Sunday, September 21, 2008

Taxes--Politics vs Reality

In the blizzard of comments on my last post a comment by Eric Martin caught my attention. In a reference to my service on Council he noted, “…he's only human, and except when he raises taxes and says yes with the crowd to things that a government has no business being involved in according to our constitution and founding fathers' intent in the role of government…” I will save the discussion on the role of government for another day. With localities facing declining revenues, reductions in state and federal support, and taking on more responsibilities usually the perview of state/federal government, the topic of taxes does deserve our attention.

In a post on my political blog, Into the (Political) Arena,
I posted my “heretical” view that my party’s mantra on “No new taxes” lacks vision and is overly simplistic. The issue is not taxes. The issue is on what our tax dollars are spent on and the outcome of those expenditures--Do we get the maximum bang for our buck? Then there is the difference between expenditures related to services, a legitimate perview of government, versus programs.

At the local level the vast majority of tax dollars are spent on services--fire, police, water and sewer, trash pick-up, street maintenance, etc. As you go up to the state, and federal level the amount of taxes spent on programs increases--subsidies, earmarks, funding for midnight basketball etc. Another factor to consider is that at the local level all your tax dollars stay in the community. Again, as you move to the state and federal levels less of your tax dollars are spent in your community and the higher up you go the impact of the expenditure decreases as more of your tax dollar goes to support the bureaucracy.

While Mr. Martin and I would probably have similar views with regards to the use of our tax dollars at the state and federal levels we seem to disagree on tax policy at the local level. Mr. Martin’s approach is any increase in taxes is unacceptable. My approach is to provide the level of services that City residents expect and recognizing the impact those services have on the financial health of the City.

Good schools, safe streets, and good services do not just benefit our quality of life but also the future economic viability of the City. Degraded services, lack of educational opportunities, and congested roads for example, do not attract economic development opportunities and negatively impact residents by devaluing their investment in the City—their homes.

This year, and in the coming year, the state will continue to reduce funding to localities. In addition, in areas that are traditionally a state responsibility such as transportation, we will see reductions in funding which localities are having to make up. Add to this equation reductions in local revenues and the question does become one of taxes vs. level of service.

Unlike most localities this year’s City budget was less than the one the year before. In a previous post I dealt with the breakdown on the budget and my views on how we should deal with it.
My approach to coming budget discussions will be along similar lines.

1. Funding for core services first which would include schools. However in the coming year new funding for schools will be difficult to achieve.

2. Word from constituents is no further reduction in basic services, public safety, trash pick-up, etc.

3. As per agreement on the last budget, unless the revenue picture changes, Outside Agencies will have to make up $450,000 paid this year to give them time to find alternate funding.

4. If City Departments are faced with further reductions I will expect similar reductions from groups such as the Regional Jail and Constitutional Officers.

Since my election I have tried to keep taxes as low as possible and will continue to do so. However, hiding behind a phrase such as, “No new taxes” may be good politics but it is bad policy.

Where do you stand on the issue of taxes?


Eric Martin said...

I have a great deal of respect for Matt and his dedication to his post and his regular submission of new ideas and solutions for the myriad of issues that pop up and require governmental solutions.

*BUT* after reading this blog post, I wonder when he last read the Republican creed:

-That the free enterprise system is the most productive supplier of human needs and economic justice;

-That all individuals are entitled to equal rights, justice, and opportunities and should assume their responsibilities as citizens in a free society;

-That fiscal responsibility and budgetary restraints must be exercised at all levels of government;

-That the Federal Government must preserve individual liberty by observing constitutional limitations;

-That peace is best preserved through a strong national defense;

-That faith in God, as recognized by our Founding Fathers, is essential to the moral fibre of the Nation.

While "keeping taxes as low as possible" is a far more comfortable mantra for the lazy bureaucrats at City Hall (in general not specifically our city hall), it is no reassurance to the families on the brink of bankruptcy because of the current economy, or to the fixed income retiree whose Social Security check is barely enough to pay her medical bills.

These are real problems, and good government demands good stewardship, not higher (net) taxes.

If more people pay even less money into the system, we all suffer and simply get less. To tax the paying people more each step only serves to create a system of payers and takers, to which I would ask- which end would you choose? Socialism can be an enticing thing when you're not the one paying for it. Even communism makes 'everyone' pay, or DO something for what they get.

In modern America, however, we seem comfortable taxing and taking from 'the rich' all the time to raise the tide of the 'the poor'.

While that sounds noble, America's 'poor' have Xbox360s, cars, and cell phones and America's 'rich' have $60,000 in credit card debt.

Mr. Kelly is right that it isn't quite as black and white as the mantra "no new taxes" but rather it could be as simple as "no new spending" -- and when Mr. Kelly's philisophical approaching-socialist fiscal policy spends more, guess who picks up the tab?

Taxpayers do. You and I. And not just the ones who can afford to weather fast-diving property values and simultaneous higher property taxes; but, working families, fixed income retirees, and those who can least afford the regressive property tax levied by a city government that would, in Mr. Kelly's words, "provide the level of services that City residents expect."

