Friday, April 25, 2008

A Roadmap to Leadership

Once again, we find greater understanding of the City's current circumstances by looking back over how we got here and listening to those who were on the front lines. Former Councilperson Bob Scales demonstrates with this paper, circulated earlier this week, that his commitment to the Island's well being remains strong even in "retirement". Thank you Bob for sharing these valuable insights, reminding us of recent history soon forgotten and helping not only the Council, but the community find its bearings in the chaos of City Hall.

Published with the author's permission.


_________________________


Bob’s 10 Step Program for Municipal Financial Success

Proposal for the Bainbridge Island City Council

from Bob Scales

Bainbridge Island City Councilmember 2004-2007


1. Trust but verify

2. Don’t ignore City Council policies and priorities

3. Sell surplus City property

4. Don’t raise taxes or rates in a recession

5. Use consultants sparingly and cautiously

6. Keep your promises.

7. Don’t break the law

8. Be an advocate

9. Don’t make excuses – make decisions

10. Find out what went wrong


1. Trust but verify

In October 2007 the Mayor presented her proposed 2008 budget to the City Council. This was the most abbreviated budget document we had ever seen. We went from the normal 3” binder to a ½” binder. The Council expressed concerns about the lack of detailed information in the budget document and we questioned how we would be able to produce a final budget from the limited data the Mayor gave us. We were told by the Finance Director, City Administrator and Mayor that they had prepared the document by following all of the Council’s budget directions and therefore we did not need detailed information and should just approve the budget as proposed.


The Mayor’s proposed budget had $9 million in councilmanic debt. We learned in December 2007 that it was actually $10 million in debt. Virtually every project in the 2008 CIP was funded with debt. The Council felt that the City could not sustain this level of debt and that it was not appropriate to fund projects like routine road maintenance with debt. We asked the administration to cut $2.5 million out of the operating budget and the Council cut $3.5 million out of the 2008 capital program. The administration’s reaction to the cuts was very strong. The finance director accused the Council of mismanaging the City’s finances. The City Administrator told the Council that we just ruined months of staff work. The Council was told that the City’s finances were sound and there was no need to cut the operating budget. The Council did not bow to this pressure and passed a budget with only $4 million in debt. The Council went through a very good exercise during the budget process and decided that what remained in the 2008 CIP was worth being funded by debt if necessary.


Just 3 months after the budget was passed the Mayor and Finance Director informed the Council that the City would be $2 million in the red in 2008. Imagine the hole the City would be in if the Council had approved the Mayor’s proposed budget. Unfortunately the 2008 budget does not appear to be worth the paper it is written on.


Before the Council takes any action on amending the 2008 budget you should verify what you are being told by the Administration. The revenue numbers they gave the Council in December were wrong. Why would you believe the numbers they are giving you now just 3 months later? The finance department should give the Council and the community a detailed assessment of the City’s finances in a form that can be easily understood. It’s not good enough for them to say just trust us. Verify what they are telling you.



2. Don’t ignore City Council policies and priorities

The City Council has never had a very good institutional memory. Councilmembers change and motions and actions taken by Councils in the past tend to get lost or forgotten. There is no one in the City who is the keeper of the Council’s priorities and actions. This would be one argument for having a dedicated staff person for the Council.


The Council has the ability to change any action taken by prior Councils. However, until they do so, they are bound by the policies established by prior Councils. It is frustrating for me to see this Council ignore or disregard policies set by the last year’s City Council.

Here are a couple of examples:


Winslow Streetscape – In the 2008 budget process the Council approved funding for the next phase of the Winslow Streetscape project. However, the Council also said that we would not approve the contracts until the administration presented a detailed financial plan for funding the entire project. The administration was told to consider all possible funding options including an LID. From what I have seen the Mayor is proposing a $1.3 million contract with Heery to be paid for entirely with utility revenue bonds. I have not seen any plan for funding the entire project. Unless the Council changes its policy, you should not approve this contract until you have approved a funding strategy for the entire project.


