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Here’s The Scoop …9/9/09 LBTS Commission Meeting #5 … Pound Foolish …


“Penny-Wise, Pound-Foolish ( cautious with small amounts of money, but careless with larger amounts … )”

Dear Readers….the Town Manager’s “pound foolish” style of management can be found throughout the 9/9/09 Commission meeting…

First up it can be found in the Sun Trust presentation… The Town Manager asked our Sun Trust Bank Representative to come and speak about “the overall structure of what we have today and provide a one page overview summary of the deposits as well as the loan summary .”…

Mr Shackman -” Currently the Town is invested in two types of accounts, one’s a Municipal Now Account , the second is a Public Fund Certificate of Deposit and the funds range from 40 base points or 0,04% to 1.33% “…He said it was important to know that these accounts are secured by the Florida Statute Chap. 280 (a requirement for all public funds) and the FDIC secures both as well…”This is a little bit different than it was a year ago. About a year or so ago the Town was invested in a repurchase agreement and the repurchase agreement differs from a Now Account in that you invest overnight funds into triple A security. For example Fannie Mae.” Making the change picked up additional yield…the repurchase is 0.8% compared to the yield of 40 base points and above to what the Town’s earning….He showed a comparison between the rate of 5% in 2007 and today’s rate .19 …it’s what the Now Account or any “liquid fund” are based on…as rates go up and the economy is going up so will the Town’s earnings on these accounts…when they go up…The question is, was this change brought to the Commission before, during or after it was done last year?…

Mr. Shackman-  went on to discuss the 2 promissory note loans with details of what the payoff amounts are and some options…He said we saved over the last 5 years or when the loan originated  and it’s over $100,000 by getting this lower interest rate of origination because we CHOSE to have the present pre-payment penalty versus no pre- payment penalty …”The Town chose the present value pre-payment which says ultimately you got all those savings HOWEVER due to where the rates are today there is a pre-payment calculation if the Town chooses to pay it off today.”…He explained it varies per day with interest rates…The numbers are such that it will cost us approximately $300,000+  to pay of the Promissory 2 notes!…So the gamble the Town took …and the savings we earned …mean we did not earn $100,000 …it is costing us $200,000+ now and as the Town Manager pointed out in Report to keep it would end up costing us a approximately $600,000 more!. … Who take s a pre- payment penalty on loans?….The Town Manager’s “crystal ball” was pretty cloudy when it came to that decision!…Pound Foolish!….

Next up the drainage RFP…for Commercial Blvd. and the Town Manager’s ongoing actions in the building of the Beach Pavilion…due to her lack of bringing the Pavilion to the Commission for direction…it was wrought with problems in its construction and its completion…..the constant flooding (prev. posts) is just the latest in this ongoing debacle…bringing in 16 vendors to bid on digging up the road to fix it …and severely impacting once again our downtown businesses…Now the Town Manager wants to bring back the Storm Water Assessment townwide ….while making some snide remarks about “someone” saying it was illegal in the past…as she directed the Town Attorney to find a way to make it happen…with the full backing of the “Gang of 3″…..It was illegal before and it is still illegal and here’s some excerpts of why to refresh some memories…including the “Gang”…

2005-“Storm-water utility maintenance and improvements (along with garbage collection, sewer im-provements, solid waste disposal, street upgrades and fire protection, including first response medical aid) are among the services the State of Florida has determined provide a direct benefit to properties, and may therefore properly be funded by special (non-ad valorem) assessments of the properties receiving the benefits. Even worse, it appears that most hi-rise condos and many single-family homes east of State Route A-1-A are being required to contribute to a Storm Water Utility Fund from which those properties derive NO DIRECT BENEFIT WHATSOEVER!

1) the REAL PROPERTY assessed must derive a special benefit from the service provided, and;
2) the assessment must be FAIRLY AND REASONABLY APPORTIONED among the assessed properties ACCORDING TO THE BENEFITS RECEIVED.
But the Florida courts have addressed that concept, as well, ruling that public health benefits are benefits to PEOPLE, not to PROPERTIES, and must therefore be publicly funded — if at all — by AD VALOREM taxes, NOT special assessments.

But it gets even worse! The condo where we live — and, we assume, also most other condos east of A-1-A — has its own “French-well” drainage system, bought when the condo was built and cleaned and maintained since then from our condo fees. Water that does not find its way into that drainage system drains either into the ocean or onto S.R. A-1-A, drainage of which is maintained by the State, NOT the Town. With rare exceptions like our own building’s partial frontage along Pine Avenue, therefore, those LBTS condos would appear to derive NO BENEFIT WHATSOEVER from the Storm Water Utility Fund, for which they are all assessed $7.00 a month per “equivalent storm-water unit (ESU).” (For our building, that comes to about $380 a month or about $4,550 a year.)”

