Who shot John?
Awash in red ink, city flounders for life preserving garbage fees and/or pay cuts
By Chip Drago
Mobile Bay Times
A strain of March Madness gripped City Hall here Tuesday -- City Council President and former Final Four referee Reggie Copeland even whistled a fire captain for a technical foul -- as 300 firefighters, cops and their supporters packed the city council chambers to protest a proposal to plug a gaping $18 million hole in the city budget by cutting their pay.
When all was said and done, much was said and little was done -- until late in the game, garbage time, provided a telling glimpse of the city's likely buzzer-beating play.
Copeland, joined by Finance Committee Chairman William Carroll, recognized a path of least resistance. The councilmen suggested a service fee, Carroll more specifically a monthly garbage collection fee as a possible solution, caught as the City Council was between a hard place (layoffs, over Mayor Sam Jones' politically prostrate body) and a rock (10 percent across-the-board pay cut, an earful from an irate squad of police officers, firefighters, other merit system employees and their spouses, some with even more vocal babes in arms).
(While a garbage tax appeared to be gaining traction, City Council members are undoubtedly getting lots of input from their constituents. Which, if any direct remedy, would you favor? Click here to participate in a POLL.
The Jones administration expected Wednesday to develop revenue figures related to the imposition of a garbage collection fee for the Council to consider and vote on, perhaps as soon as Tuesday, April 6. If a previous temporary $4 monthly garbage fee collected in 1995 is a model, the new fee of $15 would take about two months to enact; would be collected by the Mobile Area Water and Sewer System, and; could not exceed the actual cost of the service. Also, exemptions would be granted to households overly burdened by the fee/tax.
Jones had advanced the 10 percent cut in salaries as the centerpiece of his proposal to address the shortfall.
Without a measure to bring spending and income in line, as required by state law, the city would run dry about June 1 and layoffs of as many as 300 employees would be mandated. The city's workforce totals about 2,500.
The city budget office had three major miscalculations in the fiscal year 2010 budget: an estimated carryover of $1.3 million from 2009 actually was a $2.4 million shortfall for a total deficiency of $3.77 million; a revenue shortfall from sales taxes and fees of $6.65 million; and a wildly off the mark $8.1 million shortfall in projected savings from "attrition" as workers retired or quit to take better jobs.
The bottom line, according to the Jones administration, is $18,537,630 in "total threats" to the city's hitting a budgetary bull's eye and fiscal integrity.
By calling on its two percent reserve of $4.1 million, capital transfers and deep operating cuts, the mayor estimated that adding a 10 percent pay cut across the board would trim expenses by another $5-plus million and balance the budget with a princely $187,170 to spare.
The pain of a pay cut stings not nearly as badly as unemployment, said Jones whose utter opposition to layoffs was unmistakable. Besides the devastation to 300 families, Jones pointed out, the peripheral fallout delivered significant incidental damage to the city in increased unemployment compensation, increased vacation payouts and rising costs for health and workmen's compensation insurance as the expense was spread over a smaller pool.
"Layoffs would have to be forced," he said. "It is not something I would recommend under any circumstances. It is devastating to a family to be out of work in this economy."
Jones pledged to reverse the pay cuts "when the economy improves."
Jones won re-election without opposition to a second term seven months ago.
Signs of nerves on edge were present all around Tuesday morning when a pre-Council meeting conference was full of various city leaders and department heads and later when they were joined by a contingent at least 300-strong of police, firefighters and paramedics. With fire marshals present to monitor the crowd filled the council chambers to its 284-person capacity, leaving a number of on-lookers shut out.
Although Council rules prohibit public comment on non-agenda items, Copeland in deference to the crowd chose four speakers from various city departments to address the Council.
"I would ask the speakers to limit their comments to five minutes although the chair will give some leeway so you can finish up," said Copeland. "We've got a packed house here today. I want to warn everyone in advance that there should be no applause or disruption or I will clear the chambers. We want to hear from everybody so let's respect the ground rules. Also, we will have a 2 p.m. finance committee meeting right here. Mayor Jones will be the headliner and he will disclose some things for dealing with this situation."
Copeland's pre-tipoff warning against outbursts was violated a few times, on two particularly notable occasions.
Eddie Irby Jr. is a regular at City Council meeting to champion "first responders."
"If anything has to be cut, let's start at the top and work our way down," he said to whooping, cheers and prolonged applause.