Surplus of Open Space – The City Council placed a strict condition on the purchase of the Williams property. The Council required that at least $850,000 of the purchase price be raised from the sale of surplus city property. The Open Space Commission and the administration were asked to present Council with a recommended list of surplus properties by December 12, 2007. They did not meet the deadline so now this Council must act on this policy. Unfortunately the OSC and the LUC are recommending that the decision on which surplus properties to sell be deferred until next December. This amounts to ignoring and disregarding the Council’s original direction. If this Council doesn’t want the revenue then vote to change the Council’s original direction, but don’t keep deferring making a decision



3. Sell surplus City property

The City needs additional revenue to meet unexpected shortfalls in the 2008 budget. The City owns millions of dollars in property which is not being used for any meaningful public purpose. There are also open space parcels which were purchased with the clear understanding that portions could be sold to raise money for other open space purchases. In December the Council approved the sale of $850,000 of surplus city property. What is the city waiting for? Selling the Suzuki property alone could raise $3.5 million. This is a property that the City has been sitting on for years and has decided not to use for a police/court facility. I know of a family that has offered the city $200,000 to purchase a city easement next to their property. That’s money that could be put in the bank tomorrow if the city would just act on it. The City should offload surplus properties as fast as possible


4. Don’t raise taxes or rates in a recession

What should government do during a recession? Econ 101 says that government should work to stimulate the economy in a recession by increasing spending or cutting taxes or both. Now is not the time for the City to pull back on public spending or to raise taxes (like the proposed $20 car tax). The City needs to care for and improve the City’s basic infrastructure to encourage private investment and promote economic vitality. The City should maintain funding for social services, affordable housing and community development. The economic downturn will be temporary, but if the City stops investing in the community it will have long term negative impacts.


Also remember that the City raised SSWM rates 30% this year and over 100% in the last 4 years. This is a fee that affects every household and business on the island. These rates were raised to eliminate the general fund subsidy of the SSWM utility. However, it is unclear where all this new general fund money has gone. The City budget is a black hole and you never know if you will get anything tangible for your money. If the City decides to raise taxes or rates in the future, you must make certain how the new revenues will be spent and then hold the administration accountable for spending the money appropriately.


5. Use consultants sparingly and cautiously

The City’s professional services budget has mushroomed in the last few years. It wasn’t until the 2008 budget that the Council was able to make any meaningful cuts in professional services. The Administration line for many years was that professional service contracts were needed because the City did not have enough staff to complete the Council’s work plan. They used this argument to advocate for more staff because they said that these projects could be completed in house more efficiently and at a reduced cost. So the Council approved staff increases and by December 2007 the City was fully staffed and ready to roll. Beware of administration requests for additional consulting services and complaints that employees are overworked.


> To keep reading/read all "10 Steps" click here





(To post or read comments on this story click on 'COMMENTS' below)


16 comments:

Anonymous said...

The 10 steps to good mamagement are well known management precepts and are valid. However, it is up to the current city council to decide how to allocate the revenues available to best serve the citizens of BI. Each issue addressed is more complex than the article suggests so CC please remian focused and do your own homework. For example, selling surplus property is a great idea, as long as it is offered in a fair and open process to everyone (this allows all potential buyers to participate in the process and also allows for the city to receive the best price and/or terms). The suggestion that a property owner should be allowed to buy an "easement" next to their house for $200,000 does not identify the easement. Could it be the road end that augments a devloper's ability to build a huge house? Will the city then begin selling off easements on all city property? Is this the setting up of just another city policy that allows for rewarding special interests? Just remember, the devil is in the details.

Anonymous said...

Bob, you may have started as a strong advocate for affordable housing, but you didn't finish as one. It seems that you held a vision for how things should go, and when they didn't go that way, you lost your interest. I don't know where you've been, but I've seen Barry Peters, Kim Brackett and Hilary Franz first hand turn out over and over for opportunities to educate themselves on affordable housing issues. I'd say that demonstrates interest in a subject. Additionally, I know that Mr. Peters is deeply involved with Sustainable Bainbridge. I saw him at the Home and Garden show at Woodward Middle School earlier this year. Didn't see you there.

You were the chair of the finance committee, were you not? Where were you with the Empress was spinning her wardrobe aka the 2008 budget?

McCoy said...

We would like to clarify how this piece came to be posted on the PostScript. We heard today from one source that the author "posted" it here. Mr. Scales did not seek us out, one of our contributors received a copy of this paper through personal e-mail and the PostScript asked Mr. Scales for permission to publish the document. We feel that it offers a valuable perspective on our current Budget and CFP crisis and that it may also help to bring newly engaged citizens up to speed on the roles of the Council and Mayor, and how a lack of leadership has resulted in a near total breakdown at City Hall.

One need not support all Mr. Scales' recommendations -- we would not support support selling even surplus City property unless absolutely necessary -- or even agree with all the details in his recollection of what transpired during his tenure on Council, to find something of value here. I do hope that those who seek to criticize the author have in fact read through the entire piece. I think you'll find the answer to your question there, "anonymous at 1:15".

Anonymous said...

Uh, I did read the entire piece, McCoy. My comments were not intended as criticism, but rather to put forth that there are other points of view from at least one person who has been following island politics closely beginning in Jan. '07.