Indeed, "LOS" or Levels of Service, is the modern buzzword for 'keeping up the INCOME stream into the government so we don't have to look for jobs in the private sector'. "Income" seems like a funny word for a government to use to me. I wonder if we replaced it with "cost" if we as the "customer" would look differently at it?

What are these city services? Let's go over the short list (commentors please fill in the X's and add fuel to the accountability fire if you know of more): $X to Kybecca as I've recently learned, $X to economic development that yields tattoo parlors and bars, $X to city landscapers (they do an excellent job, but we're talking spending practices here) rather than to competitive-bid contractors, $X on a BCF tourism marketing firm who triple-dips its fees with minimal accountability and agency charges when we already budget enough staff members to do the job internally, $X into tax rebates to Kalahari, $X cash into river shore restrictions (when we could be charging ramp fees and increase tours on the river, instead we are paying for armed protection to keep people out, $X on a Sophia Street revitalization project best handled by *gasp!* small businesses and a free market approach, and $X into a school system that produces mid-percentile ranked students who average above-average costs to produce them (it's waaay worse in Spotsylvania at though!)

This is before we begin to explore what Fredericksburg could be doing more efficiently with our money internally. It would be great if government stuck to "Good schools, safe streets, and good services" that Mr. Kelly's eight year tenure on City Council should have given Fredericksburg's taxpayers, but they've gone way beyond that as a body.

And woe to any taxpayer that questions the handouts and poor fiscal management of the status quo. If the Caroline street busy-bodies don't get you, the Free Lance-Star will!

Instead, we settle for mediocrity time and time again. Out-of-control spending is the problem, and more taxes are the oxygen that keep that fire raging.

The simple solution? Do what every other working family does across Virginia in tough times: Cut spending, be realistic, and be firm: "No *MORE* Taxes!"

(cross-posted on Rappahannock Red)

Bryan said...

Matt, you asked a similar question in interviewing the cadidates for filling Marv Dixon's position. So I'll post the answer I gave then here for everyone to read. I agree, it's not black and white, it's two ends of a yard stick, and reality may be that we end up somewhere in the middle.

BUT - and this is a big BUT - and it's something I was trying to stress in my run for council. The city is NOT running efficiently. Before you raise 1 cent of taxes, we the public deserve to see the diet plan the city is on. We started this last year, with caping raises, and the hiring freeze. Since that time, positions have changed, and people moved up steps on the ladders. Which have probably been good for retaining the hard working people.

Yet the other week when I went to register a vehicle, I crossed the same tile in the doorway at the city offices 5 times. FIVE TIMES! 1)go left to pay the registration info into the system, 2)go to DMV express to get my registration card, 3)go back to comm of rev to get number of city sticker for VRE lot, 4)go to treasurer's office to pay $2 and pick up sticker, 5)Leave building. BTW, I was nice and paid the $2 in cash, I thought about paying by credit card, where the transaction fees probably outweight the $2 fee.

You know, this is just one publicly visible inefficency. I'm sure there are others.

Diet! Now. Before raising taxes, fix what's broken.

(wow, did I just agree with Eric?)

Larry G said...

I doubt seriously if even Mr. Martin would claim that the "right" amount of taxes is zero and that each person would then pay quid-pro-quo for services.

Or perhaps I'm wrong.

So I challenge him to come back and give us an idea of how much tax he thinks is the "right" amount.

The problem that I have as a Spotsylvanian who pays taxes is why we cannot baseline taxes on a per capita basis.

Then, we WOULD have to ante up for inflation and for mandated increases (you know - those unfunded mandates we get from the State and Feds).

What we don't have if a rational and citizen-friendly way to assure them that their taxes are being spent efficiently (by comparing peer per capita costs or some similar measureable method) and that when taxes must go up - there is an actual dollar&cents reason.

What folks don't care for and what empowers the no-mo tax folks is taxes going up and up - with little more explanation than ..essentially - that they must.

Let me start with an example.

How much does garbage service cost - per capita - as compared to other locations - both city-provided and/or private?

How much is fire&rescue/public safety - per capita?

This is not an off-the-wall concept. It is not far from the way the state figures it's funding of localities schools...and in not mistaken ... public safety, etc.

Is it a pain in the you know what to do this?


But how would you feel if you went to the grocery store and they said "That will be $85.23" and you did not get a receipt - ever?

MATT KELLY said...

Eric/Bryan—Let’s see how well you’ve done on your homework. POP QUIZ! Put your books and paper under your desks and pass the quiz back to the person behind you. All I want to see on those desks are your No. 2 pencils!

1. How will small business complete the revitalization of Sophia Street? What improvements do you expect them to make? How will they cover the cost of those improvements? Who decides on what improvements to make?

2. How does reducing funding to schools improve student performance?

3. If you invest a dollar and get two dollars back is that a good thing? Do you want tourists to pay for our new court facility or City residents?

4. If I contract out a job to a firm that has to pay competitive wages to their employees, provide benefits, and make a profit--how much money do we save? Like business should we charge for the actual cost for services?

