building a better local government

BUILDING A BETTER LOCAL GOVERNMENT

How to lower taxes and improve services at the same time

Matthew Falconer


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How to lower taxes and improve services at the same time

Publisher: Falcon Publishing Orlando, Florida

Author: Matthew Falconer www.matthewfalconer.com

Editor: William Mathes

Text & Cover Designer: CrunchTimeGraphics.N

Library of Congress Control Number: 2008907577

ISBN Number: ISBN: 978-0-9819015-1-0

First Printing 2009 | Printed in the USA A & A Printing, Tampa Florida


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DEDICATION

I dedicate this book to my children, Chrystie and Michael, and to your children in the hopes they may have the same opportunities their parents and grandparents had.

But I wrote this book for the forgotten men and women in this nation; the people who work in Home Depot, Walgreens, and who are out cutting hair and flipping pizzas. It is the quality of your lives that is most adversely affected by high levels of government spending.

Only by reforming government will your quality of life see an improvement.


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TABLE OF CONTENTS

DEDICATION ............................................................................................................ iii TABLE OF CONTENTS ............................................................................................ iv

INTRODUCTION ...................................................................................................... vi CHAPTER 1

Government Will Not Reform Itself ............................................................................ 1

CHAPTER 2 Why We Need Reform ............................................................................................ 11

CHAPTER 3 What a Better Government Will Look Like .............................................................. 18

CHAPTER 4 Building The Team .................................................................................................. 29

CHAPTER 5 Outlining the Scope of the Study ............................................................................. 37

CHAPTER 6 The Devil is in the Details........................................................................................ 42

CHAPTER 7 Breaking down the Budget ...................................................................................... 47

CHAPTER 8 A Government that Works: Ideas from Our Study ................................................... 52

CHAPTER 9 The Case for Regionalization of Government Services ......................................... 59

CAHPTER 10 Government Salaries Cannot Be Higher Than the Taxpayers ............................... 67

CHAPTER 11 Unsustainable Pensions.......................................................................................... 77

CHAPTER 12 Unfair Employee Health Benefits & Health and Human Services .......................... 85

CHAPTER 13 Fixing Public Education ........................................................................................... 92

CHAPTER 14 Improving Public Safety ........................................................................................ 103


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CHAPTER 15 Improving Accounting and Financial Management ............................................... 125

CHAPTER 16 Reinventing the Property Appraiser and Tax Collector ........................................ 134

CHAPTER 17 Improving Human Resources and Information Technology .................................. 139

CHAPTER 18 Fixing Building, Planning, Zoning and Code Enforcement ................................... 144

CHAPTER 19 Getting more from Economic Development, the Convention Center and the Visitors Bureau ...................................................................................................... 154

CHAPTER 20 Improving Environmental Services and Engineering ............................................. 163

CHAPTER 21 Analyzing Transportation and Utilities ................................................................... 168

CHAPTER 22 Perfecting Parks & Recreation and Public Libraries ............................................. 181

CHAPTER 23 Getting the most from Capital Improvement and Public Works ............................ 187

CHAPTER 24 Economizing on Facility and Fleet Maintenance ................................................... 192

CHAPTER 25 The Effects of Fees and Regulations .................................................................... 196

CHAPTER 26 Government 2.0.: Technology Transforming Government ................................... 204

CHAPTER 27 Completing the Study and Taking it Public............................................................ 209

CHAPTER 28 Actions to Take When Elected Officials Ignore the Study ..................................... 215

CHAPTER 29 Spread the Revolution .......................................................................................... 221

FOOTNOTES ........................................................................................................ 224


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INTRODUCTION

I wrote this book to save small business. I have a unique view of the economy in that I own commercial properties with 100 small business tenants. I see how small businesses are taxed in a dozen different ways, and I know from firsthand experience that without reform the survival of small business in America is uncertain. Small businesses face ever increasing taxes and costs at a time where competition is driving down sales. If small business fails in America like manufacturing has, the American way of life cannot survive.

Money does not grow on trees. All government spending falls on the backs of taxpayers through hundreds of different taxes most of which are applied at a local level. Taxes increase the cost of goods you purchase. As much as 55% of every dollar you spend goes towards one tax or another. And taxes reduce your wage because of high taxes on your employer. By putting downward pressure on your wages and increasing the cost of living, high taxes lowers the quality of life for the average citizen.

High taxes and government spending are also harmful to our local economy. As government spending increases, the economy contracts because taxpayers have less disposable income (income above living expenses). That means people have less money to spend in small businesses that drive our economy. Even children understand this theory but local governments continue to increase taxes and fees. This takes more money out of the economy forcing higher unemployment because businesses fire employees to make ends meet.

To demonstrate let’s look at the recent toll increase. Tolls on the Expressway in Orange County increased between 33% and 100%. The government looks at this increase as an extra quarter, but a family of four looks at the increase as another $100 a month on their toll bill. Since the families wages are not increasing that means $100 a month less in discretionary income to spend at local restaurants, nail salons, and movie theaters. This may sound trivial until you consider local and state spending in Florida went from $93 billion in 2002 to $151 billion in 2006 (1). As government diverted $58 billion a year from private business unemployment went from 3.3% to 10.7% (1a).


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There is a reason some states today have unemployment of 4% while others, like Florida, are 11% and higher. We all suffered from the same credit crisis and housing bubble, however government policy and taxes vary greatly from state to state. The health of a local economy is greatly influenced by local tax policies and flow of capital in or out of a local economy. Low tax states have healthy economies and an inflow of capital and high tax states have weak economies and no capital inflow. Florida went from a low tax state to a high tax state and our economy, which was number one in the nation, is now 47th.

The solution to our economic woes is to lower taxes so citizens will have more discretionary income to stimulate our small business economy. The money will flow into nail salons, restaurants and movie theaters. Those businesses will hire more people who will become customers at other businesses. Sound economic policy is not complicated; it is simply less profitable for special interests that support big government elected officials.

As I write this introduction, I am in the midst of a study of the local government budgets for Orange County, Florida, and the thirteen communities within the county. The governments have a combined budget of $7,000,000,000 which is more than double their budgets from ten years prior (1b). Our budget study recommends reforms that will save the Orange County taxpayers $1,126,000,000 a year, through innovations such as consolidation, regionalization of services, managed competition and a renewed focus on the core functions of government.

In researching my local government, I am absolutely amazed at the extent of the duplication of effort and government waste. While government uses technologies as tools, government itself “has barely evolved over the past one hundred years and we are still governed by these same archaic institutions formed before the invention of the light bulb, telephone, automobile and computer,” according to a county commission from New York who chairs a commission on consolidation of government services (2).

To study the problem locally, I assembled a group of 30 of the smartest, most experienced people in central Florida under the banner of the Orange County Taxpayer Budget Review Board (www.TaxpayerBudgetReviewBoard.org). This group of accountants, lawyers, architects, and small business owners has only one goal: to build a better government. But even for a group of passionate and intelligent members of the community, the task of building a better government is daunting. Government


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has become increasing complex, and the various departments often end up acting as though they’re their own separate governments.

Our society desperately needs to run our public services in a more efficient, cost-effective and innovative manner. The future of American society is not promising on a local level. Taxes will continue to rise, as pay and benefits for public servants eat up more of the local budget. As the cost of each employee rises, the unfunded pension benefits multiply. Our future is one of higher taxes and lower services. In Vallejo, California, the budget for fire and police consumes up to 80% of the total budget. The City was forced to file bankruptcy to renegotiate union contracts that average $150,000 per employee with benefits (3).

Every city, county and state in America faces the same future. More tax revenue will go to government retirement and health benefits, and less to government services. Taxes on everything will go up. Recently, the State of New York announced 137 new tax increases, while cutting services. CNN reported that, “New Yorkers would face tax hikes on beer, wine, non-diet soft drinks, and digital services like iTunes downloads. Cab fares would rise 4 percent while the cost of cable and satellite TV services, tickets for sporting events and movies would also jump by the same percentage. At the same time, state agencies announced the closing of more than 10 state facilities, including six children, family and youth centers. The plan also includes reductions in school aid by $698 million and $3.5 billion in health-care cuts (4).” While taxes go up and services get cut, the primary problem remains: a wildly inefficient government that is not sustainable.

To illustrate the problem, I want to relay a quote from a blog in the Orlando Sentinel: “Having worked in the City of Orlando Purchasing Department for over 20 years, I voted YES (on the Tax reform Amendment). You people may have some idea how wasteful the government is with your money, but it is worse, much worse, than you could ever imagine. The more you give them, the more they find ways to waste your $$$$. It is a crime how they don't even care how wasteful they are. Please believe me; they could get by with half of what they already get (5).”

There is a solution to every problem, and there is really no choice but to address this problem. Eventually, the burden of local government will suppress the local economy and jobs will start to leave the area. We see it all of the time in northern states and places like Detroit. If citizens want to avoid the economic future of places like Detroit, they will need to reform their own local governments. The goal of this book


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is to show citizens like you how to convert your local government from General Motors to UPS; from one of waste to one of efficiency.

This book is designed to be a roadmap for the average citizen to repeat our efforts and our study in their community. I hope to inspire and teach one person in every community in America how to start a budget study group, study your government, and enact changes to make your government more efficient to better serve your community. Our hope is that this locally-focused revolution, started as a grass roots movement in central Florida, will spread to other counties in Florida, then to cities and counties across America.

The key to any successful reform in Florida--or elsewhere in America--is taxpayer involvement. Local taxpayers have a stake in the local economy and directly feel the burden of government. There is not a single elected official who I am aware of in Florida calling for the reforms I will outline in this book. Government will not reform itself; so it is up to the taxpayers to reform their government, restore our economy, and protect the future of our communities. In this book, I will show you how to study your local government, find the waste, and design a more efficient, cost-effective and sustainable local government.

TRANSFORMATIONAL GOVERNMENT REFORM

The problems with local government are so widespread and so ingrained that I believe incremental changes will not materially benefit the taxpayers. Government needs to be transformed from top to bottom. Our local government has grown in size and complexity to the point where it has become a hazard to our economy and has actually lowered the quality of life of its citizens. Historically, the purpose of government is to serve its citizens and improve the quality of life; yet our own government is the source of many of our problems and anxieties.

The goal of transformational government reform is to design an ideal government on paper and transform our local government to that design. The reforms will include how we provide government services, how we use technology to provide those services, and how we pay our public servants. Our current local government model is not sustainable. The level of government spending is forcing small business to fail at a rapid rate, causing higher unemployment and an increased need


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for social services. Only through transformative change can Florida return to economic prosperity.

What if we closed the Division of Motor Vehicles and put those services online? You can renew your tag from the comfort of your own home. The same can be said of building permits and anything else that our government regulates. Yes, we’re talking about the end of red tape. Let’s do live commission meetings broadcast on the Internet, so that people can engage their elected officials from the comfort of their own home. Let’s put all proposed budgets online and allow the public to comment on them before being approved.

Sound radical? All of these ideas are in place somewhere else in our world. The technology and ability to make your lives better is available, but the political will, apparently, is absent in local government. Quite frankly, a lot of people make a lot of money the way things are. But at some point, we need to stand up and state that government exists to serve the taxpayer. And so it should be designed to make the lives of the taxpayer easier with the least economic burden to the public.

We have a long way to go from the way our government is run to a better government. But the ways and the means are there. It is up to you, the taxpayer, to demand change. After concluding my study, I came to truly believe we can reduce the cost of government by 20% and get 20% better government services, if we enact the right reforms.

Come with me on this journey to the center of government and find out how.

CHAPTER 1

Government Will Not Reform Itself

It may sound obvious to some people that government will not reform itself. My definition of government, however, includes the elected officials who supposedly run the government. What I have seen firsthand at the local, county, and state level is that the elected officials generally leave the business of government to the staff. The elected officials get mired in political issues, such as zoning and permitting, budget priorities, and making their own government look good. Once the elected official is part of government, rarely are they critical of the government they now run.

So much of the problem with government today comes from the actions or inactions of “career politicians.” These elected officials will go along with any program or budget, as long as the issue is popular with the voters and does not upset the all powerful labor unions. More and more Republican-elected officials are afraid of labor unions, and some even seek the support of labor unions. I find it hard to believe that an elected official can gain the support of government labor unions and, at the same time, represent the best interests of the taxpayers. Most of the time, those interests are at odds.

What became very clear at the beginning of my study of local government is that the largest obstacle to building a better government is government staffers themselves and their labor unions. Many taxpayers are unaware that almost all government workers are part of a labor union. In Orlando, the fire department employees are members of the International Association of Fire Fighters; the police are members of the Fraternal Order of Police; teachers belong to the National Education Association (which is part of the AFL-CIO); and the other government staffers are members of the Service Employees International Union. It is important to acknowledge that the union’s sole function is to maximize the pay and benefits for its members. Nowhere in any union mission statement do they suggest that part of the mission is to deliver government services at the best possible cost.


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If you ever attend a budget hearing for any city or county, you will see members of each union represented. Firemen in white shirts and shiny black shoes, policemen with dress uniforms, and other government staffers will show up, all making an emotional plea to keep revenue flowing. For the past six years in Florida, the solution put forward by our elected officials has been to increase spending, while sharply increasing taxes and fees of every kind. Virtually no effort has been made by elected officials or those in government to increase the efficiency of any department. The reason government does not want to reform itself is because they fear a loss of revenue, pay and benefits.

GOVERNMENT LABOR UNIONS

The most basic human instinct is survival, and that is how government will react when challenged by any outside group or leader seeking reform. They will resist change and try to keep the existing system in place, because they fear for their economic well being. It is not that government workers are bad people; it is simply a basic human reaction.

Most people know someone working in local government, whether personally or professionally. And while we can respect those people as individuals and their dedication we need to clearly understand the basic problem that confounds local government: the resistance to change and the power of government labor unions.

When labor unions originated in the United States they were needed. Wealthy employers had, for decades, taken advantage of the laborer. Now, however, the United States has the minimum wage, employee workplace safety rules and a thousand regulations protecting the employee. The primary purpose of government labor unions in Florida today is to leverage their power for higher pay and greater benefits. Over time, labor unions have obtained benefits beyond what the taxpayers receive. And the net result is that the cost of government services has exceeded the ability of the community to pay for them.

In many areas where this is the case, crime has increased, education quality has declined, and the standard of living of taxpayers has continued to erode. That was not the intent of labor unions, but in many communities, it is the current reality. It is the government labor unions, then, not the individual government employee, that represent the largest obstacle to an efficient, cost-effective government.


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The reason public safety is not working well in Florida is because of labor unions. They block reforms that would make the public safer. The reason public education is failing our children is labor unions. They block reforms that would make our students better prepared for life. The reason public servants earn twice the annual salaries and have twice the benefits of the taxpayer in Orlando is because of government labor unions. They work tirelessly and relentlessly to increase both the salaries and the benefits of their union members . . . regardless of what it takes or the consequences.

I propose that state law be changed, and federal law be challenged, to allow the taxpayer to collectively bargain against the employee. I propose an end to our own government blocking reforms to make our community safer and better educated. I propose a switch from a selfish government to a government that truly serves the people. In the course of my study of local government, I found that the average taxpayer is truly disgusted with the state of government today. And the irony is: providing efficient, cost-effective, life-enhancing services for the taxpayer is the reason for government’s existence.

Government employees should not fear change; they should embrace it. Every teacher knows a teacher who should be in another line of work. Every fireman knows the waste that exists in their industry. And most taxpayers know that our current way of providing government services is not sustainable. It is time for the government to serve the people, instead of the taxpayer existing to serve our government.

In order to accomplish this change, the taxpayer needs to treat employees as individuals, not as a collective. Employees should be paid for job productivity, not job longevity. Cashiers at Subway do not make $75,000 a year after 20 years on the job. Salaries and benefits need to be market-driven, not forced up by powerful special interest groups.

The laws of the State of Florida should benefit the citizens of the State of Florida. Currently, our system of government benefits special interest groups and government labor unions. The best interests of the taxpayer are not the central priority of our government.

FLORIDA’S GOVERNMENT TAX EXPLOSION

The State of Florida and the local governments within it have increased taxes in Florida and government spending to the point where it can only be described as an


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explosion. Here are some sobering facts from the U.S. Census Bureau on State and local government spending in Florida (6):

YEAR (end) STATE SPENDING: LOCAL GOVERNMENT: TOTAL

2000 $51,621,214,000 $55,504,603,000 $92,402,130,000

2002 $48,489,136,000 $60,073,293,000 $93,374,596,000

2004 $74,691,770,000 $71,787,996,000 $129,013,687,000

2006 $83,574,273,000 $86,832,855,000 $151,623,707,000

And this is only spending. It does not count the billions of dollars in debt that state and local governments continue to pile up, and the tens of billions lost in government pensions just last year alone. And the typical excuse of “population growth” simply does not justify this increase in spending. According to the U.S. Census Bureau, population in Florida was 15,982,000 in the year 2000. Over the six-year explosion, we saw roughly a 12% increase in population (ibid).

And please do not buy the argument that Florida is a “low tax state.” Illinois has 27% less people than Florida, and is considered to be a high tax state (7). But the total government spending in Illinois in 2006 was $108 billion, $43 billion less than Florida (or 28% less spending). Georgia’s total spending was $65 billion, far less than half of the State of Florida (57% less), but the population of Georgia is only 49% less. Our government spending is higher per capita than Illinois and Georgia and is increasing at a fast rate (ibid). Is it any wonder that our economy is suffering?

In 1998, Orange County had a budget of $1,379,869,000. In 2001, it skyrocketed to $2,243,000,000, and in 2007, it jumped again to $3,503,000,000 (8). In a decade, government spending in Orange County nearly tripled! And every penny came from the wages of the private sector workers, either directly or indirectly. The problem is people both inside and outside of government think that taxes are paid primarily by rich people; but the reason that hardworking taxpayers struggle from paycheck to paycheck is because they support the full weight of government. Plain and simple: government has no other income than taxes and fees so they must extract revenue from the taxpayers.


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Even when the government conducts a study of consolidation or efficiency, they generally do not honestly expose the waste or implement the bitter medicine to bring about real reforms. In studying Orange County’s effort at consolidation, Jane Healy of the Orlando Sentinel said:

“In 2004, county voters overwhelmingly said they wanted the two governments to study consolidating services in their multibillion-dollar budgets. The voters could see even then that it was folly not to be sharing costly services. The committee's work was marred from the get-go. Take the possible consolidation of fire service. Problem is, the powerful firefighters union hijacked the process. Dominating the "presenters" to the study commission were either the firefighters themselves or representatives of their union who, of course, wanted to protect all the jobs.

It's no wonder the firefighters stand by their union. One Orange County fire lieutenant made $147,000 last year. Another half-dozen made more than $100,000 (9).”

The Orange County consolidation study committee issued a 100-page report that said things like “bigger is not always better” and “our firefighters perform a valuable service (10).” The lesson to be learned from a study of government by government is this: to be effective, it needs to be done by a truly independent third party. It also should not be done using government funds, because the result will be the same. The study should be done by those who would provide unbiased, objective, credible study results to the taxpayers who shoulder the burden of government.

SHOULD LOCAL GOVERNMENTS USE TAX DOLLARS TO INFLUENCE DECISIONS

Now, I do not want to get you too upset in the first chapter; but your public servants will not only resist reforms that will improve government efficiency, they have been using your money to fight reform. In many places in Florida, local governments are using tax dollars to influence how people vote in elections. That practice would be illegal under legislation currently introduced by two state senators and recently signed by Governor Christ (which the unions will certainly challenge in court).

Senator Don Gaetz (R-Niceville) joined Senator Charlie Justice (D-St. Petersburg) in proposing a ban on the use of taxpayer funds in purchasing political advertising. “Our bill wouldn’t restrict government officials from using their offices to express an


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opinion about an issue being decided by voters.” He went on to state; “However, when local governments use their taxing authority to extract tax dollars from citizens in order to purchase political advertising, that crosses the line from ‘preachin’ to meddlin’,” Gaetz said (11).

Senator Justice, the number two Democrat in the Senate, became concerned when ten cities poured $170,000 in tax dollars into a political action committee (PAC) that bought direct mail urging voters in Volusia County to reject local charter amendments. “Philosophically, I just don’t think we should use tax dollars to say vote yes or vote no on a ballot issue,” Justice said (ibid). “I don’t know anyone who, when they pay their property tax bill or other governmental tax or fee, expects the money to be used in a political campaign,” Gaetz noted. “Government officials should be free to speak their minds on any matter, but it’s neither right nor fair for local government to tap into the public treasury to buy political ads.”

There are two groups in Florida that are essentially a union of local and county governments. The Florida League of Cities and the Florida League of Counties receive millions in taxpayer funds each year. Some of their efforts are legitimate, but they also pay for and organize efforts to resist reforms in government and any type of tax limitation. They are, in effect, working against the efforts of the taxpayers who support them. These efforts to fight taxpayer initiatives with their own money should be illegal. Ask your local town or county if they belong to such organizations and if they contribute taxpayer money for them. If they do, march down to your city hall and demand that your government stop using your money to fight taxpayer initiatives. Start a petition to amend the laws in your county to make it illegal for government to use your tax dollars to influence political decisions.

BLOATED GOVERNMENT ADMINISTRATION

The problem with almost all government functions is this: too much administration. Public schools have roughly five times the administration as private schools (12). And these administrators get paid far too much for a public servant, with some salaries exceeding $300,000 with benefits in our state, which begs the question; why should a government civil servant have a higher standard of living than the taxpayer who supports them? Below is a chart of how many civil servants work at the expense of the Florida taxpayer (13).


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Florida Government Employment Government Jobs

Branch Sept. 2007

Sept. 2008

Jobs Change (statewide)

Local 796,300 804,300 +1.0%State 216,900 215,300 -0.07Federal 127,400 130,800 +2.7

Total Govt.

1,140,600 1,150,400 +0.86

Source: Florida Agency for Workforce Innovation

Based on historic ratios of government employees to population up to 35% of those employees are not needed. Michael Hodges, the author of The Grandfather Report, said the State of Florida (including County and City employees) had 371,000 “excess” employees as of 2002 (14). This figure was based on the historical number of government workers per capita, and does not include the fact that productivity in the private sector has increased dramatically in the past two decades. Since 2002, government payrolls have swelled to the point where we may have more than 400,000 government workers more than we need within the State of Florida (based on Hodges formula).

Mr. Hodges has an interesting graph showing the percentage of the economy between the private sector and State and local government. In 1947, the private sector comprised 78% of the economy, federal government accounted for 16% and local (incl. State) government contributed 6%. In 2000, the private sector shrank to 58%, the federal government climbed to 23%, and local and State government surged to 19%. It is important to note that the local and State government tripled in size, while the Federal government rose by less than 50% (ibid). The sad part is that from 2000 to 2007 is when the real boom in government spending took place; so these numbers are worse today than in 2000!


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The pie charts at the left represent the economic pie of our nation in 1947 vs. today, showing a breakdown of its components:

And despite the fact that the Florida economy has fallen from number 1 in the nation to number 47, and the demand for most government services (e.g. permitting and planning) have dropped by as much as 80%, the government workforce continues to grow. It is as if we staffed to host the Olympics, the games are over, but we still have the workers!

WHY IS GOVERNMENT SO INEFFICIENT

The simple answer to why government is so inefficient is because government does not want to be efficient. Being efficient would mean less money and less power. Small businesses need to be increasingly efficient to stay ahead of competition. On the contrary, government staffers will put themselves out of jobs if they increase efficiency. Think of government like a club. Members support each other by increasing taxes (revenue), by adding unnecessary regulations (which create a need for more government workers), and by maintaining “normal” (i.e., low) productivity. If you analyze any government agency, you will find the policies and fees are structured to maximize revenue and sustain government jobs. While small business uses technology such as e-mail, government workers constantly have


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meetings of many government staff members. What one person can achieve in an e-mail in two minutes, ten government staffers will review in a two-hour meeting.

The following is an analysis of why government is inefficient by Nobel Prize-winning economist Milton Friedman; “Why is government the problem? It is not because the people who run the government are bad, mean, nasty. Quite the opposite. They are the same kind of people, with the same background, same ideas; just as the people who made Hong Kong into a Little Tiger are the same as those on the other side of the border who earlier made China a hellhole. Same people. The difference is not because one group of people was smart and the other stupid. The difference between China and Hong Kong was in institutions and incentives. The fundamental problem in government here, too, is the same: institutions and incentives. There are many reasons why the government is the problem, including the role of vested interests, of people trying to benefit themselves by special government subsidies and favors. However, I believe that the basic reason is the difference in incentives, in the bottom line, between private and government ventures. If private people start a venture, if, for example, they start a school and don't get any customers, it is a failure. They can keep it going only at their own expense. They would have to dig into their own pockets to do so. Suppose exactly the same project is started as a governmental venture and has exactly the same results. The people who run it now have a different alternative. With the greatest of sincerity, with the best of motives, nobody likes to admit that what he or she has done is wrong, it’s a failure. It is natural to say that the only reason the school has not been a success is because it wasn't established on a large enough scale. They have a much deeper pocket than their own to turn to. They have the taxpayer. They only have to persuade the government, that is, the legislature, that the school is a worthy project. Of course, it is. Nobody would have started it if he or she hadn't thought it was a worthy project. The result is a general rule: if a private venture is a failure, it is closed down; if a government venture is a failure, it is expanded. I challenge anyone to find an exception. How many government ventures can you think of, however big their failures, which were ever closed down? That is why, in my opinion, government has so frequently been the problem. It is why projects undertaken with the best of motives under government auspices, over and over again, produce results that are the exact opposite of those that were intended by their well-meaning sponsors (15).”

The private sector always looks for ways to become more efficient to compete. Government has an incentive not to be efficient . . . i.e., to sustain itself and grow ever


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larger. The incentives between government and the private sector are exact opposites; therefore, the private sector will always outperform government.

Government personnel have no incentive to be efficient and do not develop productive skills. In fact, the skills they will develop will not be the economic skills of production, but political skills—how to fawn on political superiors, how demagogically to attract the electorate, how to wield force most effectively. These skills are very different from the productive ones, and therefore different people will rise to the top in the government from those who succeed in the free marketplace.

Since we have confidence government will not reform itself, this book is intended to be a road map to show the taxpayer how to reform their own local government. Only with the facts and overwhelming evidence will you be able to overcome the slander and rhetoric the labor unions will most likely put up as a defense against reform.


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CHAPTER 2

Why We Need Reform

FLORIDA: AN INCREASINGLY DIFFICULT BUSINESS ENVIRONMENT

In order for any city or region to have a sound economy, the business environment must be healthy and stable to enable business to survive and to continue to employ workers. Florida has seen a recent sharp increase in the rate of business failures and unemployment, evidenced by unemployment tripling, going from 3.3% to 9.9% in four years (16). For many years, Florida has taxed business heavily. Commercial properties pay billions in school taxes, despite the fact they send no children to school. The ad valorem taxes that justify this system have been further turned against business by reducing taxes on homestead property owners and shifting billions more in real estate taxes to small business. It must seem to some people that “business owners” can afford to pay any tax imposed or that the tax comes out of the pocket of “some rich guy.” Quite the contrary, every dollar of tax or fee has a direct impact on the business environment.

The net income of a business is typically 5% of sales or less. If costs go up by 10%, the business will become unprofitable and fail (it is a myth that business can pass along costs, especially in an internet-based economy). To give you a clear picture of just how many “costs” are being imposed upon the typical Florida small business by State and local government, the following is a list of revenue sources for Palm Beach County, primarily consisting of taxes, fees, or charges levied by the County or paid to the County. This chart of accounts was prepared in connection with fiscal planning for fiscal year 2003:

Ad Valorem Taxes; Tourist Development Tax; Local Option Gas Tax; Local Alternate Fuel Fee – FS 206.877; Local Option Gas Tax; Constitutional Gas Tax; County Gas Tax; Franchise Fee- Electricity; Franchise Fee - Telephone; “911” Emergency Fee; Franchise Fee - Cable TV Ordnance; Franchise Fee - Solid Waste;


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Utility Service Tax – Electricity; Utility Service Tax – Telecommunications; Utility Service Tax- Gas; Communications Services Tax; Professional & Occupational Licenses; Building Permits fee; Other Licenses & Permits; Contractors License fee; Zoning Fees; Zoning Fees – Charges for Services fee; Planning Fees; Permit Fees; Platting Fees Ordnance; Building Fees Other Than Permits; Comprehensive Plan Amendment Plan Fees; Maps and Publications – Sale fee; Services Charges – Certify, Copying, Searching; Sheriff – Fees; Clerk Circuit Court – Fees; Clerk County Court – Fees; Supervisor of Elections – Fees; Public Defender Fees; Special Public Defender Fees; County Court Fees; Circuit Court Fees; County Commission Office/ Fees; PAAB Petition Filing Fees; Director Community Service Fees; Environmental Ordnance Appeals - Filing Fees; Impact Fee Appeals Board Filing Fees; Impact Fees – Public Buildings; Impact Fees – Fire Rescue; Impact Fees – Law Enforcement; Impact Fees – Schools; Impact Fees – Roads; Impact Fees – Libraries; Impact Fees – Parks & Recreation; Fair Share Fee; Conditionally Impact Road Improvement Fee; Service Impact Fees; Roadside Vendor Permits fee; Adult Entertainment Licenses; “911” Wireless Fee; Child Safe Place Pickup Fee; Child Custody Investigations fee; Other Charge Services – General Government; Services - Police Services Charge; Fire Protection Services Charge; Fire Protection Municipal Charge; Fire Plan Review Fees Charge; Fire Inspection Fee; False Alarm Revenue Fee; Hazard Material Cost Recovery fee; Fire Rescue Insurance Verification Fee; Room & Board Prisoners Charge; Emergency Services Fees Charge; Protective Inspection Fee Charge; ALS Transport Fees; BLS Transport Fees; Public Safety Training Services Charge; Other Public Safety Services Charge; Customer Account Charges; Water Revenue “Readiness To Serve”; Water Revenue Commodity ; Waste Water Revenue Rights fee; Waste Water Revenue Commodity; Waste Water Public Authorities; Disposal Charges; Meter Sales fees; Service Charges; Reclaimed Water Revenues; Industrial Pretreatment fee; Lot Clearing fee; Commuter Passes fee; Charter Aircraft Parking Fees; Parking Fees – Transient; Parking Fees – Monthly; Services – Other Transportation Charge; Rent – Housing; Animal C&C Registration Tag fee; Animal C&C Adoption fee; Animal C&C Medical Vaccination; Animal C&C Medical Tests/Adoption; Animal C&C Rabies Investigation fee; Animal C&C Burial/Euthanasia fee; Animal C&C Auction Animals; Animal C&C Guard Dog Registration Fee; Animal C&C Commercial Permits; Animal C&C Other Revenues; Animal C&C Boarding Fees; Animal C&C Impound Fees; Animal C&C Surgery Deposits fee; Animal C&C Quarantine Fees; Animal C&C Medical Treatment fee; Animal C&C Mileage Fees; Animal C&C Pet Supplies Fee; Animal C&C Bite Coordination Investigation; Animal C&C Field Officer


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Investigation; Animal C&C Animal Transport fee; Animal C&C Quarantine Release fee; Welfare Receipts Services Charge; County Home Services Charge; Other Human Services Charge; Insurance Agents County Licenses Fee; Mobile Home Licenses fee; Alcoholic Beverages Licenses fee; Racing Tax; Recording of Legal Institutions – Clerk fee; Local Government ½ Cent Sales Tax; Parks Program Activity Fees; Parks Camping Fees; Golf Course Revenue fee; Parks Swimming pools; Parks Parking Fees; Parks Tennis Courts fee; Parks & Recreation – Other Fees; Gold Course Revenue – Other Fees; Museum Admission Fees; Golf Course Revenue – Leagues/Tournament fee; Locker rental fee; Equipment Rental Fee; Room Rental fee; Commission Revenue; Other Culture/Recreation Services Charge; Landing Fees Aircraft Incentive fee; Landing Fees; Landing Fees - Non-Signatory; Aeronautical Services fee; Environmental Operating Fees; Apron Fees; Passenger Facility Charges; Airline Catering fee; Rental Space- Rental cars; Rent – Buildings; Rental space – Airlines; Rent – Hangar; Rent – Grounds; Airline Equipment Rental – Gate Use fee; Airline Equipment Rental; Concessions fee – Gas & Oil; Concessions fee –Food & Beverage; Concessions fee – News & Gifts; Concessions fee – Advertising; Concessions fee – Valet parking; Concessions fee – Rental Cars; Concessions fee –off Airport Rental Cars; Concessions fee – Auto Parking; Concessions fee – Taxi-Limo; Concessions fee – Other; Reimbursed Expenses – Passenger Screening; Park Rental Charges for Services; Television Services fee; Firefighters Supp Comp; Assessed Court Costs – County; Assessed Court Costs – Cities; Court Fines; Probation Payments; Court Immobilization fee; Confiscated Property; Law Officers Education; JAC Assessed Court Fee; Domestic Violence Surcharge; Library Fines; Pollution Control Violations fee; Violations of Local Ordnances fines; Handicap Parking Enforcement fines; Unclaimed Cash Bond Evidence Money; Crossing Guard fee; Unclaimed Juvenile Restitution Money; Interest Arbitrage Rebate; Interest Hamlet Escrow; Interest- Penalty; Change in Fair Value; Offset to Conv to Fair Value; Tax Collector Interest; Sheriff Interest; Rental of Buildings; Rental of Land; Rental of Advertising Apace; Rental of Revenue Vehicles; Commercial Lease Revenue; Developer Contributions fee; Payments in Lieu of Recreational Facility; Sale of TDRs; Civic Site Cash in Lieu of Land; Indirect Cost Reimbursement charge; Utility Relocation; Tap-In Conn, Capacity; Capacity Reservation fees; Engineering Inspection & Review Fees; Municipal Participation Protection fee; Travel Agency Commissions fee; Coin Telephone Commission fee; Fleet Management Equipment Rental fee; Occupational Safety Charges; Airport Development Aid Program charge; plus 169 separate funds or inter-fund transfers that earn interest on any money within the funds (17).


