on its own defense.

With the City on the hook for both sides’ legal fees — an amount that seemingly will reach the millions at the rate this litigation is moving -– the City’s ability to improve employee salaries and city services is lessened.  Such a result is harmful to both Hollywood employees and Hollywood residents.

Separate from the Pension Board litigation, the Unions are seeking to have the pension changes invalidated as a violation of their collective bargaining agreements. These actions, which began in the courts, are now being adjudicated in the State’s Public Employees Relations Commission (PERC).

So far the only winners in the Pension Board litigation are the private law firms engaged in the Pension Boards’ lawsuits. We urge the Pension Boards to drop these costly unproductive suits.

As for the Unions, we can only hope that all three City Unions will enter into negotiations with the City in a mutual effort both to rebuild trust and to work out creative and sustainable salary/benefit structures that will help all their members. Only then can we move forward together to create a sound footing for a more prosperous, successful Hollywood.


Seems to me , once upon a time the Balance Sheet actually challanged the city, instead of being a mouthpiece FOR it. Seems to me, that you have already sided with those that feel the police union, and for that matter,ANY union that represents the people who actually DO the work for this city , should continue to not have a raise in 5 years while we outsource jobs despite the exorbitant cost. We can go hire outside building inspectors at $68 dollars an hour , but refuse the Building Department head when he begs for 5 hours of overtime FOR THE ENTIRE department to ” improve morale” ?

You’ve made no mention of how the enterprise employees in the Utilities Department have taken over AFSCME . You’ve made no mention of how the fire department is getting their deal behind the scenes, but now you want to heap more garbage on the men and women that protect us every day ?

And to quote you
” the City’s ability to improve employee salaries and city services is lessened. Such a result is harmful to both Hollywood employees and Hollywood residents.”

Hmmm, sounds like a talking point for the current management team. But of course , that would be in line with the entire tone the BS has taken recently . You dont think that allocating $3 MILLION for architects and $280,000 for building inspectors is a problem, or harmful to the employees , as you’ve posted nothing about that , but the police unions fighting for their rights are ?

Whats going to be harmful to the city is when another 30-40 current sworn officers walk out to other departments in the next 90-180 days, as they already have applications in.

Whats going to be harmful to the city is when candidates for the police department who have passed all tests ( including the psych eval) , have been signed off on by ALL parties, and are then turned down by the city manager when the department is severly short warm bodies on the street

“For the Funds to have taken this legal action detracts from their all-important purpose which is to administer and grow the pension funds.” When you make a statement like this, you imply that the pension boards have NOT grown their funds. Whyt dont you put up their returns for their members , before you make a statement like this . Oh wait, facts are inconvenient when you are posturing for the position you are obviously supporting

Whats going to be harmful to this city is when talented people continue to go elsewhere because they are overworked , underpaid , and un appreciated.

But of course, that just MAY BE THE PLAN of the current manager, to have us look more like Weston .

You want to ” rebuild trust “,
-pay people what they’re worth, stop making them do the work of 2 or 3 people ,
-stop those transfers of ” unspecified budgetary reserves” that always seem to happen ,
-stop manipulating the CRA/Comission agendas behind the scenes that the average citizen knows nothing about,
– and start going back to your original mission of questioning what is really going on behind the scenes.

or is that too much to ask for ?

I dont know what has happened to a blog that USED to look at all sides , but it is pretty easy to see that your objectiveness has been compromised IMHO .

And finally , to Linda Ball: Come on over to the homes of the people who work for the city , talk to them about how they havent had a raise in 5 + years, have had their benefits cut , their costs increased , the workload increased, and have continued to watch the ways and excess inside , and talk to me about greed then .

I dont think so !

Comment by Jeff Brodeur

The Balance Sheet welcomes differing opinions. The ones you’ve stated here are significant for Hollywood and we plan to include them in our next post. The subjects you raise are too important to remain only in the comment section of the current post.

Comment by Balance Sheet Blog

I have to side with Mr Wilkie on this one…. The City spent how much money on the referendum? But somehow the $60K spent on legal fees is a problem?

And! You tip your hand by displaying your arrogance in presuming the Union’s filing suit is for no other reason than to annoy and bankrupt the City. Could it ever be true in your mind that maybe the Unions are correct in this issue? Could it be that the Union’s are using the only legal means left to them to correct a wrong?

Comment by Charles Kerr, Resident and Employee.

With all due respect, sir, we do not question — and did not question in our post — the Unions’ rights to use any and all legal means at their disposal. We do question the Boards of Trustees of the Pension Funds litigating over the Pension Referendum. For the Funds to have taken this legal action detracts from their all-important purpose which is to administer and grow the pension funds.

And as for the cost of the Referendum, it was less than half of what the combined legal fees have accrued to date by the City and the Boards of Trustees of the two Pension Funds — around $217,000 for the Referendum.

Comment by Balance Sheet Blog

The Referendum cost just over $250k to the County to manage, another $500k in mailings and advertising by the City, with an additional $1.5mil set aside in the budget for possible litigation. Even if you disregard the budget set-aside the cost of the Referendum was three-quarters of a million dollars. Hardly a small sum to be so casually tossed aside in an attempt to paint the Unions as the Bad-Guys.

Comment by Charles Kerr, Resident and Employee.

You can point the finger at the pension boards and state that the lawsuits are a frivolous waste of taxpayer money, but the fact remains that the City started this debacle. Any discussion about a frivolous waste of taxpayer dollars should start with the money spent by the City on the referendum and the advertising costs (propaganda) leading up to the referendum. Was this blog opposed to the money spent on the referendum? If not, then why the double standard??
As for the claim that the City covers the pension board’s legal costs…. C’mon, that’s a dramatic stretch of the truth I think.

Comment by Brian Wilkie

Thank you for your continued vigilance and maybe one day our city will not be ruled by the greed of its citizens.

Comment by linda ball

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