5. If the people continue to contribute to erosion of the riverbank, cut down trees, and leave large amounts of trash how long will it be before people will stop coming?

6. What specific projects or programs has the City paid for that you object to?

7. True or False. The City reduced its operating budget last year?

8. True or False. Congested roads, and infrastructure in disrepair are good for economic development?

9. Would it be more efficient for you to drive out to Massaponax and come back to City Hall to get your car registered? Do you understand that the Commissioner of the Revenue and Treasurer are State Constitutional Officers?

10. Can you give a specific example of how you would reduce expenditures without reducing services?

Boys, its time to put some meat on those gross generalizations you have made.

MATT KELLY said...

Extra-Credit Questions (2) points each--TRUE or FALSE:

A) Local governemnt is not sunject to such forces as competition and inflation/cost of living?

B) Government employees are on average paid more than their counterparts in the private sector?

C) Unlike private sector employees, Government employees are all lazy and look for ways to waste money?

D) If government operated like the private sector all waste and inefficiency would come to an end?

E) We do not have tax relief programs to help people on fixed incomes?

Bryan said...

Lets go after the questions in post #3.

1) Improvements should be done with a bond, where the BID pays the debt service through the increased tax revenue. Immediately after improving the area, you would expect property values to increase. You would also expect improvements to drive additional business in the area. All prime areas for BIDs, or a Sophia overlay. Most citys pay for parking garages this way, with parking revenue and increased business tax revenue used to cover dept service.

2) Funding for schools needs to be based on enrollment and services offered. What do you remember from school? I remember the teachers, which I consider the core service a school offers. In tight times, a diet light in construction and extras allows more emphasis on scholarly work. The school budget has not been my specialty, so I will openly admit to needing to brush up on this one.

3)I take it your 1 dollar investment for 2 in return is in reference to incentives for Kalahari. I agree with you that this is a good investment. It's NEW tax revenue, which will probaly all go to building the new courthouse. Now lets talk courts - what do we really get for 60M? It is a Taj Mahal building? What do we need? Courts. Simple. Even if the building offers retail, doesn't that compete directly with other downtown business owners for rent? Where do you draw the line. I'd suggest we ask what we can get for 40M, how much better is 60M? But lets go even further, what are the yearly maintenance costs going to be for the courts and who's going to pay that? I've suggested before that we need a very efficient building, so that our long term base costs are reduced. Council has not published any options for the courts, so stop using it as a scare tactic. Right now it could be 40M, it could be 80M for all we know. Maybe initially we need to consider using the existing parking garage to reduce our upfront costs. (Did I say I was perfectly OK with incentivising other businesses to create NEW revenue.)

4)I didn't suggest uping service charges, I suggest combining services to reduce our biggest cost that we have control over - manpower. I think the hiring freeze was a good start. Now as attrition continues, we need to think hard about how to become more productive. Like business, we absolutely should be looking at our productivity numbers. By my survey of a few budget items, looking at overhead rates compared to money expended on services, we're less productive this year than last.

5) So bring on the conservation ordinances. Let talk more than just the river resource, lets talk light polution, lets talk runoff from pavement (which is required by the current ordinance for all parking). The saving of 2000+ acres was a great thing. It is great that the public owns this area. Whatever design is created for the riverfront, should consider flooding and erosion resistant landscaping.

6) Hasn't happened yet, but I object to spending 50k to remove 1200 Prince Edward. Like I stated earlier, up until now, I've pretty much supported the plans of council. It's just time to cut back, tighten the belts, combine departments where needed. Remove the stovepipes, and stop duplicating services.

7)True - the city reduced spending this year, and yet still had to borrow from the reserve.

8)Name me a truely congested road inside the city? Coming from northern va, and the hapton roads area, and you can't compare. Rt3 between Rt1 and Carl D Silver parkway is probably the best example. So what plans are there? Show me a plan that can get more throughput with what exists - lets talk to VDOT about retiming the lights, which they already have an employee to do. Lets talk about Fall Hill, which will be paid for with transportation money - what speed did you drive the last time you went up Fall Hill? If you're honest, you will probably find it was close to the speed limit. We need sidewalks in the new design, we want bike lanes/paths, what we don't need are more stoplights breaking up that throughput. There are designs out there that would allow intersections at each residential neighborhood, and since they don't require the utility work for a dozen stoplights, it should be cheaper. Do more with less, that's all I ask. I would say not having buried utilities does more for economic development in the city. Now I know you're interested in regional solutions to tranport congestion, and there we should work with the state to direct transport funds to good efficient designs.
BTW - this is not a true or false problem. To present it as such is deceiving the public. It's an analysis of alternatives. Apply a little six sigma to 1st uncover the true problems, create a measurement if needed, then design and implement the correct solution. Measure again to see if you solved the problem. Council is trying to make it too black and white. Apply a little engineering effort to understand the issues first.