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And the list is only going to get longer. On the City of Maitland’s “Strategic Plan” for the fire department, that list includes “analyze the revenue generation possibilities associated with inspection programs and other life safety evaluations.’ What this means is that governments are running out of resources, so the individual departments are looking to create additional revenue streams to keep their department from being reformed (18). After looking at that list, pretend you are about to open a manufacturing business. Your choice is to deal with all of those fees, or have your product made overseas where it shows up on your customer’s doorstep in a box. Now you know why just about everything is made overseas.

Originally, government was established to provide basic services efficiently. A common tax was imposed, instead of having a toll booth at every street corner. Now we have common tax and a toll booth (or service fee) at every corner. And if you think these fees do not adversely affect the economy or that they are paid by “some rich guy,” you would be wrong. All of the taxes, including real estate taxes, impact fees, permit fees and the above list of taxes and fees, gets added to the occupancy cost of the local businesses in our communities.

The small businesses will fail at a higher rate, because of the higher cost of occupancy. What is more distressing is that, most often, the small businesses cannot raise their prices, especially in the internet age. When their cost of occupancy goes up from government taxation, they can only adjust by paying their employees less. So in the end, the cost of government is borne almost entirely by the private sector workforce.

What is equally harmful to our workforce and our community is the time business spends on complying with government regulations. Nationally, it is estimated that $900 billion is spent on regulatory compliance (19). When no one was looking, government seems to have decided that the main function of business should be to pay taxes and comply with regulations, even though the goal of every business should be to efficiently and effectively deliver services to their customers. As business spends more time and money on government, they spend less time on their customers. This increases the failure rate of business, which again is harmful to our economy.

We need to stop building a toll booth on every street corner of government and allow our small businesses in Florida to survive. To do so, we need to return government to its core functions and reduce the financial and regulatory burden on our economy.


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INTENTIONAL WASTE

One of my pet peeves is fire rescue and the waste of money in sending fire trucks out to fender benders. I recently read that it costs $3,500 every time the fire truck goes on a call (20). You will hear a lot of reasons why the trucks follow the paramedics to calls and why the hook and ladder truck goes to a motorcycle accident. But the real reason is that we do not have enough fires to justify all of this expense, so fire unions invented a way to keep firemen busy.

My banker was at the Maitland, Florida fire station with his son and their sixth grade class. The banker, being a logical person, asked the fire chief why they send multiple fire trucks to car accidents. The fire chief was quite frank in his response. He said “We want to create as many trips as possible to get more money to the fire department.” In my opinion, this is not only waste, it is fraud. The firefighters union is defrauding the taxpayer and squandering their money.

The fact is that government workers know more that anyone how much waste and inefficiency there is in government. But since those workers are the beneficiaries of such waste, not only do they sit idly by and allow it to go on, but they block attempts at reform and conceal the problem. The elected officials have allowed this situation to continue, in part, because they do not understand the problem and, in part, because it is politically inconvenient for them to do anything about it.

So, my fellow taxpayer, it is up to us to create a meaningful reform movement. It is up to us to study the waste and inefficiency in our local governments, and then force reforms. It is a difficult task, but certainly not impossible. With patience, persistence, and passion, we (the taxpaying public) will succeed.

WHY NOT LET TAXES CONTINUE TO INCREASE?

Some people will read this chapter and ask the questions: Why not let taxes increase (as they have in the past)? The answer is simple. If we allow taxes (and fees) to continue to increase, the cost of doing business and employing our citizens will be too high for the average small business. It has gotten to the point where a local businessman in central Florida recently took out a full-page ad in the Orlando Sentinel with the title: “STOP THE EXTERMINATION OF SMALL BUSINESS (21).” If we do not do something to lighten the load on small business, our economy and our way of life will


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be permanently impaired. Small business is the heart of our local economy, and without them, none of the critical functions of government will have funding. Below is an article I wrote on why local government reform is so critical to the health of our economy.

TEACHER LAYOFFS VERSUS GREAT GOVERNMENT EFFICIENCY

Across Florida, some of our best teachers are being laid off because of budget cuts. In Brevard County, they laid off a former “Teacher of the Year.” They are cutting supplies, textbooks, sports programs and even graduation ceremonies. But what they are not cutting is waste. They are not reducing administration, pension benefits, or the six-figure salaries of the pencil pushers. We can keep our teachers if we eliminate waste.

Government labor unions are working hard to find ways to increase State revenue and taxes. These are not tax increases according to the unions; they are “revenue enhancements.” You will see your taxes go up in everything you consume. Progress Energy received a 25% rate increase in January. Your water and garbage fees will increase, as government increases its tax on those services. But we need to convince our own government that, at some point, increasing taxes reaches a point of diminishing returns. By raises taxes, businesses fail, people lose their jobs, and less tax revenue is collected. There is a third alternative to raising taxes or cutting services; getting greater efficiency from the taxes we currently collect.

There is plenty of money to run our essential services. The key is to spend that money efficiently. We cannot afford to keep our teachers if we pay firemen who work 24-hour shifts and get paid to sleep and eat. We cannot afford to help the poor if we have 10 building departments in Orange County that cost well over $100 million annually, when four regional departments will cut that cost in half and improve services. We have duplicate functions in almost every area of government, from human resources to information technology to economic development (which seems to be not working at the moment).

We can keep our teachers and have a lower tax burden, if we truly demand greater efficiency from government.

The choice is between declining services coupled with an ever increasing tax burden, or greater government efficiency. I choose greater government efficiency and so will 80% of the American people (20% work for the government). We need major reform in local government to prevent the demise of small business in Florida. In the


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past seven years, taxes and fees on small business have tripled. Because of “Save our Homes,” this process will repeat itself, until the only businesses left will be Wal-Mart, Walgreens, and government subsidized businesses.

Some may think I am being dramatic, but it is a mathematical certainty. This book will show that our built-in cost escalations in government, our underfunded pensions, and our waste in government will continually add to the burden of small business, until, one by one, they fail. As each business fails, unemployment rises and there is less revenue for government. The weight on government falls on a smaller pool of taxpayers and their burden gets heavier. It is a viscous cycle, being played out in places like Michigan and upstate New York, and is coming soon to a town near you in Florida.


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CHAPTER 3

What a Better Government Will Look Like

In order to build a better government, you first need to know what a better government looks like. There are two ways to see a vision of a better government. The first is to assume there is no government to start with and design it from scratch. The second is to take the government you have and make incremental improvements to it. To begin with, let’s examine what government will look like in the future.

THE FUTURE OF GOVERNMENT

Government in Florida and across America has not evolved much at all over the past century, even as we have seen unprecedented evolution in technology and business. If we, the citizens of Florida, want positive changes in how our government services are delivered (and at less cost), we need to demand that government evolve (in terms of its efficiency and cost-effectiveness). In Chapter One, we showed how the government has incentive not to be efficient and not to spend the taxpayer’s money wisely. But the government exists to serve the taxpayer and we have a choice in how things go. The future, which starts right now, can see a government that steers society and leaves the rowing to its citizens and the private sector. Instead of a large bureaucratic government, the future can feature a small group of managers who oversee individual agencies and companies that serve the taxpayer. The managers’ sole function shall be to ensure efficiency, competitiveness, and synergy between government functions.

The future of government, if this book’s suggested actions are taken on a widespread basis, will be more than simply providing the services of government on the internet (although that is one part of efficiency). The future of government, according to the recommendations you’ll find in these pages, will involve a small team


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of government workers who ensure the policies of the elected political leaders are most effectively and efficiently carried out.

Let me give you an example of how these different approaches play out on a smaller scale. In my own business, I tried to run every aspect of my operations “in house.” I bought a truck and hired a property maintenance person. I obtained my general contracting license and hired a superintendent to run construction projects. I hired leasing people. In theory, I controlled every aspect of my business and the workers were concerned exclusively with my company.

The reality was a complete disaster. Instead of focusing on my core mission of finding shopping center sites and making deals, I was distracted by the day-to-day issues of each aspect of non-core businesses. When an employee did not show up, I became the superintendent for the day. I spent hours and hours dealing with subcontractors on issues I could have outsourced. My experience in these new aspects of my business was far less than someone who does that type of work for a living. My projects took 40% longer to build and my existing tenants were unhappy with property maintenance. After the failed experiment, I outsourced general contracting, property maintenance, and other aspects of my day-to-day business. The end result was that my company became more effective in its core mission.

Because I focused on “steering” my company and not “rowing,” my business was more successful. Government needs to do the same thing. Our government needs to focus on managing the services provided by third party vendors, not the day-to-day problems that prevent effective management. Government needs to get out of the “rowing” business and limit itself to “steering” others. This simple adjustment will create two important improvements. First, taxpayer’s services will be done more efficiently by companies that compete to supply these government services. Second, waste will be reduced, because government will be more focused on efficiency. This is a fundamental change from the direction governments are headed. It may seem like a task too large to achieve, but if the taxpayer demands change, it will happen.

MORE TAXPAYER INVOLVEMENT – TAXPAYER BUDGET REVIEW BOARD

If you look at a flow chart of how local government is structured all of the power and control rests at the top. There is virtually no opportunity for taxpayer input (in fact the taxpayer is at the bottom of the pyramid).


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In contrast, the governments of the future—given the tenets of this book are embraced--will look more like chart C-3 below. Each government function will be independent of the others to enable managers to outsource or privatize that function and be able to gauge efficiency. At the top of the chart are the taxpayer budget and policy review boards. These boards will audit and oversee the managers and provide in-depth recommendations to the political leaders. This fundamental change will balance the scales of power and give the taxpayers more control over their futures.


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The hard part is not in designing an efficient government; rather, it is to overcome the objections of the special interests and labor unions. That is where you, the taxpayer, are critically important. Taxpayers must unite in demanding a more efficient government. But since we have an existing government already in place, let’s look at how to improve that existing government.

INCREMENTAL IMPROVEMENTS TO THE EXISTING LOCAL GOVERNMENT

Every small business owner stays competitive by constantly making improvements to his or her business, and by always increasing efficiency. Our government needs to do the same thing (even though it has an incentive not to be efficient). Every function and department of government needs to be analyzed by an independent group--I propose the development of a Taxpayer Budget Review Board for each government--and each function and department needs to be reformed to achieve maximum efficiency. Trust me when I say this: a 20% increase in government efficiency is easily achievable. That means 20% lower taxes, a 20% safer community, or, in my plan, both.

In this book, I will detail dozens of incremental improvements; but here is just one example. Code enforcement in most communities acts as if the computer and the internet have not been invented. The typical situation starts with an infraction and the code enforcement officer visiting the property. The code enforcement officer returns to the office, writes up a report, and a certified letter is sent to the property owner. The property owner is summoned to municipal court to answer the charges or prove they are in compliance. In most cases, this involves a small business owner taking an entire day off work. It should be noted that the annual loss of revenue for small business, related to the code and regulation bureaucracy is in the millions, even in small communities.

Now, compare that to the improved method I’m proposing. The local government maintains a list of e-mail addresses for all property owners, along with their property tax records. When visiting the property with an infraction, the code enforcement officer takes a digital picture of the infraction and e-mails the photo to the property owner, along with the description of the code infraction. The property owner must, within 30 days, send a return e-mail to the code enforcement officer with a photo of the property being in compliance. The code officer’s calendar will automatically resend another e-mail to the property owner, if the property is not in compliance within the 30 days.


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In virtually every government service, there are huge productivity gains possible. The next section describes cost-effective ways to reduce the burden of government and improve services at the same time.

CONSOLIDATION OF SERVICES

Most population centers in Florida, like Orlando and Ocala, have a City and County government that serve the same functions, side by side, often on opposite sides of the same street. The Ocala Star Banner reported recently that, “we have yet to hear one elected or administrative official mention one particular means of achieving greater efficiency - streamlining local government here. Consolidation of some city and county services should be on the table as part of the evolving strategy for coping with revenue problems. For too long, the idea of at least partial local government consolidation - things like parks, fire service and, maybe most critically, water and sewer service - has languished without serious consideration . . .

In each of these cases, the concept of county-city consolidation has been broached as a potential way to economize and improve efficiency. And in each case, the arguments in favor of consolidation have had merit worth deeper study. Yet, in almost every instance, resistance from within the appointed administrative hierarchy, fearful of losing jobs and perceived power, has ended the discussion.

The Public Policy Institute of Marion County recognizes the need to seriously look at consolidation. PPI is made up of some of our community's best thinkers and most involved citizens and the group chose this topic because they believe the current system isn't working as effectively as it must (22).”

If we could go back in time and plan a new government to serve the area, we certainly would not create fourteen separate governments like we now have in Orange County. That does not include the State of Florida and the dozens of different regional agencies that serve central Florida (agencies on a state and local level like the Water Management District, Forest Service, regional economic development agencies, regional transportation agencies, etc.). The duplication of effort and waste from the overlap of regional governments is enormous and wastes hundreds of millions of dollars annually.

There is absolutely no reason for the City of Orlando and Orange County to have separate SWAT teams when they are not used even on a weekly basis. The


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same applies for virtually all government services. Central Florida has eight 9-1-1 call centers when we can get by with one or two. We have eight separate and overlapping fire departments and ten building departments. The sole reason we have this waste is due to the power of government labor unions and the inability of elected officials to promote real reform.

Our study, completed April 15, 2009, suggests that the consolidation of all government services regionally will increase the efficiency and cost-effectiveness of our communities’ local governments. The report also recommends the interagency consolidation of resources, as well. There is no good reason for the parks department to have a human resources department down the hall from the human resources department for the building department. In addition to consolidation of local government services and resources, the concept of managed competition will save the taxpayer millions of dollars.

MANAGED COMPETITION

Managed competition is different from simply outsourcing, or contracting out services. It encourages public employees to submit bids and compete with private bidders to provide services, bringing private-sector competitive pressures and incentives to bear on the public sector. Under managed competition, it doesn't really matter whether public employees or private providers earn the contract; the simple introduction of competition means that taxpayers win either way.

Managed competition has been used extensively as a management tool in America in Virginia, and Indiana, as well as in cities such as Phoenix, Philadelphia, Indianapolis, and countless other municipalities around the country. The City of Charlotte, for example, has extensively used competition since the mid-1990s, undertaking over 60 managed competition initiatives that have saved taxpayers millions of dollars over the years (23).

PRIVATIZATION

Privatization refers to transfer of any government function to the private sector. Privatization remains a key policy focus, as public officials continue to grapple with deteriorating fiscal conditions, according to Reason Foundation's Annual Privatization


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Report 2008. With as many as 23 states potentially facing budget deficits in fiscal 2009, state governments are increasingly looking for ways to cut costs without cutting services.

There are really two types of privatization in use by governments today. One is the privatization of a service, like landscaping or information technology; and the other is the privatization of an asset, like a toll road or an airport. While privatization of services has helped save the taxpayer money, privatization of some assets may be mortgaging our future and, therefore, should be approached with “eyes wide open.” Democratic Gov. Ed Rendell recently accepted a $12.8 billion bid to lease the Pennsylvania Turnpike, in what would be the biggest toll road privatization deal in U.S. history (24). The concern with a transaction like this is: ultimately, where does the money go? Is the sale of the asset being used to pay for budget shortfalls, thereby creating a long-term debt obligation? If so, we are just putting our future obligations on a credit card.

While privatization is heralded by many as the solution, managed competition is probably better in most cases. And no matter what the solution, we need to consider efficiency before applying a solution. Outsourcing a function like fire rescue does not help when there are duplicate services nearby. Before we outsource an inefficient business model, we first need to consider regionalization, consolidation, and whether the function is a priority at all.

TECHNOLOGY

For all of those truly interested in meaningful government reform, I suggest reading Government 2.0 by William Eggers. Eggers states, “Every citizen who cares about the future has a stake in modernizing government.”He criticizes the first stage of digital government, because “it is merely putting a pretty face on a slothful, clunky edifice,” and goes on to say, “Governments still operate as fractious collections of hierarchical, rule-laden, stove-piped bureaucracies, whose modus operandi is fanatical protection of their turf (25).” This expert is saying that, instead of government using technology to improve services and lower the tax burden on citizens, they are using technology like a brochure cover to make it appear they are advancing. The reality is that technology in government is often merely window dressing for governments designed in the Industrial Age.

Anyone who has applied for a building permit in Florida understands this. Applicants can check on the status of their permit online, but the technology does nothing


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to reduce the time it takes to acquire a permit. A simple permit can take six months and complex approvals can take years. Such was the frustration of Veterans’ Affairs patients before they adopted the Computerized Patient Records System (CPRS). A veteran can now visit a VA hospital anywhere in the world and all of his or her medical records are available, including digital x-rays. When a patient goes online in CPRS, the system recognizes the patient, and their information automatically gets filled out in forms. Their name, address, account number, and blood type are instantly deposited onto the form. This cuts way down on mistakes and makes the lives of patients much simpler.

In the building permit process, we can learn from the VA and switch to a digital application process, gearing the service towards the consumer, not the government. Currently almost all governments require multiple sets of building plans on 24 inch by 36 inch paper. These plans are marked up by hand by up to a dozen reviewers and then returned to the architect for revisions. In a more ideal future government system, the plans will be submitted electronically, where the reviewer can markup the electronic version and add comments in writing. The plans will then be sent electronically back to the architect for immediate response. The technology already exists for this type of service, but governments are unwilling to make these convenient changes . . . for fear of losing jobs.

Compare our building department or Division of Motor Vehicles with Dell Computers, a company which offers 16 million combinations of computers. When you order online, each component for your custom computer is ordered from 100 suppliers and arrives at a factory the very next day. Your custom computer is built, tested, and shows up on your doorstep four days after your order. If Michael Dell ran the Division of Motor Vehicles, do you think it might be run more efficiently?

William Eggers asks the question: “Why can’t government be more like Amazon?” Why can’t our government customize its information in a way that is most consumer-friendly (and cost-effective) to the individual taxpayer? A citizen should be able to log onto a government website that recognizes the citizen and provides a custom portal based on their past experience and needs. In the case of the architect, the status of his/her review should pop up the moment he/she logs on. In the case of a homemaker, the schedule of garbage pickups or school closings can be made available online, based on the individual’s last requests.

The use of existing technology will package government information in a user-friendly fashion. The key is to reorganize service delivery around the customer,


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instead of around the existing government structure. This will result in a better quality of life for taxpayers, a better economy, and lower costs for government services. The tools exist for this change, but the willingness needs to be “inspired” in government by taxpayers’ demands.

A CALL TO RETURN TO CORE FUNCTIONS OF GOVERNMENT

Every government needs to have a defined mission, and should seek to limit its activities to the core functions of government. As government continually expands its role in the economy, it starts to compete with the private sector and reduce economic growth. So, let’s take a moment to define the core functions of government.

In 1996, Arkansas created the Murphy Commission and authored a report entitled, “The Role and Function of State Government (26).” They determined the core functions of government to be:

1. To ensure safety.

2. To facilitate the “rule of law” and a system of justice.

3. To assure proper help is given to individuals who legitimately can’t meet their own basic needs.

4. To assure educational opportunity exists for all citizens.

5. To act as a responsible steward for public property.

If you analyze the budgets of most local governments, you will see that they have gone far beyond their core missions, and, in many cases, directly compete with the private sector. It should be noted that the expansion of the role of government is contrary to its primary missions. At some point, the level of taxation reaches a point of diminishing returns, and the new missions take away resources from the core functions of governments. The best example of this problem is described in a January 29th, 2009 editorial in the Ocala Banner concerning commuter rail, quoted below (27).


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AN EMBARRASSMENT OF STATE RICHES

While Florida lawmakers were making a billion-dollar raid on trust funds, draining the state's rainy day fund and slashing education, health care and social services last week to balance the state budget, the Department of Transportation was sitting on a cool $795 million in ready cash set aside for a sweetheart deal that may not even come to fruition.

The money is in hand and awaiting finalization of a deal between DOT and CSX that would create a commuter line in the Orlando area. A recent study declared the Orlando commuter project the costliest railroad acquisition in U.S. history - $10.5 million per mile - where were our representatives in Tallahassee demanding a reassessment of the project's scope and cost?

It is outrageous that the state of Florida would allow teachers to be laid off, poor people to be denied access to health care and other support services, infrastructure to be neglected and universities to turn away qualified students while it has access to $795 million of unencumbered taxpayers' money. All because a company with deep pockets, a record profit and an army of lobbyists, and its patrons in the Legislature want to pay too much for a commuter rail line that is not even guaranteed of being a success.

When the Legislature convenes for its regular session, it faces some $3 billion in new budget shortfalls. Before cutting education, health care and public works more, lawmakers should cut back the CSX deal. Its price tag of $795 million is simply unacceptable, given the state's current economic health. That our lawmakers have refused to take a serious look at raiding the CSX fund - like it did with the Chiles Endowment - is an abrogation of duty.

The people of Florida are hurting because of the bad economy. CSX isn't. So why is there $795 million sitting in the bank for CSX, when the people of Florida are being told the worst is yet to come?

The most important lesson from this mistake is that, as a government, we need to stop funding programs as if they had no relationship with others. Instead of having separate tax revenues for schools and fire rescue, our revenues should go into one pot. The programs then should be given a mission priority and an allocation or budget. Public safety and education might be on the top of the list. If there is not sufficient money for education, then programs like commuter rail or other public enterprises need to be scaled back.


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LEGAL SPENDING LIMITS FOR LOCAL GOVERNMENT

Across the United States, taxpayers have voted to place limits on government spending and, in some cases, government revenue. Government has proven over the past ten years that without defined limits of spending, they will grow to an unreasonable size and burden. Some 30 states have taxpayer-initiated government spending limits or are considering such measures, including Florida.

Dr. Barry Poulson is a Professor of Economics at the University of Colorado and is considered one of the nation’s foremost experts on the Taxpayer’s Bill of Rights. He is the chief architect behind the Florida initiative called the “Taxpayer Protection Amendment.” Led by the National Federation of Independent Businesses (NFIB), tax reformers are gathering 600,000 signatures to place the amendment on the 2010 ballot. The website for the Florida initiative is www.YourDollarYourDecision.com. The special interest groups opposed to reforms and tax limits suggest that tax and revenue limits will cause a shortage of services. They use fear and intimidation to scare voters and elected officials. In Volusia County, government officials suggested they will need to cut school crossing guards (which was simply a scare tactic and never a consideration).

The truth is that without tax limits, government will never change. Without drawing a line in the sand, government will never look inside themselves and seek greater efficiency. It is my strong opinion that we need both spending limits and taxpayer initiatives for greater government efficiency. One is putting a ceiling on government and the other is rebuilding the foundation.

So, the future government will be one that has both spending and revenue limits, focuses on its core mission, and constantly seeks to find innovative and new ways to deliver government services more effectively and efficiently. This is easier said than done; but if we do not succeed in reforming local government, our standard of living will continually erode.

I ask that you consider replicating in your county the study we completed in Orange County. The next four chapters are a guide to conducting such a study. If you are not planning to be part of a study group, you can skip these chapters and go directly to Chapter 8.


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CHAPTER 4

Building The Team

While it is always challenging to gather a group of successful, intelligent, and caring people to volunteer their time, there has never been, in my lifetime, more concern over our future. I have been talking for the past four years about the problems with government and my concern over the future of the economy. For the most part, people have agreed with me; but the level of their concern, generally, did not give rise to action. Now, however, the level of concern is such that every person I invited to serve on my Taxpayer Budget Review Board volunteered their time.

My group consists of lawyers, accountants, architects, and small business owners. These people are very busy with their careers and family; but they understand that if we do not do something to build a more efficient government, the future is very bleak. So, while the task is difficult, now is the best time in our lifetimes to get it done. I am proposing, then, that we begin the “Greater Government Efficiency” revolution by building the team for your area.

In my business (real estate), in my writing, and in my tax reform efforts, everything starts with a Microsoft Excel spreadsheet. I call them “masters,” and I put into them my project outline, contacts, e-mails, and phone numbers. I copy and paste the public information to the spreadsheet. I suggest you become familiar with spreadsheets like these or develop some method to manage information, because the process is complex. So first, create a spreadsheet and save it as “Budget Review Board Master.” My spreadsheet has a number of pages, or tabs, with the following page names; Board Members; Study Outline; County Contacts; City Contacts; Other Contacts; and Notes.

Start by adding the names, addresses and phone numbers of 20 people you think will benefit the mission. You do not need to know these people personally. Next, send each person an e-mail asking them to join the team. Here is a sample e-mail:


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Dear ________________________,

I have recently formed the Orange County Taxpayer Budget Review Board and I seek your help. Our mission is to study the budgets of all 14 governments in Orange County and make recommendations to achieve greater efficiency in our government. There is no reward for this service, other that knowing you are helping your fellow citizen and protecting the future for our children. If you prefer, your participation can remain anonymous. Our first meeting is June 5, 2009, and I hope we can count on your participation. Please let me know if you’d like to help.

It is important that candidates can remain anonymous, because many of the best candidates have regular dealings with the government. It seems logical that government will welcome the advice; but governments are afraid of reform and may look at an outside review as a threat. In your search for board members, look toward your friends, local business leaders, professionals in the fields of accounting, law, architecture and construction. There are many qualified people out there; all you need to do is engage them.

I use Meet Up groups at www.meetup.com to find like-minded people. Visit the website and click on “Find Meetups.” Enter “Tax reform” and your zip code. Also try “Republican club,” “Republican Liberty Caucus,” “Ron Paul,” and other like-minded, “limited government” groups. Join every one of them and e-mail them about your mission.

Another tool I used to build the team and to get our message out is e-mail marketing. I use a web-based program called Constant Contact. This is essentially an e-mail service that allows you to send one e-mail to thousands of people. Most e-mail service providers limit the number of recipients to a few dozen. Initially, I loaded all of my e-mail contacts into the Constant Contact database (which was several thousand). Then I entered the e-mail of everyone who sent me an e-mail (and I get 100 a day). As I write this section, I have 8,036 people on my e-mail list, and by the time I finish the book, I will have 10,000.

Most e-mail service providers, including Constant Contact, do not allow the use of “bought lists.” Since an e-mail list is important to your reform efforts, I suggest you gather e-mails from all of your friends. Ask everyone you know to send you every e-mail they have from people living in your county. Send them an e-mail similar to the following:


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Dear ________________________,

I have recently formed the Orange County Taxpayer Budget Review Board (www.TaxpayerBudgetReviewBoard.org). Our volunteer group is studying the budgets of all fourteen Orange County governments and will prepare a report to recommend regionalization and consolidation of duplicative services.

We need your help. If you do not mind, I will add your e-mail to my Taxpayer Budget Review Board list. I sent out a weekly newsletter on the events regarding our efforts to help our economy.

Some of the e-mail addresses I received back were no longer valid; so, I erased them. If the person did not object to being on my list, I added their e-mail address. My e-mail database has separate lists for elected officials, media, and tax reform activists. Each message can be specialized to each group, or you can broadcast to the entire list of lists. If you join any of the tax reform movements--like Americans for Prosperity, the Taxpayers Union, or local tax reform groups--they will have Excel spreadsheets of elected officials and media. Ask the state directors for their media and elected officials list.

Once a week, I send out a newsletter on a template I created for the group, LowerTaxesNow.org. I usually write about a current topic and how it affects our local economy. I give an update on the Taxpayer Budget Review Board, and invite people to join as new members. In one week, I had three new volunteers, so it does work. The more newsletters the people receive, the more they believe the reforms will work. E-mail marketing is a numbers game; so, the more contacts you have, the better. Eventually, you will reach people who are fed up and want to step up and make a difference. Here are a few examples of the informative/educational e-mails I sent to my growing e-mail database:

WHAT HAPPENS WITHOUT GOVERNMENT REFORM

The answer to the question "What happens without government reform?" is that your standard of living will continually decline. Here is why.

Without government reform, the cost of government will continue to increase faster than the rate of inflation. Your taxes will continue in the form of higher fees and


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so will the taxes on your employer. The higher tax on your employer will put downward pressure on your wages, and business failures will increase. Your cost of living will increase, since higher taxes are absorbed in everything you buy. Government puts upward pressure on the cost of living and downward pressure on wages. Government is necessary; but too much government is an unhealthy burden on its citizens.

My objective is to ensure the basic services of government at the lowest possible cost. My study so far has uncovered that waste in government is approximately 20-30% of total spending. We do not need higher taxes; we need to get more efficiency out of the government spending we currently are burdened with. My study group is working to make recommendations on how to achieve maximum efficiency (www.TaxpayerBudgetReviewBoard.org). If you want to volunteer for the Board, please let me know.

WHO PAYS FOR OUR $7 BILLION LOCAL GOVERNMENT?

The reason I believe so many people are apathetic about government spending is because they think someone else is paying the taxes. The truth is every penny of the seven billion dollars in local government spending in Orange County comes out of the wages and income of our workers and taxpayers. Milton Friedman, the Nobel Prize winner and most quoted economist of the 20th Century, said: “The total tax on a society is the sum of all government spending.” Let me explain.

The waitress at Chili’s may not think government spending on items like commuter rail affects her, but it does. Government spending is why she struggles financially more every year. Real estate taxes on the restaurant she works at have doubled (as have most all restaurants in Florida) in the past six years. The increased cost of occupancy for her employer puts downward pressure on her wages. The business cannot double the price of a hamburger, because no one will buy them anymore. As government spending increases, the economy contracts, as a result of higher taxes and fees. This means fewer customers and less tips at her restaurant.