And this….
“During public comments on the proposed 100% increase in the special assessment for the Storm Water utility fund John Thompson said he again thinks this an improper, inequitable, and possibly illegal tax. He pointed out that under Florida state guidelines, based on court decisions, one requirement for a special assessment is that it “must be fairly and reasonably apportioned among the properties that receive the special benefit.” Thompson said he fully supported the concept of a Storm Water Utility Fund to maintain and improve the Town’s drainage system. But according to the proposed budget document, the lion’s share of planned expenditure from the Fund next year — and indeed for the next four years — is for installation of NEW storm drains on Terra Mar Island, where none now exist, which Thompson found essentially different from “maintenance and improvement.” Next year $1,233,355 is budgeted to install new storm drains on Terra Mar, but only $79,177 for maintenance throughout the entire Town. 65% of the proposed budget for the next four years is for the Terra Mar installation. On that basis alone, Thompson submitted, a $7.00 fee for every property throughout the Town can in no way be considered “fair and reasonable.”
Even worse, according to the retired diplomat, was the Commission’s agreement at their previous meeting to borrow $1 million (which would not be required for simple maintenance and improvement of the existing system) in order to fund the Terra Mar installation. Interest over the 15-year term of the loan will be over $350,000, and debt service costs of over $90,000 annually will consume about 90% of the proceeds from the increased $7.00 fee, forcing the Town to maintain that fee for the life of the loan, but leaving only a minuscule portion of the proceeds for bona fide maintenance and improvement of the existing drainage system. Therefore Thompson urged that, at a minimum, residents of Terra Mar Island be asked to pick up half of the installation costs through front-foot benefit charges, which is the way such utilities are traditionally funded across the nation.
Jim Silverstone pointed out that another disadvantage of special assessments, as compared with ad valorem taxes is that while the taxes can be deducted for federal income tax purposes, special assessments cannot! Regardless, the $3.50 proposed increase in the Storm Water special assessment to $7.00 was passed by a 4-1 vote of the Commission. Only Commissioner Wessels felt that perhaps the additional $3.50 should be funded from ad valorem taxes, because “special assessments are getting out of hand!”

BC- Now that Terra Mar is done and out of the picture….we are still left with A1A condos not benefiting from the Storm Water Assessment…The only way to have an assessment of this type is to confine it to those who own properties that will receive a benefit… and take the condos out of the equation…

More RFPs were addressed in New Business… and showed that the Manager did indeed thwart the RFP process to stick it to this writer ( making trumped up accusations…lame)… and Commissioner Dodd…She did it at the expense of the Town…..both in dollars and the Town’s reputation… There were charges for the Town Attorney’s opinion (of sorts)………and in costs the Town will most likely incur when there is an accurate “apples to apples” comparison of the RFP Parking Citation bids… ( and perhaps the others as well?)…It appears she made misleading  statements in her dais comparison that must call into question her “experience” with the procurement process…   …She said she did not want to pay the “upfront costs for hand held devices for parking…she doesn’t do that for something new or different… (Come on!…she buys “upfront” all the time…as with the new Municipal trucks…and even the crappy old Public Safety Complex…It appears her RFP was lacking in form and did not ask for monthly rates…It also appears that to keep her vendor of choice she was  willing cost the Town $$$$…The Representative from ITek sent an e-mail to the Commission the next day after listening to her remarks standing at the podium and doing his own follow-up after leaving the hall…

(public record)….

I think no matter how tenuous the process benefits to your city may already been realized. Looking over your old contract and the new offers I see concessions have been made in each of the new offers. This is indeed the benefit of the open procurement process involving numerous vendors. After reviewing the pricing analysis late last night a few items came to note. It appears nothing was in the calculations for Duncan ’s equipment cost. The evaluation last night as a result lacked fair apples to apples comparison.

I noted last night that this RFP was lacking a key feature. This RFP lacked a typical pricing matrix (contained in most RFP’s). This price breakdown is done for conformity among the vendors, and ease of final analysis. Lacking this type of format your city ends up without the even view needed for comparison. If each vendor could be in the future required to answer a set of price and feature related questions. Once completed it takes only a few moments to do an analysis. Even without this matrix we created our own and outlined each item listing the associated cost. The idea is to include everything needed and prevent a costly surprise down the road.