9) No other locality that I've ever lived in has had 2 windows for commissioner of revenue and treasurers office. They are two positions in the back office, it doesn't mean there can't be one front person that collects taxes and issues decals. Heck, Greene county barely had one glass window to go to. And yes, I like the DMV express - and I believe that function is paid for by revenue from their cut of transactions. Talking with the attendant though, there are overhead costs for this such as nightly mailing in the days forms. Is this self supporting? Many people don't even know it's there, I tell everyone I know.

a)Combine the windows for comm of revenue and treasurers office.
b)Ditch the city decal from the revenue/treasures office altogether, move that function to the police department with the other city resident decals.
c)look for more partnerships such as the master gardeners and parks
d)ditch the 100% cotton paper used in city offices for official correspondence (it's minor, I know, but it means more to me to get a 100% recycled paper at 25% the cost)
e)move the city to leasing computer equipment, equalizing expenses over 3 years rather than having spikes in spending, making it easier to plan
f)question HVAC replacement $1.3M, can any of this be moved out 1yr, 2yrs? With the new window film on the executive center, shouldn't the AC needs be reduced (BTW-good move in my opinion)?

g)question 1.1M for VCR trail. I know a majority of this is grant money, but what isn't? City crews, planning department overhead? What's the true cost. I want the VCR trail, but in a critical budget year, will it hurt to dalay? What if I put it in the same black/white statement - VCR trail or Historic Sidewalks around the new hotel downtown to draw return tourists?

h)with all the sewer work, how about an ordinance to allow more construction up, and limit coverage to assist in runoff? The storm sewers can barely (can not) handle the runoff we have now. Lock these hand in hand.

i)Look at the trash and recycling fees, are they covering costs? How about investing in larger trash cans and going to one pickup a week?
-These are just a few I've spoken about before, plus a quick look at the CIP. I'm sure there are more. If you cut external agencies, please please please provide them a method to earn that money back easily, open up Finally Fridays to an every Friday event manned by volunteers, with the end of year profit going back to those organizations.

A)Inflation affects gov't, and in previous years also impacted the tax revenue. This year is bad, because inflation is driving up prices while tax revenue is down. Many of the constituents in this city are personally affected in a similar way, so to say that justifies raising taxes is cruel and unusual punishment.

B)Most recent polls say that gov't workers and professional counterparts are close to equal. This is mostly due to the bust of the internet bubble years ago. With the recent private layoffs, the gov't security has been an equalizer. Also, we have to stop thinking that we're competing with Prince William or Fairfax. The equalizing force of gas prices is making it more appealing to work close to home, not to mention the extra time to spend with friends and family. You guys are doing a great job trying to draw more opportunities here local. You heard me say it the other night, we are the center of a nice metro area, lets use that to our advantage. Some things have worked, some we lost, don't stop trying.

C)haha - good one. Council needs to make the rules so that they can be efficient, structure has a lot to do with efficiency.

D)I think that's why you're seeing public-private partnerships for things like ampitheaters, parking garages, and even whole redevelopment areas. You get the best in gov't financing, contracting, and private implementation, attention to details and budget/cost/benefit. You have to admit that private industry can accomplish things that government cannot, because they have an incentive.
E)This couldn't have been directed at my post. Raising real estate taxes usually hurts the people on fixed incomes first.

Thanks Matt! For providing a platform for all of us, and for listening to our stances.

Wow that was a long answer. Might create more questions.

Bryan said...

Oh - it was to answer #4 and #5, and I forgot to give true/false's on the last few. TRUE We offer tax relief for fixed income over a certain age right? How about low income? How about tax releif for hardship cases? You know, lower taxes helps these, but then when do you have to cut something like the homeless shelter, which really hurts.

I'll repeat something I said the other night - it's a yardstick. The answer lays somewhere between the start and the end, but I doubt if it's really at either end, and I really hope it's closer to the smallest raise possible. I also favor consumption taxes, which are voluntary based on wants of those paying for the product/service.

I just want to be sure we're lean. Not convinced we're there yet.

Oh - and I think the garage should offer a 10-pack of prepaid $4 tickets. The city would collect money upfront for services not yet rendered. Also, seems that $4 is low for a daily rate (maybe we need daily, 10-pack and monthly rates), and why isn't this a prime special event parking (at $5 or more). Think of an every friday's event!!!
If the garage covered it's own debt service, that would free up some funds from the 2% gas tax to cover street work, burying utilities, concrete/pavement rehab, etc.

MATT KELLY said...

Bryan—Thank-you for your response. If we are going to talk about taxes let have a serious discussion. Not a litany of one liners, clich├ęs, and gross generalizations. No one, including myself, like to pay taxes. Lets take a hard look and see what we can really do to:

1. What I think you are referring to is Tax Increment Financing (TIFs) The City would still be obligated to pay the bond off. What you are banking on (excuse the pun) is spending projected revenue from increase sales and rising real estate values would cover the debt. TIF can be beneficial in getting project completed without the added burden to residents but it doesn’t get us to tax relief.

2. Take a look at the school budget and you will find the vast majority is for salaries and benefits. Capital projects are handles as part of the CIP. You must also remember that state and federal mandates (a lot unfunded) also impact what positions we have and the programs we must offer. And then there is the state funding formula leaving us to pay a higher portion of the budget each year.