Government spending also increases her cost of living. Everything she spends her money on--from food to housing to cosmetics--goes up in price, because government spending increases much faster than the rate of inflation. Her apartment rent goes up $100 a month, and her utility bill goes up as well.


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So, on the income side, government spending decreases her wages, and on the expense side, government spending increases her costs. The gap between income and expenses is how I define the “standard of living.” As government spending increases faster than inflation (and in Florida, it has increased faster than a speeding bullet), the standard of living declines.

It is important for every taxpayer, regardless of political affiliation, to be concerned about government spending. Please visit our website, www.TaxpayerBudgetReviewBoard,org, and learn more about our efforts to gain greater efficiency from our local governments. Our economy cannot support $300 billion in local and state spending in ten years, which is exactly the path we are on today.

PLEASE HELP US SAVE THE FUTURE OF FLORIDA.

Each e-mail newsletter is meant to educate the taxpayer about the problems with wasteful government spending and how it affects them directly. Different subjects ring true for different people, and after a while the readers realize that your effort is, in fact, going to help them. Some people respond positively right away, some after a dozen e-mails, and some take a long time to convert to the cause. I have received dozens of e-mails with such messages as, “You are our only hope” and “Thank god you are doing this.” But for the most part, you will find about 10% of the e-mail recipients open them and read them (the e-mail server gives those facts). The effort to “reach” more and more readers is a numbers game; so keep adding to your e-mail list every week. Not only will it help you gather members, but when the study is done, your e-mail list is your army to get the reforms enacted.

TEA PARTIES TO PROMOTE LOCAL GOVERNMENT REFORM

The “Tea Party” phenomenon has been very helpful to my government reform movement. While the movement started with the frustration of taxpayers as they watched the federal government spend trillions of dollars, the people attending these informal, yet educational Tea Parties are locals who are frustrated with all levels of government. I use the Tea Parties to gather thousands of e-mail addresses and focus the frustration of the taxpayer on local government. Below is a speech I gave to those gathered at a Tea Party on April 15th in Tallahassee, Florida on the steps of the State Capitol:


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Welcome, fellow citizens and taxpayers. My name is Matthew Falconer and I was invited to speak to you today, because I am the founder of LowerTaxesNow.org. Before I talk about government spending, I want to say a little prayer:

Dear Lord, please show wisdom to our elected officials in all parties that spending deficits are mortgaging our children’s future.

Can I get an Amen?

The tea party is the taxpayer saying I have had enough. I am Taxed Enough Already. I am going to try and put your frustrations with government into words. I do this with facts and figures. I need to let you know that wasteful government spending is not just a problem on a federal level.

In 2002, state and local government spending was $93 billion in Florida. In 2006, it skyrocketed to $151 billion. Because of Save Our Homes, most of that additional burden was placed on the backs of small business owners, who have laid off nearly one million Floridians.

The State of Florida is cutting spending dramatically. But where is local government spending? They are stuck on the top floor. The reason the taxpayer is frustrated with local government, and some are down-right disgusted, is because in the City of Orlando, the public servants make twice the annual wage of the taxpayers who support them. The reason taxpayers are frustrated with governments across Florida is our public servants have twice the pension and health benefits of the taxpayers. The reason the taxpayer is frustrated with government at all levels is because you, my friends, are getting screwed.

The worst part about the insane amounts of local government spending is that our services keep eroding. Taxes go up, crime goes up. The reason for this is because more and more of your tax dollars are going into the black hole of government employee benefits. Our local government is an ancient, gas-guzzling, four-engine 707 jetliner sucking your tax dollars at an amazing rate, and not getting far in the process. We need to reform local government from top to bottom.


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Our mission at LowerTaxesNow.org is to repeat the government budget study we did in Orange County in every county across Florida. Our study found that we spend an incredible $7 billion in local government, just in Orange County. We came up with recommendations to save $1.2 billion annually and increase service levels at the same time. Lower spending and safer streets.

Imagine if we can save 20% on all government spending in Florida. That will reduce taxes by $30 billion annually. That money will flow into our restaurants, hair salons and other small businesses. We have one million small businesses in Florida. If each one hires just one person, unemployment goes down to zero. If they all lay off one employee, unemployment goes to 20%. It is clear to me that the path to economic prosperity is to lower the burden of government on small business.

In order to achieve this goal, we need your help. We need taxpayers to ignore their differences on social issues and unite to take back our government; to return fiscal sanity to all levels of government. I ask that you repeat the following pledge of allegiance to the taxpayer. Please repeat what I say after my pause.

I, state your name, do solemnly swear,

to unite with my fellow taxpayers, to take back my government.

I promise to visit LowerTaxesNow.org,

To join any reform group, And to make a difference.

One of our goals at LowerTaxesNow.org is to have 1,000 reform candidates on

the 2010 ballot. I ask that each of you consider someone who can deliver this message of economic reform. We need to grow a new breed of politician who is going to do things differently.

Ronald Reagan loved to see America as the shining city on the hill. Today, our economy is experiencing a dark and rainy night. But all is not lost. American small business can pay off our debts, employee our citizens, and get us out of this mess our


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government created. But we need to change our direction first. We need to take the handcuffs off of our economy and let small business pave the way to a better future, like it has always done.

America will once again be the shining city on the hill. That I promise. Please help me bring us there.

The more you look the more you will find people who are fed up with their own government and want real reforms. Some members will become very active and some just want to socialize; but they all do their part in growing the cause.

Building the team is a slow process. Start with a modest goal of one new member a week, and never stop recruiting. Your passion for reform is the key to success, and over time the right people will come along.


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CHAPTER 5

Outlining the Scope of the Study

The first step in the study itself is determining what you will study and how you will go about it. We used the San Diego budget study (www.sandiegobudget.org) as the basis of our study, and relied heavily on existing reports available on www.reason.org to give us insight about how other communities were making their governments more efficient. You, the reader, will have an advantage with the details of this book, but do note that each government is different.

You can download our budget study in MS Word and PDF from our website (www.TaxpayerBudgetReviewBoard.org) and use it as a template for your study. Please don’t hesitate to use our facts and ideas. It is not important who gets credit for bringing about change; what is important is creating interest in building better local governments, thereby protecting the future for our children.

For the most part, your study will follow the basic divisions of your local government’s budget. Most governments break down services into similar divisions, such as follows;

Administration; Budget & Finance; Building & Permitting; Economic Development; Education; Environmental Services (Trash pickup and Landfills); Health and Human Services; Parks & Recreation; Planning & Zoning; Public Safety (Police, Fire Rescue, 9-1-1 Communication); Public Works (Water and Sewer, Utilities, Transportation).

It is advisable to have one person study a separate department. Some departments may be intertwined, as in the City of Orlando, where Building and Permitting is under Economic Development. For our study, we separated those two study areas, because the regional consolidation of Economic Development will remove Building and Permitting from their domain. I suggest laying out the budgets of the separate governments side by side, and figuring out the best way to separate the study areas.


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The first step, then, is to outline the study and to outline the scope of each study area. Below is the initial outline I used in my designated area of study: public safety.

ORLANDO ORANGE COUNTY TAXPAYER BUYDGET REVIEW BOARD

STUDY AREA:

Public Safety (police, fire, 911, EMS, corrections)

TASK OUTLINE:

1. Prepare list of important contacts.

2. Obtain the budget for each department.

3. Compile list of key employees.

4. Determine where duplications exist between other communities.

5. Research reforms in other communities.

6. Prepare preliminary report.

IMPORTANT CONTACTS:

• Orlando CFO Rebecca Sutton [email protected]

• Fire Chief James Reynolds [email protected]

• Fire Budget Tessie Lookhoff [email protected]

• Police Chief Val Demings [email protected]

• Police Budget Tim Welter [email protected]

• Orange County Comptroller [email protected]

• OC Fire Mary Bauer [email protected]

• OC Corrections Mary Bauer [email protected]

• OC Public Safety Christine Arrant [email protected]

• OC Sherriff Ernest Moody [email protected]


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As I began to outline the study, I found that each time I read a budget summary or received a response to a question, I found more waste and I had more questions. It is important to be a critical thinker in your investigation, and always look for imperfections in the way your government is run. If you look at any budget item and ask the question “why?” you will add to the scope of your study. In virtually every area of government, there is waste; this is because government staffers do not want to reform themselves out of jobs. Your job is to seek out the waste and recommend changes in your local government. Common sense is your best tool.

DEVELOPING A SERVICE MATRIX

One of the most important chores I did early in my budget study was to prepare a service matrix. On a spreadsheet, I listed all fourteen local governments in Orange County across the top of the spreadsheet. On the left side, down the column, I listed each department or function of government I found in the budgets, from administration to public safety. In the top row, under each government, I put “Total Spending,” which shows the total budget for that government.

I then inserted in each corresponding spreadsheet cell the amount spent for each service and department. In doing so, one can see at a glance, how much all governments in Orange County spent on, for example, information technology. We can also see which governments provide that service. If the government provided that service “in house,” I made the box green. If they spent the money, but outsourced the function, I made it orange. An example of an “orange” would be a city using a private garbage service. The benefit to showing some governments are outsourcing a service is to enable you to prove that outsourcing can save the taxpayer money in neighboring communities. My service matrix is available on our website: www.TaxpayerBudgetReviewBoard.org, and in this book as Exhibit A on the inside of the front cover.

In order to complete the service matrix, you will need to acquire the budgets of all local governments. Most of the information is available online. When you dig deeper, you will need to make public information requests for more details from specific departments. The service matrix is a great tool, as well as a great visual when taking your study public.


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THE ALL IMPORTANT STUDY MASTER

At the very beginning, I also created a study master. This spreadsheet contained a list of contacts for my study group, as well as for each government. I made tabs (pages) for: Board Members, Orange County, City of Orlando, and Other Governments. For each government, I obtained and listed the name and e-mail for all elected officials, the city manager and city clerk, as well as the department heads for my area of study (in my case, public safety). I also listed the websites for each government, for easy reference. Any study of government is complex, and these masters will make your job easier.

By the end of my study I had hundreds of contacts in the Study Master with phone numbers and email addresses. I was able to ask a specific question to a specific person with each government in less than one minute. Organization will ensure the maximum results for your effort.

QUESTION MATRIX

The last spreadsheet I created (I promise) was a question matrix. I created a tab (or page) for every government I’d listed, and I copied and pasted any question I posed to each government on their specific page. If I received a response, I made that question green. I sent all my public information requests via e-mail, so it was not much work to copy and paste. I came up with the idea of a question matrix after I realized how difficult it became to track these requests. Some governments complied quickly, some replied to only portions of the questions, and some seemed to make it as difficult as possible to gather information.

I know there are lots of programs that do the same thing as Microsoft Excel spreadsheets. I have tried Project Manager, Google Documents, and other advanced programs. I always go back to a spreadsheet because it is the simplest, most widely used type of information database. Even if you have expertise in an advanced program, your board members will not. Keep it simple and place the effort on research and not on getting members to learn new programs.

Your budget outline will grow as you get deeper into the study. Download the information spreadsheets and templates from our website (www.Taxpayer BudgetReviewBoard.org) and edit them to fit your needs. I recommend that you read


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our full report, “CARE. Final Report of the Orange County Taxpayer Budget Review Board.” However, I’d also encourage you to take each step we took, acquire the facts, and come to your own conclusions. Every government and every situation is different, and our study will be improved upon by others in the future. Your study will not be credible, if you do not have the facts to support your conclusions.

NUMBERS DON’T LIE

It is often said that facts are stubborn things. In our report, I point out that public education spending doubled in ten years (from $741 million to $1.46 billion) while school population went up 15%. We also found that public servants in the City of Orlando make exactly twice the annual wage of the taxpayers who support them.

It is one thing to say that there is waste in government and complain about high taxes. But cold hard facts will win the argument every time. This study is a lot of work. Work that has never been done in your community. But an in-depth study is the solution to the problem and needs to be done if you want real reform.

The key to completing the study is to be hyper-organized. Create a special folder on your hard drive for all budgets, and make folders in your e-mail program to save correspondence. After a while, the process becomes easier if you are organized.


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CHAPTER 6

The Devil is in the Details

HOW TO EXTRACT INFORMATION FROM YOUR GOVERNMENT

Part of the problem with reforming government is that most of the information needed to make changes is in the hands of the government staffers, who desperately want to avoid reform. Most government staffers know how inefficient government is and they fear for their own job security. However, if you know what to ask and who to ask, you will have a better likelihood of getting the information you need.

After you obtain a list of department heads for your government, the next step is to e-mail them requests for public information. Every state is different, but in general, every governmental e-mail, document, and report is public property. You have a right to obtain a copy of the government’s information. You even have a right to each e-mail on each computer, in most instances. Almost all government workers will resist, in some way, your efforts to improve government efficiency. Realize, from the beginning, that it is your job, not theirs, to get the information you need.

Quite often, there is a single person in each community who handles public information requests. If they are prompt with providing answers, you can e-mail them exclusively; if not, copy other department heads. The best way to ensure cooperation of staff is to copy the city clerk and the municipal attorney on your requests. Keep in mind that no staffer will go out of their way to help you; so, you will need to be persistent and sometimes creative in getting the information you need. Below is a copy of a typical e-mail I sent to government employees:

As you may know, I am part of a private study group attempting to create a more efficient government (www.TaxpayerBudgetReviewBoard.org).

Pursuant to the laws relating to the Public Records Request, I would like to request the following...


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1. Copy of the most recent planning department budget.

2. Copy of the employee roster with annual salaries.

3. Number of site permits or development orders issued this past year (and partial, if not completed).

4. Number of site permits or development orders issued in the past three full years.

Thank you for your time.

About half of the time that I sent an e-mail, I received no response. In those cases, I simply kept sending the e-mail and copied more people in government each time I sent it. The other half of the time, the government staffer would say things like, “I have forwarded your request to the City attorney who handles all public information requests” or “That is a finance department question.” Both answers are incorrect. There is no written policy that all requests for information must go through the city attorney; and the best person to answer a question about a department function is someone from that department. The staff is merely trying to avoid answering.

So keep at them and copy more people with each request. If they direct you to someone else, copy the original staffer, the city attorney, the finance department, and an elected official. At some point, they will realize you are not going away and the shortest path for them to get back to their job is to give you what you want. After a dozen e-mails, most cities asked that I send all e-mails to a specific person, normally the city clerk. I then sent the e-mail to the city clerk, as requested; but I copied the person in charge of the specific department (such as the fire chief, if it was a fire question).

As this study was my invention and my passion, I sent out dozens of public information requests each week in my study area, which, as I’ve said, was public safety. With fourteen different communities, I decided to send the same request to each city at the same time. I used my contacts from my Excel spreadsheet and copied and pasted the e-mail content to each recipient. The following is a list of information I wanted or questions I asked in the area of public safety:

1. Individual department budgets for the previous and next fiscal year for the fire department (including EMS and 911), police department, corrections and other agencies under the category of public safety.


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2. Copy of the collective bargaining agreement between the City and the employees in the departments listed above.

3. Map of district boundaries and locations of police stations (staffed full-time) and fire stations.

LIST OF EMPLOYEES FOR THOSE DEPARTMENTS, INCLUDING SALARIES AND E-MAIL ADDRESSES.

4. Copy of the most recent annual budget for the following sub-departments (if any):

5. S.W.A.T, mounted horse patrol, marine units, canine units.

6. List of fire rescue responses for each station for the month of September 2008. List of actual fires that were put out during the month of September 2008 by station.

1. Copy of the most recent annual budget for 9-1-1 communications.

2. List of all 9-1-1 employees with e-mail addresses.

3. Addresses of all 9-1-1 call centers.

4. a.) List of all fire rescue vehicles in the City of (name of city).

b.) Designate if the primary function of the vehicle is fire suppression.

c.) List the acquisition cost.

d.) List the station where the vehicle is located.

This is just a partial list; but as you can see, I asked specific, direct questions that were designed to uncover inefficiency in government. I knew before asking these questions that Orange County had eight 9-1-1 call centers, and that, in actuality, two would be sufficient to cover the area’s population. I knew going in that we have more than double the amount of fire suppression equipment needed on a regional basis, and that the reason they send a fire truck to “fender benders” is to justify their existence. I also knew in advance that there is no valid reason to have separate SWAT teams just miles apart, when they are needed, on average, once a month. But in order to conduct such a study properly, we need to ask the questions, get the facts, and justify our conclusions.


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FULL-TIME HELP

Since many of your Board members may not have the time or political will to ask these important questions, you may want to hire a full-time research assistant. I had the time to devote to the study, as well as intimate knowledge of who to contact for answers. A full-time research assistant could be very helpful; but if your board members are willing to invest a few hours a week, it is not necessary.

FOLLOW-UP

About half of the questions I asked did not receive a response within two weeks. Every Monday, I forwarded the unanswered questions to the government staffers and stated simply, “I do not believe I have received a reply to this request. Thank you.” I found that they simply will not answer some of the questions; quite often, they will answer the easy ones and leave the controversial questions out, hoping you’ll forget about them.

I made it a habit to save each e-mail that I sent and received in my Outlook e-mail folder. I have folders for unanswered questions, responses from government, and completed questions (for my e-mails). This way, I can simply forward the unanswered e-mail without much effort. Occasionally, you will forward a question that has already been answered; that is why I started the Question Matrix. Government staffers do not like to work any harder than they have to; so try to be precise with your follow-up questions. If you sent a public information request with four questions and they answered two, send a follow up that says; “I do not believe I have received the answers for questions 2 and 4 in the attached e-mail. Thank you.”

It is not the job of staff to make sure the answers are complete or that you get the information you need. It is our job as reformers to make sure the mission is successful; therefore it is your job as a researcher to follow up with unanswered questions.

BE PROFESSIONAL

The most important thing to remember throughout the entire study is that you will need to be professional in dealing with the government and general public. If you are derogatory, sarcastic, or mean-spirited in any way, the government will be able to dismiss your group as an anti-government fringe group. Government staffers are used


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to having their butts kissed by people who need their cooperation to keep their business careers alive. You do not need to give government any special treatment; because most government workers will view you as “the enemy” at worst or a troublemaker at best. The right approach is simply to be professional and treat them with respect, if you want your mission to succeed.

Even if members of the government engage you in an unprofessional manner, keep your cool. I received e-mails from firefighters who questioned my motives and competence (I am stating it nicely), and I simply responded in a professional way. Once the study is completed, public opinion is very important. Therefore, your group must maintain its professionalism throughout.

I always used terms like duplication of services, waste, and inefficiency. If you use terms like crooks, thieves, or corruption, you will lose the argument, even if you are correct. So be professional at all times, and remember that the mission is real reform.

WHAT FACTS ARE IMPORTANT

When people study government, they tend to seek out corruption. While that is a noble goal, it is not your mission. Your mission is to study your local government to find where the waste and duplication of services exists. The corrupt official is a pimple on a cancer patient. Focus on the overall problem (waste and duplication of services) and the solution, which is greater government efficiency.

The annual budgets for each government are the most important documents. Most governments have two budgets, a normal budget and a CAFRA budget. Documents that outline the waste and high cost of government are the tools of your reform. I cannot predict what that will be in every city; but after reading this book and looking through your local budgets, you will know waste when you see it. Most of the public information requests I made can be found on our website, www.TaxpayerBudgetReviewBoard.org. Take a look at our questions and see how you might best apply them to your community.

The biggest weapon you have on your side is persistence. If you have a lead, don’t give up until you get the answers. The more damaging the information, the harder the information will be to acquire. Don’t worry about every little detail that you can’t find. Focus on the facts that you can acquire, and string those facts together to make a compelling case for change.


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CHAPTER 7

Breaking down the Budget

In most cases, reforming your local government study will involve multiple budgets. In addition to waste and inefficiency on a local level, there is redundancy and waste from the three layers of government: city, county and state. For my study, I chose not to study the budget of the State of Florida, because the study is complex enough already. But you may want to consider that many of the services provided by your local government can be provided by your county or state government and vice versa. What I mean is, why have three road departments handing the same road network?

Most budgets can be found online, and you can save the budget to a PDF on your hard drive. I recommend doing so, because you will refer to them often. I suggest you create a folder on the C: drive of your computer entitled, “Taxpayer Study” (it is much easier to have separate folders than it is to use My Documents). I have a folder of my C: drive for the study effort, and then sub-folders with different categories such as: Budgets, Employee Contracts, Research, and others. I am also very organized in saving my e-mails and public information requests. There is a great deal of information; so the better organized you are, the easier the study will be.

Keep in mind that the budget contains factual information, but it is presented in a way your government wants it to be seen. For example, they will tell you that the fire department budget is $125 million, but they will not tell you the fire chief makes $175,000 base salary with five weeks of paid vacation, three weeks of paid sick leave, ten paid holidays plus a day off for their birthday, and another $40,000 in benefits annually. So the next step, after you receive the overall budget, is to request individual budgets for each department. Also, ask for the employment contracts with each labor union. Those contracts will spell out the pay and benefits to each employee. If you illustrate the total salary, benefits and pension cost of each employee to the taxpayer, they will come to realize the civil servants are making far more than the taxpayers who employee them.


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Below is a graph of a single employee working in Orlando, Florida and how much he is costing the taxpayer each year. Special Assistant to the Mayor, Joe Robinson, makes $118,456 a year, while collecting another $81,383.40 from his police pension. Here is a breakdown for the total pay for one employee in the City of Orlando, Joe Robinson (28):

• Annual Salary: $118,456

• Pension: $81,383.40 (from his police job)

• Annual Pension Currently: $25,716.79

• Annual Health Benefits: $12,000

• Total Cost of Employee: $237,556.19

When Joe retires again, he will still cost the City of Orlando $150,000 a year and produce no benefit to the taxpayer. These are the facts that will come to light in your budget study.

In breaking down the budget, your goal is to fill out the “Service Matrix.” My service matrix is available on our taxpayer review board website for you to download and modify to meet your needs. As you review the budget of each community, insert the amount spent on each department into the spreadsheet. If some departments are combined, like building and planning, send an e-mail asking the city to break out the cost of each department.

If they do not have a department, make the section grey on the matrix. If they spend money, but outsource the department service, insert the amount and make that section orange (orange, for outsourcing). The service matrix will not only show how much your local government really costs; it will also show how services are duplicated across your region.

TOUGH QUESTIONS

In order to break down the budget, you will need to ask some tough questions. Although the budget issues may be different in every community, below is a sample e-mail I sent out, including some of the questions I asked in my study:


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As you may know, I am part of a private study group attempting to create a more efficient government (www.TaxpayerBudgetReviewBoard.org).

Pursuant to the laws relating to the Public Records Request, I request the following...

1. Copy of the most recent budgets for all departments.

2. List of employees in each department, including name, salary and e-mail address.

3. Any bids from outside vendors for services.

4. Total amount contributed to employee pensions for the City in 2008 (if not available 2007).

5. Total amount of money spent on employee healthcare in the same period.

6. Total number of full-time employees.

7. List of all City employees who were paid $10,000 or more in overtime in the most recent calendar year. Please list by employee name, department, title, amount of overtime paid, and provide their e-mail address.

8. Number of site permits or development orders issued this past year (and partial if not completed).

9. Number of site permits or development orders issued in the past three full years.

10. Copy of the contracts for each solid waste vendor in Orange County.

11. Chart of cost per unit for solid waste services (this can be per pickup, per household weekly or annually, or whatever the best method to compare costs for garbage service is).

12. Geographic service boundaries for vendors.

13. Copy of the most recent budgets for capital improvements of roads.

14. Number of miles of county roads that were added in the last two fiscal years.

Please forward that information in an electronic format.

Thank you.


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BREAKING THE BUDGET INTO BITE-SIZED FACTS

Once you have the overall budgets for government and the individual budgets, you will be able to fill out the service matrix. That will enable you to use the data to produce facts that you can present to the taxpayer in a meaningful way. For example, I took the total annual salaries of the City of Orlando and divided that figure by the number of employees. I found the average civil servant in Orlando makes exactly twice what the average taxpayer makes annually. You will not find that fact on a government website.

You can and should illustrate the total cost of each employee. Base salary is just the beginning. If you combine salary, pension, health and other benefits, the average government worker in Orlando costs the taxpayer nearly $100,000 per year. It costs nearly $150,000 a year to put a single police officer on our streets. Ironically, at that price, we still cannot afford to keep the taxpayer safe. People in Orange County, Florida make an average annual salary of $38,000 a year. More than half have no pension and a third have no health insurance. By breaking down the facts and doing a little research, you can produce meaningful comparables.

BUDGET FORECASTING

Without a radical change to the way we govern, the employee costs will continue to skyrocket. This will eventually lead to a round of massive tax increases or a cutback in services, or both. One of the first questions I asked each government is whether or not they have a five- and ten-year budget forecast, given the current built-in salary increases and pension obligations. We need to know what our government will cost in the future. So, I sent the following request to each government in central Florida:

Pursuant to the laws relating to the Public Records Request I request the following....

1. A copy of a five- and ten-year projection of the County budget, given the contracted pay increases and pension obligations.

2. Any projections of future revenue needs for the County.

3. Any correspondence regarding projected budget shortfalls in future years.


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The response I received from the City of Apopka was: “In response to your public records request below, the city currently has no information available regarding a five- and ten-year projection of the City budget, a projection of future revenue needs or any correspondence regarding projected budget shortfalls in future years.” Of the fourteen governments in Orange County, only one, Winter Park, had a budget projection beyond the next calendar year. So your local government has no clue what the expenses will be in five years, except that they will be higher, given the guaranteed salary increases and pension obligations. It should be a requirement for all governments to have a five- and ten-year budget forecast, but they do not want to show the taxpayers the truth. And that truth is we have massive unfunded liabilities and built-in cost increases that will ensure taxes will increase much faster than inflation. In Chapter 19, we discuss switching from a cash-based accounting system to an accrual system, which I believe will solve this problem.

Our study effort did not include a budget projection. If you have the time and ability, I do suggest you project the budgets out ten, and even twenty years, into the future. At some point, the number of government retirees will exceed existing employees, so more money will go out the back door than to the services being provided. By forecasting those expenses and showing the problem mathematically, the taxpayers and elected officials will wake up to the fact that we have a serious problem.

The future of local government is exactly the same as the future of General Motors. At some point, the system will fail because of the legacy costs of government. Legacy costs are obligations created in past years that will come due in future years. General Motors failed because they have 150,000 current employees who also support 600,000 retirees. It is not a question of “if” local government will reach a point where it cannot provide basic services, but when.

Your budget study may be able to pinpoint exactly when that will happen, thereby saving the citizens of your community from the pain and suffering our automotive industry is feeling now.


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CHAPTER 8

A Government that Works: Ideas from Our Study

The ideas and strategies in this chapter were taken from the success of other government reforms. When possible, we will give an example of how the reform was used and the results of the effort. It is important to note that the reforms your city needs depend on the way your government is structured, how it integrates with other governments, the political conditions, and the ability of the taxpayers to rise up and demand reform.

There are four ways in which we recommend reforming local government: consolidation, managed competition, privatization, and a return to the core functions of government.

CONSOLIDATION

There are two types of consolidation: consolidation (or amalgamation) of governments themselves, and consolidation of the services they provide. In Chapter 9, we outline why regionalization--a consolidation of government services across a region--is preferable for Orange County.

The goal of consolidation is to eliminate wasteful or unneeded duplication of physical plant, labor, apparatus, equipment, political and/or fiscal resources. The primary reason to consolidate is that, often, departments exist immediately adjacent to one another, each with a complete, and many times, duplicated set of resources; and, obviously, this is wasteful, on any of a number of levels. There is also partial consolidation. An example might be separate fire departments are retained, and a special agreement is formed to handle specific challenges. Adjacent communities can share the use of a seldom used ladder truck, which can cost over $1 million.


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The regionalization of government services is such an important topic that I devote an entire chapter to the subject. For now, I will simply give my definition of it, which is: “Delivery of government services without regard to political boundaries.” In most cases, this is the most effective solution to eliminating waste and duplication.

MANAGED COMPETITION

In 2003, the City of San Diego was nearly bankrupt and one of the most inefficient governments in the United States (labeled “The Enron by the Sea” by comedian Jay Leno). In November of 2006, the City of San Diego passed Proposition C which allowed and required the city to utilize competition with the private sector to provide services to the community at the lowest possible cost (29). The City’s leaders’ thinking was that competition encourages potential service providers to keep costs at a minimum or face the loss of the contract to a competitor. Cost savings can be realized through economies of scale, lower labor costs (by reducing the number of supervisors), better technology, innovation, or simply finding a different (more efficient) way of providing the service.

While low cost is the primary goal, they found a number of additional reasons to bring outside competition and resources to local government. Here are just a few:

Access to Outside Expertise. Contracting out allows governments to obtain staff expertise that they do not have in-house on an as needed basis.

Innovation. The need to provide low cost, high quality services under competition encourages providers to create new cutting edge solutions to help win and retain government contracts.

Flexibility to Accommodate Peak Demand. Changes in season and economic conditions may cause staffing needs to fluctuate significantly. Contracting out allows governments to obtain additional help when it is most needed, so that services are uninterrupted for residents. In Florida today, there are tens of thousands of government workers in building departments with very little to do, yet we pay for them every day.


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Quality and Service Improvements. Competition encourages bidders to offer the highest quality and best service to win over their rivals. Compare the Division of Motor Vehicles with Starbucks.

The following is an example of managed competition working successfully in local government:

Maricopa County, Arizona was spending approximately $18 million dollars a year on stray animals. The local sheriff offered to take the department over, and the county supervisors eventually agreed. The animal shelters are now all staffed and operated by prisoners. They feed and care for the strays. Every animal in a prisoner’s care is taken out and walked twice daily. He now has prisoners who are experts in animal nutrition and behavior. They give classes for anyone who'd like to adopt an animal. The county sheriff has literally taken stray dogs off the street, given them to the care of prisoners, and had them placed in dog shows. The best part is that his budget for the entire department is now under $3 million annually.

PRIVATIZATION

There are numerous studies demonstrating that privatization of state and local government can realize tremendous savings and efficiencies. Lawrence Reed of the Mackinac Center for Public Policy said, “Governments must say, ‘We are no longer going to perform this work with our own workforce.’ States are privatizing utilities, prison management, data processing, foster care and others. Counties and cities and schools are privatizing fire protection, police protection, waste-water treatment, street lighting, tree trimming, snow removal, hospitals, custodial and jails." And he adds that, "…government must be most careful with the savings realized, less they be squandered on some other dubious government enterprise (30)." The following are a few examples from his report:

1. Indianapolis, Indana - Mayor Steve Goldsmith has put up almost everything the city does on the list for privatization. He says, "A funny thing happens when public employees have to compete - they discover they really don't need so many supervisor categories and breaks." It was extremely difficult to resolve citizen complaints and get the bureaucracy to move on anything. Once a service is privatized, accountability is almost instantaneous. If performance suffers, the city can quickly cancel the contract. Because of this city officials are really empowered."


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2. Flint, Michigan - Mayor Woodrow Stanley said the City experienced 32% savings by way of privatization. The mayor believes that the “privatization option is nothing less than good stewardship.” It prompts officials to open their minds and think about government services in ways they never pondered before. It forces them to find out the real free-market price, and need.

3. Head count growth - State and local government should be required to achieve equal to or better productivity than the local private sector, such that its spending ratio to gross state product declines instead of increases, and that the number of its employees increases at a smaller rate than the population.

4. Compensation - State and local government should be required to assure that their employees do not receive wages higher than the local private sector, nor receive medical insurance, dental insurance, and prescription drug insurance of a better quality or at a cost to employees less than in the local private sector, nor pension benefits that are better than the private sector. A significant down-sizing of compensation is called for.