Earlier, Fire Capt. Bryan Lee, a 27-year veteran of the department, said it was "very wrong" to put the entire burden of fixing a problem on the backs of city employees who did not cause the problem.
"A temporary tax to fix this problem is the best way for all to share in the solution, to pull us out of this slump," he said. "It needs to have a starting date and an end date. There needs to be a clear sunset provision."
In the private sector, said Lee, heads would roll for such a fiscal performance.
"If you were on a board or a CEO and you brought about this problem, you would be replaced," said Lee. "The very ones who got us in this situation are the ones to get us out? I think not. Maybe it's time for somebody new without this political baggage to get us out."
Then, noting Jones's intermittent absences for cancer treatments in Arkansas, Lee said the effort to govern through his therapy had "failed, for whatever reason ... chemo brain ... a bad connection with his Blackberry ... whatever, it did not work."
With Jones sitting just arm's length from the podium where Lee stood, Lee said, "Mayor Jones, it's time for you to do the right thing. It's time for you to resign."
Virtually the entire audience collectively leapt to its feet with thunderous and sustained applause. With his back to the crowd, Jones showed no visible signs of a reaction and never directly responded to Lee's command.
Dismayed, Copeland said, "We don't need this. This is a serious matter. Let's stay away from derogatory remarks. We've got other speakers and I can cut 'em off. And if there is anymore applause like that I will cut 'em off."
Now 80, but once a college basketball referee, Copeland later said he was tossing Lee and not allowing him to address the Council again, reputedly for one year.
Lee last summer had considered running for the City Council District 5 seat held by Copeland since 1985. However, in the city's redrawing of city council district lines prior to municipal elections, Lee's neighborhood shifted to another district. With a six-election winning streak under his belt, Copeland scoffed at any hint of his hand in a maneuver to dodge a challenge from Lee or any political opponent.
Although judging from later reaction to the paramedic Lee's comments, the term "chemo brain" isn't as commonly known among the general public as it is to cancer survivors and the medical community. The term is shorthand for the memory and thinking problems that sometimes occur after cancer treatment. However, there is no scientific proof that chemotherapy causes mental fuzziness. Also, Lee's wife is a physician.
Later, Paul Cumbaa, president of Firefighters Local 1349, said some of Lee's remarks were not appropriate, counter-productive and should not be taken as the local's official position. As the elected leader of the firefighters' organization, Cumbaa said he had asked Lee to cede his time at the microphone, but Lee declined. Lee did not claim to be speaking for anyone other than himself.
More than 25 years ago, Mobile firefighters went out on strike in a labor dispute with the city. Could it happen again if pay cuts are imposed?
"Is it conceivable? Yes," said Cumbaa. "I would recommend against it. I believe that would probably be counter productive, too. But, yes, it is conceivable as a very, very, very last resort."
John Molyneaux of the Mobile County Law Enforcement Association was puzzled that the CitiSmart management program hadn't caught the burgeoning problem so that it could be addressed before City Hall was figuratively engulfed in flames.
"I just don't see how this could happen," he said. "Who dropped the ball? How did this happen? Maybe we need an outside audit? You manage a $14 million shortfall and you're asking 2,500 city employees to pay for it? This is so big it should've been seen back in September. What you are asking is not reasonable. There has to be another way."
FInger-pointing doesn't do any good, city officials say, adding that budget projections are just that, projections, and last year's projections did not, really could not, account for the Katrina-like surge of red ink rolling in with the current economic recession.
City Finance Director Barbara Malkove was clearly peeved with implications that her department had not kept Council members in the loop on developing information that pointed to the present financial crisis.
"I feel like my (monthly) letters and statements (contained information) that we knew we had a problem," said Malkove. "We monitor all the the costs, operating and capital. I've read that you didn't know we had financial problems. We have a severe cash flow problem. We're dangerously low on funds. I don't know any other way to say it than that we have to make cuts. I usually give these reports while sitting at the table. If standing up here (at the podium) helps you understand this any better, I will continue to give my reports standing right here. If there was any good news, I would give it to you gladly. It is time to deal with this or face very serious consequences."
"No one could predict the chasm that we have fallen into," said Malkove, the city's finance director for more than 20 years.