My point with this question is that the constant cry for cutting school budgets does not address the issue of student performance that frankly has more to do with the home front than on government involvement. The discussion here should be on what will it take to improve student performance. In the end it should not only be about perceived inefficiencies but more importantly on outcomes (as per my post.). I getting a bit tired of simplistic negatives.

3. It is current security concerns and federal requirements that will dictate the cost of the courthouse. The 60M figure is not based on frills but safety requirements. As per staffs’ number crunching the projected debt service on the court facility will soak up revenue from the new economic development projects coming on line.

4. Currently we cannot provide 24/7 Advanced Life support coverage for the City, are in need of a third fire station, and cannot keep up with some of the basic maintenance needs in the City. The number of people coming in and out of the City requiring services continues to increase every year. Can you be more specific on how we can become more productive with even less staff?

5. My point here was one I made during the debate on the easement. Just passing more laws, without being able to enforce them, would be a waste of time. To keep attracting people to the river we need to keep it from further degradation. I don’t take issue with the points you made I just don’t see any tax savings coming from your suggestion. Actually, you’ve probable increased our costs.

6. First, we are not going to spend $50,000 to teardown 1200 Prince Edward. As you don’t take issue with any projects to date you don’t take issue with the City’s debt load. NO taxes savings here.

7. Revenue projections for the coming year are down. As you say we should be able to do more with less. Can you give me a few examples and how much they will save City taxpayers?

8. Transportation is a regional problem. You cannot look at it strictly in the context of the City system and ignore the 100,000 + people who pass through here everyday. I’ve spend quite a bit of time on this issue and your point that the state should step up to the plate doesn’t meet reality testing. Neither the state nor the feds have the money to put into transportation. And what they do spend is still tax dollars. No tax savings here. And you didn’t answer the question—Is there a correlation between the condition of City infrastructure and economic development?

9. Then you can have a conversation with the Constitutional Officers involved. Frankly their budgets are supposed to be covered by the state. Instead they all are a cost to the City. Actually we are working with the two offices to streamline the service but the fee allowed by the state for theses transactions doesn’t even cover the cost of one employee. Still not a tax savings for us.

10. Most all either good suggestions and/or something we are already looking into. However, on balance, your suggestions have taken a few more dollars out of residents’ pockets especially in regard to covering expenses. I got more calls about stopping the issuing of trash bags than I did on the tax rate. Reducing trash service was not be received well.

A) It is not an issue of good or bad—its reality. The question is how do we deal with it.

B) My son just got back from overseas duty with the National Guard. He was offered a job by the private sector to do what he was doing overseas for a six-figure salary as part of a government contract. Even if we accept your view where are the significant savings for out sourcing? Unfortunately we don’t have a choice in looking at what is going on in Prince William and Fairfax. Fire/police go there from Stafford for higher salaries and Stafford goes to the City to replace them. Competition is a reality we have to deal with.

C) Public private projects have saved the City money. However, the private sector does not have to deal with the level of regulation, mandates, and something called the Dillon Rule, which puts a crimp on innovation at the local level. I’ve worked in the private sector most of my career and I’d have to say that in any organization there is waste. The private sector does not have all the answers (especially now). The City has utilized public-private partnerships probably more than any locality in the Commonwealth and plan to continue to do so. No tax savings here.

Bryan, I do appreciate your comments and suggestions. Keep them coming. I guess Mr. Martin has decided to skip class today

Eric Martin said...

wow- I got beat to the punch with agreat series of answers. I can't say I disagree with any of them, so I'll save the brain damage and say "ditto" ...Serves me right for working two jobs to pay my government fees and not staying up all night blogging.

One question I have for Matt, which goes for all of council– who apparently don't care to use the valuable free blogging system to solicit new ideas like Matt– "What does your highly-compensated team of city management say about all of these questions; aren't they tasked with finding these solutions more so than any taxpayer and any elected official is?"

Moreover (part B), "What solutions to equalize or reduce the tax rate are they proposing?"

Shouldn't that be a standard question expected to have an answer before each vote on altering the taxes collected prior to entertaining any new expenses?

By the way, here's one for the peanut gallery: "What day of 2008 marks the day you started working for yourself and not the government?" (This day varies each year based on the taxes you pay and when you get to actually keep your money.)

In response to the question to me of how much tax should we pay, I respond, "nothing, but let's work our way up from there and see what seems right." The Boston Tea Party was thrown, as we teach it in school (hopefully), to amplify our unwillingness to be unfairly taxed. Then I recall it was 3%... and people were furious.

Only under the King's rule have taxes been in the 50% area where we are now (all taxes included after salary withholdings.)

Bryan said...

Matt, lets turn the tables. What specific services would get cut if the real estate taxes remained the same?

You posted a vague safety, eductional and street congestion. How exactly would congestion get worse, what plan would stop. By safety and education, I take it you mean actually cutting headcount? What might we cut in admin and overhead instead of feet on the street or teachers in classrooms? Can we cut back on payments to the Jail?