Once considered radical, privatization has largely shifted from an ideological concept to a well-established, proven policy management tool. Decades of successful privatization policies have proven private-sector innovation and initiative can do certain things better than the public sector. Privatization is a worldwide phenomenon. In recent years, all levels of government, seeking to reduce costs, have begun turning to the private sector to provide some of the services that are ordinarily provided by government. The spread of the privatization movement is grounded in the fundamental belief that market competition in the private sector is a more efficient way to provide these services and allows for greater citizen choice. A study of 20 California cities demonstrated savings of 28 to 42 percent from use of privatization (31).

RETURN TO THE CORE FUNCTIONS OF GOVERNMENT

Chapter 3 outlined the results of the “Murphy Commission.” The purpose of that commission was to determine what functions and services governments should provide. I also believe we need to provide a rating system on the priority of each proposal or service. There is a finite amount of tax revenue available so we need to prioritize where the money will go.


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One of the ideas I came up with during the study was the “critical mission test.” I felt there was a need to create a formula to determine if the service being provided by government was one of the “core functions of government.” Naturally, I wanted to keep the test simple. You’ll find the three-question critical mission test below:

1. Will the taxpayer’s quality of life be acceptable without this service?

2. Does the service decrease available funds for the core functions of government?

3. Is the number of people receiving the service lower than the number of people paying for the service?

If the answer to all three questions is yes, the service should be discontinued.

WHAT OTHER GOVERNMENTS ARE DOING

No study of government can be completed in a vacuum. In our study, we relied on several previous studies for ideas and to check on the results of our ideas in other areas. Initially, many of our members suggested we consolidate all local governments, just as Jacksonville and Duval County did back in the 1970’s. While that consolidation was a success from an efficiency standpoint, most consolidation attempts fail, because of the politics involved. So, our focus became providing the services of government as efficiently as possible.

The first efficiency study we examined was called the “San Diego Citizens Budget Project.” In 2004, the Performance Institute launched the study to find greater efficiency in what many considered the worst run city government in America; www.sandiegobudget.org (32). Their in-depth study resulted in the following recommendations:

1. Enact a balanced budget

2. Launch an independent audit of City funds

3. Reorganize government to streamline overhead costs

4. Create a “311” citizen service center

5. Create a competitive bid process

6. Reduce skyrocketing city labor costs and pension liability


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7. Establish a reasonable limit for city spending increases

8. Reduce corporate welfare and subsidies to special interests

9. Reduce Mayor and Council staff size and budget (focus spending on services, not administration)

During my research, I found that my home state of New Jersey has enacted state laws requiring the consolidation of services in New Jersey. The November 15, 2006 report entitled “Government Consolidation and Shared Services” was a great resource on what other governments have done (33). The report can be found on the internet at:

www.njleg.state.nj.us/PropertyTaxSession/OPI/jcgo_report111506.pdf

The report is so good that I recommend reading the entire document. One of the primary strategies of the study was to create a bi-partisan effort to increase efficiency and eliminate waste in local government. New Jersey Speaker Joseph Roberts termed the phrase “CORE,” which stands for “Clearing hurdles that stand in the way of sharing services; Overriding administrative waste in our schools; Reining in pension abuse; and Empowering our Citizens.” Since I grew up in New Jersey and saw firsthand how strong the unions are, I was surprised to find New Jersey with mandatory shared services laws. This report emphasizes the urgent need for reform, because the longer we wait for reform, the deeper the hole we need to dig out of.

Here are some of the recommendations in the New Jersey consolidation report;

1. Create a Reorganization and Consolidation Commission on the State level.

2. Transparency of local government employee salaries and benefits packages.

3. Re-engineer Information Technology using common software and hardware devices.

4. Develop “employment reconciliation plan” to facilitate resolution of employee issues that arise from consolidation.

5. Tie state aid to increased efficiency of local government. The report stated “subsidizing inefficiency has to stop.”


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The report went on to say, “The time has come to hold municipal governments accountable to the taxpayer for the efficiency of service delivery and for the State to provide the necessary means and guidance.” In the conclusion section of the report, they go on to say that, “Government fragmentation breeds excessive spending on major capital items which are not shared”, and “…principal among these concerns was duplicative expenditures on fire apparatus.”

Here’s what CORE would do:

• Give new broad authority to county school superintendents to get involved in local school budgets and other decisions

• Reform the state's school funding formula

• End public employee pension padding and boosting practices

• Move school board elections to November

• Require all municipalities to post annual budgets and details of employment contracts on a website

The most important conclusion in the New Jersey study was “to provide for the establishment of regional fire and rescue agencies, regional school districts, regional planning boards, and regional health commissions.” The Pony Express was retired a long time ago and it is time we did away with a separate government for every stage stop.

There are hundreds of examples where local governments have reformed for greater efficiency, lower cost, and better services. My book will give you a few dozen examples, but I encourage you to find more. A simple internet search can lead you to dozens of solutions for the specific problems within your local government.

There are a number of good resources to find ideas about and track results of reform efforts in other areas of the country. We used the following websites and organizations to help learn what other communities were trying: www.Reason.org; Americans for Prosperity.org; Citizens against Government Waste (CAGW.org); and FloridaTaxWatch.org.


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CHAPTER 9

The Case for Regionalization of Government Services

Before I embarked on my study of local government I read several books on the consolidation of governments. In “City-County Consolidation and Its Alternatives,” author Jered Carr notes there have only been 33 successful consolidations of governments in the United States. He points out that the consolidation attempts are successful only 15% of the time they are attempted (34). At first, I rejected the idea of consolidating local governments, because the success rate was so low. But then I looked into why the success rate was as low as it was. I found there are reasons why local governments do not consolidate beyond politics, money and power. One of those reasons is economies of scale.

ECONOMIES OF SCALE

To illustrate economies of scale, consider that government is like a restaurant with fourteen tables. Each table (each government) has its own hostess, cashier, manager, cook and waitress. The following graph (G-1) shows that, as small governments get larger, the production costs decrease because of “economies of scale.” In our restaurant analogy, we really need only one hostess, one cashier and one manager, a few cooks and a few waitresses. Similarly, it is more efficient to have one medium-sized city than three small cities with the same total population as the medium city.

But as the size of the government grows, the economies of scale start to produce smaller increases in efficiency. At some point, the size of the government grows to the point where it stops becoming more efficient, and the larger it gets, the less efficient it gets. This is known as “diseconomies of scale.” The classic example of this is New York City, where government services cost several times what smaller


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communities are able to provide them for. In our restaurant analogy, we begin to need an HR department for hostesses.

In our graph, “cost” is on the vertical line, while “size” is the horizontal line. The optimum size of government is one that can deliver core services at the peak of efficiency, as can be seen in Graph Q2. Not too small, not too big. It is not possible to determine the optimum size of government. The key is to realize that you can gain economies of scale by consolidating services; but be wary that at some point, the efficiency eventually peaks, and then it begins to decline.

OTHER REASONS WHY CONSOLIDATIONS OF GOVERNMENTS HAVE NOT WORKED

There are many other reasons why consolidations of local governments have not worked, the primary reason being that the larger the government, the less control an individual citizen has over its local government. If your small town enacts an ordinance banning green cars, you can march into city hall and protest the ordinance.


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You can usually meet with elected officials, even on short notice. The larger the city, the larger the government; and the larger the government, the less accessible elected officials are . . . and the harder it is to fight that government. Voters and taxpayers understand this and they are reluctant to give up what little power they now have to a larger central government.

Another reason consolidation of governments has not worked is because of the fact that consolidation of services is a complex issue, in and of itself. Consolidation of services takes time to study, time to implement, and may take years to successfully accomplish. If you consolidate a government, the services are consolidated the instant the law takes effect. For those intent on consolidating governments, I suggest you consolidate services first and then consolidate the governments.

When governments consolidate regionally, small towns lose their character and culture to the larger communities. Small towns in Florida, like Windermere in Orange County, take pride in their community and have more social functions than people just blocks away in Orange County. There is a sense of community that exists in Windermere that does not exist in unincorporated Orange County. I know; I live in Orange County just down the street from the City of Windermere. We do not want to lose that sense of community, but we need to deliver government services more efficiently.

There are some examples I found during my research that show how consolidation of government makes great sense. In New Jersey, there are a pair of sister cities called Princeton Borough and Princeton Township. One consolidated city called Princeton makes all the sense in the world (and they are trying to do just that). Because of the above-mentioned obstacles to government consolidation, our team’s chosen approach is to consolidate services, not governments.

APPROACHES TO CONSOLIDATING LOCAL GOVERNMENT SERVICES

There are several ways to consolidate services. They are:

• Horizontal collaboration or consolidation is when two or more similar units of local government agree to work together. In central Florida, that may be Ocoee and Apopka.

• Vertical collaboration or consolidation is when two or more dissimilar units of government agree to work together, such as Orange County and Ocoee, or the State of Florida and Orange County.


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Neither of these methods will be optimal for Orange County, Florida, because of the checkerboard nature of the geographical boundaries of the cities and Orange County. We will need a combination of the two to create the optimal delivery of local government services. I have termed this approach “Regionalization,” which is simply the delivery of government services without regard to political boundaries.

REGIONALIZATION

After concluding that consolidating services into one central bureaucracy was not optimal or politically feasible, I searched for a logical way to improve the efficiency of government services. Looking at the map of Orange County (A-1, below), I saw that the service boundaries were drawn on old political boundaries and are wildly inefficient. Service providers drive millions of miles a year and waste thousands of hours simply driving past other government’s service areas. The waste is most prevalent for Orange County employees, who must service pockets of Orange County that exist deep within the boundaries of smaller communities (known as enclaves). And for much of that travel time, they are going through other cities.


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The first step I took was to assume that there are no separate governments and no service boundaries. Logically, I assumed that the service areas will be geographic squares, likely bordered by major roadways. Next, I looked at the cities in the region and the nature of the area. In northwest Orange County, there are four cities that are similar: Apopka, Ocoee, Oakland and Winter Garden. Those four cities and the corresponding portion of Orange County became Zone 1. In southwest Orange County, there are three cities, plus the 28,000 acres of Disney: Lake Buena Vista, Bay Lake and Windermere. I made that area Zone 2.

In central Orange County lie the City of Orlando, Maitland, Eatonville, Winter Park, Edgewood and Belle Isle. This “urban core” was made Zone 3. And lastly, we made eastern Orange County Zone 4, which was rural in character, but now has the giant subdivisions of Avalon Park, Stoneybook and Eastwood. The communities in Zone 4 are considering ceding from Orange County to get better services; but, in my view, regionalization will solve their problems more efficiently.

I created the Orange County Zone Map (Appendix B, inside back cover) to illustrate the proposed service boundaries. The service boundaries are logical, efficient from a service delivery standpoint, and group communities into zones that share their cultural identity. It is worth noting that my plan does not call for the elimination of those communities; rather, it simply requires a regionalization (consolidation) of government services. The taxpayer will not even know there has been any change, other than from news reports and the fact that his or her tax bill will not increase every year.

OTHER CITIES AND STATES ARE COMING TO THE SAME CONCLUSION

I concluded that regionalization of government services is the best way to improve government efficiency and lower the tax burden on citizens. Many other communities and states have come to the same conclusion. In New Jersey, the state legislature passed a law requiring local governments to consolidate and regionalize services.

A Special Session Joint Legislative Committee prepared a report in 2006 entitled “Government Consolidation and Shared Services (35).” They recommended a “permanent local government reorganization and consolidation commission.” The


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report became the basis for New Jersey law requiring greater cooperation between governments, ultimately paving the way for consolidation to occur.

In March of 2008, the Warwick, Rhode Island City Council passed a resolution asking the state legislature to “commission a study for the formation of countywide governmental services in order to provide a higher quality and more economically efficient way of providing services to Rhode Island residents and businesses. Regionalizing police, fire, schools, public works and other departments in the form of countywide governmental services would provide a more economically efficient form of government and would eliminate the needless duplication of management and supervisory positions,” the resolution reads (36).

City Council vice president Steve Merolla said, “We just can’t keep doing what we’re doing. Otherwise, we’ll continue to remain in debt, provide fewer services to our residents and our quality of life will continue to deteriorate.” Merolla added, “And let’s get rid of these boundaries that were created back in the colonial days (ibid).”

In Maine, the Maine Municipal Association is a strong supporter of the concepts of regionalism, inter-local cooperation and consolidation, and encourages municipal governments to use these governance alternatives when municipal governments determine that implementation of these concepts makes sense -- when they result in cost savings and/or greater effectiveness in the delivery of municipal services, or enhance those services (37). In some cases, that means sharing fire services, 9-1-1 call centers, and even school districts.

The fundamental policy needs to be that government shall provide the highest quality services at the lowest possible cost. If the cost of government services is too high, it will adversely affect our economy, our standard of living, and ultimately erode the public service being provided. How we achieve that goal will differ from place to place, but the goal should be the same everywhere. At the current time, government merely raises taxes or fees as the cost of government grows, without regard to the consequences of those increases. This model of government is not sustainable.

The regionalization of government services should work in every county in Florida and almost every place in the United States. It is the most efficient way to increase the efficiency of delivering government services without consolidating governments themselves.


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HOW REGIONALIZATION WILL WORK IN ORANGE COUNTY

The key to improving public services in Orange County is to design the system around the citizens. Now, the service is run by government labor unions and is an archaic industrial business model. My plan is to appoint a civilian administrator in each zone who works directly for the taxpayer. The administrator has a one-year contract and can be terminated by the taxpayers through the county commissioner whose districts he services. The administrator will oversee all government services within each zone and direct the activities of the civilian director of public safety.

The director of public safety in each zone will be responsible for ensuring that public safety, including policies and procedures, is re-designed around the taxpaying citizen. Methods will be introduced to maximize service and efficiency with a goal of crime prevention. Police will spend more time on crime prevention and less on writing speeding tickets.

The director will coordinate the activities of the new Road Rangers (more details on these programs in the Public Safety chapter). The coordinated activities will ensure that local police service the entire zone, rather than jagged jurisdictional boundaries.

Regarding fire rescue, the director will remove duplication of services and design the system for maximum effectiveness. In short, the public safety director is an executive working directly for the taxpayers, and does not represent the government labor unions who dominate the actions of public safety in Orange County.

PHASED APPROACH

It is my suggestion that we immediately regionalize Public Safety and Building and Planning Departments. As those changes are implemented, plans should be devised to regionalize the other services of government.

Those services will be under the direction of a civilian regional administrator whose sole function shall be to increase efficiency and improve customer service. Like the public safety director, the administrator shall have a one-year contract and be subject to removal by the elected official in the county whose districts they serve.


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CONCLUSION

The key to these reforms is to design the services around the taxpayer. Currently, the system is designed around the government and benefits government employees. In New Zealand, these same reforms have transformed government into a much improved public service. In Lessons from New Zealand, Ian Ball describes how making government executives accountable for performance has resulted in lower cost, better service, and much greater efficiency (38). The resistance to these reforms will come from government labor unions who have decades of experience in keeping the status quo through their political power and propaganda. Existing elected officials will also be reluctant to change, because they are comfortable with the current system that keeps them in power.

Change must be demanded by the taxpayer; but our first step is to educate the taxpayer on the true problems with local government. Knowledge is power, and facts are the weapons we shall use in the battle to take back local government.


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CAHPTER 10

Government Salaries Cannot Be Higher Than the Taxpayers

The media has done a great job of portraying civil servants and government employees as noble, brave, and underpaid. The public perception is that police and firemen work in dangerous occupations. But the truth is that they are neither underpaid nor at greater risk than the private sector workers who pay their salaries.

Further, the average public servant in Florida makes much more salary than their private sector counterparts. The average annual wage in Florida is $37,260 (39). The average salary in Orlando is $36,323 (40). And yet the public servants who work at the expense of the taxpayers make an average of $64,231 in the City of Orlando, some more than $200,000 a year (41). And the benefits to government workers add 30-40% to the cost of each salary.

And at the risk of offending anyone who subscribes to stereotypical views of such, please ignore the argument that some government positions are highly dangerous. Below is a list of the ten most dangerous occupations in Florida (42). You’ll note, as did I, that police and firefighters are not on the list. Taxi drivers and garbage men work in a more dangerous, albeit less glamorous, occupation.

Rank Occupation Death rate/100,000

1 Logging workers 92.4

2 Aircraft pilots 92.4

3 Fishers and fishing workers 86.4

4 Structural iron and steel workers 47.0

5 Refuse and recyclable material collectors 43.2


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6 Farmers and ranchers 37.5

7 Roofers 34.9

8 Electrical power line installers/repairers 30.0

9 Driver/sales workers and truck drivers 27.6

10 Taxi drivers and chauffeurs 24.2

In addition to comparatively high salaries and greater benefits, government employees rack up overtime unlike the private sector. There were over 300 employees from Orange County alone who made more than $10,000 a year in overtime in 2008 (43). The top overtime recipient was Cris Raymundo, who pulled in $56,241 in overtime pay in 2008, working in water treatment (ibid). It is common for public servants to be allowed massive overtime in the last few years of employment to boost their pension salary. It is another subtle form of stealing (from the taxpayers) that is rampant in government.

The dirty little secrets of government are overlooked by elected officials who are afraid of labor unions or who use the money to further their own careers and agendas.

IT PAYS TO BE FRIENDS WITH THE KING

Orlando is currently in the middle of a budget crisis, and just raised taxes 15% last year (44). While the foreclosure rate in Orlando has never been higher, crime surges, and businesses fail, being a public employee has never been more profitable. At age 27, Brie Turek went from the press secretary to Chief of Staff in three years in the City of Orlando government; now he’s effectively running a major city. The following was made public in the Orlando Sentinel on March 31, 2008:

“Orlando Mayor Buddy Dyer shuffled two key advisors Monday, appointing his sixth chief of staff in five years. Dyer promoted Deputy Chief of Staff Brie Turek to chief of staff. It's her job to ensure Dyer's initiatives and policies are instituted, as well supervise the city's top administrators. The job also traditionally carries certain political responsibilities, such as dealing with the community's power players and serving as the mayor's "hatchet man."


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Turek (photo) replaces Joe Robinson, who will now carry the title "special assistant to the mayor.” In her new job, Turek, 27, will receive $127,000 a year (45). " (Note: She currently earns $131,000 a year, after pay raises she’s received since March 2008).

The blog on the Sentinel website had the following comment: “Sounds like a reasonable transition for a 27-year-old, huh? The Mayor has surrounded himself with a bevy of young, attractive females who make astronomical salaries and have perks that most would only dream of.”

Unfortunately, the story of Brie Turek is not all that unusual in local governments across central Florida. The fact is that there are hundreds of public employees making over $100,000 a year, not including benefits. And the pension, health, and other benefits cost the taxpayer 40% on top of those huge salaries. Brie Turek, age 27, cost the taxpayers $165,100 per year. I sincerely doubt that in the private sector, Miss Turek can command a third of that pay (unless, of course, she becomes a consultant doing business with the City of Orlando).

Joe Robinson, the “special assistant to the Mayor,” had retired as an Orlando police captain and Dyer's deputy chief of staff in January 2006. He then went to work as chief of staff for Orlando venture capitalist Frank L. Amodeo and his AQMI Strategy Corp. Frank Amodeo, is a disbarred Georgia bankruptcy lawyer who served time in federal prison for fraud in 1990, having allegedly embezzled $200 million from the federal government from 2002 to 2006. Robinson left that firm in 2003 and went back to work for the City of Orlando. The Special Assistant to the Mayor makes $118,456 a year while collecting another $81,383.40 from his police pension. With benefits from his new job he is pulling in $225,000 a year (46).

Dade County Attorney Robert Cuevas Jr. received a 9-percent raise in 2008, and the county agreed to pay all health and medical insurance costs for him and his wife. He will now earn $319,000 a year plus a $10,000-plus personal expense account, a $4,000 car allowance and $420 for parking and transit (47). Even before the raise, Mr. Cuevas was the highest-paid county attorney in Florida. In 2007, as the deputy county attorney, Mr. Cuevas retired before returning later to take the department's top job. Retirement entitled him to a pension, plus a lump sum of $423,000 in accumulated unused sick time. All county executives and higher salaried employees can accumulate thousands of dollars in sick time to collect upon at retirement. This distorts the intent of paid sick days. Sensible employers allow sick


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pay for people who are actually sick, not to build a tidy nest egg. The county should abolish this policy, period. It is an abuse of taxpayers' money.

And the huge salaries are not confined to elected officials and their friends. In Orange County and Orlando, there are 100 firemen who make over $100,000 plus pension and benefits (48). We have dozens of building officials who rake in more than $100,000 a year, while permits are down more than 80% (ibid). People in the private sector who produce jobs and are the backbone of our economy are suffering mightily, but the gravy train in government keeps on rolling. There are problems with government workers making double what the taxpayers make (aside from the moral inequity in the situation).

First, we cannot afford to provide basic public services if the wages of the workers are too high. Imagine a Subway run by our government. The director of subs would make $125,000 a year plus $30,000 in benefits. The Director of Neighborhood and Community Affairs would make $117,748 (a real salary and office in Orlando) and each sub-sandwich maker would make $64,231 plus benefits. Instead of a $5 foot-long, we would have a $50 foot-long. No one could afford them! Our government has simply doubled taxes to cover their expenses, but small business cannot afford the taxes. In effect, our government is drowning our local economy.

The second and long-term problem is that we corrupt our political process as more money goes through the system. Elected officials no longer represent the taxpayers working at Home Depot and Subway; they are now career bureaucrats who make six-figure salaries. What is the purpose of term limits when the elected official jumps to a new office and continues their pension? Our leaders are now part of the government, when they are intended to represent the people.

It is my firm belief that public servants should not make more than the taxpayers who support them. Firefighters work no harder and are at no more risk than roofers and carpenters. It is also my firm belief that elected officials should not make six-figure salaries; at least, not when the average taxpayer is making much less than half of that. Public service should be just that.


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COMPARING MUNICIPAL EMPLOYEES TO MILITARY SOLDIERS

Let’s compare the wages and benefits of our municipal workers to those employed in our military. From the military side, I will use Dave Webb, who was an NCO in the Army when he retired from service and a resident of Orange County. He spent 18 months in Iraq and 18 months in Afghanistan. As a ten-year veteran of the Army, Dave had achieved the highest rank a non-officer can get, a Non-Commissioned Officer. His annual salary started at $16,000 a year and peaked at $42,000. He worked 14 hours a day on average and had 30 days of leave each year.

Most of the time he slept on a cot or in a sleeping bag. The weather was either extremely cold or extremely hot. He was shot at on dozens of occasions and saw two of his friends die from combat wounds. Now let’s compare the pay, benefits and risk between NCO Dave to 27-year-old Brie Turek in the City of Orlando. Brie has been working at the City for four years and makes three times what a ten-year military veteran makes. Brie works long hours, but she gets to sleep in a bed in an air conditioned home. Brie gets a hot meal whenever she wants and does not get shot at!

Whenever someone tells you our government workers have long hours or stressful jobs, just think about the 200,000 young men and women halfway around the world, sleeping in a cot with the rifle at their side. And remember that those hardworking Americans make less than half of the annual salary of the people working in your local government.

The reason our military does not have the pay and benefits of our local government employees is because they do not have the political clout of government labor unions. Those labor unions give hundreds of millions of dollars to candidates and PACs and leverage their power for excessive pay and benefits. The loser in that battle is the working taxpayer.

GOVERNMENT PAYROLL

It is important to realize our government has its own labor unions and organizations that represent government workers, not the taxpayers. Government staffers are paid through budgets prepared by other government staffers, with little or no supervision from political leaders and absolutely no control by the taxpayers. It is a


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fact: state and local government employees receive higher wages than do the private sector.

The National Compensation Survey of Occupational Wages in the United States, July 2003, which was published by the U.S. Department of Labor Bureau of Labor Statistics in September 2004, stated "average hourly earnings in private industry were $16.98, compared with $22.22 in State and local government (31% higher) (49). In our study of local government, we found the employees of the City of Orlando make more than double the annual salary of the taxpayers who support them (50). The average wage in the City of Orlando is $32,000 annually, while the average civil servant makes $64,231 a year plus benefits (ibid).

State and local government employees have superior medical, prescription and dental insurance benefits, at lower premium costs to themselves, than nearly all persons in the private sector. It is often found that city employees receive medical insurance and prescription drug benefits and dental benefits, yet pay only 1-2% of the premium costs - - with local taxpayers picking up the other 98-99% (51).

Additionally, in general, state and local government employee medical and pension obligations are guaranteed by taxes on local residents. States pay more for public retirees, too. According to the Employee Benefit Research Institute (EBRI), the average public-plan retiree got $16,188 a year in 2003, far more than the $7,200 their private company counterparts could expect. All in all, EBRI concludes, state and local government wage and salary costs are 40% higher than the private sector's; and, its employee benefit costs are 60% higher. According to the U.S. Census Bureau, major public pension plans paid out $78.5 billion in the 12 months ended Sept. 30, 2000. By the comparable period in 2004, that had grown to $117.8 billion, a 50% climb in five years (52). Why should government employees receive better wages and medical insurance coverage than the taxpayers who are paying for their coverage? Who is serving whom?

BENEFIT COMPARISON

In comparing government benefits to the private sector, well-… there is no comparison. Government workers get more perks and benefits by far than private sector workers. In part, it is because of the incremental gains by union negotiators over time; but mostly it is because the union negotiators are negotiating against


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government staffers who are spending taxpayers money, not their own. It is important in doing your study to read each union contract and list all of the benefits that the members receive. The average taxpayer will be appalled that their tax dollars get wasted for benefits they themselves do not receive.

The following is an example of the benefits for a Lieutenant with the Orlando Fire Department. To start with, most of the firefighters work 24-hour shifts, basically two days a week (in other sections, I detail why paying firefighters to sleep is not a good use of taxpayer resources). The typical Orlando firefighter gets 250 hours of vacation pay per year, or four and a quarter weeks of vacation a year (53). They get eleven paid holidays, including their birthday. Since they work 24-hour shifts, they get paid 12 hours for each holiday, 50% more than your average taxpayer (who does not get their birthdays off and paid for).

If the firefighter must attend court on a non-work related matter, they get time off with pay. They accumulate sick leave at 2.31 hours per week. That amounts to 120 hours per year or three weeks of sick leave. If they are not sick, they can get paid to work; and if they die, their estate gets paid for their unused sick leave (ibid). It is a strange twist to pay someone twice for the 120 hours he or she is working because of a clause in the contract; but that is how it works out.

They get eight consecutive days of “bereavement leave” if someone in their family dies. This does not count against their vacation time, sick leave or holidays. They get $2000 a year for being with the fire service for 18 years annually, a base pay of $76,426, full health benefits, and guaranteed salary for life in retirement. If they are on the Executive Board, they can get two shifts (48 hours) off to attend the union convention (as does the fire chief) (ibid). They also get one and a half days off for passing a physical fitness test, which is ironic, because they lift weights and work out during work hours in the firehouse gym.

So, let’s look at an Orlando fire lieutenant who has 18 years of service and a 2,080 hour work year. Deduct his 250 hours of vacation, 120 hours for sick leave, 132 hours for paid holidays, 48 hours for court proceedings, 12 hours for voting, 72 hours for bereavement leave, 48 hours for union conventions, and 12 hours for passing a physical fitness test. That amounts to 694 hours off, in this hypothetical year, meaning he works only 1,386 hours a year. Looking at it another way, he can get paid for 33% of the year without working.


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And given the fact that he works 24-hour shifts, guess how many days this firefighter must show up for work a year? The answer is 58. That is why one of this study’s Board members, who lives next door to a fire lieutenant, says, “His truck is always in the driveway, day and night.’ The entire system of employment has been corrupted to the maximum benefit of the union members. And no one is angry about it. Well, how you’re feeling, now, after having just read about the “pay structure” given to an Orlando firefighter and comparing it to what you get for the time you put in at work. In order for our economy to be revived and to secure a decent economic future for our children, we need our civil servants to work similar hours with equivalent pay and similar benefits as the taxpayers who support them.

Only, the gap is getting worse. In April 2009, USA Today had the following article:

The pay gap between government workers and lower-compensated private employees is growing, as public employees enjoy sizable benefit growth, even in a distressed economy, federal figures show.

Public employees earned benefits worth an average of $13.38 an hour in December 2008, the latest available data, the Bureau of Labor Statistics (BLS) says. Private-sector workers got $7.98 an hour.

Overall, total compensation for state and local workers was $39.25 an hour — $11.90 more than in private business. In 2007, the gap in wages and benefits was $11.31.

The gap has been expanding because of the increasing value of public employee benefits. Last year, government benefits rose three times more than those in the private sector: up 69 cents an hour for civil servants, 23 cents for private workers.

Labor costs account for about half of state and local spending, according to BLS and Census data. Benefits consume a growing share of that, now 34%. Illinois state Sen. Chris Lauzen, a Republican, says government benefits are unsustainable and unfair to taxpayers who earn less than civil servants. "People will become angrier and angrier when they learn the difference between their pay and benefits and what we give to public employees," he says.

For every $1-an-hour pay increase, public employees have gotten $1.17 in new benefits. Private workers have gotten just 58 cents in benefits for every $1 raise. The


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difference: Companies have ended most traditional pension plans and increased workers' share of health care costs. Government paid an average of $8,800 annually toward employee medical insurance. Private companies paid $4,100.

A full-time government worker receives benefits worth an average of $27,830 per year. A private worker's benefits are worth $16,598 (54).

This is both unfair and unsustainable. The comparisons to General Motors cannot be made strongly enough.

GOVERNMENT SALARY INCREASES DO NOT ADJUST IN RECESSIONS

As I write this book, the unemployment rate in central Florida is 10.8%. Many people who have received experience pay increases in the past decade will return to work at lower salaries. Carpenters who made $10 an hour ten years ago and who saw their salaries increase to as much as $25 an hour during the construction boom will find themselves working for $8 an hour in the future. In the private sector, there are adjustments to worker salaries in weak economic periods. We saw this in the tech boom and bust in the late 1990s, when tech workers were in high demand. The same worker making $80,000 in 1999 was making $40,000 in 2002. The reality is that this worker was probably overpaid in 1999 because of the high demand for his services, and the market simply corrected his salary.

The salaries of government workers do not correct themselves, because there is no free market. Government salaries just continue to increase like an elevator; but in the private sector, salaries increase rapidly in good times and decrease in recessions. After Jarrod Posner, 34, was laid off from his $110,000-a-year job as a mortgage lender for D.R. Horton, he had to change careers to find employment. After months of looking, he took a job as an enrollment counselor at the University of Phoenix - a position that paid $33,000 (55). And he was happy to land that job.

So, while the private sector sees adjustments in every economic cycle, government workers see pay raises. Over time, this results in government workers making significantly more than their private sector counterparts. This is known as “sticky wages” in economic terms, when wages go up, but not down. According to economist Maynard Keynes, if wages are sticky downwards, wages will not fall during a recession and the economy will not be able to automatically correct itself. In other


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words, there can be high and prolonged unemployment with the economy being unable to rectify itself.

The solution to this dilemma and the way to achieve fairness to the taxpayer is to require that government salaries (and benefits) should be equal to or less than the taxpayers who support them.

PAY SHOULD BE A FUNCTION OF THE SERVICE, NOT LENGTH ON A JOB

In many cases, government workers continue to get pay increases year after year (above the rate of inflation) for performing the same service. In Kissimmee, Florida, there are a dozen garbage truck drivers who make over $50,000 a year, simply because they have been on the job for decades (56). The value of their service has not increased, just their pay. In the private sector, Subway does not pay a worker $50,000 a year to make subs, because it is not economically feasible. Productive employees become managers or start their own business.

It is also not morally fair that government workers get pay and benefits higher than private sector workers who support their salaries. A waitress at Chili’s works 50 hours a week to take home $500 a week. The average government staffer in Orlando makes $64,231 a year plus another $12,000 in benefits and does not work any harder or produce any more than the hardworking waitress. The sad fact is that the high cost of government is actually driving the wages of the private sector workers down; so our Chili’s waitress not only makes less than the government worker, but her wages are being suppressed due to the high cost of government.