I truly don't understand the basis of several of Mr. Scales' comments. I have had radically different experiences regarding several of his points.

Frankly, I think Debbie Vancil's recent column, is much more helpful for our community.

Shogun said...

As I recall, I have a standing bet with former Councilmember Scales over a statement he made at the Port Blakely Council show-down when he was in office. I have the money quote where Mr. Scales said in firey defiance that he would "spend $100 million (of taxpayer money although he did not identify the war chest he would use) to fight buidling one additional private dock at Blakely. The tapes are available for inspection at Silver Screen.

My point is in the heat of battle Mr. Bob Scales could be as wasteful as anyone with the taxpayer money. Furthermore, when former Councilmember Scales was in office he manages to vote "YES" on numerous big ticket items even though he appears to claim he did not have the financials to move foreward.

If COBI does not give the financial justification -- shut the project down.

It is always easier to remember after the fact with the gauze of time to shield the facts.

Anonymous said...

Dear Anonymous 1,

You are right. I am no longer on the City Council and I have no vote. It is up to the current city Council to make informed decisions. I was simply giving them my point of view like many other citizens do.

Last year the Council passed a motion to sell $850,000 of city property in order to raise the funds needed to buy the Williams property. The Council asked the administration to work with the Open Space Commission and the public to produce a list of potential properties that could be sold and then bring that list to the Council. So all the issues you raise will be discussed during that prioritization process. The city has an insatiable appetite for acquiring open space. Unfortunately the city spent $3.5 million on two open space parcels (Meigs Farm and Williams)last year with money that we did not have. I would not have voted in favor of the Williams purchase (it was a 4-3 vote) had we been told the truth about the city's finances. So while it might not be fun, it is essential that the City examine all of its property and determine which parcels should be sold to raise needed revenues.

Dear Anonymous 2,

Your comments sound very familiar. I think I know who you are. I assume that you are referring to my lack of support for the Community Housing Coalition. I voted for the creation of that group. I voted to fund that group for 3 years to the tune of $300,000. CHC produced absolutely nothing. No cottage housing ordinance, no affordable housing ordinance, no accessory dwelling unit program, and not one single unit of affordable housing was created while CHC was active. I hate to waste money and I have no tolerance for ineffective organizations. CHC was ineffective and a waste of money. I was able to get the city to fund an assessment of CHC and the consultant recommended that it be disbanded. CHC was not funded in 2008. My lack of support for CHC in the end should not be read as lack of support for affordable housing.

I did have a vision for how things should go. I thought that the City should support efforts that created and preserved affordable housing. CHC did not accomplish those goals. I did try to do something different and the Council supported my motion to create an affordable housing project developer. Unfortunately that position was opposed by CHC, HRB and the Mayor who corrupted the selection process.

If you look at the record, I think you will find that I was primarily responsible for getting the city to support the purchase of the Quay Bainbridge.

I was very well educated about affordable housing issues. However, I chose to get my advice from professionals who were not politically involved with HRB and CHC. This made some people in those groups very upset.

I'm glad that Barry, Kim and Hilary are educating themselves on affordable housing. But I want to see them take some decisive actions to support affordable housing. It seems all we ever do on this issue is talk about it and hold community forums. I wanted to actually produce something tangible.

I'm glad that Barry has time to get involved with your group Sustainable Bainbridge and that he goes to the Home and Garden show. If I was retired without kids at home I would probably spend more time at community events as well. How many current Councilmembers have a full-time job and commute to Seattle? Spending four years on the Council took a lot of my time. You'll forgive me if I choose to take a little time off to be with my family. Maybe next year you'll see me at your show.

Actually I was not chair of the finance committee in 2007. But I was the Councilmember who made the motion to cut $2.5 million out of the city's operating budget. If we had been given accurate financial data I would have cut much more.

Anonymous said...

Dear Shogun,

As I told you before, you have me confused with someone else. Nezam and I were the two Councilmembers who were trying to find a compromise solution to Blakely Harbor and end the lenghty and costly litigation the City was engage in. I was in favor of allowing more docks in the harbor but unfortunately we were not able to come up with a formula that the Council could agree on.

I don't need to watch the tape to know that I did not make the kinds of comments you are attributing to me. How much was our bet? I'd like to collect on it now.

I did vote on some big ticket items when I was on the Council like the sewer plant and early phases of Winslow Tomorrow. According to the information we had, money was not the problem, it was the City's inability to perform. We were budgeting millions of dollars for capital projects each year but only 25% of the projects were being completed. This meant that millions of dollars would be left over each year. It turns out that for at least the last two years we were given false financial information and the City actually had no money. If I was an accountant and had time to go through all the city's books maybe I could have figured it out sooner. But the Council must rely on the paid professionals in the City to give us information. The system breaks down when that information is false and you can't make responsible informed decisions.