I'm not saying I support any of these cuts, but without knowing what they are specifically, no one can meke an informed decision on the right choice.

PS. "devaluing their investment in the City—their homes." The proposed ordinance to limit BOTH height and coverage does devalue my investment. If you're serious about that statement, you should consider not supporting the oversized housing ordinance.

Bryan said...


Thank you for taking the time to put this out, and point out the struggles of council. I second Mr. Martin's statement about how nice it is to have one council member use this service.

If it means a burden to the city, as much as I like it, I'll take a cut in the DMV express. How about making it M/W/F

Bryan said...

A few more answers off the quick list. These could use some further investigation by the paid experts, not a resident just stating what is being seen on the outside:

"Can you be more specific on how we can become more productive with even less staff?"
- How many admin assistants does the city employ? Can we share some of these between divisions. Can managers start typing their own letters?

"The 60M figure is not based on frills but safety requirements."
- Really? The residential townhomes, retail development and new parking garage aren't part of the 60M?

WRT the fire station, construction on that is several years away, as we have yet to complete the land swap. Forget the construction, lets just talk manning. It's going to take 15 people to man a 3rd station. It will be needed - in x years, lets define x, it isn't next year. Especially if we do get the funds to fix the fall hill avenue bridge so that the ladder truck can cross it. Would that delay construction? What about adding a crew to stations 1 or 2 to delay construction. I'll grant you that this increases taxes, but does it increase it less that constructing a whole 3rd station? Then add the 3rd station when revenue increases?

And on the issue of public sector jobs, I did not include armed services. I would wager that the job your son is serving here is not the same job he did before. It was great training in management, which is why he was given a high paying job in a private company, where management is a valued asset. However, some of the civil service members that I work with, when you look at total compensation, benefits, leave, etc, it is getting very close to those contracting for similar jobs.

GE was big on Six Sigma, which they used in all levels of their organization. What does Six Sigma provide? A way of measuring your process, a way of working to understand the problem in a measured way, and a way of improving processes, removing low-hanging-fruit, followed by a continuous process improvement methodology. It also helps an organization define it's core requirements, the must-haves, the like-to-haves and unspoken requirements. Then you put that on a scale with projected budget and figure out the nice-to-haves, and delighters. Put all this together and make your tradeoffs to create a sucessful product. Last year on a differnet project, we took an $80M(roughly a third) cut in one project, think about the changes we had to make! So don't think I don't understand why you're pushing back on the public. We definately started with the it-can't-be-done mentality, but in the end we had to live with the cut.

Man I wish all the council members would jump in here!

MATT KELLY said...

On the road for most of the day and Council meeting tonight. Good points made by all parties and deserve a response. Keep the comments and questions coming. I shall return!

MATT KELLY said...

Let me be less vague in regards to what I believe are local government responsibilities. The core services are public safety (fire/police/EMS), services (water/sewer, trash pick-up, street maintenance etc.), and education. The next ring out covers recreational services, parks, libraries, rec. programs etc. Facilities and programs that not only add to our quality of life but also make the City more attractive to businesses and visitors which can offset the need to depend on residents for revenue.

Finally there is what we refer to as Outside Agencies (the museum, Community Service Board, Sister City Associations etc.). I would sub-divide this latter group into organizations like the Community Services Board that provide a needed service that the City doesn’t provide. Then there are groups such as museums, Sister City Associations, and DRMI that are nice additions to the community but also should be supported by the community.

Needless to say you could find some savings in each of these areas but if it comes to significant cuts we move from the outside in. Hope that clarifies my position on what are tax dollars should be spent on.

Now to your questions:

As for positions I would again point out there are areas where we lack sufficient personnel especially on the EMS Fire/Police side of the house. In addition, the big complaint now is the time it takes to get a building permit in the City. This is due in part to staffing issues. If I could find an admin assistant or two I’d probably trade them in for another plan reviewer or a fireman with advanced life support training.

As for the fire station #3 the land swap is completed. And, Jud are you listening, we have talked with the Silver Cos. about a Special Tax district in Celebrate VA to offset the cost of the new station. However, your concerns about the cost of staffing it are well founded.

With regard to the schools we do have a high overhead because of the small size of our system and the fact that a lot of the positions and programs are mandated from on high. For example, in designing the new schools we had to ensure we had classroom space and facilities for special education. In this case we had to provide a room and staff for every ten students. That is not a slam on special education (my mother was a Special Ed Assist.) just a fact. State/Fed law also mandates us to have certain positions whether you have 2,000 or 20,000 students.

The 60M figure if I remember correctly would include the parking deck but not the commercial/residential component, which would be built and maintained by the developer. Lets drop the estimate to 40M the impact will be the same.

The Regional Jail is a black Hole sucking in more dollars every year. So much for all the money we were going to make from housing state/federal prisoners as it was originally advertised. During the last budget cycle I was adamant that if our city employees were only going to see a 2% raise then we would not support raises for any other organization above that level. That would have required a cut in the agreed Regional Jail budget. The fear with any regional programs is that one locality cuts and there is a cascading affect and “regional implications.” This coming budget I think I’ll choose the “regional implications” because frankly we can’t afford it.