We must bring the wages of government workers in line with the average taxpayer to enable our government to provide effective services. In doing so, we will also prevent the weight of government from decreasing the standard of living of the taxpayers who support the government. My hope is that this book will educate the taxpayers about the fact that they are now servants to their own government. We revolted from our service to the King of England centuries ago; now, it is time to revolt from our service to our own government.


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CHAPTER 11

Unsustainable Pensions

Don't let anyone tell you the American dream has faded. The truth is that the U.S. is still minting lots of millionaires. Glenn Goss is one of them. Goss retired four years ago, at 42, from a $90,000 job as a police commander in Delray Beach, Fla. He immediately began drawing a $65,000 annual pension that is guaranteed for life, is indexed to keep up with inflation, and comes with full health benefits. The highest pension for a single worker in the State of Florida is $283,000 per year, and it goes up 3% a year. In thirty years this retired civil servant will be making $666,908 per year and will not have worked in more than thirty years (57). Meanwhile, in the private sector, employers are phasing out pensions and workers are challenged to save enough for their own retirements. Sound fair?


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The holy grail of government workers is the government pension. Teachers, police and government employees are all looking for the Holy Grail at the expense of the taxpayer. The under-funded pension plans that are destroying companies like General Motors are a hidden problem at the State, federal and local level. The total future taxpayer obligation will create a budget disaster that will rival the social security problem. A recent report stated that every American family owes $500,000 in under-funded pensions for public workers (58). The government pension was established when the average person lived into their 60’s. Future generations will live into their 90’s. A government worker can work for 25 years to the age of 47, and get paid for 75 years (to age 97), with full health benefits all the time. The only way to pay for those under-funded programs is to extract wealth from the taxpayers. Why does the civil servant deserve a better pension than the taxpayers they serve?

Politicians and government workers receive guaranteed salary levels for the rest of their lives after retirement. The best way to prevent such future problems would be for these workers and politicians to have the same retirement plans that most of us have in the private sectors: 401K plans (“defined contribution plans”) that they own and control as individuals; and every month, the pension contribution is paid into the government employee’s account. The taxpayer liability is severed with that payment and does not grow. Under the current system, the pension liability is postponed to the future. The current system pushes past losses in pension accounts into the future, and does not account for the increasing lifespan of government retirees. The taxpayers will be on the hook for decades for tens of billions of dollars of guarantees to retired government workers.

UNFUNDED BENEFITS

The City of Tampa has seen their pension fund contribution increase from $1.5 million in 2003 to $16 million in 2006 (59). The City is trying to convert to a defined contribution plan, instead of the current plan that guarantees retirees a lifetime of income and health benefits based on their salaries and years of employment. Unless and until all government pensions are “pay as you go,” the taxpayer will be burdened with a growing snowball of pension liabilities.

Our budget study found five areas of concern in our local government employees’ pensions in Orange County and the thirteen cities within it; government


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workers earn higher pensions than the taxpayers who support them; unfair and uneven pensions abound, depending on the job description; widespread pension abuse; the existence of taxpayer liability for pension fund losses; and an unrealistic pension plan, given the life expectancy of workers.

GOVERNMENT WORKERS HAVE BETTER PENSIONS THAN TAXPAYERS

The media has done a good job of highlighting the many examples of pension abuse in state and local government. Our goal is not to highlight each abuse. We aim to point out that government pensions should not exceed pensions given to the taxpayers who support them.

More than half of Floridians do not have a pension plan and must rely on their own savings and Social Security. Even those taxpayers fortunate to have a pension plan at work receive a defined contribution with no lifetime guarantee of payments. The public sector must not receive greater pensions than the private sector for the sake of fairness and to enable our government to provide services without the cost of government exceeding a sustainable level.

For many government employees, the lifetime pension is equal to half their pay at retirement. For some, it approaches full pay. That is in stark contrast to the situation faced by private-sector workers. The Employee Benefit Research Institute estimates that about half of U.S. workers have less than $25,000 in retirement savings, and 36 percent of workers 55 and older have that much less than that.

I recommend that the pension for government workers be comparable to the private sector. Not comparable to a private sector company with great benefits, but to the private sector as a whole. Government employee pensions should also be strictly defined contribution and matching by the employee.

UNFAIR AND UNEVEN PENSION CONTRIBUTIONS

Currently, the pension contribution ranges from 8.39% of the employees annual salary for government workers, 15.37% for elected officials, and over 20% for what are considered “high risk” government occupations. Since none of these supposedly high risk government jobs are in the top ten most dangerous occupations, we believe


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all pension contributions to all government workers should be the same percentage. We also believe that the annual contribution to an employee 401K account should be capped, as it often is in the private sector.

Depending on the retirement category under the Florida Retirement System, employee retirement contributions are budgeted at the following blended rates (60):

FY 06-07

Regular 10.22%

Elected Officials 18.19%

Special Risk 22.52%

Special Risk Administration 13.48%

Senior Management 14.46%

DROP 12.93%

The government pension plans are regulated by the state, but there are differences among the county and cities. The following is a direct quote from a public information request to the city of Orlando about their pension plans (61):

“Police Plan - City contributes 26.63%; Employees contribute 8.47% Fire Plan - City contributes 26.82%; Employees contribute 7.49% General Employee Defined Benefit Plan - City contributes 21.74%; Employees contribute 4.88% General Employee Defined Contribution Plan - City contributes 7%: Employee contributes 0%

Those percentages are based on actual salary. So, for example, if a member of the police plan earns $100,000 of pensionable wages in a year, the City will put $26,630 in the pension plan and the employee will have $8,470 deducted from their paycheck and that amount will be deposited in the pension plan (total of $35,100 will be put in the pension plan).


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Now, if you earn $10 per hour in Orange County, the police and firefighters you support get more taxpayer money into their annual pension accounts than you earn in a year. This is both unfair and unsustainable.

The revised formula should look something like this: the government will contribute into a defined contribution 401K account a maximum of $8,000 per year per employee. The amount will be 8.39% of the employee’s base salary without overtime or bonuses. Once the contribution to the employees 401K account is made, the pension obligation for the worker is severed for that time period.

WIDESPREAD PENSION ABUSE

The golden parachutes and pension abuses decried on Wall Street are common in Florida government. State and local government workers can retire, collect a pension, and go back to work the next day. Some workers collect not one, but two pensions, plus a paycheck at the same time. This is known as the DROP program . . . and participants in DROP should be dropped from the government payroll!

In the past year, news articles appearing across Florida showed examples of how generous this state government is with taxpayer dollars. Many state workers, including judges and top administrators, are receiving retirement benefits in addition to fulltime paychecks, because of a loophole in the law. The worst example is Miami-Dade College President Eduard J. Padron who, in May 2006, collected $893,286 in lump sum benefits and began receiving $14,631 a month retirement pay. He then returned to his position and collects his annual salary of $328,860 (62). Another example is Supreme Court Justice Harry Anstead, who began collecting $426,852 in deferred compensation in 2004. Since then, he has received $7,596 a month in retirement, plus his $161,083 annual salary (ibid).

When city managers or other government officials do not get along with their governing council, they are paid large severance packages to go quietly. In addition, retiring government workers are often paid bonuses of as much as a year’s salary. It is unfair to the taxpayer to pay a government employee anything above and beyond what is clearly stated in the employment contract. Government employment contracts should not allow for golden parachutes or severance payments, because the average taxpayer does not have those benefits.


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Other pension abuses include allowing overtime in the calculation of retirement pay. It is common for government workers to receive hundreds of hours of overtime in their final year to boost their retirement pay. This practice is a fraud committed against the taxpayer, and it must stop.

The lesson here is that government pensions were designed by government employees, not taxpayers. It is time that the government workers work for the taxpayer; not the other way around.

TAXPAYER LIABILITY FOR PENSION FUND LOSES

The Florida Retirement System (FRS) had $137 billion invested in about 14,000 securities. Florida's state pension plan was fully funded a year ago. Now, it's at least $28 billion, or 22%, in the hole (63). "Taxpayers are on the hook," says Susan Mangiero, who maintains Pensionriskmatters.com. Retirees getting their monthly pension checks don't need to worry, because their benefits, along with a cost-of-living raise each year, are guaranteed. Any gap between the promise and the financial reality is covered by taxpayers.

The State Board of Administration, which manages many of Florida's public investments, has seen its assets plummet by $62-billion, a third of their value, in the last 13 months. The decline — the steepest in the agency's 65-year history — reflects both big investment losses in the global financial crisis and the decision by hundreds of local and state agencies to withdraw money from shaky SBA accounts. In both cases, the SBA plowed money into higher-risk investments with the potential for bigger profits. But in the ongoing financial meltdown they generated big losses (64).

Let’s take a look at the pension plans for the City of Orlando. Orlando has a “defined benefit” plan, so the taxpayer guarantees payments regardless of the amount of money contributed or available. The "General Employees" pension fund's net assets decreased $34 million or 18% in the last year. The "Police" pension fund decreased $69 million or 17.75%. The "Firefighter" pension fund decreased $43 million or 16.8%. So the Orlando taxpayers lost $146 million in 2008 (65). In effect, they will have to pay that tax twice.

But the truth is worse. The City of Orlando guarantees an 8.65% return on the entire pension fund of $962 million (66). So, the taxpayer needs to pony up another


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$83 million on top of the $146 million they are paying twice. Jacksonville is in the hole for $534 million plus interest (67). I suspect Orange County is in the hole for over $1 billion; but for the past five months, I have not been given a straight answer to a very simply question: “How much did Orange County taxpayers lose in their pension fund last year?”

During a long period of slow economic growth, Florida will have to increase the burden on taxpayers to make good its generous promises to government retirees. The slower these investments grow, the more taxpayers must kick in. Florida guarantees its public workers a lifetime pension benefit that is unaffected by gains or losses in pension-fund investments. Taxpayers have an open-ended responsibility to cover any future shortfall.

Millions of American workers lost an average of 27% of their 401(k) retirement savings in 2008 due to the dramatic market declines (68). Those same taxpayers will be forced to make up the losses for government employees. In addition, the number of retirees is growing faster than the number of workers.

UNREALISTIC PENSION PLAN GIVEN LIFE EXPECTANCY

The methods to calculate pension contributions do not take into account medical advances that will allow people to live longer. The plan also is changing from mostly contributors to mostly beneficiaries. In 1995, the plan paid retirement checks to 25 people for every 100 active workers. By the end of 2006, the ratio was 47 to 100 (69). At some point, the payments from the fund will exceed the contributions to the fund, especially as medical advances allow people to live longer and the average age lifespan increases.

That means workers in the private sector, most of who don't have pensions, will probably be paying more to guarantee comfortable retirements for an increasing number of government retirees. The current government pension plans are unrealistic and unsustainable. We recommend major changes as follows;

1. The government will contribute into a defined contribution 401K account a maximum of $8,000 per year per employee.

2. The amount will be 8.39% of the employee’s base salary without overtime or bonuses.


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3. Once the contribution to the employees 401K account is made, the pension obligation for the worker is severed for that time period.

4. Existing employees will start 401K accounts under the same formula.

5. DROP programs participants will retire under the same formula.

POTENTIAL COST SAVINGS

We estimate the savings from pension reforms to be in the tens of billions of dollars over the next few decades in Florida. The annual pension contributions in Orange County are approximately $140 million. We estimate the savings from pension reforms to be 20% annually, or $28 million a year, in just Orange County. Across Florida, these savings will approach $1 billion per year.

More important than the actual savings is the fact that reforming our pension system will enable local governments to provide services without destroying our economy and small business. If we do not reform our pension system, our future is one of taxes increasing much faster than the rate of inflation, a weaker economy, higher crime, and a decline in government services. We do not have a choice, but to reform our pension system.


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CHAPTER 12

Unfair Employee Health Benefits & Health and Human Services

When I analyze any function, I look at it first in a “micro” sense and then in a “macro” or “big picture” sense. In this chapter, you will see that the cost of government employee healthcare has been rising by 11% per year. That is a micro detail. In the macro sense, this cost increase is not sustainable. Private sector wages have been flat or see a modest 2% annual increase. When health care costs for civil servants increase more than the private sector wage increases, government spending is guaranteed to lower the quality of life for its citizens.

While the unfunded government pensions is a larger problem, health care benefits for government workers is rapidly becoming the number one problem in government benefits. Many taxpayers will be appalled to see that some government healthcare benefits for a single worker are more than some taxpayers make working an entire year.

Our Orange County study found five areas of concern and waste in its current employee healthcare benefits structure: government workers have better health benefits than the taxpayers who support them; uneven health benefits across municipal boundaries; widespread health benefits abuse; the taxpayer liability for health benefits after retirement; and an unrealistic health benefits plan, given the rising cost of medical insurance.

GOVERNMENT WORKERS HAVE BETTER HEALTH BENEFITS THAN TAXPAYERS

One in four Florida residents under the age of 65 lacked health insurance coverage in 2006, according to an estimate by the U.S. Census Bureau (70). The


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report also said that the number of uninsured Floridians of all ages has risen from 2.779 million in 1999 to 3.828 million in 2006, an increase of 37.7 percent over the seven-year period (ibid). And since one out of every five workers in Florida is employed by the government, and almost every one of those is covered by insurance, the percentage of non-government workers without health insurance is greater than 30%.

Given the fact that one out of three working taxpayers do not have health insurance, it is fair to say that government workers have better health benefits than taxpayers on average. The cost to the taxpayer for health benefits for government workers in Orange County ranges from $7,000 per employee to over $12,000 annually. The high range of cost approaches the annual salary of millions of minimum wage Florida workers.

In the sake of fairness to taxpayers, we recommend that the health benefits for government workers be comparable to the private sector. Not comparable to a private sector company with great benefits, but to the private sector as a whole. They should also be strictly defined contribution plans that are consistent across all of Florida. As a small business owner with three employees, I give each employee $350 a month for them to apply to whatever insurance they choose. If they want more coverage, they add their own money to their plans. Unlimited healthcare for government workers is not fair to the taxpayer, nor is it sustainable.

UNEVEN HEALTH BENEFITS AND SERVICES ACROSS THE COUNTY

In our study, we asked for copies of each health plan from each local government, and virtually every health plan is unique across municipal boundaries. Some are self-insured or self-funded, meaning the taxpayer takes the risk of losses; and others are “pure” insurance policies, where the risk of loss is borne by the insurance company.

Some plans pay for the employee only, and others ask the employee to pay a portion of the cost. Almost all plans allow the employee to add family members to the policy. The City of Ocoee even has their own on-site clinic that costs the taxpayer $312,000 a year, not including the cost of health insurance. Ocoee also has an HRA (health resource account), and annually puts $1,250 in cash ($2500 for families) into the account to pay for deductibles. When government staffers select the plan and elected officials are included, there is little incentive to economize on health benefits.


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Having more than a dozen health plans in Orange County creates higher administration costs. Not only for the health provider, but for our government, as well. An oft-cited study by Harvard Medical School determined that some 31% of U.S. health care dollars go towards administration (71). We believe there should be one health plan for all government workers within Orange County, with a variety of options within that plan.

WIDESPREAD HEALTH BENEFITS ABUSE

Jeffrey Barber, a medical claims auditor with Accu-Rate in El Paso, Tex. (which gets paid for finding overcharges), states that excessive and unjustified costs consume as much as 20% of health care spending (72). Over the past seven years, he has dug through hundreds of corporate and municipal plans.

Among the excessive and bogus bills Accu-Rate has uncovered: an $89,000 night in a hospital for a patient who wasn't even admitted; a hip replacement expensed to the wrong person; and bills for workers in Iowa charged to a firm whose employees are all in New England. When Accu-Rate audited the plan of Springfield, Mass., it found the city severely lacking in spending controls and paying bills for 250 ineligible people (ibid).

AutoNation filed a lawsuit against United Healthcare in a Florida federal court last August. The nation's top car retailer charged UHC with paying for services not covered, failing to collect co-payments, miscalculating benefits and paying claims for thousands of ineligible people. All told, AutoNation claims the overpayments cost it in excess of $10 million over 18 months. UHC settled the suit late last year for undisclosed terms.

For all government employee healthcare plans, especially self-insured plans, accuracy needs to be greatly improved. This can be accomplished through standardized invoices, standardized forms, and simpler audit procedures. Controlling the cost of healthcare must address mistakes, fraud, and other abuses of the system.

TAXPAYER LIABILITY FOR HEALTH BENEFITS AFTER RETIREMENT

The State of Florida has not funded any of the post-retirement healthcare benefits for state employees, and several communities in Orange County are liable for


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post-retirement health benefits (73). With the tremendous increase in state and local government staff, Florida is headed down the same path that California is on. California paid $4 billion in retiree health care costs in 2006 and is projected to pay $27 billion in 2019 (74). Almost all of these benefits are not funded and will come from a tax increase (or increase in fees).

It is vitally important that health benefits cease once employment ends or the cost comes out of the retirement pension payments for the employees. With the rising cost of healthcare, post-retirement healthcare benefits can bankrupt our communities.

UNREALISTIC EMPLOYEE HEALTH BENEFITS PLAN

The cost for employer-paid health insurance is rising rapidly: since 2001, premiums for family coverage have increased 78%, while wages have risen 19% and inflation has risen 17%, according to a 2007 study by the Kaiser Family Foundation (75). It is unrealistic to believe that taxpayers can support rapidly increasing health benefits without lowering their quality of life.

A limit must be placed on the annual contribution for healthcare benefits to each employee. Without such a limit, health care benefits will continue to rise faster than personal incomes of the taxpayer and the quality of life in our county will continue to erode. The healthcare benefits to our public servants should not be greater than what our citizens enjoy, nor should they lower the quality of life of taxpayers.

The current government health benefits plans are unrealistic and unsustainable. We recommend major changes, as follows:

1. The government will contribute into a defined contribution health plan, with a maximum of $6,000 per year per employee.

2. Once the contribution to the account is made, the health benefits obligation for the worker is severed for that time period.

3. Post-retirement health benefits shall be eliminated.

4. Health plans should provide for standardized billing and unlimited audit ability for services provided.

5. We suggest a single county-wide health program administered by a private agency. The county can have the right to audit bills and services to ensure fraud is not prevalent within the system.


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These changes will also make our system more efficient. Employees will shop around for services and maintain a healthier lifestyle.


The total cost of government employee healthcare across Orange County’s 14 local governments is approaching $150 million annually. It is $107 million in Orange County government alone. We believe that with a defined contribution plan as outlined above, the overall savings to the taxpayer will be 20% within three years as health costs escalate. The savings will be approximately $30 million per year and $300 million over a ten year period.

In the State of Florida, the potential savings by capping the healthcare contributions will exceed $1 billion annually. These measures will also reduce the private sector health care costs by encouraging competition for medical services. Beyond savings, these measures will make the system fair to the taxpayer and allow government to provide quality essential services without harming our economy.

HEALTH AND HUMAN SERVICES

I tell people who are advocates for the poor that I am not against feeding the homeless. What I object to is spending 80% of those funds on administration. I want to spend 80% on food. That generally ends the conversation, while they try to figure out if I am one of them. I am, but I just cannot tolerate the level of waste in any agency.

Our study found two areas of waste in Health and Human Services in Orange County: a failure to use non-profit resources, and a failure to utilize the private sector. Orange County spends roughly $118,541,000 on Health and Human Services. The vast majority of those costs are payroll and benefits.

FAILURE TO USE NON-PROFITS

There are many communities that run Health and Human Services partially or wholly through the efforts of volunteer and civic organizations. National non-profits in the health and human services field comprise the membership of the National


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Assembly. Those organizations and their constituent services networks collectively touch or are touched by nearly every household in America–as consumers of services, donors or volunteers. We recommend wherever and whenever possible to shift the management of Health and Human Services to non-profits. In addition to lowering the cost to the taxpayer, these groups have a passion for helping and resources to managerial talent the public sector cannot afford.

There are dozens of non-profits and civic groups that can and are willing to help our community by volunteering to run portions of our Health and Human Services. We recommended a Health and Human Services Committee be established to determine which functions of Health and Human Services can be run by non-profits at a lower cost without lowering the level of service.

A prime department that can be run by non-profits and volunteers is the Regional History center; but virtually every department can be run by non-profits to some extent.

FAILURE TO USE THE PRIVATE SECTOR

The other method to achieve better taxpayer service and lower government overhead is to outsource or privatize certain government enterprises. It has been proven time and again that the private sector can provide services for 10-40% less than the public sector. Departments like Mosquito Control can be bid out and those services can be secured for less.

Entire programs can be bid in “managed competitions,” where the public agency bids against the private sector for that service. This ensures optimal efficiency from our public services. Many communities across the nation are finding ways to deliver Health and Human Services more efficiently. In Oregon, Josephine County will no longer administer various mental and health service programs. But officials say the general public shouldn't notice much of a change. That's because Josephine County will contract those services to private, non-profit agencies. Options for Southern Oregon will oversee about two-thirds of the government programs that become private in July, 2009.

Commissioner Jim Riddle explains. "We will still provide mental health authority in the county. We'll have a mental health director, and funds will come through Josephine County. But the services themselves will be on contract through Options of


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Southern Oregon." Riddle says Josephine County is one of the last counties in Oregon to privatize its mental health and human services programs.


I believe that through managed competition and using non-profits to assist in the running of Health and Human Services, we can save 20% of the total cost of Health and Human Services. This will save the taxpayer $23 million annually in Orange County and engage the public in their community. The savings to the Florida taxpayer will approach $1 billion annually.

Healthcare costs will continue to put a strain on taxpayers and governments alike, until two things happen. First, we need to give economic indemnity to all healthcare practitioners. The cost of insurance along with the paperwork and procedures needed to practice “defensive medicine” are crippling our ability to keep our citizens healthy. The second ingredient is to standardize all billing and paperwork.

What is clear is that “healthcare as usual” is not working and the cost of providing unlimited healthcare to government workers in not sustainable. Finding ways to lower healthcare costs is the only way to solve our healthcare crisis.


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CHAPTER 13

Fixing Public Education

The U.S. spends more per pupil on elementary and high school education than most developed nations (76). Yet it is behind most of them in the math and science abilities of its children (ibid). Young Americans today are less likely than their parents were to finish high school (ibid). This is an issue that is warping the nation's economy and security, and the causes are not as mysterious as they seem. The biggest problem with U.S. public schools is ineffective teaching, according to decades of research (ibid).

My brother recently told me a tale of education in America today. If a doctor came to the future from 100 years ago, he or she would be amazed at the advances in medicine. If an inventor came to the future from 100 years ago, he or she would be amazed at the technology and innovation over the last 100 years. If a teacher came to the future from 100 years ago, he or she could walk to the front of the room and teach the class.

A century ago, employers needed an educated workforce so they could operate machinery. We adopted this teaching method from the early industrial age to train workers in the factories. This rote learning education is not working in the information age. Like most government services, we need to ignore what exists and design a new system, which takes into account all of the technology and innovation that exists in America and across the world today.

But first, we need to dispel the myth that our society and Florida, in particular, does not spend enough money on education. Recently, the Volusia County schools presented their Council of Governments with a statistic: Florida is 47th in the nation in per capita spending on education. Sounds bad; but the truth is Florida has 50% more retirees than the average state, so our per capita student population is the lowest in the nation (77). Florida would have to spend double the amount per student than other states to be in the top ten, under this example.


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As you will see from the Orange County stats below, education spending has been rapidly increasing without improving results. Think of money as jet fuel. Our education system is like an old 707 jetliner with four gas-guzzling engines. Today’s jets move more people with one fourth of the fuel burn. It is not the amount of money we put in, or fuel; it is how efficient the engine is. Our education system, our engine, is wildly inefficient and expensive.

There are dozens of problems with the public education system in Florida and across America. To illustrate the problem, I have copied an article by Terry Moe. Mr. Moe, a senior fellow at the Hoover Institution, is the winner of this year's Thomas B. Fordham Prize for distinguished scholarship in education.

“No Teacher Left Behind. Unions don't have children's best interests at heart. “

The unions have more influence over the public schools than any other group in American society. They influence schools from the bottom up, through collective bargaining activities that shape virtually every aspect of school organization. And they influence schools from the top down, through political activities that shape government policy. They are the 800-pound gorillas of public education. Yet the American public is largely unaware of how influential they are--and how much they impede efforts to improve public schools.

The problem is not that the unions are somehow bad or ill-intentioned. They aren't. The problem is that when they simply do what all organizations do--pursue their own interests--they are inevitably led to do things that are not in the best interests of children. Unions have to be understood in the following way. Their behavior is driven by their fundamental interests; their interests have to do with the jobs, working conditions, and material well-being of union members. When unions negotiate with school boards, these are the interests they pursue, not those of the children who are supposed to be getting educated. The resulting contracts often run to more than 100 pages, and are filled with provisions for higher wages, fantastic health benefits and retirement packages, generous time off, total job security, transfer and assignment rights, restrictions on how teachers can be evaluated, restrictions on non-classroom duties, and countless other rules that shackle the discretion of administrators. These contracts make the schools costly to run, heavily bureaucratic, and extremely difficult for administrators to manage. They also ensure that even the most incompetent teachers are virtually impossible to remove from the classroom. The organization of


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schools, as a result, is not even remotely the kind of organization one would design if the best interests of children were the guiding criterion.

Exactly the same can be said about the design of government education policy, which is tilted toward interests through the unions' exercise of political power. The sources of their power are not difficult to discern. With three million members, they control huge amounts of money that can be handed out in campaign contributions. More important, they have members in every political district in the country, and can field armies of activists who make phone calls, ring doorbells and do whatever else is necessary to elect friends and defeat enemies. No other interest group in the country can match their political arsenal. It is not surprising, then, that politicians at all levels of government are acutely sensitive to what the unions want. This is especially true of democrats, most of whom are their reliable allies.

When the unions want government to act, the reforms they demand are invariably in their own interests: more spending, higher salaries, smaller classes, more professional development, and so on. There is no evidence that any of these is an important determinant of student learning. What the unions want above all else, however, is to block reforms that seriously threaten their interests--and these reforms, not coincidentally, are attempts to bring about fundamental changes in the system that would significantly improve student learning.

The unions are opposed to school choice--charter schools and vouchers--because they don't want students or money to leave any of the schools where their members work. They are opposed to the systematic testing of veteran teachers for competence in their subjects, because they know that some portion would fail and lose their jobs. And so it goes. If the unions can't kill these threatening reforms outright, they work behind the scenes to make them as ineffective as possible--resulting in accountability systems with no teeth, choice systems with little choice, and tests that anyone can pass.

If we really want to improve schools, something has to be done about the unions. If the unions won't voluntarily give up their power, then it has to be taken away from them--through new laws that, among other things, drastically limit (or prohibit) collective bargaining in public education, link pay to their performance, make it easy to get rid of mediocre teachers, give administrators control over the assignment of teachers to schools and classrooms, and prohibit unions from spending a member's dues on political activities unless that member gives explicit prior consent.


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These reforms won't come easily because the unions will use their existing power, which is tremendous, to defeat most attempts to take it away. There is, however, one ray of hope: that the American public will become informed about the unions' iron grip on the public schools and demand that something be done. Only when the public speaks out will politicians have the courage--and the electoral incentive--to do the right thing. And only then will the interests of children be given true priority (78).

The problem of public education is "systemic," Peter Brimelow explains, in the preface to The Worm in the Apple: How the Unions are Destroying American Education. It is the same as for any service provided by government. "There is no market process that rewards success and punishes failure; or that even holds down costs." As in every government service, labor unions block reforms to make that service more efficient, and thus more effective. The time has come to realize government workers should not be able to collectively bargain against the taxpayer.

BEYOND UNIONS-WHAT IS WORKING IN PUBLIC EDUCATION

The greatest tool in solving the problems we have in education is using examples from other communities. My suggestion for fixing the Orange County Public Schools is to take an “all of the above” approach. If we list the top four innovations across the world and try all of them on a small scale, we can see how each one works in our community. Here are four ideas working in other communities.

CYBER-SCHOOLS (AKA E-SCHOOLS)

K12 Inc. (www.K12.com) is a worldwide virtual homeschooling business. The company was founded by William Bennett and Ronald Jay Packard in April 2000. It was in 1999 that Mr. Packard walked up to Mr. Bennett's door with the idea of a virtual education company. The impetus for such an enterprise arose when Mr. Packard realized that his daughter needed more advanced math than the public school was giving her.

The two men created an online education system whose curriculum includes subjects such as Math, Science, Literature, Language, Vocabulary, Composition, and History. A student's schedule is arranged in a weekly or daily calendar format


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displaying each subject that must be done for the day. The student clicks on a lesson in their list for that day, completes all of the assignments, and then clicks on a "Complete" check box, to indicate the lesson's completion. If there is an assessment to be taken (assessments are taken almost every day), then the assessment must be completed before the student can go onto another lesson in that subject. By clicking on a "Lesson Lists" tab, the student can choose a subject, and complete as many lessons and units in one day as he/she would like to. The student may also check his/her progress in a certain subject by clicking on the "Progress" tab.

K12 allows parents to customize the student's curriculum. The parent may set vacation days, specify what, and how many lessons are taught each day, and whether a student can take an assessment with or without their password permission. The parent can also mark a lesson complete, whether or not the assessment or lesson has been completed. For younger grades, parents are often required to teach, or read a lesson.

There are dozens of cyber schools operating at all grade levels across America. These tools must be a part of the future of public education.

VIRTUAL SCHOOLS

K12 virtual schools are state-funded schools that use K12's program and curriculum. The schools are considered public schools, and they follow a public school's schedule. Instead of the parent being the sole teacher (as in the independent K12), a public school teacher is at hand to administer assignments, schedule conferences, and to monitor work. The parent becomes a "Learning Coach." The same curriculum is used, but class projects, such as field trips, are used. Several times (almost every school day), students of the same grade will come together in a virtual classroom, using the communication program Elluminate. They are taught a certain concept by a teacher, while interacting with other students from across the state. At the end of the year, the students are required to take the same state standardized test as a typical "brick and mortar" school.

Pennsylvania has the largest virtual school network in the nation. The Pennsylvania Virtual Charter School was named “Parents’ Choice, Best Public School in Pennsylvania,” according to the latest edition of Business Week (79). The Pennsylvania Virtual Charter School is proof that a combination public-private-parent education system works. The students have better tests scores, the children and the


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parents are happier with the system, and it costs the taxpayers a lot less money. The only group that has resisted virtual schools, of course, are teachers unions, who fear loss of power and money. In Ohio and Texas, teachers unions have filed lawsuits to stop charter cyber-schools from being funded (80).

Virtual schools are able to customize the education of each child. In most classrooms, the best students are held back by the slow learners; and the quiet students become “woodwork students,” because they just go with the flow. In virtual schools, each student is the river. Virtual schools, whether in the classroom, in a private school, or in your home, will end assembly line education.

Florida already has the Florida Virtual School, but the school is not integrated with private content providers, like K12, Inc. In Government 2.0, William Eggers states, “The changes wrought by e-learning will ultimately blur the lines between home and school, teacher and parent, elementary and secondary, and public and private (81).” Eggers believes that our future will be a combination of education services offered by private and public providers, both at home and in the classrooms. Children can take history and math at home, then science and P.E. at their public school. Parents and teachers will work together for the best interest of the child. Instead of the system being rigid and designed around the school, the child will be the center of the system, which will be customized to maximize each student’s potential.

CHARTER SCHOOLS

Charter schools are public schools of choice. They are very popular—and among the fastest growing school choice options in Florida. Charter schools are largely free to innovate, and often provide more effective programs and choice to diverse groups of students.