Councilwoman Connie Hudson last summer and fall was the Council's most outspokenly dubious member about the validity of the Jones' administration's budget. The numbers, she said then, were not realistic and the budget could aptly be described as a "prelude to a tax increase," deep cuts and layoffs or some combination of the three. She recalled that she was hooted at and ostracized as an alarmist.
Her "I told you so" tack did not appear to cheer up Jones and his staffers.
Only in the past week, according to Hudson, has the administration provided a true picture of the city's financial debacle to its elected officials.
Later, Carroll called the finance committee that he chairs to order, shortly after concluding a private, intense and animated discussion with Jones and his chief of staff Al Stokes off to the side.
Jones, Malkove and Budget Officer Bubba Young all gave accounts of how the ship came to be upon the shoals.
"If anyone knows of other resources, other funding, please come forward with it," said Jones. "If it is a better approach, I will be the first to say, 'Okay, let's do it.' If the City Council has another proposal so we don't have to cut employees' pay, I will be happy to adopt that proposal."
Jones said he had spent a sleepless night in worry over 2,500 city employees and their families. Jones said he replied to emails "all through the night." It is no time for "political grandstanding or political rhetoric," said Jones.
"Either we come up with a solution or we harm 2,500 families and that's the bottom line," said Jones. "We can't cut to the point that we can't deliver service. If we are forced there, we cease to be a city at all."
After recounting his history on the Council, Copeland said, "My suggestion is a user fee and let the people of the city of Mobile help. We have good service here in Mobile. The people of this community I love so much will step forward. We should step forward and ask them on a short term basis to step to the plate and help all of our 2,500 employees."
Hudson was called down after she continued to question the decision-making process that led the city so far off financial course.
"Our bond rating recently improved based on our healthy reserves and now we don't have any?" she asked.
Other perplexing questions that arose:
- To be off by more than $3 million on a carry-over from one fiscal year to the next at almost the same time the carryover was to occur?
- With the worst economy since the Great Depression weighing heavily, the budget assumes revenue growth or even flat revenues when most evidence shouted declining?
- Was an attrition figure arrived at after the fact, an obvious book-keeping concoction to strike "im" from "balanced" with no basis in reality?
Hudson asked how layoffs would work if the mayor couldn't sell his plan, does nothing and events play out.
"Not if I do nothing, if the the Council does nothing," Jones shot back.
Hudson advised the mayor that the definition of "political grandstanding" wasn't holding an opinion that differs from Mayor Jones.
It was eerie how closely the actual budget shortfall halfway through FY 2010 meshed with her publicly expressed fears of August and September of 2009, Hudson noted.
"They are almost exactly the amounts I had figured based on studying the numbers," she said. "I think I said it would lead either to drastic cuts and/or tax or fee increases. I called it a prelude to a tax increase and I was called an alarmist. If we had only been advised of this earlier, it would've been easier to deal with. Our backs are against the wall now. But we were told the mayor was comfortable with those figures and if any adjustments were needed, he was prepared to make them. I was told that my concerns were premature and not in the best interests of our employees and our city."
Did Hudson have any solutions or was she content to live in the past, she was asked.
"I was in the dark until last week and maybe if I knew a little earlier (the extent of the debacle) and had the resources of the mayor's office, maybe I'd have some recommendations," she said. "I'm not in favor of a tax. I'm on record as not supporting a 10 percent reduction in pay."
"So you're supporting layoffs," said Carroll.
"That's the mayor's prerogative," she replied.
Then the moment Carroll had been waiting for arrived.
Carroll said he wanted to "take a play out of the playbook" of the 1995 administration which imposed a six-month $4 per month garbage collection fee to raise employee pay.
Carroll called for a $15 per month fee over six months, dropping to $8 per month for 12 months. Accounting for 60-days to implement the fee, the additional revenues should match the $5-plus million cost savings from the proposed 10 percent pay cut, helping to balance this year's budget only from the opposite direction.
"I think all of us can come up with $15 a month," said Carroll. "It's an idea that should be seriously looked at."
Many heads in the audience were nodding in agreement.
When would Carroll need the numbers run for him, asked Jones.
"As you like to say," said Carroll, 'yesterday.'"
Councilwoman Gina Gregory asked Jones about layoffs and how they might come into play.
"If we can't make payroll, they (the Mobile County Personnel Board) give us a list for 'reduction in force' and we lay off that number," said Jones. "We have some discretion in the departments and class. Unfortunately, it's the mayor's discretion.