In the end, we can find a number of employees, and level of service that we all agree on, and arrive at an agreed budget. But to expect that budget to remain stagnant is unrealistic in the face of the growth in population, inflation, cost of services and materials and such things as gas. Then throw in a few unfunded mandates and funding cuts from on high (state/fed) and it all comes crashing down.

I agree that we need to insure that we are getting the biggest bang for our tax dollar. We also need to better define as a community what we expect government to pay for and hold them to it. At this level, City residents have a big say in this process—it’s called the ballot box.

For me the solution for us rests with diversifying our tax base making it less susceptible to economic downturns. We also need to continue with projects that attract new dollars to the City that don’t require a lot of services. That is why as Fredericksburg approaches build-out we need to be pro-active in achieving these goals.

MATT KELLY said...

Eric--Have been meaning to ask you a question. As a school board candidate you had the opportunity to go through the Spotsy School budget. Where did you see the waste and what cuts were you contemplating?

Eric Martin said...

I just wrote a three page response to the question of cutting school waste and recognized it sounds too drastic to read without a slew of background data to explain it, so I can't post it in good conscious!

In summary to the rant I feel is coming on....


What would I cut if I were the only decision maker?

• It will have to suffice that I would start at the top (if I were king for a day and had to solve all the problems at once)- and fire superintendent Jerry Hill. The guy is a crook, in my opinion. Anyone who has the audacity to accept a $50,000 per year raise for back-to back years on the public dime in a RECESSION has no morals and no integrity. Any board who would unanimously vote for this type of cash rewards and then stiff a janitor, lunch lady and bus driver is guilty of malfeasance of public trust and financial irresponsibility. Go figure- not one of the seven has ever run a business.

oh yes, a rant is here... stay tuned...
• Hire a few more teachers to replace the ones who flee hearing about the coming cuts of dead weight.
• Fire half the overpaid PHD's at the headquarters level since they aren't teaching students a minute of the year-and replace them with plants. Ask the other half what the hell they do there for $150,000 per year for 9 months of full-time attendance.
• Examine every other position that doesn't require them to interact with students at least weekly, and weigh their cost benefit (personnel, vehicle maintenance and the sort would be exempt from this).
• Demand that the MILLIONS in cash be returned to taxpayers that was paid for the over-inflated student enrollment numbers that never appeared on the first day of school but was fully funded already in anticipation of their arrival. Question what the real enrollment is since the state was told a totally different number than the county was. These are multiple PHD's who schemed these numbers up- there are no accidents here. This is willful and reckless negligence!
• Cut the free schooling for non-county residents benefit, that is simply robbing our taxpayers of cash. If every employee lived outside the county and brought their 2 kids to our schools, we'd have 6,000 unfunded students enrolled. What then? Stupid rule. Move here or teach in your own county, or simply pay your fair share of the costs of education in ours. No offense meant, this is business- and Spotsylvania's money.
• Give achieving teachers raises. Tenure doesn't exist anymore, produce results or leave. This isn't a charity, it's a school. America's future depends on these kids learning MORE than you know, not less.
• Stop building extra schools for phantom students. But build the SAME school designs when we finally do need more of them.
• $70,000,000 is too damn much for a new high school, except in Dubai maybe. Get more than ONE BID for big expenses like this. Give me $70M and I'll show you TWO schools!
• Privatize cafeteria services. Make money here, not spend it. Subway and Pizza Hut are dying to sell us a $3 lunch, and THEY pay the employees!
• Sell off Jerry Hill's personal state of the art industrial printing press to the highest bidder. It serves nothing but his ego and his false propaganda with no oversight. Taxpayers are paying for slick glossy paper to be mailed to them to tell them how the schools are working tirelessly to save money- duh... Power to the Internet and FREE PDF's! Send every family with kids a laptop if you have to- it's still CHEAPER PER YEAR than these costs!
• Offer vouchers to parents who want to home school or send kids to private school to further lessen classroom size and reduce the need for more schools.
• Return the power to teachers to fail, discipline and expel truly trouble-students that refuse to behave.
• Reduce the number of vice principals in each school and their related support staff. Reduced students require fewer executives. What happened to all these college-educated teachers being capable of leading themselves and managing the needs of the building?
• We have dozens of administrators FOR administrators! *POOF* Gone.
• Tie CASH to PERFORMANCE like any other business. Failing schools get less funding.
• Allow private sponsorships and naming rights of sports teams, stadiums and gymnasiums. INCOME.

By CUTS in executive staff alone, we can fund more than ample teachers at low student ratios. One bureaucrat gone yields us THREE teachers without spending a dime more.
By construction streamlining, we can divert costs to teachers salaries and still have left over cash to pay for ALL school supplies. By issuing vouchers, we further reduce classroom sizes and free up overhead costs in schools, buses, books, desks, toilet paper, pencils and more for the students who remain. By privatizing lunches, we create a profit center not an expense item. We use the computers we have for 5+ years- replacements occur in the classroom first and work their way up not the reverse-- which is now.