Anonymous said...

All I can say is that I watched those last council meetings at the close of 2007 and I would like to thank Bob for refusing to accept the fuzzy numbers coming out of the administration. It was in December that many of us began to really question what the administration was telling council (and us) about City finances. Prior to that point, I had read Konkel as a man caught between his own integrity and pressure from the Mayor to suppress information (?) or spin it. He had given council hints that Winslow Tomorrow was an overly ambitious plan and had warned that "the lines would cross" (revenue and expenditures) if they didn't reign in spending. But then when they tried to reign in spending he became infuriated (to put it mildly) and now we find out that the City was already deep in the red.

I am the first to admit that the council deserves some of the blame for our present situation, but there is just no doubt that we would not be here if it wasn’t for the administration's poor management (or worse). Critics have been blaming the counsel for “not making decisions” for years, and under that pressure council persons have had to try to do their jobs without any staff and with an administration that manipulates or hides information. Damned if you do, damned if you don’t.

All that said, we now have enough information to know that at the very least there’s no money and at the worst something shady may be going on. From this point there can be no more excuses. Council must stop spending until they are absolutely confident they are fully informed about the city's finances and the law.

Anonymous said...

Surprising to see community/environmental bloggers still singing praises for Franz and Peters. Watching Council (thank BITV) it is very clear that Franz and Peters are both advocating for VERY small, high roller, developer heavy special interests most recently casting determinative votes (Heery) that destroy trust, necessary programs and more and generally have turned into complete and non-stop disappointments. Lesson: we get what we vote for and in this instance, no one voted for either one since each ran unopposed. Perhaps it's time to be thinking of better candidates to run next time around...

Anonymous said...

Thanks to Bob Scales, Nezam Tooloee, Bill Knobloch and Debbie Vancil for doing all they could to blow the whistle on the Mayor’s tissue-paper thin budgeting information in 2007. And thanks to current council members who have continued to seek the truth, despite stone-walling by the Mayor and her staff. Without even one staff person, principled Council members have appropriately challenged our Mayor, who's flanked by 155 full-time employees + many, many part-timers + a revolving door of consultants. The public is watching & gets it. Far from being the victim, the Mayor, with her disproportionate power, is a problem.

Cities under 100,000 across the state & nation, recognizing it’s the Mayor-Council form of government that is at fault, have opted successfully for a COUNCIL-MANAGER form of government. Voila! Council then hires a real CEO to run the City and the dysfunctional power conflicts caused by a Mayor-Council setup in small cities dissipate. Let it happen here.

Anonymous said...

bob, right on fellow dudester! we need a cfp smack-down. bring it on councilors. put the winslow streetscape up against still unfunded needs like the '07 storm repair, waste water treatment plant, affordable housing, unsafe road shoulders, walking paths etc.

the winslow storm sewer replacement is legitimate but you know, when you have friends in high places, really odd things happen in city hall. view vistas, streetscape amenities and delusions of grandeur. hey, there's only so much of our money to spend and we aren't even sure how much of the green stuff we have anymore. fellow garderners, think maybe it's time to tend our garden?

Anonymous said...

Written from Anonymous 2:

Bob, I can tell from your response, that you think I am in the Sustainable Bainbridge organization. I am not. I'm sure you have no idea who I am and who I am doesn't matter. It has nothing to do with anything. I too am very busy, a single parent working full time and very involved with our community. I attend many meetings both as an observer at council meetings and serving on a non-profit board, leaving my two kids home alone many evenings. I volunteer those details of my life in response to your noting your busy schedule.

Your opinion that CHC accomplished nothing is your opinion. I have an opinion, too, and as someone who was involved with CHC, my experience is that a great deal was accomplished. It was folly for the mayor to create an organization of one staff member and all volunteer board, non of whom had experience in writing municipal code, and expect them to come up with municipal codes for affordable housing, cottage housing, etc. The CHC took it as far as people who do not have expertise in writing law can and delivered their body of work to the city. As the CH2MHILL study said, this kind of work should be handled within the city where the expertise lies.

I bring up current council members because you said you did know what they stood for. I can only say you must not be paying attention. I brought up Mr. Peters' involvement in SB as a demonstration of interest by a council member.

My opinion - You seem to be easily insulted when insult is not intended. This appears to put you into a defensive posture and when parties are defensive they cannot work together to solve issues. Or maybe its frustration. I don't know. It doesn't matter.

