How Can The St. Pete Administration Cut The Budget?

Two administrations, Baker and Foster, have tried to wait this thing out hoping something magical would happen. There is no magic bullet, it's time to act.

For the past few years the City administration has used the traditional budget balancing methods of reducing capital expenditures, eliminating training budgets and reducing general operating expenses. There have been a significant number of staff reductions including eliminating positions, resignations and retirements. But the administration has run out of quick fixes. 

There have been calls to use the City's massive reserves to defray operating expenses, but Mayors and City Councils have generally shied away from this as a bad business practice since it really just pushes the problem down the road. 

The private sector for decades has used a combination of plans to incentivize people to leave the payroll. These plans allow those at or near retirement to leave early or if they have just been hanging around, like a lot of City employees, it encourages them to leave.  

Three steps To Transforming the City Administration

1. Determine the total amount of savings necessary to bring both the 2013 and estimated 2014 budgets into balance. 

2. Look at the entire MANAGEMENT team and reduce the number of supervisors and managers, Majors, Captains, Assistant Chiefs, District Chiefs and  administrators to meet that goal. As a general rule of thumb reduce:

  • 2 senior administrators, and their support staff such as secretaries and assistants.
  • 1 manger in every 5 and their support staff such as secretaries.
  • 1 supervisor in every 8.
  • Public safety must participate but only with senior staff such as Assistant Chiefs, District Chiefs, and Majors, Captains, and civilian managers and supervisors.
  • Once identified these people must leave the organization.
  • No cut and shuffle leaving them hidden away on the payroll.
3. How?
  • Put together a viable incentive program that adds significantly to the normal termination pay and will encourage people to leave.
  • Don't worry about people walking away with large sums of money. This thinking is a holdover from the David Fisher Administration and is last century's thinking .
  • These payouts are investments in the City's future .
  • Identify those whose positions are being cut, inform them of the decision, and they will have 1 month to take the incentive package or simply be removed from the payroll.
  • Take whatever amount is necessary to fund the incentives and termination pay from the reserve funds.
  • This approach creates permanent solution to the problem, blunts the argument against using reserve funds, because this program is a onetime effort that resolves the budget problem going forward .
  • The pay back on this investment should be 100% in less than three years.
  • Do not hire a consultant to study or do this - just do it.
  • Maintain a hard hiring freeze for at least 24 months.

Draconian? Insensitive? Uncaring? Perhaps. But if Bill Foster had had the courage to take similar steps when he came to office, there is a good chance the budget would be balanced and maybe even running a slight surplus. 

Two administrations, Baker and Foster, have tried to wait this thing out hoping something magical would happen. There is no magic bullet, it's time to act. 

e-mail Doc at: dr.webb@verizon.net, or send me a Facebook Friend Request.