What we are working with now is an evaluation sheet. This approach requires your staff to hunt for data from each submitted RFP response. This process is not only cumbersome, prone to inaccuracy; it’s time consuming and results in the “NA” fields found in the document used last night. This is very hard work for the manager’s staff the inserted “NA” represent key areas needed to make a sound decision.

Commissioner Dodd’s approach is laudable – this long term view will get the facts out in the open. I stated from the start that our firm could give the city more for less – and I stand on that statement. When your commission views the three year long term view your city will be quite impressed.

Lastly the manager gave the impression we were charging the city $20.00 for bad checks – we are not the violator (bad check writer) pays this fee to recover what we are charged by our bank. Also some may have the impression that we were profiteering by charging the city upfront for services and equipment. When in fact without lease or interest charges this method saves the city over 50% on the equipment! Duncan proposes $250 per month or $3000 per year X 3 handheld units or $9,000 per year. Our formula using the upfront cost model would cost Zero each month! Consider this in your overview…

The life of contract cost per handheld with Duncan is $9,000 per unit or $27,000 for three units over the life of the contract. Our total over three years is $13,950. Cost per citation issued Duncan $34,060 – iyeTek $16,250

Over three years:
Per ticket iyeTek is $17,810 less
Equipment iyeTek is $13,050 less
Total: The Duncan variance on these two major items shows iyeTek is $30,860 below the Duncan cost.

We are perfectly open to a few modifications in the up from model by converting some of this upfront costing to monthly payments – this is a very minor issue when compared to the projected cost saving to the city.

Chris Hood
Grant & Partnership Manager
iyeTek LLC”

BC- The RFP will be before the Commission again at the 2nd meeting in October… Just another Pound of  RFP Foolishness……not to be “read aloud”!…

The Town Manager’s review needs to address all of the above especially in light of the “cause” she applied to the termination Of former BSO Police Chief Scott Gooding…”Fiscal Irresponsibility”…

The Town Manager’s “Pound Foolish Fiscal Irresponsibility”…2007-2009…

1. Her Contract…to fire her $250,000

2. The Public Safety Complex was a “shell” game (in this writer’s opinion)…from the get-go…It costs way too much for a tear-down…(the property behind it…same size lot…cost about half only months later)…We were not told the true costs that would be involved to renovate and we were not told the BSO informed her they could not use the premises as they were preferring to stay where they are…she falsely told them the Commission wanted them moved…(per the BSO Colonel at the June special meeting for Chief Gooding) when the Commission were told of her plans for the development offices to go in the current police department…We were not told it would need a lift…the VFD could not sleep there after all (now looking for a $3 million “firehouse garage” per the description in the 2009-10 budget…that sleeps the VFD)…We were told the warehouse sale would make it a wash…(or even better)…but the warehouse is off the dais…no discussion…despite the ONLY vote of the Commission was a 90 day real estate agreement to sell… way back when… $2,000,000+

3.. The Beach Dec. this writer posted that the Town was moving ahead without permits…a charge denied by the Town……but the prev.posts showed the online Broward County permit dates and the failure of the inspection…and an e-mail received confirmed it… (below) …Throughout the businesses were harmed  due to building in-season as we found the Manager kept mum on the fact that the Broward County grant was extended to next month (Oct. 2009)… We  were informed by the contractor of ongoing permit problems…the Town being informed of  the drainage problems..the Town Manager telling the contractor that the Commission did not want to spend for that or the lights…although she never  brought it to the Commission to decide on…We had change orders…shoddy siding…and are now putting in extra municipal worker hours to replace sand every time we flood…sot he cost in the end…to the commerce…the taxpayers ….$$$$$$ anyone’s guess-timate…

An e-mail from a concerned observer….

[email protected]
The discussion of drainage should include the fact that the commissioners pushed the drainage issue through against the county review process. XXXX XXXX put a stop work order on the project because it was proceeding without approvals or inspections. ”

And now we are told  by the Town Manager after months of no responses…that we have $18+ million dollars at the end of the fiscal year!…If the Manager had told us this in 2008 and the right majority was on the dais (not the VFD first and last and at all costs…pun intended)…we could have had a groundbreaking for a whole new Town Hall-Public Safety Complex…We had the money for it the whole time……with the promissory notes that are approx. $6+ million…the money from not installing the sewers in Palm Club…the money used for the purchase of the Public Safety Complex…and the sale of the warehouse…But instead…thanks to our Town Manager… we are…stuck with being ……


more to come…………

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