There- ya got me going again. I'd better stop while I'm just at about $30M per year in taxpayer savings... I'll get an ulcer. It truly makes me sick how much we waste calling it 'education' money. The sad thing is- I didn’t EVEN make a 10% reduction in spending, and I’m certainly no expert on the subject.

Imagine what a budget conscious, private-sector professional manager could do here with $330M per year to play with. Oh wait, we already pay A QUARTER MILLION DOLLARS PER YEAR for one.

We're at more than $13,000 per year per kid and no one is getting a world-class education for it yet they still want more cash each year and keep on giving less performance. This amount is BEFORE we pay for uniforms, supplies, bake sales, field trips, and so on... most people pay about $1,000 per year PER student in 'hidden' school expenses!

Since when did public education become a breeding ground for pirates, thieves and lethargic leeches? ARGH!

You have it GOOD in the city, I can tell you that! Be thankful you haven’t succumbed into a Jerry Hill franchise yet.

Are we having fun yet?

Question Everything folks. Then, when you're being lied to, FOIA request the evidence to covnict your county criminals and take back your government.


Eric Martin said...

Hey- look at that in today's FLS. Link

Spotsy is ordering spending cuts in all departments by as much as 10%, and 'asking' the school to find 2% in savings.

hmmm. Even the Democrats on the BOS are asking for spending cuts... we must REALLY be in trouble! But this is what I'm talking about- spending less in the bad times so we can survive.

Note the ONLY person advocating for spending more? Gary Skinner, recently elected to the BOS straight from the wasteful-spending fantasy land of Jerry Hill's personal checkbook, umm I mean, school board.

Cut spending, not tax more. This is the way to salvation. Drink the Koolaid, it's fresh.

Anonymous said...

Eric's comment on tying increases to performance is dead-on. Brad Ellis mentioned during the candidate's forum last Tuesday that he wanted to pursue performance-based budgeting if appointed...well, he's now on City Council so let's hope Council will make progress on this front. We should all know what we are getting for our money especially during these tight fiscal times!!

MATT KELLY said...

I look forward to Mr. Ellis views on how performance based budgeting can be applied. However, I would again refer you to my past post on the budget dynamics in the City- Our budget is not program based where there are specific, tasks, outcomes and timelines involved. We are primarily service based where there are not at lot of timelines or specific outcomes involved. An example is the Fire Department. There can be months that they have just a few calls and others where they have a large number. How do you quantify efficiencies in this case? Also, I will guarantee you that we will identify savings from the standpoint of efficiencies and outcomes and can’t do a thing about it because it’s mandated or we don’t have direct control—The Regional Jail jumps to mind. Eric, Sparta has fallen.

Larry G said...

I'm gonna say what I did to begin with.

Many folks believe that Government is inefficient and not operated on a cost-effective basis.

Many elected folks think it's about priorities and what people want.

but the cost-effectiveness issue is corrosive.

The folks that think this way do not want to give any more money at all no matter how good it sounds because they feel, in the end, that Government never becomes more efficient.. will always wants more money and will invariable not spend it efficiently.

If you read between the lines of those who don't like to see Government get more money - to them - it's not about the quality or quantity of services, it's about the 3 guys watching the one guy cut grass.

and the last thing folks who think this way want is "new programs" with even more folks watching others......

That's why I think there ARE ways to measure and disclose cost-effective operations, and that in doing so, some, not all, opponents and more of the skeptics will be induced to be more focused on the germane.

Even Matt.. does this...

notice.. he apparently believes that his own city employees are just fine...but he is suspicious of the Regional Jail folks - who he has less ownership in and merely gives them money for their operations.

Of course, this concept goes away when it comes to parents and schools.

And that's something Mr. Hill and other School Systems use to their advantage.

Isn't it curious that the school systems HAVE found a way to cultivate a huge number of people who are actually IN FAVOR of higher taxes - for a Government-operated enterprise.


MATT KELLY said...

Larry—It was not my intent to say there is not any tweaking that could be done at City Hall. The two points I am trying to make are:

1. Contrary to what some people think government’s primary responsibility is not to just waste money and the private sector is not a pillar of virtue either when it comes to efficiencies.
2. The reason there are four guys out there patching a hole is that there is a myriad of state and federal regulations requiring them to be there to-- supervise the supervisor and/or to make sure a wayward squirrel doesn’t become traumatized by the work being done. While the rationale makes no sense as a local official I cannot change this and therefore we have to bear the expense. That's a fact not an issue of control.

Eric Martin said...

...anyone else have the mental image of the prehistoric twitching squirrel from the movie Ice Age trying to hold on to the last acorn?

Matt's right on one hand that unfunded mandates and ridiculous laws/rules made by BIG GOVERNMENT are intrusive and costly... BUT we need not look further than any given Tuesday council or school board meeting for examples of LOCAL decisions made with no such hinderances that are completely outside the scope of 'core' services like police, fire, rescue, roads, water services.