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Concerned Floridian September 20, 2012 at 12:47 PM
I love this line "Do not hire a consultant to study or do this - just do it." This is also an additional way to spare some funds: cut & freeze fees paid to consultants. A list of all consultants fees paid in the last 10-15 years would be useful to all citizens to review the efficiency of the in-house administrators... How much money has been given to outsiders/consultants? And for which projects? Could this information justify the unnecessity of many administrators positions on the city payroll? For those who cannot do their job without the sempiternal assistance of 'consultants'?
beichler September 20, 2012 at 01:26 PM
Using consultants shields the City of liability. The reason the City has these huge reserves is because it is self insured. If the City shied away from consultants it would open itself up to more liability. The City is already down to a skeleton crew. What incentive do well educated, hard-working people have to come work for the City if positions are changed out after each administration. These "excess" people that you point out are residents in the City. When you eliminate their positions they leave the City going elsewhere for work and we replace them with some low-level subordinate that is incapable of sound decision making that this City so desperately needs. I am all for smaller government, but if the City is going to function effectively there needs to be incentives for people to come work there. If not, people will just go to the private sector and leave City work altogether.
Peter J Dunlay September 20, 2012 at 03:33 PM
The first point is the most important one and the one that has not, to this day, been determined. Do we actually know what amount will bring us to a balanced budget? Grasping at straws, I suspect!
Concerned Floridian September 20, 2012 at 09:10 PM
Beichler: I hear you, and like yourself and I am for employment of city workers, and I am opposing outsourcing functions and tasks that can be done in-house. What I can do without is keeping folks on the payroll for the sake of keeping them and hiring outsiders (consultants) to do what the city employees can do. And here I'm referring to positions kept by high-level administrators. It's bad for these employees [who finds pride in being paid doing nothing? kept on the payroll to cover a political window-dressing?] and bad for the city which is subsidising high-level welfare for workers who ... do not do the relevant work associated with their position or have stop being efficient in their duties. This is unjustifiable, undefensible at all levels, be it in the private industry or the public one.
Diane M September 20, 2012 at 10:06 PM
Bringing in a consultant will help eliminate the continuation of the good old boy network, make sure there is little or no bias in the decision-making, and perhaps move some folks out who have previously been protected because of connections. If the City doesn't want to pay for consultants, put together a volunteer task force to do the job. There are plenty of people who have expertise who would be able to develop a recommendation. Better yet, get USF and University of Tampa MBA students to do this for a grade rather than money. I do think that one should reconsider the need to "add significantly to the standard termination plan" since that is no longer the norm in most businesses and the City cannot afford it. What has happened in private business is that the pensions or retirement benefits are reduced as of a certain date in the future, which in turn encourages those qualified to retire to do so before the changes set in. THAT's an incentive. So is getting something more than 2 weeks notice and a few weeks pay, which is what is happening all over. Again, the City cannot afford enhanced retirement incentives. I'd also suggest 'retiring' anyone receiving a City pension and collecting a current salary. That will open up opportunities for current employees to move up. And lastly, who among us hasn't encountered a not so engaged City employee with a crappy attitude? They do the job, they do it well, they are productive, or they are gone.
S. Ripley September 24, 2012 at 02:43 PM
It is certainly appealing to gripe about over-paid city managers, directors, and administrators. And who of us hasn’t encountered a sour experience with a less-than-thrilled city worker? But consider this: Most of the senior level positions are vastly underpaid relative to their private sector equivalents, so our chances of attracting and keeping good talent are pretty low. Simply put, the top performers find work elsewhere, those that do come to city life end up leaving pretty quickly, and those few who stay retrograde their performance down to their substandard pay level over time. For the city worker perspective: the above factors leave them with less than motivating leadership. Combine that with a culture that rewards longevity more than performance, and you will rarely find a smiling competent worker. The sad irony here is that most of the city worker positions ARE competitively paid relative to the private sector. Cutting the budget certainly has to be done to resolve the accounting problem, but let’s not kid ourselves that the employee or citizen experience will ever improve.
Concerned Floridian September 24, 2012 at 03:57 PM
Ripley, please clarify your argument. Are you saying that top-levels city executives are underpaid compared to private industry and burnt out & unmotivated due to this, while lower-levels have competitive salaries but are nevertheless not-motivated due to poor leadership at the top? If so, I don't agree. That argument has been served to citizens, time and time again by the city administration [be it the mayor or certain citycouncil members] - at best, this is self-serving and at worst it denotes a lack of managerial creativity to uplift productivity.
S. Ripley September 24, 2012 at 04:47 PM
Concerned Floridian – you paraphrased me perfectly. But to add clarity: the top-levels are mostly staffed by those who can't cut it in the private sector (where managerial creativity is required). I’m not advocating increasing their pay- but the pay for the position, and then find qualified candidates to replace them. That said- my comments are generalizations. There are a few superstars working at the city, unfortunately they are the exception, not the rule. Over time, even these folks will tire of the low pay and BS and will find something better. Final point: You are correct, that argument has been made several times. And despite the inherent truth it will never get any popluar support, which is why things are unlikely to ever change.
Concerned Floridian September 26, 2012 at 07:50 PM
Ripley, are you suggesting that the city embarks in the business of offering paid positions at a as much indecent level as what is offered in the private industry so to compete for the same, and maybe not so recommendable, white-collars folks? I don't see this as the solution, per se. Nor as being the ultimate attraction or retention tool for good administrators and good trustees of city resources. The city risks ending up attracting the same highly incompetent (some even say criminal) people from the private industry who earn highly indecent wages & other compensations, incl. bonus, based on 'they know so much!' Just be reminded of whom were behind the recent financial debacle? The ones who where the artisans of such debacle received hefty bonus at end-year, no matter how culprit and responsible they were in/for the inflated economy resting on a bubble. So imaginative are these folks that they created fantasy economies. And we had to bail them out, under the same argument you advocated that high compensations were needed to keep these 'knowledgeable' folks at the helm of the sinking ships [paraphrasing Obama's rhetoric at the time of the massive bailouts].
S. Ripley September 26, 2012 at 09:12 PM
Well that is quite a stretch-- and an entertaining analogy (albeit an invalid one). But as this is just a place for bloggers and blather, by all means enjoy yourself. Time for me to move on.
Concerned Floridian September 26, 2012 at 09:21 PM
Same here.


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