Since 1996, the number of charter schools in Florida has grown from 5 to 358 schools in 2007-2008. Charter school student enrollment for 2007-2008 was well over 100,000 students. Over 20 new charter schools have opened in the 2007-2008 school year (82).

The biggest advantage of charter schools is they are free to conduct specialized curricula, and they allow students more freedom to choose their education program. The classroom teacher also has more input into the lives of their students.


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SMALLL SCHOOLS

Research has shown that small schools offer many advantages to students, teachers, parents, community members, partners and administrators. A national study by Bank Street College of Education, released in 2000, found that small schools in the Chicago Public Schools had higher attendance, fewer dropouts, fewer course failures, fewer incidents of discipline and violence and higher teacher, student, parent and community member satisfaction than large schools (83).

The research base making the case for small schools is compelling. Student achievement goes up and the gap between poor students and their more affluent peers is narrowed. Students are known by their teachers, and as a result, discipline problems and dropout rates go down, while attendance goes up. Significantly, the cost per graduate is lower in small schools, compared to large comprehensive high schools.

Imagine if, instead of a school with 1500 students, we instead had schools of 50-100 children. Every adult knows the name of every child. Schools can be located in closed Winn Dixie’s and Walgreens, just blocks from student’s homes. Construction and transportation costs decrease dramatically, and small schools have higher test scores and student achievement than industrial sized schools.

VOUCHERS

The Step Up for Children Scholarship program allows poverty-level students to attend private schools, through use of scholarships financed with corporate income tax credits.

The State of Florida saves $1.49 for every dollar invested in the program, according to the Office of Program Policy Analysis and Governmental Accountability (OPPAGA) (84). The savings comes from the positive difference between the higher cost, which taxpayers would have incurred in public schools, and the lower cost of attending a private school chosen by the family.

“Step Up for Children produces a savings for taxpayers, because educational services purchased from private schools chosen by families are thousands of dollars less per student than the cost of a public school education,” according to Florida lawmaker Don Gaetz. “This program leverages the physical and teaching resources


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of cooperating private schools to help save tax dollars. Step Up For Children provides a triple benefit.” Gaetz praises what Step Up For Children is accomplishing. “The essence of the program is giving families a choice of schools, which this program certainly accomplishes. Every student who participates saves taxpayer dollars, at a time when the state education budget is strained as never before. Finally, public schools don’t have to build classrooms and hire teachers for the thousands of students who attend private schools using these scholarships.”

To participate, a student must qualify for free or reduced lunch and have either attended public school the previous year, be a returning Step Up recipient, or be a new kindergartener or first grader. Forty percent of children in the program are African-American and thirty percent are Hispanic. The average household income of participating families is $23,000. Each student receives a $3,950 scholarship to be applied toward tuition at over 800 participating private schools in 64 counties. Typically, families still come out of pocket for about $1,000 above and beyond the scholarship amount (ibid).

During the 2007-2008 school year 21,493 students benefitted. Senator Gaetz’s legislation increased enrollment in the program by an additional 5,000 students for 2008-2009 and succeeding years, and increased the allowable tax credit contributions by corporations from $88 million to $118 million.

Our recommendations are not to further cut the public education budget, but rather to use the savings from reform to make public education better. We need to make reforms to improve education, focus the money on the classroom, and center the system around the student.

ORANGE COUNTY STATS

Our study found four major problem areas in public education in Orange County: a failure to innovate, a failure to use private sector resources, too many resources spent on administration and benefits, and too much money spent on bricks and mortar.

In 1998, Orange County had 144,573 students, a figure that increased to 171,412 in 2008 (85), an increase of just over 15%. The number of employees rose from 16,633 in 1998 to 23,228 in that same time period, an increase of 40%. The cost per student went from $5,045 per year to $8,528 per year, while the overall budget


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went from $729,424,000 to an eye-popping $1,461,000,000 (ibid). This does not include the $375,000,000 in capital projects in 2008, which will jump to an unbelievable $488,387,000 in 2009. It is estimated that the school population is down by 5% statewide. My son is a senior in Orange County public schools and his senior class size is half of what it was last year. In fact, school population has decreased in each of the last three years in Orange County (ibid).

Our public education system will never work if it is run by government labor unions. The only people who should be allowed to collectively bargain are the classroom teachers. Everything else should be subject to market competition to allow real reforms and to better prepare our children for life in the 21st Century.


One method to achieve better taxpayer service and lower government overhead is to outsource or privatize certain government enterprises. We believe that all functions outside of classroom teaching should be made part of a “managed competition.” There is no reason why the Teamsters need to serve food to our children, especially when the cost of that service interferes with the mission of education.

If our school administration is forced to compete against the private sector, they will almost certainly find ways to reduce overhead and cut administrative costs. The idea of unions collectively bargaining against the best interests of our children is un-American. It is time to change the way we provide public education in Florida.

The first step is to look at competitive bidding for all non-instructional services. In Michigan, Michelle Shepherd is president of the Rochester Community Schools Board of Education. She notes that approximately 85% of Rochester Community Schools' $155 million in annual expenses are tied to employee compensation and benefits and, therefore, are governed by collective bargaining (86). “Privatization of non-instructional services is a growing trend, and has been successfully implemented in many districts around the state,” says Shepherd. I completely agree. Any proven method to reduce costs and put more money into the classrooms should be considered.

Two recent studies call for reforms in teacher negotiations and contracts. “Restoring the Balance," by the Education Partnership, was released in March and is


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the second in a series detailing how union contracts shape public education in Rhode Island (87). The study points out, "unions are focused on their own economic interests, on membership and membership outcomes--not students." As a result, "[union] contracts--the delivery system of our schools--[fail] to reward high-performing teachers [and] are inconsistent with the reality of the professional teachers' workday and work year." The study recommends collective bargaining be limited to those subjects that substantially relate to meeting student needs. All other subjects, such as professional requirements, should be outside the scope of collective bargaining. I cannot agree more. The student is the reason for the existence of the school system. Blocking reforms to help students is un-American.

ADMINISTRATION AND BENEFITS

Despite the fact that school enrollment has declined three years in a row, the operational school budget of Orange County went from $1.164 billion in 2006 to $1.461 billion in 2008-2009 (ibid). An increase of $234 million dollars and we have 700 less teachers this year. The reason for this is quite simple; public schools have five times the administration as private schools and those administrators make double the private sector wages (88). Of the $729 million in salaries paid to OCPS employees in 2009, only $489 million will go to classroom teachers. A third of the salaries go to administration.

Of the 13,000 teachers listed as employed by OCPS, as many as 20% of those are not active in classroom education. I heard a story recently that administrators enter classrooms once a month and “teach” the class for a day, so they can be classified as teachers. We need to remove this practice and put our education dollars into the classrooms. The administration costs are higher than most believe.

SPENDING ON BRICKS AND MORTAR

It is estimated that the school population is down by 5% statewide (89). In fact, school population has decreased in each of the last three years in Orange County. That begs the question: Why are we spending $488 million on new schools this year?

We recommend postponing all new construction of classrooms until the education budget is stabilized. Thereafter, our focus should be on small schools,


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located close to the home of the student, using all of the technology and innovation available. We can increase the success of our education system, while at the same time lowering transportation and construction costs.

CONCLUSION

In our Orange County report, we suggested forming an “Education Commission” to study the problems in detail and present real solutions. I say “real solutions,” because Orange County just completed a study that was run by the superintendent of schools. The public was allowed to be on the committee, but they were not allowed to ask questions or make specific recommendations. The sole input the taxpayers had was to give a number grade to how the recommendations will effect public involvement in education.

Public safety and education are the two top priorities in local government. We are failing our citizens at both. We need to equip our children to enter the workforce in the Information Age, and our Industrial Age education system is not working. No amount of money will make that work. We must accept the fact that special interests run our public education system, and we must allow the taxpayers and citizens to regain control of public education.


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CHAPTER 14

Improving Public Safety

Public safety is one of the “core functions of government.” Public safety budgets have increased across central Florida by over $100 million in the past five years, yet crime has risen dramatically. The 2006 F.B.I. Annual Crime Report has shown crime in Orlando increased more than any other major city in the United States (90). Our recommendations will show how to reduce wasteful spending and better protect the lives and property of our citizens.

Our study found five areas of waste in public safety in Orange County: duplication of services, jagged jurisdictional boundaries of services, inefficient methods of protecting the public, an overemphasis on fire suppression throughout the county, and a failure to innovate.

DUPLICATION OF SERVICES

The most obvious waste found throughout government is the duplication of services. This waste is found in all government departments, but nowhere is the waste more costly than public safety. Throughout Orange County, we spend $700 million a year on public safety (91).

There are obvious areas where duplication is unnecessary. Orange County has eight 9-1-1 call centers when experts say two are sufficient. The City of Orlando and Orange County both have individual SWAT teams, mounted horse patrols, marine patrols, and canine units. Those services are rarely used and one unit can cover the entire county. Each of the 22 public safety agencies in Orange County has some duplication of services and administrative functions that can be shared effectively. Departments like Crime Scene Investigations can benefit greatly by shared resources for equipment and specialized personnel. Gangs and crime know no jurisdictional boundary


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and are best fought on a regional basis. Our goal is to eliminate the duplication of resources and allocate those resources towards better protecting the public.

GEOGRAPHIC BOUNDARIES

If we drew the boundaries of communities in Orange County today, we certainly would not draw the jurisdictional boundaries with uneven and jagged boundary lines that make our services inefficient to deliver. The current boundaries are a result of annexations of individual properties over decades, but our government services do not need to follow those jagged boundaries (see Orange County Zone Map inside rear cover).

A police officer in Apopka told me a story recently about how drug dealers use municipal boundaries to their advantage. They set up shop on a street in Apopka that borders Orange County property. When the Apopka police patrol, the drug dealers simply walk across the street into Orange County proper, where the Apopka police have no authority.

To eliminate the inefficiencies inherent with jagged boundaries and the duplication of services from neighboring communities we have divided Orange County into four separate service zones. Each zone is bordered by a major roadway for easy distinction, and each zone attempts to contain within it the major cities and maintain the cultural identity of the area.

We have attached on the inside rear cover of this report the Orange County Zone Map. There are four zones, three suburban zones and one urban core. It is our recommendation that government services for public safety be regionalized along these new zone boundaries.

REGIONALIZATION OF PUBLIC SAFETY IN ORANGE COUNTY

Regionalization will eliminate much of the waste and duplication of services prevalent in Orange County, without creating a massive central bureaucracy. Each zone will have one public safety command center. Each zone will have a single 9-1-1 call center and dispatch. Each zone will have five or six fire suppression centers.


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Beyond the regionalization of service areas, all governments in Orange County will share services that are duplicative or specialties that are not needed on a daily basis. It is likely that Orange County only needs one SWAT team. Departments like Crime Scene Investigation benefit from the sharing of expensive equipment and expertise. Investigative services are better regionally, as are most police specialty agencies. By reducing the duplication of services and resources in Orange County, not only will the safety of the public be increased, but the estimated potential cost savings of public safety through regionalization would be well over $100 million annually.

Local police will handle patrols and 9-1-1 calls within the entire zone, not just their political jurisdiction. County police will handle regional issues like CSI, SWAT, homicide, drug enforcement and other issues that affect a larger area. Local police know their neighborhoods and population better than county police and will be more effective at patrolling. County police often have more training to handle the more complex issues on a regional basis.

Consolidation and regionalization of public safety is being considered all across America. In Massachusetts, the cities of Hamilton and Wenham -- which already share school, library, recreation, and emergency dispatch services -- are exploring whether to extend their regionalization in the area of public safety. The neighboring towns have agreed to take a fresh look at merging their police departments and/or combining their fire departments.

"If we can do certain things that give us efficiencies in public safety, we owe it to the taxpayers in this fiscal time" to look at them, said Wenham selectmen chairman Peter Hersee. The League of Women Voters recommended that the two towns study the costs of merging the two police departments, and to go further with that merger if it is shown to be "the most cost-effective way to deliver high quality service (92)." I wholeheartedly agree.

PUBLIC SAFETY COMMAND CENTERS

Each zone in Orange County should have a public safety command center. The command center will house one 9-1-1 communications and dispatching center, along with the director of public safety in each region. The director of public safety is a non-union civilian employee who will be responsible to ensure that services are provided effectively


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and efficiently. The director of public safety will coordinate the efforts of the local police force and the county, along with the fire rescue within each zone. The command center will likely be housed in an existing facility in one of the communities within the region.

The regional director of public safety will allocate the patrol areas for each department. By having a civilian in this position, policy and patrols will be determined by what is best for the citizens. Quite often, union employees are driven by union interests. That is why we see most government-paid public safety staff on duty during the day, when the crimes are not being committed.

GREATER EFFICIENCY IN LAW ENFORCEMENT

We also looked at the functional consolidation of law enforcement in Orange County. Below is a study on the consolidation of services between the City of Memphis and Shelby County in Tennessee, which incorporates many of the suggestions we have made for greater efficiency in law enforcement in Orange County.

Proposal for Local Law Enforcement Consolidation in Memphis and Shelby County, Tennessee

The arguments for consolidation of law enforcement services seem to focus primarily in several areas:

1. Economies of Scale

2. Duplication of Efforts or Services

3. Effectiveness

4. Efficiency

FUNCTIONS TO BE CONSOLIDATED

1. BASIC TRAINING ACADEMIES

Consolidate the majority of the training between the existing police training academies. The Shelby County Sheriff’s Office Academy should serve as the site for all in-service training, correctional training and other identified and specialized training.


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2. COMMUNICATIONS TECHNOLOGY

Create a Consolidated Communications Center for Shelby County by joining forces with the regional 911 effort to construct a public safety communications center. Appoint a communications director who is separate from either the Shelby County Sheriff’s Office or the Memphis Police Department and civilianize the leadership position. Include the Emergency Management function in this building and designate it as the primary Emergency Operations Center.

3. CRIMINAL INVESTIGATIONS

Criminals do not respect boundaries of different jurisdictions and often commit similar crimes in adjacent areas. Intelligence sharing contributes to the process of criminal investigation and solving crime. A standardized crime investigations unit, along with metropolitan mobile crime units, will enhance criminal investigation in Shelby County. Collection of evidence and chain of custody should be handled in a standardized manner throughout the county. Combine the equipment needed for processing crime scenes in Crime Response Units. Consideration should be given to the civilianizing of the crime response unit position due to the specialization of this role. Metropolitan burglary investigation is an area that demands consolidation.

4. TRAFFIC

A better and more efficient utilization of the traffic divisions would be to combine resources for blanket traffic enforcement and investigation.

5. TACTICAL RESPONSE

Combine the functions of the tactical response units from each agency to create a Metropolitan Tactical Response Unit. Differentiate the responses by identifying offensive and defensive teams and specially trained riot response for detention facilities. Consolidation of the Bomb Response Units is included in this recommendation.

6. CANINE UNIT

Create a Consolidated Canine Unit, and combine the functions of the separate canine units into one that includes training and response.


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7. WATER PATROL/SEARCH & RESCUE

Consolidate the function of search, rescue and recovery to create a Metropolitan Search, Rescue and Recovery Unit that provides both land and water search and rescues. Combine the training and resources for paid and volunteer personnel.

8. PUBLIC INTEGRITY UNIT

Create a Metropolitan Public Integrity Unit that is autonomous of both the Memphis Police Department and the Shelby County Sheriff’s Office. Select and appoint an independent executive who has support from the Director of the Memphis Police Department and the Shelby County Sheriff. This unit should include individuals from both the Memphis Police Department and the Shelby County Sheriff’s Office who would investigate all police personnel complaints in a standardized manner

CONCLUSION

This examination concludes that there are a number of tasks and responsibilities that are being performed by both the Memphis Police Department and the Shelby County Sheriff’s Office in which a merging of resources should occur. Unification of individual tasks and public safety functions makes good business sense.

Therefore, this report has concluded that functional consolidation of selected tasks identified in this report should occur between the City of Memphis Police Department and the Shelby County Sheriff’s Office, in accordance with the implementation process as outlined.

The ideas from the Memphis study should be shared with every city council in America. It is time to realize that even our police departments are a special interest group and need to be managed like a business.

WHERE’S THE FIRE?

We have all seen this: large fire trucks at the scene of a fender-bender or responding to a fainting spell. Each of us wonders why the fire truck is sent to a situation where there is no fire. The answer the union will give you is that every truck has a trained


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paramedic on board, which is true. The next question to ask is why the paramedic doesn’t go to the scene in a smaller vehicle. The union has no answer for that, because the entire fire department budget is based on maximizing revenue to the department.

In central Florida, there is an average of less than one structural fire per day (93). Yet we have hundreds of fire trucks and spend hundreds of millions preparing to fight fires that do not exist. The waste in fire safety is greater than any function of government. My goal is not to put these firefighters in the unemployment line; rather, it is to shift those recourses to a productive segment of public safety: more public safety officers on the street.

It costs roughly $3,500 each time a fire apparatus goes on a call (94). Every time the fire truck responds to a non-fire emergency, the public is less safe because those resources are unavailable, and ultimately, wasted. In central Florida, that happens dozens of times a day. The sole reason fire suppression trucks are sent out on non-fire emergencies is because, without those trips, their existence (in the quantity they have) would not be justified.

Wilbur Meredith, a Geauga County-based engineer who has reconstructed traffic accidents for municipalities, insurance companies and others for nearly 20 years, said that routinely sending fire trucks to crashes makes no sense if there is not fire. "If there is no fire, I can't imagine why you would need a fire truck on the scene," Meredith said. "If a tanker carrying hazardous waste were involved in a wreck, you might need a fire truck. But even if a crash is pretty severe, there's seldom oil spillage, and vehicle fires are rare. "Simply using a fire truck to block traffic on a side-street after a fender bender would just create a bigger hazard," he added.

"It’s a waste of taxpayers' money," said Kevin Conwell, chairman of Cleveland’s council's Public Safety Committee. "It's a subtle way of stealing (95)." The dispatch of fire suppression equipment, each of which cost as much as $1 million per vehicle, to fender-benders just because one paramedic is on the truck is extremely wasteful and disingenuous.

TOO MAMY FIRE TRUCKS

I have already stated that fire rescue sends out fire suppression trucks out on a daily basis to events that do not have an actual fire. We can and should send EMS units to non-fire related events. So, let’s pretend we only send fire trucks to real fires.


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The question then becomes, “How many fire trucks do we need in a given area?” The technical term for this answer is a fire resources allocation study. I decided I needed to conduct my own fire suppression allocation study.

My first step was to find out how many fire trucks are stationed in Orange County. Orange County has eight fire departments: Apopka, Lake Buena Vista, Maitland, Ocoee, Orange County, Orlando, Winter Garden and Winter Park. I sent each city manager, clerk, and fire chief an e-mail such as the one below:

Pursuant to the laws relating to the Public Records Request, I request the following:

1. List of all fire rescue vehicles in the City of Orlando.

Designate if the primary function of the vehicle is fire suppression.

List the acquisition cost.

List the station at which the vehicle is located.

What I found is that fire trucks are very expensive. A ladder truck runs about $600,000, a pumper truck $300,000, and rescue vehicles between $100,000 and $200,000. There are some fire trucks that cost in excess of $1,000,000 and are only needed once a year. The cost is significant, but the waste lies in the fact that we have more than double the necessary amount of fire suppression vehicles in Orange County. And the firefighters and the fire unions know this; they know more than anyone how little each truck gets used for its designated purpose.

FIRE RESOURCE ALLOCATION STUDY

My next step was to research the number of fires nationally and find a source of information. The United States Fire Administration has a National Fire Data Center. In their October 2004 report, they show that there was a reduction in deaths by fire nationally from 12,000 in 1974 to 3,570 in 1999 (96). This is primarily a result of building codes and innovations, like smoke detectors. The overall number of fires dropped by 24% during that same time, down to 6 fires per 100,000 people. The value of fire loss per capita in the United States is $37.10 (ibid).

The next step in my study was to request a list of actual fires in Orange County. Here is the request I sent to each fire department:


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Pursuant to the laws relating to the Public Records Request, I request the following:

1. List of all actual fires in the City in 2007, not including false alarms.

2. Separate them between structural and non-structural.

3. If possible, separate the fires that were on the second floor or higher.

The fire reports separate responses into EMS response, building fires, vehicle fires, and forest fires. Here is an example of one fire station in Orlando for the month of September 2008: Station 2 had 502 EMS responses, 130 investigations/enforcement, 56 standbys, and 5 extinguish and control (97). Of the actual fires, four were vehicle or grass fires and one was structural. Vehicle fires can be put out with a fire extinguisher by police or other public safety personnel (like NASCAR safety staff does), and “most of the vehicle fires are burned out by the time the fire truck gets there,” according to the wife of an Orange County fireman. So, the 25 members of Station 2 put out one fire during that month. And I did not pick out a month to dramatize this waste. The same “one structural fire per month” statistic exists in Apopka and Winter Garden, Florida, as well.

As much as 70% of the fire rescue budget goes to fire suppression, based on the cost of the equipment, facilities, and payroll. Based on my research, the inefficiency and waste in fire suppression is as much as 50%. To reduce this waste, I propose we regionalize fire suppression to eliminate duplication of services.

REGIONALIZATION OF FIRE SUPPRESSION

In my fire recourse allocation study, I found that 95% of responses did not involve an actual fire, despite the fact that most of fire rescue budgets go toward fire suppression. I also found that because of jurisdictional boundaries, we have fire stations just blocks apart . . . sometimes on opposite sides of the street!

I plotted all 69 fire stations in Orange County and drew a 5-mile circle around each station. On the following page is my fire station service map. Where the circles intersect, duplicate fire suppression exists due to jurisdictional issues. In regionalizing


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fire suppression and EMS, we can reduce the number of fire stations by almost half without reducing public safety. Our plan is to use existing fire stations to house the new regional fire suppression stations and close the remaining units or convert them to EMS stations. This will reduce the number of expensive fire trucks needed in Orange County.

This same effort has been done in other states. In Cherry Hill, New Jersey, the fire department was regionalized and the fire chief testified that the region is now better served. Chief Giorgio testified that Cherry Hill achieved savings through such measures as a reduction in the fleet from 24 engine companies to 10, from five ladder companies to three, and from five rescue companies to three. They have also achieved a 43 percent reduction in heavy apparatus, such as ladders, engines, and rescue vehicles (98). Asked why “less is more” when it comes to fire equipment and personnel, Chief Giorgio explained that, “There is a base requirement that will meet the service needs of each community. Once that requirement is satisfied, any additional equipment and personnel are superfluous and an unnecessary expense (ibid).”

ORANGE COUNTY FIRE STATION MAP


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We also recommend separating fire suppression from EMS. By separating fire suppression and EMS, we can allocate the proper amount of resources to fire suppression. Given the fire allocation study we conducted, we believe we can reduce the number of staffed fire suppression stations in Orange County to five or six per zone. Further, we believe we can close at least one station per zone at night, when the number of fires drops and road traffic allows for quicker response times.

Fire suppression personal will convert to 12-hour shifts, to avoid making the taxpayer pay personnel to sleep at night. Our fire suppression format is a throwback to fire stations of the late 1800’s. In the past few decades, we have invested billions of dollars in fire sprinklers and fire resistant structures. Our fire suppression effort needs to adapt to these changes and recognize the dramatic reduction in fires.

EMS services will be provided through an enhanced network of on-demand personnel. Rather than stationing EMS personnel in firehouses, they should be stationed in the road network available for immediate service. The public safety director will move the EMS personnel around to cover areas when calls remove a unit from a service area. EMS units will have GPS tracking devices to ensure adequate coverage of the entire county.

In addition to on demand EMS, each zone will have 2-4 Road Rangers (who are on patrol at all times), available to respond to accidents to clear roadways immediately. These Road Rangers will also respond to fire alarms that are suspected of being false alarms. Road Rangers will be able to extinguish most car fires. Union officials will try to claim these changes will result in higher insurance rates; but with the prevalence of Road Rangers and mobile EMS units, response times will decrease.

BRINGING FIRE RESCUE INTO THE 21ST CENTURY

My study brought me to these conclusions;

1. Send fire trucks to fires only. It will cut the number of fire suppression trips

down 90%.

2. Separate fire suppression and EMS stations. EMS does not need to be housed in a station. Like police, EMS and public safety vehicles can be on patrol, thereby decreasing the lag time between the call for help and the time to get the vehicle in motion.


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3. Regionalize fire suppression and EMS. We do not need 30 ladder trucks in central Florida, when there is, on average, one multi-story fire per month in the region. Also, it is unnecessary, inefficient and wasteful to have separate fire stations on opposite sides of the street.

4. Close fire stations at night, when the incidents drop dramatically, and regionalize response. Less traffic equals faster response times. Paying firefighters to sleep is a huge waste. Of the fire suppression stations that remain, some can be closed between 7 p.m. and 7 a.m.

5. Add Road Rangers (similar to those on the Florida turnpike) for prompt accident response. Public safety Road Rangers can be mobile and respond to all accidents and fire alarms. The responses will clear accidents from the street and allow police to catch criminals, instead of forcing them to write accident reports. Road Rangers can be the first responders to fire alarms and determine if there is a real fire. Road Rangers can also extinguish 95% of vehicle fires.

POTENTIAL COST SAVINGS FROM FIRE RESCUE

Here are the budgets for fire rescue in Orange County: Orange County: $188,000,000; Orlando: $73,000,000; Winter Park: $9,147,000; Winter Garden: $9,147,000; Ocoee: $4,960,000; Maitland: $4,266,196; Lake Buena Vista: $12,000,000. We are spending $300,000,000 a year in Orange County for fire rescue services. My estimate is that half of that money is wasted because of duplicative services and overspending on fire suppression. That equals $150,000,000 a year of hard-earned taxpayer money that is wasted by the current system of fire rescue public safety.

CORRECTIONS

The corrections department in Orange County Florida cost taxpayers $175 million in 2008 (99). While corrections is a core function of government, it is an area where reforms can reduce costs considerably and improve services to the taxpayers. According to Reason.org studies, private corrections facilities can save at least 10-15% on the total cost of correctional budgets (100). In Australia, the savings was 23%, and the Sellers Study in 1989 showed possible savings of 63% (ibid). Assuming a 20% savings, that will save the Orange County taxpayer $35 million a year or more. Enough to fund most of the cuts in education over the next five years.


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There are two types of methods used to outsource operations of prisons. The first is for a private company to operate an existing government-owned facility. The second is for a private firm to build a new facility and operate that facility. Either way, the key to privatizing the service is to control variable costs of labor. Union salaries and benefits escalate much faster than the private sector, and overtime in union prison systems is unbelievably high. During my research of public safety, I found dozens of Orange County corrections employees making more than $10,000 a year in overtime, and one made $46,050 of overtime pay in a single year (101). This does not happen in the private sector.

In the case of Orange County, the choice of managed competition seems to be most feasible. Managed competition allows the government employees to bid for services against private contractors. A request for bid is prepared that outlines the scope of work and the contract. The government union and the private contractors prepare bids for correctional services, and the entity that offers the best service and price wins the contract. The taxpayer wins either way, because the cost is reduced and efficiency is maximized.

9-1-1- COMMUNICATIONS

Our study found two areas of waste in 9-1-1 Communications in Orange County: duplication of services across municipal boundaries; and a failure to use advanced technologies.


Orange County has eight 9-1-1 Communications centers. I met with the Orange County 9-1-1 department and asked how many 9-1-1 call centers are necessary. The answer was two; one is needed to meet the needs of the area, plus one additional center, in case the other center goes down. The following are the 9-1-1 Communications annual budgets: Orange County: $13,949,170; Orlando: $5,376,257; Apopka: $1,463,350; Maitland: $456,922; Ocoee: $724,720; Winter Garden: $597,897; Winter Park: $1,119,798; Belle Isle: $12,500; Eatonville: $10,000; Edgewood: $22,500; Oakland: $19,500.


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The actual cost of 9-1-1 Communications is actually considerably higher, because these figures do not take into account facility cost and information technology. We estimate the cost of 9-1-1 Communications in Orange County to exceed $25 million.

REGIONALIZATION OF 9-1-1 IN ORANGE COUNTY

It is our recommendation that 9-1-1 Communications be regionalized. The regionalization of 9-1-1 Communications will follow our Orange County Zone Map. We recommend the reduction in 9-1-1 call centers and dispatch centers from eight to four. The new regions will be more clearly identifiable and reduce errors in dispatch, due to jagged jurisdictional boundaries.

Regionalization of 9-1-1 Communications, along with the services provided by government, will ensure that services are provided as effectively and efficiently as possible. Regionalization will also reduce the cost of 9-1-1 Communications by 30% on average. Many other communities across America are coming to the same conclusion.

Lee County, Connecticut is taking steps to consolidate 9-1-1 and dispatch services. Jackson County, Tennessee is planning to consolidate its four 9-1-1 public service answering points (PSAPs) (102). The City of Ashland, Oregon determined they can save $400,000 a year by using Southern Oregon regional Communications for 9-1-1 answering and dispatch (ibid). None of these communities are willing to sacrifice public safety, but they all realize that duplication of services exists.

FAILURE TO USE ADVANCED TECHNOLOGIES

The other method to achieve better taxpayer service is to broadly implement advanced 911 Communications technology. This will be less costly and easier to implement with fewer 911 call centers. Next Gen or Enhanced 911 has the ability to locate callers who do not call on landlines. With the emergence of cell phones as the primary source of calls, and other call devices like Voice-over Internet (VoIP), better technology will increase response times and reduce errors. This technology is expensive, and by reducing the number of call centers in half, it will foster quicker implementation.


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By eliminating overhead and duplication of services, we believe that regionalization of 9-1-1 Communications can reduce costs by 30%. The savings to the taxpayer in the Orange County area can be $7.5 million.

INNOVATION

Albert Einstein was famous for saying, “Insanity is doing the same thing over and over again and expecting different results.” Orange County needs to change the way we protect the public, if we are to achieve better results. The following are just a few ideas on how to improve public safety without raising taxes.

LOCAL ROAD RANGER PROGRAM

Most people in Florida are familiar with the Road Rangers who serve the Florida turnpike and other toll roads in Florida. These private sector service vehicles assist motorists by coming to their aid when they have car problems or are involved in an accident. Since 2000, when the program began, state transportation managers estimate that Road Rangers have made close to 2 million assists (104).

They respond to typical road maladies: flat tires, abandoned cars, and empty fuel tanks. They clear debris and get broken-down cars out of traffic. ''The Road Ranger is the biggest bang for the buck that a taxpayer could have, when it comes to getting from point A to point B,'' said Florida Highway Patrol Lt. Pat Santangelo (ibid). The following is how the program will work, and why it will increase rescue response time, reduce waste, and help solve our current crime crisis.

OUTLINING THE NEED

The public needs uniformed officers to apprehend criminals, not to respond to fenderbenders. It can take police and Florida Highway Patrol over one hour to arrive at an accident scene. All the while, the taxpayer is at risk on the side of the road, and additional accidents occur from rubbernecking. In order to better serve the taxpayer and keep our uniformed law enforcement members focused on more important duties,


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we need to have Road Rangers take care of the mundane tasks of responding to fender benders, broken down cars, and non-life threatening situations.

The Road Rangers can also put out most vehicle fires and respond to fire alarms that are suspected false alarms. By responding to vehicle accidents, the Road Rangers can quickly determine whether or not medical assistance is needed. In many cases, 9-1-1 calls are reports of abandoned vehicles or simple accidents that are reported as injuries. The road rangers will reduce waste and increase public safety by clearing accidents off of our streets more quickly.

THE PLAN

Each region of Orange County will get two to four Road Rangers who work 7 a.m. to 7 p.m. shifts Monday through Friday. On weekends, one Road Ranger from each region will be working the same shift. After three months, an analysis will be done of the need for additional Road Rangers. As the number of fire suppression stations is reduced, those personnel who are surplus will be added to the Road Ranger program and other public safety areas.