I do know that to be effective and advocate for one's beliefs, one has to remain involved in the discussion. Passing judgment negates your ability to be effective. It sets up an us/them dynamic when actually we are all WE.

Anonymous said...

Not a bad generic list. But, selling surplus property can be made to sound like a good idea, but it's not.

First, it irrevocably deprives the city of public property for all time. This may appeal to the few but vocal advocates among us of turning over our public endowment to privatization, but for the other 95% of us, it's robbery - a tax by any other name.

Further, the pittance it will bring in may help the city score its next "fix," but it is not real money.

Still further, needlessly selling off property in a down market is just bad money management, unless you're the buyer. Perhaps it's not impossible that the visible and vocal advocates of the city unloading the public's assets at bargain-basement prices are a part of the scam. What it really amounts to is a disproportionate tax minimizing the necessary contribution of the well-to-do. This works for the greedy among us, but not for those with any real sense of community.

Better the city figure out how to finance the worthy goals of our community by contributions from those most lavishly enjoying the benefits of membership in our community - those most able to pay.

Anonymous said...

Bob's comments are a compendium of common sense expectations that a community with the sophistication of COBI should expect and demand. Life on BI is not cheap and long time residents are being taxed out of their homes while an administration squanders tax revenues without accountability. The taxpayers of COBI are paying top dollar for a banana republic government. Each day a new revelation, more incredible than the last, would make a uninformed observer question whether this Island community is capable of self government. No business with annual expenditures of $50M would survive in the real world if they could not balance their books four months into the New Year.
The taxpayers of this Island are stockholders in this enterprise.It is sobering to realize that an island government, controlled by a mayor who has repeatedly displayed a total lack of respect for the interests of all the citizenry, can create an indebtedness secured by the homeowners of this Island without any approval from those who must pay the tab. We are past the point of civility. This adminstration is out of control and it is time that questions be answered and the real condition of the City finances be publicly revealed.

Anonymous said...

Anonymous 2,

I'm actually not offended by any of your comments. Remember I spent four years on the Council and endured a lot of criticism. I don't expect everyone to agree with my opinions or decisions I made when I was on the Council. What I have little tolerance for are inaccurate statements or misrepresentations of what I have done, said or stood for.

I'm glad that you think CHC accomplished something, but you don't say what it is. CHC was set up with a specific purpose - to recraft the affordable housing ordinance. CHC was created at the urging of the Mayor's Affordable Housing Task Force. They told the Council that they needed to have an experienced full time executive director for CHC and that would give them the ability to get a lot of things done. Unfortunately HHHS chose a director who had no experience with affordable housing. As far as I know the only things this group produced were a few communtiy meetings. Are you aware of any other deliverables produced by CHC? Again what we need is affordable housing units not a lot of cheap talk about how much we need affordable housing.

You seem to think that I should not voice opinions that may be critical of others because "we are all we." However, I can guarantee you that nothing in our city government is going to improve by sitting around at some retreat and saying "we are all we." This City needs a major overhaul at every level - electeds, management and staff. I'm beginning to think that the best solution would be to unincorporate. Moving to a City Manager form of government will help but ultimately I think our city government will fail because "we are not all we" on Bainbridge Island.

All you need to do is attend any City Council meeting or read the letters in papers or read blogs like this one or look at the City's litigation list. We have a lot of very different views on this Island. Strong and contradictory opinions. An unwillingness to compromise. A deeply entrenched old guard competing with the newbies for power and control. It's not all the city's fault. Ultimately we are a community divided on many issues (docks, soccer fields, development, winslow way, fast food, shorelines, hildebrand-erickson, bathrooms, etc. etc. etc.) The City is often just caught in the middle. When you combine a divided citizenry with a complete lack of leadership at City hall it is a recipe for stagnation, inefficiency and waste.

Anonymous said...

I thought I would comment on
Anonymous 1's question about
the $200k "easement" offer. I
am the property owner in question.
The easement is a 10 ft wide strip
of land that leads to the water off
of Olallie Lane, near Battlepoint.
The land formerly belonged to the
prior owners of my house. COBI
obtained it a few years ago by suing the owners, in a legally doubtful (in my opinion) and heavy handed action, that was not exactly "willing seller/
willing buyer". Anyway, that is beside the point. I made the purchase offer when the Williams deal was announced, thinking that it would be a win/win, i.e. trade a fairly useless road-end for almost 15% of the new park, or to
pay for the improvments needed to make it useful to the public. I am not making big deal about it. The city can take it or leave it. Apparently they are going to leave it.