THE BENEFITS

The benefits of the program far outweigh the costs. Having Road Rangers respond to fender benders will reduce response time and clear accidents quicker. Our uniformed law enforcement officers will be able to dedicate the additional time to quicker 9-1-1 response and community patrols.

REGIONAL INTERNAL AFFAIRS DEPARTMENT

The epidemic of illegal drugs on our streets plaguing our children is not getting any better. Part of this is the ineffective way we approach the issue and part of the problem is that some of the police officers we pay to take illegal drugs off of our streets are selling drugs themselves or protecting the drug dealers. Below is just a sampling of police corruption cases in 2001.


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In February, 2001, three south Florida police officers were indicted for drug trafficking, including using their patrol cars to transport drugs for drug dealers. Their actions came to light when one of the police officers attempted to shake down an undercover officer posing as a drug dealer. Acting on a tip from an informant, the officer pulled over the undercover officer’s car, seized the $200,000 he was carrying, and split the money with his informant (105).

In September 2001, nearly a dozen current and former Miami SWAT, narcotics, or special crime suppression officers were charged with stealing evidence, planting guns at crime scenes and covering up their actions in a string of police shootings that killed three people, including a 73-year-old man. In that case, officers raided his apartment to serve a drug warrant and sprayed his bedroom with 123 bullets. They later lied about the man having a gun, and no drugs were found. The corruption and abuse were reminiscent of the “Miami River Cops” scandal in the 1980s, in which more than 100 Miami police officers were arrested, suspended, or punished in a series of drug-related cases (106).

In October 2001, two current and former Hialeah police officers were charged with protecting and assisting drug dealers, setting up three robberies, serving as lookouts, and providing badges and pepper spray to the robbers (107).

In November 2001, a Sarasota woman brought a $3 million lawsuit against five Manatee County sheriff’s deputies who planted drugs in her home. All five deputies were sentenced to prison for various offenses, including stealing money from people under arrest. The men were part of an elite drug-fighting group called the Delta Task Force (108).

Orange County Sheriff's captain Victor Thomas pleaded guilty to conspiracy to sell 40 pounds of cocaine in 2001. He was sentenced to prison for seven years. This story was very close to me, as my son was in the same class as his eldest daughter. The charges left out a number of other infractions by Thomas and other sheriff’s officers, which were dropped in a plea bargain (109).

The fact is that wherever there is money, there will be crime and corruption, whether it is in the private sector, politics or police departments. And in recognition of this, we need to police the police vigorously. Our crime prevention efforts are a waste of time if the police themselves are protecting the bad guys. For this reason, I suggest a regional internal affairs department that monitors community police department staff, and conducts operations designed to “weed out” any instances of police corruption.


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CHANGING THE DYNAMIC FROM WRITING POLICE REPORTS TO PREVENTING CRIME

An honest evaluation of police effectiveness will lead to the conclusion that our efforts to reduce and prevent crime are not working. While the budgets for the City of Orlando and Orange County police departments have doubled in ten years, crime in Orlando has increased 396% (110). I own a business and several properties in central Florida, and I am the victim of a crime every few months. My own house in the suburbs was robbed while my family slept. My office vehicles have been robbed, my construction equipment has been stolen on many occasions, and my tenants are robbed on a regular basis. The Starbucks in my Hunter’s Creek center was robbed by two masked men who forced the managers at gunpoint back into the store at closing and had them empty the safe. This is a common occurrence across Orange County, Florida, despite spending $700,000,000 on public safety annually.

If our goal is to make the citizens safer and reduce crime, we must analyze the problems and come up with recommendations for real reform. History has shown that more money does not equal safer streets.

CHANGING THE FOCUS

We cannot accept that crime is nothing we can control. I do not blame the uniformed officer on the street, although there are some officers who work harder than others (like teachers, there are effective officers and ineffective ones). The reason crime is rampant in central Florida is because our efforts are going into writing police reports and traffic tickets and not preventing crime.

Every Monday morning, dozens of police in uniform descend into the suburbs, not looking for hard criminals, but set out to issue traffic tickets to moms in mini-vans and other taxpayers on the way to work. I lived within the city limits of Orlando for eight years. Every Monday through Friday, Orlando police set up a speed trap on Westpointe Boulevard, a divided four-lane road with limited traffic in the suburbs. In all eight years, I never saw an accident on Westpoint Boulevard; but I can honestly say I saw hundreds, if not thousands of speeding tickets issued. Near the end of my stay in Orlando, the speed limit was raised from 35 to 40 miles per hour, and the speed traps disappeared. The fishing hole had dried up.


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In 2004, there were 4.4 million traffic tickets issued in the state of Florida (112). Rather than catching violent criminals, arresting drug dealers or child molesters, our highly paid police force are ticketing decent citizens and raising billions in additional revenue for government (I tried to calculate 4.4 million tickets times at the going rate of $180 per ticket, but my calculator did not have enough zeros). In tiny Windermere, Florida, with a population of 2003, the police department issued 60,000 traffic tickets in 2005 (113). It is essential that we take our police focus off of revenue generation and put it back onto preventing crime. My public safety regionalization plan will convert the Windemere police efforts into a more effective crime fighting tool.

For this reason, I have researched and created a public safety priority list. Until we address the highest priorities, the ones on the bottom of the list must be left alone. Here is our list of priorities for public safety;

• Protect the safety and welfare of our children.

• Protect the safety and welfare of our seniors.

• Prevent crime.

• Apprehend violent criminals.

There are many ways to reduce crime, the first being to be proactive, instead of reactive. Let’s take the Hunter’s Creek Starbucks robbery. After the 9-1-1 call, there were a dozen police officers on the scene for several hours. If those officers were properly allocated, we could likely have prevented the crime and saved all of those paid staff hours. The matrix of police efforts needs to change from chasing criminals, which is very unproductive, to preventing crime.

9-5 WILL NOT CUT IT

Part of the proposed effort is putting more officers on the street at times when crimes are committed. Most of our police work 9-5, although most crimes are committed outside of those work hours. Police want “regular” schedules, but we need to understand that when someone signs up to be a police officer, they must accept the fact that crime is not a 9-5 problem. In New York City, Mayor Giuliani and Police Chief Bratton instituted a “deployment matrix.” The number of officers on the street was


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revised to deploy officers at peak crime periods (114). It worked. Crime in New York City was reduced dramatically as a result of the innovations introduced.

WHO IS TO BLAME

The goal for my reform efforts is to build a better government, not find people to blame. But we need to understand where the problem lies in order to fix it. In public safety, we must start at the top. Our elected officials have accepted the fact that they can do nothing to increase the safety of the citizens, other than to vote more money into the departments. That is completely false. They are the general managers of the team, and the police chief or sheriff is the coach. It is up to the elected officials to ensure public safety, and they have failed to make the public safe. Our elected officials have allowed all departments in our governments to be run as mini-fiefdoms, where the department heads are in complete control. To be an effective leader, one must be aware of all aspects of the team efforts and constantly seek to improve the performance of the team.

The general managers and the coaches have let us down and crime has increased, despite increased police budgets. Do we blame the police officers themselves, the players? The answer to this is yes and no. I have seen police officers indifferent to their job in my interaction with them. They simply want to write their police report and go home, and are not concerned with the results of their work. But much of the motivation of the individual police officers comes from the culture of the department in which they operate. New York City had a highly ineffective police force until Rudy Giuliani was elected Mayor in 1994. He simply came in and told them that results matter. With his police chief, William Bratten, they changed the deployment matrix and had a zero tolerance to small crimes. Crime in New York City plunged (ibid).

The main problem with public safety in Florida and across America is that we have accepted that crime is here to stay. However, it does not have to be that way. We can be more effective in preventing crime. We can be more effective in deterring crime. We simply need to innovate and focus on prevention, not writing police reports. But the primary obstacle to that fundamental shift in strategy is our own unionized police force. The union leaders do not want to change our focus, because they fear that a reduction in crime will result in a reduction in the flow of money, positions, and power.

During the writing of this book, I watched of the movie American Gangster, a movie about the 1960s gangster, Frank Lucas. In the movie, Russell Crowe plays a


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detective who questions whether our government really wants to eliminate illegal drugs and crime. He states, “I do not think they want this to end. This employs too many people. Cops, lawyers, judges, corrections officers (116).” Maybe he is right.


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CHAPTER 15

Improving Accounting and Financial Management

This chapter will give even the most passionate government reformer reason for greater concern. The truth is that almost all local government’s use a “cash based” accounting system that tracks cash in and cash out, making no allowance for future expenses that we accrue or collect along the way. An example may be building a sports arena, but not providing or accounting for its operation and maintenance in the future. In a “cash based” accounting system, those future expenses do not exist until they become due. Across Florida, we are committing to tens of billions of dollars worth of capital improvement programs and only accounting for a fraction of their true cost. The liability for ongoing debt service, operating costs and maintenance is being pushed to future generations. Just like the snowballing pension and retirement benefits, these hidden costs will cripple local government’s ability to provide basic services in the future. The opposite of a cash based system is an “accrual based” accounting system.

THE DIFFERENCE BETWEEN CASH AND ACCRUAL ACCOUNTING

In a cash based accounting system, it records income and expenses when cash is paid. It does not record many of the impacts that will result from the consequences or events associated with the transaction. For instance, with cash accounting, money borrowed via a long-term arrangement is recorded as a cash inflow. The long-term liability is not brought into the financial statements until it is due and payable. Under accrual accounting, the money raised is both an inflow and a liability.

Accrual accounting recognizes events and transactions when they occur, regardless of when cash changes hands. By recording accounts payable and receivable, and thus the change in value of the assets and liabilities, it keeps a running tally of what an organization owns and owes in economic terms. If a


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government promises pension benefits in the current period and must pay retirement claims in future periods, the liability and expense is recorded when the event occurred. When the cash is actually paid, the liability is removed.

There are a number of deficiencies in cash based government accounting and financial-management systems, specifically:

• Accountability is unclear.

• Goals and performance requirements of government departments are poorly specified.

• Incentives often encourage dysfunctional behavior (for example, year-end spending).

• Assets are poorly maintained, and changes in value or depreciation are poorly recorded.

• Losses and long-term liabilities are hidden by cash-based accounting systems.

• Responsiveness to changing circumstances is slow.

Moreover, an important consideration for fiscal policy is intergenerational fairness. By allowing governments to hide both their liabilities and the real state of their finances, traditional government financial reporting enables governments to pass off present costs to future generations.

These problems are receiving attention in state and local governments in the United States. In response to the inadequacies of traditional government accounting and financial management, the Governmental Accounting Standards Board (GASB), which is charged with setting standards for government financial reporting, proposed major changes in government financial systems. Part of the change includes moving from traditional modified cash accounting (officially called modified accrual) to the business model of accrual accounting.

As state and local governments begin the transition to new and improved financial and accounting systems, they could find no better model for how to get from the traditional cash based system to the new accrual system of accounting than in New Zealand. Having moved further than any other government in the world in revamping its financial management, accounting, and budgeting systems, New Zealand’s reforms have four main features:


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• Adoption of accrual accounting and budgeting;

• Introduction of a capital charge and decentralized authority to buy and sell assets;

• Output-based management and budgeting; and,

• Improved financial decision making, coupled with increased accountability.

Together, these reforms have had a dramatic impact on the New Zealand public sector. Thanks in part to these reforms, the quality of financial information has vastly improved, efficiency has increased, assets are managed more proactively, accountability is stronger, and public disclosure of information has improved immensely. For U.S. policymakers embarking on overhauling and modernizing their financial management and accounting systems, the highly acclaimed New Zealand reforms offer powerful lessons.

WHY SHIFT TO ACCRUAL ACCOUNTING?

Public-sector and private-sector accounting grew apart over a long period of time. While public-sector accounting has remained on a cash basis, the private sector developed generally accepted accounting practices (which included accrual accounting) in response to several key commercial and political pressures. First, the distancing of owners and lenders from managers, driven by the development of financial markets, created a need for better and more transparent information about how well departments are run. Second, growing competition drove the requirement for better management information on which to base decisions (such as price setting).

Accrual accounting is designed to provide critical information to owners and lenders. If major pieces of equipment are becoming obsolete, or long-term liabilities are accumulating, owners and lenders want to know now, not when the equipment is sold or scrapped, or when the liabilities come due. The absence of similar pressures in the public sector caused the stagnation of public-sector accounting. Legislators typically focus on whether money is spent as appropriated.


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PROBLEMS WITH CASH ACCOUNTING

Cash accounting satisfies the annual compliance interest of legislators, but unfortunately has a number of serious drawbacks, including:

1. Failure to accurately represent the amount of resource usage. For instance, a large capital acquisition will distort expenditure upward in the first year, but the usage of that asset will not be recognized in following years.

2. Failure to take account of future commitments, guarantees, or other contingent liabilities. A liability will not be recognized until the cash is paid to settle the debt.

3. Concentration on cash payments alone, sometimes resulting in an unnoticed deterioration in fixed assets.

4. Control of the inputs purchased, rather than the outputs produced.

5. Distortion of incentives by encouraging managers to underestimate the costs of programs and to spend their full annual appropriations.

When Stephen Goldsmith was elected mayor of Indianapolis in 1992, the city had a great credit rating and slick, four-color glossy financial reports rivaling those of Fortune 500 companies. But when he starting asking around to find out how much it cost to fill a pothole, plant a tree, or clean out the sewers, no one could tell him. Without this data, it was impossible to know whether city services were being delivered efficiently, and he couldn't accurately compare the costs of public-sector delivery with those of the private sector. Explains the mayor, "We used standard government accounting principles that prevented our managers from stealing money, but did nothing to stop them from wasting it. . . . As a direct result, city employees neither knew nor cared about their costs of doing business (117)." We have heard similar refrains from dozens of public officials and elected officeholders.

If the taxpayer knew it cost $1,500 to fill a pothole, or $3,500 to send a fire truck to a fender bender, they might demand better performance from their tax dollars. An accrual based system based on outputs will give elected officials and taxpayers the tools to see how efficient their government really is.


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BENEFITS OF OUTPUT-BASED MANAGEMENT

A major feature of the New Zealand management reforms was the move from an input to an output focus of control and accountability. Inputs are the dollars, workers, and procedures used to produce an agency’s goods or services. Outputs are the goods or services themselves. Outputs are products (i.e., paving x square feet of roadway for y dollars/square foot), not outcome measures (such as minimizing traffic disruption). They are viewed in exactly the same way as the products or services produced by a private-sector entity, and are priced in a manner similar to market transactions.

Government ministers in New Zealand negotiate a price for outputs on the basis of the goods and services supplied—in theory irrespective of input costs. For example, the Minister of Justice might negotiate with the Correctional Services Agency to house x number of prisoners at y dollars, or the department could contract with the police for z dollars worth of crime-prevention programs. The ministers try to choose outputs that will lead to desired outcomes—i.e., crime prevention programs that reduce crime. The benefits of the focus on outputs are:

• Gives added incentive to charge for services that provide certain parties specific benefits.

• Allows more discretion and innovation in choosing how much and which kinds of inputs to use to provide services.

• Increases focus on achieving policy goals (outputs and outcomes).

• Reduces ability of legislators to engage in pork-barrel spending.

• Chief executives are held accountable for the delivery of outputs, which can be defined in terms of quantity, quality, cost and, when relevant, location, and timeliness.

FINANCIAL MANAGEMENT

Chief executives (called city managers in Florida) are also accountable for the financial management of their department—an instance of financial mismanagement will reflect on the chief executive’s own performance assessment at the end of each period (chief executives have annual performance agreements within a limited-term contract of employment). Chief executives are also accountable for the management of their financial statements, including the balance sheets; meaning they are


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accountable for the financial results and financial performance of their organizations, in addition to the delivery of a specified set of services.

PERFORMANCE AGREEMENTS

New Zealand also developed a performance regimen for chief executives. "Jobs for life" were replaced by fixed limited-term employment contracts. Each year a performance agreement for the chief executive is developed in parallel with the budget. The agreement states the outputs for which the chief executive will be held accountable, as well as dimensions of the financial performance. At the end of each year, the agreement is reviewed to determine the appropriate action; for example, whether bonuses should be awarded or employment terminated.

Typically, at least 10–15 percent of each chief executive’s salary depends on performance, and a bonus of up to 20 percent can be earned for superior performance. In turn, chief executives typically require performance agreements from their senior managers, who do the same for those working under them—creating a pyramid of performance agreements that become powerful levers for driving change downwards.

In the past ten years, the New Zealand government’s financial-management systems have been completely reengineered. Cash accounting has been jettisoned in favor of accrual accounting. Output-based budgeting has replaced outdated program-based budgeting. Public-sector managers now have significantly greater discretion than elsewhere—matched by increased accountability and robust performance-appraisal systems. The New Zealand public sector is widely recognized as more efficient and effective than it was a decade ago.

Accrual accounting and output based management are coming to the United States, albeit slowly.

SUNNYVALE, CALIFORNIA’S OUTPUT BASED BUDGETING SYSTEM

With detailed information at their fingertips on the quantity, quality, and cost of each service they deliver, the Sunnyvale City Council doesn't even bother voting on line items. The council tells each department what results it wants and the department


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returns to the council with detailed figures on the cost of achieving this output or outcome. The council then, in essence, "buys" the level and quantity of service desired.

Sunnyvale's success with output-based budgeting has been so dramatic that its budgeting system was highlighted in an August 1993 visit by President Clinton (118). Between 1985 and 1990 the average cost of delivering services dropped 20 percent; one year, the city even rebated $1 million in property taxes. In a 1990 comparison with other cities of its size, Sunnyvale found that it accomplished most functions with 35 to 45 percent fewer employees and those Sunnyvale employees tended to be better paid. On a per-capita basis, Sunnyvale's taxes were lower than any city in the survey (ibid).

The cash based accounting system used by governments is a 19th Century technology that needs to be replaced. It hides future liabilities that we pass on to our children, encourages waste, and leads to lower quality of life for our citizens. Accounting is not a hot topic of debate in politics; but in order to create long term meaningful reform, we need to accurately portray how much each government service is costing the taxpayer. Accrual accounting will give a clear picture of the true cost of government and prevent pushing liabilities to future generations.

BUDGET AND FINANCE

One of the items that astounded me in completing our budget study was finding 400-page annual budgets for communities that most people have never heard of. Small towns with the overhead of a Fortune 500 company. The other point that struck me was that there is no uniformity to the reporting. Some towns print their report out of Microsoft Excel or Quickbooks. Others have full-color brochures. In addition to reducing the cost of finance departments, we need uniformity across local governments to increase transparency and accuracy in public accounting.

Our study found three areas of waste in Budget and Finance in Orange County and the thirteen cities within it: duplication of services across municipal boundaries; inefficiency in operations; and a failure to use private sector resources.

The following are the Budget and Finance annual budgets we studied: Orange County: $17,698,331; Orlando: $28,442,698; Apopka: $505,400; Maitland: $4,419,000; Ocoee: $794,120; Winter Garden: $1,735,392; Winter Park: $1,688,429; Belle Isle: $388,480; Eatonville: $335,550; Edgewood: $86,000; Oakland: $327,333; Lake Buena


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Vista: $637,222. The actual cost of budget and finance is actually considerably higher, because these figures do not take into account facility cost and information technology.

We estimate the cost of Budget and Finance in Orange County to exceed $60 million.

REGIONALIZATION OF BUDGET AND FINANCE SERVICES IN ORANGE COUNTY

It is our recommendation that Budget and Finance services be regionalized to eliminate the duplication of services. Individual communities no longer need a separate department, when most of the services provided by the individual government are regionalized. The regionalization of Budget and Finance will generally follow our Orange County Zone Map with a few distinctions. Because of the size and complexity of Orange County and Orlando, it is likely they will maintain their own budget departments.

All other Budget and Finance departments are prime candidates for regionalization. Regionalization of Budget and Finance, along with the services provided, will ensure that revenue collection and spending is synchronized with the other services provided. Regionalization will also reduce the cost of Budget and Finance by approximately 30%.

Our primary recommendation is to consolidate the Budget and Finance for smaller communities into a regional service. However, within the larger governments, consolidation of Budget and Finance can occur as well. In Fauqier County, Virginia, the Finance Department services both the county government and public schools. All Budget or Finance departments should be reviewed for potential savings through consolidation with other agencies.

INEFFICIENCY IN OPERATIONS

Anyone who has ever entered a government facility has probably seen a number of government workers mulling about doing very little. The fact is that the public sector is 10-30% less efficient, mainly because the taxpayer is not supervising the government workers. The Budget and Finance departments of all governments should be a model of efficiency. We recommend that a permanent “Government


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Efficiency Committee” be established to regularly perform reviews of all departments, including Budget and Finance departments. Allowing experts in all fields from the private sector to review departmental practices, procedures and results will ensure innovations and best practices are adopted and utilized.


The other method to achieve better taxpayer service and lower government overhead is to outsource or privatize certain government functions. The Budget and Finance department has peak periods of demand. The staff should accommodate average demand periods, and additional staff should be hired as independent contractors, as needed, to accommodate peak demand periods.

Another key to efficiency and the ability of the taxpayer to see how their government is spending their money is to create a uniform accounting system and software. The taxpayer should be able to visit their local government website and not only see the budget online, but we should be able to click on a service and see how much it costs compared to other governments. We should be able to compare our results against the results of other governments. What we have now is just the opposite. Our government wants to hide the waste and inefficiency, so it takes a taxpayer like me six months to find all of the details.


By eliminating overhead and duplication of services, we believe that regionalization of Budget and Finance can reduce costs by 30%. Savings in communities without regionalization can be 10-20%, if waste is reduced and innovations are introduced. The savings to the taxpayer in this area can exceed $10 million in Orange County annually.

Without reform to the way we manage finances, it will be difficult to enact meaningful reforms. Numbers don’t lie, but they also cannot tell the truth if they are presented improperly. We need our public accounting system to represent our finances accurately.


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CHAPTER 16

Reinventing the Property Appraiser and Tax Collector

The advances in technology are being used by the property appraiser to maximize revenue, not to reduce the burden on the taxpayer. Our local government has a website with an aerial photo of your home, along with the details including the size of the lot and structures. But technology has not made the department more efficient, nor has it helped in getting property valuations correct.

Our study found four areas of inefficiency in the Property Appraiser and Tax Collector’s offices within Orange County: duplicate and inefficient delivery of services; inaccurate and unfair assessments; “commission” payments motivate the tax collector to yield maximum revenue; and a failure to use private sector resources.


Most people do not realize the Property Appraiser and the Tax Collector are separate departments headed by separate elected officials. The Orange County Property Appraiser has a budget of $12,366,000 and the Orange County Tax Collector has a budget of $27,208,000.

In our Orange County Taxpayer Budget Review report, we suggested combining the two agencies for greater efficiency. We also recommended the department heads be appointed, instead of elected; because the public needs the most qualified and innovative candidate, which is not what Orange County has now. The Tax Collector works an admitted 25 hours a week, and has failed to implement significant reforms to increase efficiency.


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INNACURATE AND UNFAIR ASSESSMENTS

Like a broken clock that is only right twice a day, assessments are only accurate once during a good economy and once on the way down. The multitude of variables and constant changes in market creates an unfair assessment on virtually every property owner. Some property owners pay too little, while others pay more than their fair share. I recommend converting the assessment system to use the land and building area multiplied by a neighborhood component to create a mathematically sound and simple valuation formula.

The Florida statutes allow for and even call for “mass appraisals.” The records of each home and property should be simple. The total square footage of the property, along with the total square footage of the structure, can be used to determine property value. With those two variables, we can create a mathematical model that guides us to the most even assessment. The two variables will be multiplied by a neighborhood factor. The overall system will be much fairer, since all property is judged on the same basis.

In order to remove the incentive for the property appraiser to inflate the value of property to generate more revenue (a pressure that is continually increasing), I recommend the assessment function be outsourced to a private vendor. Tyler Technologies and other similar companies already perform similar functions for Lee County and hundreds of other cities across America. With these changes, we can reduce costs, improve fairness, and serve the taxpayer more effectively.

COMMISSION PAYMENTS MOTIVATE TAX COLLECTOR TO YIELD MAXIMUM REVENUE

Florida Statute 192.091 allows the Tax Collector in your county to retain a percentage of revenues collected. This gives staff an incentive to procure the most revenue possible and results in a bloated budget. Every government department should be operated as efficiently as possible without regard to revenue produced. The Tax Collector should be funded like any agency and the commission payments should cease.


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I already mentioned Tyler Technologies as a private vendor that can increase fairness in property assessment. What is equally important is that specialty companies can bring thousands of examples of innovation to our county. Think about this: we have a single property appraiser with his own background and experience. Tyler Technologies has hundreds of cities and counties as clients, with thousands of employees to serve them. Each one of them is focused on delivering services more efficiently, every day, to gain a competitive advantage. Only through outsourcing do we gain all of this knowledge.

The function of the property assessment office should be to select the best service provider and monitor their performance. The tax collector is a difference function, but most of the services they provide can now be done on the internet. Things like hunting and fishing licenses should be free of charge when processed on the internet. This rough spot in the economy is a great time to completely reinvent government services. We should use all available technology to design the system around the taxpayer.


It is our estimate that by combining property assessment and tax collection, along with outsourcing certain functions, we can reduce the cost of this public service by 30%. The savings to the taxpayer can be $12 million annually in Orange County.

EFFECTS OF SAVE OUR HOMES

In 1992, Ken Wilkinson, a County Property Appraiser from Lee County, Florida, was successful in promoting and getting into law a bill known as “Save Our Homes.” The law limited the increase in property taxes on “homestead property” to CPI or 3% annually. A homestead property is a permanent residence, not a second home, rental apartment, or commercial building. Wilkinson said, “Government should not be in the business of taxing people off their primary residence (119).” This sounds nice, but as is often the case with government regulations, there were unintended consequences.


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Save Our Homes was sold to the people of Florida as a tax limit. This couldn’t be farther from the truth. In essence, Save Our Homes is flawed, because it is not a tax limit, but a tax shift. The savings of homestead property owners is made up by additional taxation of non-homestead property owners. The result has been devastating to the small business community and to our Florida economy, as tens of thousands of second homeowners flee the tax burden in Florida. Here are some examples.

From a second homeowner in Volusia County: “As a non-homesteader building a house in 2003, I went from paying $4,500 in taxes to over $12,000. This cannot go on. Many of my non-homesteaded friends are trying to get out, but can't. I hope these morons who are running the government understand this (120).”

From another second homeowner in Volusia who wanted to keep their parent’s home in the family for two more generations after they died: “Not in my wildest dreams would I have expected to pay a $22,700 dollar tax bill this year. We will have to borrow to pay this year’s taxes and hope the market is strong enough to sell soon. Our property has a modest house on it, which we bought it in the 60"s for $1,200; we then put a prefab house on it that the county says is worth $1.2 million? One year’s tax bill is now 20 times our purchase price. This is insane (ibid).”

Yet another non-homestead owner: “My name is Joyce Stone. I live on Commonwealth Avenue in Boston, Massachusetts. In 2003, I bought an oceanfront condo in Daytona Beach, Florida. My property tax was just shy of $10,000 last year. What disturbed me was finding out that many units in my building were only paying $2,300 to $2,500 per year, because they had this so-called homestead exemption.

I use my condo five to six months a year, and have no impact on the school and many other services used or needed by full-time residents. I bring family and friends down for vacation, who spend lots of dollars at all the attractions, restaurants, and shopping. We are your best customer, and you punish us with a totally unfair, excessive property tax. Your distorted system will cause many to eventually sell. Paying over $800 per month for property tax does not justify keeping a vacation condo in Florida (ibid).”

Okay, so it is clear Save Our Homes is driving second homeowners out of Florida (and stopping others from buying homes). If your reaction is “so what,” like our government must think, there are 670,000 second homeowners in Florida (121). Imagine 670,000 homes on the market at the same time for an extended period of time. Then, imagine 1.5 million people not spending their winters in Florida. Even if


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these retirees are forced to keep their homes, they will use them less and spend less when they do, because of the high taxes.

It is just as bad for small business owners. Taxes on commercial property have tripled in six years, because Save Our Homes has shifted the burden of government on them. A Putt Putt Golf course saw their taxes go from $11,000 a year to $40,000 in a single year (122). A marina saw their taxes go from $30,000 annually to over $100,000 (ibid). These businesses are laying off employees, lowering wages, and reducing benefits, all to keep government employees from doing the same.

Almost everyone agrees that voters will not remove Save Our Homes from our State Constitution. The way to reverse the massive inequity in taxes is to lower government spending until the homestead taxes and the non-homestead taxes equal each other. If we reduce spending by 3% a year, while homestead taxes increase by 3% a year (which they will do anyhow), we can have tax parity in ten years.

Without tax parity between “homestead” and “non-homestead” property, Florida’s economy will continue to erode.


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CHAPTER 17

Improving Human Resources and Information Technology

It is vital to the future of our society to focus our resources on the core functions of government. In my opinion, the primary objective of government should be public safety and education. Any dollars that do not protect the public or are not spent in the classroom lessen the resources to those functions. Bureaucracies, anything behind a desk, needs to be kept at an absolute minimum to make government more effective and more efficient. While departments of human resources may be necessary, they must be as efficient as possible, so they do not take away from core services.

Our study found two areas of waste in human resources in Orange County: duplication of services across municipal boundaries, and an overcapacity given the current economy.


The human resources function of local governments is repeated in most municipalities, even at a time when those services are barely needed. The following are the governments with human resources departments and their annual budgets: Orange County: $4,823,260; Orlando: $2,927,071; Apopka: $250,020; Ocoee: $450,670; Windermere: $438,000; Oakland: $252,000; Winter Garden: $311,537; Winter Park: $400,529; and Maitland: $451,000.

The budget for Orange County does not represent the true cost of human resources, because the Orange County HR department does not perform the service for each department in the County. Each department within Orange County has an HR/Employee Services Division within the department. The following departments have their own HR department in Orange County:


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• Fire Rescue

• Administration

• Orange County Sheriff

• Corrections

• Utilities

• Public Works

• Growth Management

• Community & Environmental Services

• Administrative Services

• Health & Family Services

• Convention Center

We estimate the cost for Human Resources across Orange County (excluding the two communities of Lake Buena Vista and Bay Lake) to exceed $15 million. This comes at a time with a hiring freeze and layoffs. There may be valid reasons to keep personnel departments at this time, such as the filing of accident reports; but the truth is that the function of human resources across all Orange County governments is duplicated and a waste of taxpayer resources.

REGIONALIZATION OF HUMAN RESOURCES IN ORANGE COUNTY

It is our recommendation that we regionalize most government services throughout Orange County, including human resources. Our proposal to regionalize human resources will enable local governments, such as Ocoee, Apopka, and Winter Garden to consolidate their human resources departments into one. We also propose a regional human resources cooperative, where specialty services, like public safety, can be addressed on a county wide level. The same service provided to the Orange County sheriff can be given to the small communities in Orange County.

We recommend that both the City of Orlando and Orange County consolidate their separate HR departments into one single department in each community. The demand for HR services is down dramatically, and a centralized unit will be more efficient and cost effective.


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The State of Florida has begun to consolidate separate HR departments, as has Los Angeles County and the State of Texas. Texas expects to save $1 billion in just two years from consolidation of human resources services (123).

OVERCAPACITY

The current human resources departments in Orange County were staffed to handle the largest expansion of local government in Florida history. Now with a hiring freeze in effect in many places and layoffs looming, our human resources staff is way over capacity. As with any government service, the staffing and capacity should be geared to the average volume, not peak capacity. Any additional capacity needs can be outsourced to the private sector to avoid excess capacity and unnecessary staffing levels.

Our human resources personnel are also very expensive. The HR Director in Ocoee makes $99,674, and the City of Orlando HR Director makes $95,000. These are very expensive salaries to carry when the demand is not there. There is a way to maintain employee standards, keep records, and lower the tax burden on residents at the same time. We need to simply be more efficient.

The goal of an efficient government should be to staff for the average demand period and outsource demand for peak periods.


We believe that by regionalizing HR departments and consolidating the human resources function within Orlando and Orange County, the savings will be approximately 30% or $4.5 million annually.

Human resources can also benefit from a managed competition that pits the private sector against our government to provide this service. The goal should be to provide the best service at the lowest possible cost.

INFORMATION TECHNOLOGY

I already talked about the different accounting software programs that make consolidation and comparison difficult. The same problem exists with information


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technology. By consolidation of the information technology function of governments, software integration will be more likely and transparency in government can become a reality.

Our study found two areas of waste in information technology in Orange County: duplication of services across municipal boundaries, and a failure to use the private sector.


The information technology functions of local governments are repeated in most municipalities, even when the resources are not needed on a full-time basis, in many cases. We estimate the cost for information technology across Orange County to exceed $13 million. Information technology is vital to every organization; however the duplication of this service does not benefit the taxpayer.

REGIONALIZATION OF INFORMATION TECHNOLOGY IN ORANGE COUNTY

It is our recommendation that we regionalize most government services throughout Orange County, including information technology. We also propose a regional information technology cooperative, where departments can share resources, ideas, and improve compatibility.

Other communities and states have consolidated IT services. In 2005, the State of Missouri consolidated its Information Technology departments. The state of Missouri IT infrastructure supports the systems that serve the state’s 5.8 million citizens and approximately 60,000 government employees (124). To drive efficiency, the state has centralized IT personnel and functions for 14 of 16 state departments within the Information Technology Services Division (ITSD) of the Office of Administration.

“Consolidating IT resources has enabled us to effectively manage IT budget decreases of up to 25 percent during the last three years—without sacrificing our ability to keep pace with the increasing demand for new IT services and upgrades,” says Dan Ross, chief information officer, Missouri Information Technology Services


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Division. “By eliminating the duplication of government services and centralizing IT administration, the state of Missouri is saving millions of dollars and precious staff resources (ibid).”

FAILURE TO USE PRIVATE SECTOR

The other method to achieve better taxpayer service and lower government overhead is to outsource or privatize certain government enterprises. Information Technology does not need to be provided by government employees. A small group of government employees can decide which functions are done in-house and which functions are contracted out.

Entire programs can be bid in managed competitions, where the public agency bids against the private sector for that service. This ensures optimal efficiency from our public services.


We believe that by regionalizing IT departments and outsourcing specific jobs the annual savings will be approximately 25% or $3.25 million annually in Orange County.

Human Resources and Information Technology are not core functions of government. They are a tool in the service of government, and, as such, need to be as sharp and efficient as possible. We need to realize that there is a finite amount of tax revenue we can extract from our local economy. Wasting money on non-core functions will hurt the overall mission of government.


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CHAPTER 18

Fixing Building, Planning, Zoning and Code Enforcement

With the construction boom in Florida from 2002 to 2006, all governments hired staff to accommodate the demand and paid astronomical salaries, because of high demand for experienced people. The boom is gone, but the taxpayers are stuck with the high salaries. The first rule of government, apparently, is: “Thou shalt never lay off a government employee.”The taxpayer deserves better service and a lower tax burden, and building departments are an area where we can achieve both at the same time.

Our study found three areas of waste in building departments in Orange County: duplication of services across municipal boundaries; failure to use private sector resources; and a failure to use technology to improve customer service and response times.


Building departments are found in most municipalities, even when the resources are not needed on a full-time basis, in many cases. The following are the governments with city-run building departments and their annual budgets: Orange County: $26,000,000; Orlando: $7,953,623; Apopka: $515,250; Maitland: $1,630,973; Ocoee: $1,165,000; Winter Garden: $1,234,197; Winter Park: $1,532,386; Lake Buena Vista/Bay Lake: $1,914,156 (includes planning).

We estimate the cost for building departments across Orange County to exceed $40 million. This is a low estimate, because much of the supervisory and facility costs are not included in these budgets. The same basic function performed by building departments is performed in most Orange County governments. The highly


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paid staff process submissions in an archaic fashion that wastes valuable resources and does not best serve the community.

REGIONALIZATION OF BUILDING DEPARTMENTS IN ORANGE COUNTY

It is our recommendation that we regionalize most government services throughout Orange County, including Building Departments. Our proposal to regionalize Building Departments will enable local governments, such as Ocoee, Apopka, and Winter Garden, to consolidate their departments into one. This will not only save money, but improve the level of service to the community. It will create a uniform county wide system that will be consistent in its processes and procedures which will lead to greater efficiency and better service to the community.

In an average year, a regional department for building and permitting can serve the public adequately. In boom times, which we do not expect any time soon, the additional capacity can be outsourced to private sector plan review and building inspecting services, to avoid carrying additional overhead during low and moderate periods of activity.

Along with many other government services, the regional Building Department will be under the direction of a civilian regional administrator whose sole function shall be to increase efficiency and improve customer service.


The other method to achieve better taxpayer service and lower government overhead is to outsource or privatize certain government enterprises. In Bushnell, Florida, the city outsources the building inspection and plan review to a private contractor, Nova Engineering. The City of Windermere uses Nova, as well. They provide the same service and are often more available and less expensive to the taxpayer, because these services are a direct cost that can be billed to the builder/developer.

A private service provider such as Nova or T.R. Arnold and Associates provides various levels of support services to meet the fluctuating demands of any municipal building department. Whether augmenting existing municipal staff or


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providing a full team of qualified personnel needed to run an entire building department, they are equipped and able to take on either short or long-term assignments.

Private providers use certified building officials/code administrators, plans examiners and inspectors, who are focused on providing a consistent high level of service, whether the municipality is small or large. As a result of working within the private sector, private providers’ utilize professional and licensed staff maintaining in-depth knowledge of the latest codes and code developments.

Government should staff its building departments with the minimum staff for the average volume year. When demand increases, the excess demand should be outsourced to the private sector to avoid carrying additional personnel during slow periods.

ELECTRONIC PLAN REVIEW

Currently, almost all governments require multiple sets of building plans printed on paper. These plans are marked up by hand by up to a dozen reviewers, and then returned to the design professional for revisions, more printing, then followed by a resubmission. The process can repeat itself for months. In the future, the plans ought to be submitted electronically, where the reviewer can markup the electronic version and add comments electronically. The plans should be electronically transferred from department to department, and then back to the design professional for response. The technology already exists for this type of service.

Electronic plan review, in those building departments utilizing it, is reducing the amount of time it takes to review plans by as much as 50% and increasing code compliance within communities. The City of Atlanta was one of the first to adopt an end-to-end digital plan submission process for construction and land-use approval. Atlanta reports the following estimated savings (125):

• 720,000 miles driven and 48,000 gallons of gas

• 864,000 lbs. of paper used (1,073 trees)

• 29,000 hours of driving time

• 432 tons of paper requiring storage


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Electronic plan review is the future of permitting, and the sooner our community adapts to this technology, the greater our savings will be. E-Plan Review is now being conducted in Atlanta, Georgia, Bend, Oregon, Maricopa County, Arizona and Osceola County, Florida, as well as a dozen other jurisdictions. It has reduced the amount of time it takes to review plans by 40%, eliminates lost plans, and has reduced by 80% the number of trips to these jurisdictions by out of state owners/architects (ibid).

The streamlined processes are getting buildings up and open faster, and putting both people to work and revenues into the jurisdiction’s coffers sooner; for example, a 200-room hotel that opens 3 months earlier--using streamlined processes--with an 80% occupancy = $144,000 in added tax revenues to a jurisdiction . . . just from the 10% occupancy tax on $100/night rooms.

FAILURE TO USE TECHNOLOGY

Anyone who has applied for a building permit in Florida understands that technology has not improved service levels. Applicants can check on the status of their permit on-line, but the technology does nothing to reduce the time it takes to acquire a permit. A simple permit can take six months and complex approvals can take years. In the building permit process, we can learn from the Veterans Administration’s switch to a digital application process and gear the service towards the consumer, not the government.

With as many as 14 separate permitting agencies, any of which can kill a project, taxpayers spend most of their time dealing with the regulatory process, not on their business. Government mistakenly believes the regulatory process is a business; but, really, it is an impediment to economic activity. The process should be as efficient as possible and designed around the taxpayer, so that the 14 government agencies work as one in serving the applicant.

Instead of the taxpayer searching to find the various agencies and steps to permit a new business or project, the government should design the system to make job creation as easy as possible. If a business owner wants to open a restaurant, he should be able to visit the local government’s website and type in “open a restaurant.” The website should be able to list all of the agencies and steps needed to do so (along with the corresponding fees, which might make them think twice).


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The goal should be to have one taxpayer dealing with one government. This sounds logical, but the separate agencies do not want to give up an inch of power or control. So, the problem is not the software; it is the turf battle between government agencies.


Our building departments are very expensive. The City of Orlando has a half dozen employees who make over $100,000 a year plus benefits in the division. The building inspectors and official in Winter Garden cost the taxpayer an average of $80,222 annually with benefits, while the number of permits processed has dropped by as much as 80%. These are very expensive salaries to carry when the demand is not there.

We believe the regionalization of building departments along with the new technologies can reduce the cost of this public service by 30% or well over $10 million annually. And the savings to the private sector in time and interest will be in the tens of millions of dollars annually.

PLANNNIG AND ZONING DEPARTMENTS

Our study found three areas of waste in Planning and Zoning in Orange County and the thirteen cities within it: duplication of services across municipal boundaries; a failure to use private sector resources; and a failure to use technology to improve customer service and response times.


The planning and zoning function of local government is repeated in most municipalities, even when the resources are not needed on a full-time basis, in many cases. The following are the governments in Orange County with city run Zoning and Planning Departments and their annual budgets: Orange County: $6,000,000; Orlando: $2,559,468; Apopka: $951,500; Ocoee: $660,000; Maitland: $1,799,973; Winter Garden: $559,964; Winter Park: $1,531,948; Lake Buena Vista: $1,914,156.


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We estimate the cost for Planning and Zoning across Orange County to exceed $15 million. This is a low estimate, because much of the supervisory costs are not included in these budgets, nor are the facility costs.

REGIONALIZATION OF PLANNING AND ZONING IN ORANGE COUNTY

It is our recommendation that we regionalize most government services throughout Orange County, including the Department of Planning and Zoning. A regional agency will provide consistent and equitable zoning analysis across jagged municipal up borders. There are numerous properties that are adjacent to one another in different municipalities, each having different regulations. As an example, the McDonald’s on Sand Lake Road near Turkey Lake Road barely falls in the Orlando city limits. Orange County rejected McDonald’s development request a block away, due to traffic concerns on a road that had a very poor level of service. So, McDonald’s purchased property within the City of Orlando along the same road. The City allowed McDonald’s to build for tax base reasons. A regional Planning and Zoning department will provide fair and consistent regional development, removing political boundaries and agendas. This will provide the taxpayer, at a lower cost, with better regional development strategies that result in a better place to work and live.

Along with many other government services, the regional Department of Planning and Zoning will be under the direction of a civilian regional administrator whose sole function shall be to increase efficiency and improve customer service. Other planning departments across the country have consolidated and many more are considering consolidation. The Rochester (MN)-Olmsted Planning Department was formed in 1975 through the merger of the Olmsted County Department of Development and the Rochester Planning Department (126). The combined department provides planning and related services under the administrative direction of the Planning Administrative Services Committee (PASC), which has charge of setting the department's budget and work program within the constraints established by the County's levy for the department. The PASC is made up of representatives from the City of Rochester, Olmsted County, the smaller cities in Olmsted County, and the townships.

By forming a joint planning agency, the community created a geographically integrated planning system with a comprehensive approach to all phases of the planning and community development process. Planning can be carried out on a


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community-wide basis without regard to jurisdictional boundaries. When planning for the overall settlement pattern of a county, the local officials of the cities, townships, and the county itself have the potential to work with one planning system to create the growth management system necessary for orderly development. Not only is consolidation more cost-effective, it results in better planning.


Orange County’s planning and zoning personnel are also very expensive. The Director of Planning and Zoning in Winter Park makes $115,560, plus pension, health, and other benefits (bringing the total cost of that employee to around $150,000). In Winter Garden, the director receives $122,977 in total compensation, while the director of Ocoee’s Department of Planning and Zoning gets $157,337 in total compensation. These are very expensive salaries to carry when the demand is not there.

Since many planning budgets are combined with building departments in Orange County, it is difficult to forecast an exact savings. But overall, we believe the regionalization of planning and zoning, along with the implementation of new technologies, can reduce the cost of this public service by 30%. The total savings to the taxpayer may be $4.5 million annually. And the savings to the private sector in time and interest will be in the tens of millions of dollars annually.

CODE ENFORCEMENT

I admit to a certain bias with regards to code enforcement. I own commercial property within the City of Orlando. It may be a coincidence, but after I formed the “Coalition to Reform Orlando Government,” I received a number of code violations on my Kirkman Road shopping center. I sent my property maintenance person to deal with the issues. Some of the issues were not even on my property; but for the most part, they were listed as trash in the parking lot, weeds, and nuisance items. If you own commercial property, you know that the owner does not litter the parking lot. The lot is swept every night and by noon there is litter. If code enforcement wants to fine you, they can and will.

After a few months of addressing their concerns and trying to convince code enforcement that the uncut grass was on someone else’s property, I was told by my


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staff that the violations were addressed. What I did not know was the code fine “clock” was not turned off by the code officials. Despite the fact that no one called or complained for six months, at the end of the year, I received a code fine of $93,000. I consider myself something of an expert in what is wrong with “Code Enforcement.”

Our study found four areas of waste in Code Enforcement in Orange County: archaic enforcement procedures; duplication of services across municipal boundaries; a failure to focus on compliance, not penalties; and poor service to the taxpayer.

ARCHAIC ENFOCEMMENT PROCEDURES

It is necessary that a community have regulations and that these be complied with. Most communities have code enforcement departments that process complaints the same way they did 60 years ago. The typical situation starts with an infraction and the code enforcement officer visiting the property. The code enforcement officer returns to the office, writes up a report, and a certified letter is sent to the property owner. The property owner is summoned to municipal court to answer the charges or prove that they are in compliance. In most cases, this involves a small business owner taking an entire day off of work. The total annual loss of revenue for small business, related to following this protocol, is in the millions, even in small communities.

We need to modernize code enforcement to take advantage of existing technology, and make the system more convenient for the taxpayer.


The code enforcement function of local government is repeated in most municipalities, even when the resources are not needed on a full-time basis, in many cases. The following are the governments with Code Enforcement departments and their annual budgets: Orange County: $5,078,187; Orlando: $3,144,212; Apopka: (part of building); Ocoee: $200,000; Oakland: (combined with planner), Winter Garden: $369,429; Winter Park: $300,000 (estimated, combined with building); Maitland: $34,209. We estimate the cost for code enforcement across Orange County to exceed $10 million.


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REGIONALIZATION OF CODE ENFORCEMENT IN ORANGE COUNTY

It is our recommendation that we regionalize most government services throughout Orange County, including code enforcement. Our proposal to regionalize code enforcement will enable local governments, such as Ocoee, Apopka, and Winter Garden to consolidate their code enforcement departments into one single department.

The innovations we suggest will require less manpower to achieve the same results. Having a regional Code Enforcement department will apply codes consistently and fairly, and reduce the potential for abuse by code enforcement of the business community. Other counties have already consolidated code enforcement departments, including Broome County, New York and the cities within it.

FAILURE TO FOCUS ON COMPLAINCE, NOT PENALTIES

Since government does not have its own source of income, it is natural for government employees to focus on revenue. But code enforcement‘s mission is to protect the public and our quality of life. Our code enforcement personnel should solely be interested in helping taxpayers comply with our code.

By using technology and “smart systems,” code enforcement can become part of a solution, instead of a regulatory bureaucracy. Our code officials can create a list of vendors to help taxpayers meet compliance standards and turn the agency into a service, instead of a police agency.

POOR SERVICE TO THE TAXPAYER

Let’s compare the current archaic system to our proposal of an improved code enforcement method. We propose the government maintain a list of e-mail addresses for all property owners, along with their property tax records. When visiting the property with an infraction, the code enforcement officer would take a digital picture of the infraction and e-mail the photo to the property owner, along with the description of the code infraction. The code officer will supply a link to the section of the code that has been violated, along with information to help the taxpayer come into compliance with the code. The property owner must, within 30 days, send a return e-mail to the code enforcement officer with a photo of the property being in compliance. The code


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officer’s calendar will automatically resend another e-mail to the property owner, if the property is not in compliance within the 30 days.

The taxpayer no longer needs to spend a day in a code hearing and the compliance results are the same. In the past the convenience to the taxpayer has been secondary to the way government operates. The future of government will revolve around the taxpayer, even when it comes to code infractions.


By consolidating code enforcement on a regional basis and through implementing innovations, we can reduce costs by 20% and increase customer service at the same time. We estimate the savings from code enforcement reforms to be approximately $2.5 million per year for the existing budgets across Orange County. We estimate the time savings to small business and homeowners to be in the tens of millions of dollars annually.

CONCLUSION

There are hundreds of small business owners with the same story I told in this chapter. Code enforcement, as it currently exists, does not focus on serving the public. The service should be a benefit to the taxpayer, not a source of revenue for government.

In the big picture, we must realize that these complex and inefficient agencies are harmful to our economy. When a project takes years to permit, no jobs are being created (outside of government jobs). When a small business owner is sitting in a code enforcement hearing, he or she is not out creating new jobs. All government departments should shed red tape and focus on the greater good of our local economy.

The key to all government reform is to design the system around the taxpayer. Our government is now a complex maze designed to ensure job security for government workers. It is planned obsolescence, and we all know how that worked out for American car companies.


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CHAPTER 19

Getting more from Economic Development, the Convention Center and the Visitors Bureau

When I am done sharing with you this first story, ask yourself if economic development in Orlando is meant to create jobs in low income areas or in government. If you log onto the City of Orlando website, you will find the following “Incentive Programs:” Arts and Cultural Assistance Program; Business Assistance Program, Business Assistance Team; Orlando Economic Enhancement District; Economic Development Transportation Fund; Minority Women Entrepreneur Business Assistance Program; Neighborhood Commercial District Revitalization Program; Not for Profit Impact Fee Assistance Program; Orlando Enterprise Zone Program; Historically Underutilized Business Zone; Urban Job Tax Credit Program (127) . More money goes towards administration of these programs than to the supposed beneficiaries of the programs (it should be noted that this list does not include programs offered by Orange County, the State of Florida, or the U.S. government). Currently, our economic development programs create government jobs, not private sector jobs. I have a simple idea that does not cost the taxpayer any money.

The best and most efficient way to encourage employment in low income areas is simply to lower real estate taxes. Real estate taxes make up a large percentage of occupancy costs for businesses located in those areas. It is a myth that the taxes are paid by rich people, they are passed on to the tenants in commercial properties. High taxes put downward pressure on wages, as well. It should not matter if the employer in a low income area is white, black, Asian or Hispanic. The important result is that we bring jobs to low income areas and give people a reason to become productive members of society. High taxes are an obstacle to jobs. This innovation will also reduce the rent on low income apartments, as well, thereby allowing low income residents to spend more of their money on food and other essentials.


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Our study found three areas of waste in economic development in Orange County and the thirteen cities within it: duplication of services across municipal boundaries; waste, inefficiency, and poor rate of return on taxpayer funds; and a failure to use private sector resources.


The economic development function of local government is repeated in many municipalities. We estimated the cost of economic development in Orange County to exceed $50 million.

The benefits of economic development have come under question in the recent information age. Promoting a region has become popular for governments across the nation, but there is little evidence that economic development departments spur economic activity. Economic activity generally surges during strong economies and falls in periods of weak economic growth. It is likely that, as of the writing of this report, our return on economic development in Orange County is zero, because our economy is contracting. In fact, the Florida economy has been contracting since 2006, in large part due to higher tax burdens.

REGIONALIZATION OF ECONOMIC DEVELOPMENT IN ORANGE COUNTY

It is our recommendation that economic development be regionalized. Individual communities no longer need a separate department, because most of the data needed by potential employers is widely available on the internet. The regional Economic Commission promoting central Florida will adequately serve our community. Each community should rely on their own Chamber of Commerce, realtors, and business community to answer questions from potential employers.

We suggest the elimination of economic development departments in small communities, and transferring the management of information to a regional authority. Specific promotion of a region should be done by non-profits and other community groups. The State of Connecticut is considering a bill that will consolidate all of the state’s economic development agencies into one. “The best way to recover from this national recession is to literally work our way out,” Connecticut Governor Rell said, “while at the same time making state government smaller and more efficient and more


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affordable for taxpayers. My proposal will give businesses a single point of contact for assistance and continue incentives for job creation (128).” We agree and think this should be done on a county level even more so.

WASTE, INEFFICIENCY, AND POOR RATE OF RETURN ON TAXPAYER FUNDS

It must first be understood that higher tax burdens weaken our economy and impose a barrier to economic development. It is therefore critical to keep spending on economic development to a minimum and to ensure a good return on taxpayer funds. At this time, most of the money spent on economic development goes to government salaries and benefits. We propose that a greater percentage of economic development funds be used in the community.

The City of Orlando has a budget of roughly $32 million for economic development. Of that, $468,000 is paid to the Orlando Metro Economic Development Commission (129). The Director of Economic Development makes $143,145 in salary plus another 30% in benefits. There are 160 government employees under his direction (which includes permitting) and the average salary with benefits is near $100,000 (ibid). None of this overhead actually makes it into the community.

If our communities desire to help development in low income areas, we suggest a more efficient method. Currently, we have a dozen programs that give grants to various minority groups. We feel employment in low income areas should be color-blind. It is our recommendation that the real estate taxes in low income areas should be reduced in exchange for improvements to commercial facilities and tenant improvements. Instead of $16 million in overhead, we should invest $16 million in our community to increase employment.

PROPERTY IMPROVEMENT CREDITS

One way to provide incentive to employ people in low income areas is to reduce taxes in those areas. Another way is to give a property improvement credit, where feasible. An example might be a new restaurant owner who wants to open in a low income area. The landlord, or property owner, often gives the new tenant an “Improvement Allowance.” Let’s assume this allowance is $25,000. The local


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government should provide a tax credit of half of this amount to encourage jobs in low income areas. The money goes into the building, which means if the tenant should fail, another tenant can use those improvements in the future.

The same credit can be made available to property owners for exterior improvements, as well. A property owner who renovates the exterior of a property in an Enterprise Zone should be entitled to a tax credit, or reduction in property taxes, as a reward for investing in these low income areas. This will encourage new business and jobs in those areas.

A property tax credit is one of the most efficient ways to encourage jobs in low income areas. Right now, most of the taxpayer money for economic development, especially in low income areas, is spent on administration, not incentives. A broad based tax credit policy also eliminates favoritism and corruption in the allocation of taxpayer funds.


The other method to achieve better taxpayer service and lower government overhead is to outsource or privatize certain government enterprises. Our local governments often duplicate the efforts to attract business currently being done by the Chambers of Commerce and other non-profits, like the Florida Association of Realtors. There are many groups actively promoting our region; therefore, we have suggested that local government leaders seeking economic development in the internet age avoid the rampant duplication of effort by simply outsourcing or privatizing area business promotion wherever possible.

CORPORATE WELFARE

We must remember that one man’s tax break is another man’s tax increase. While it is noble to encourage companies to bring high paying jobs to our area, we do not want to bring them at the expense of existing jobs. Before any tax breaks are given, we recommend the Government Efficiency Commission perform a review to determine if the breaks will add to the tax burden of existing employers. If that is the case, we should reject the tax breaks, because it will result in job losses to our existing employers.


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We must also understand that giving money to companies to locate in Florida (what many call “corporate welfare”) does not necessarily mean they will be here long-term. Quite often, when the stimulus stops, the companies relocate to areas that offer more incentives. A stable economy has employers who can sustain themselves without government stimulus.

INNOVATION

We also suggest the implementation of street fairs in low income areas. Our plan is to have a non-profit agency assist minority entrepreneurs by purchasing surplus merchandise in bulk and making the products available to the merchants on credit. These entrepreneurs will be given tables and booths at the street fairs, where they will sell their goods to the public.

Our economic development program should be geared towards teaching minorities how to open a small business, starting with a simple booth at a street fair, and hopefully growing that business into a retail store.

CONVENTION CENTER AND VISITORS BUREAU

Our study found four major areas of concern with the Convention Center and Visitors Bureau in Orange County: duplication of efforts and research among like agencies; lack of transparency in the use of public funds; a failure to use best practices for optimal efficiency; and a failure to consider alternate uses of tourist tax funds. The following is an impartial and critical analysis of the Orange County Convention Center.

The Orange County Convention Center is arguably the public enterprise with the best return on the taxpayer’s investment. Each year, hundreds of thousands of people come from other states to attend conventions and stay in our hotels, eat in our restaurants and enjoy our recreational facilities. While the enterprise is worthy, every public asset should be critically examined to ensure maximum efficiency and achieve the lowest possible burden on the taxpayer. While “all funding for operational and expansion costs are generated by a tourism and resort tax, not local tax dollars,” according to the County, those funds are still public assets and must be used with discretion and efficiency.


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The Orange County Convention Center has a budget for 2009 of $366,844,866. Of that, $127 million goes to reserves and $76 million was for debt service. Operations personnel costs are $25.25 million, information services cost $1.699 million, while transportation and security costs are $5.1 million (130). What question should the concerned taxpayer be asking? “Is our current way of managing the Convention Center the most cost-effective and are they producing the highest benefit to our community?” Given our experience with all departments, we feel that the Orlando-Orange County Convention Center and Visitors Bureau can benefit from greater efficiency and competition.

DUPLICATION OF EFFORTS AND RESEARCH AMONG LIKE AGENCIES

The Orlando-Orange County Convention & Visitors Bureau is set to receive about $30 million in taxpayer subsidies this year. President and CEO Gary Sain makes a $307,000 base salary (ibid). The functions of the Metro Orlando Economic Development Commission, the Convention Center and Visitors Bureau, and Florida Citrus Sports are similar and often overlap. Florida Citrus Sports is the athletic equivalent of the Convention Bureau. Many people in central Florida are not aware that these are full-time organizations funded by the taxpayer.

It is our recommendation that all regional economic development departments, athletic boards and the convention center and visitor bureaus be consolidated into one agency. By consolidating these agencies, we will eliminate duplicate services and research and allow more funds to be spent on advertising and media. The goal of the “Economic Development and Tourism Council,” as we call it, will be to spend our promotion funds most effectively. Currently, most of our funds go to administration and not to advertising and promotions.

We also recommend that this agency serve under the direction of a non-profit board of directors comprised of private sector citizens with experience in all areas of business. The board will require complete transparency and ensure the allocated taxpayer funds are used efficiency and to the maximum benefit of the community.


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INABILITY TO ATTRACT AND MAINTAIN CONVENTION BUSINESS

The mission of the Orlando-Orange County Convention Center is to attract conventions and to bring people to Orlando and stimulate our economy. For many years, they were highly successful; but recently, the Convention Center has begun to lose business to other cities. In part, this is because of the increased supply of convention center space elsewhere, but some of the blame has to be placed on policy decisions.

One of our board members commented that the “Builders Show” moved to Las Vegas because of the inefficient layout in Orlando and the logistics of getting people to the show. While Las Vegas did invest hundreds of millions on a rail system, our members have attended conventions in Las Vegas and logistics there are equally as bad. And yes, crime in Las Vegas is worse.

Our assessment of why Orlando is losing business to Las Vegas and other cities points to both the entertainment options Las Vegas offers and pricing. Orlando will never compete with Las Vegas in terms of nighttime entertainment, but we can compete with pricing. Real estate taxes have more than doubled on our hoteliers and restaurants, making Orlando an expensive place to do business. Lower taxes will result in lower prices, and therefore more tourism.

If the Convention Center followed the example of Harris Rosen, who lowered the price of his class “A” hotel rooms to $49, the Convention Center would be full each week. Aggressive pricing sells in every market. In order to accomplish aggressive pricing, two things need to happen. First, the Convention Center needs to be operating as efficiently as possible to keep costs down. No more $100,000 parties and golden parachutes. Follow best practices from around the globe to find the peak level of efficiency. Second, hoteliers need to aggressively package rooms at a discount, and offer these to the conference attendees.

Probably more than any specific entity outside of Disney, the occupancy level of the Convention Center drives our local economy. A more aggressive approach to fill the Convention Center will help everyone in central Florida.


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LACK OF TRANSPARENCY IN THE USE OF PUBLIC FUNDS

As with every taxpayer funded agency, we believe that all information should be posted online and readily available for the public to review. That includes budgets, the salaries and benefits of all employees, and the contracts for all vendors. Maximum disclosure ensures minimal corruption. Orange County Commissioner Mildred Fernandez recently addressed this point succinctly, when she commented, "Is it too much to ask that when someone gets tax dollars that its business be conducted openly (131)?”

We have recommended that a “Transparency Committee” be formed by the Orange County Commission, and all departments shall be subject to the recommendations of that committee.

FAILURE TO USE BEST PRACTICES FOR OPTIMAL EFFICIENCY

Many communities are getting greater efficiency from tax dollars by using competitive forces to bring the cost of government down. These include managed competitions, where the existing government staff bid against the private sector for the management of assets and departments. Some governments have even completely privatized enterprise functions of government.

According to the Houston Chronicle, officials in Houston are considering the possibility of consolidating and privatizing the city's marketing functions. A committee set up by Mayor Bill White is strongly considering a move that would partially privatize the Greater Houston Convention and Visitors Bureau, a city department with a $60 million budget (132).

Orange County has a variety of economic development agencies, as well as convention and tourism bureaus, and we recommend the Committee on Government Efficiency look at how to consolidate these separate agencies.

FAILURE TO CONSIDER ALTERNATE USES OF TOURIST TAX REVENUE

While county statute limits the use of tourist tax revenue to certain items, it is possible to amend the law to allow tourist tax be used for public safety and


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transportation. We do not proposed eliminating or hampering the marketing effort of central Florida; but we believe that public safety and transportation goes hand in hand with tourism. For example, instead of using those funds to build a sports arena, the area may be better served with a monorail giving tourists better access to theme parks.

The business community should have a say in how the tourist tax is used, as well. They know how to attract customers. Diverting tourist taxes to venues that are not proven to attract tourist may result in a weaker economy.


We believe the potential cost savings by managed competition and merging duplicative agencies can save the taxpayer at least $5 million of the Convention Center and Visitors Bureau budget. More importantly, a revised approach and lower cost structure can add tens of millions of dollars into our local economy.

As I write this section, unemployment in central Florida is 10.8%. If you factor in people who took menial jobs, people who left Florida, and undocumented workers who cannot claim unemployment, the real rate of unemployment in Florida might be 20%. Clearly, the tens of millions spent on economic development are not having a positive effect at this time.

Our economic development agencies have massive budgets, and government workers make several times what the taxpayers earn. And they are not held accountable for their performance. By consolidating agencies, we will reduce costs, eliminate duplication of effort, and achieve better results for the taxpayer. You deserve it.


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CHAPTER 20

Improving Environmental Services and Engineering

Most citizens do not care who picks up their trash. As long as it gets done, they are happy. But garbage collection is a major cost to all local governments, and improving efficiency in environmental services will allow more funds to go to the core functions of government.

Our study found two areas of waste in Environmental Services in Orange County and the thirteen cities within it: duplication of services across municipal boundaries, and a failure to use private sector resources.


There are two governments with city owned solid waste departments in Orange County: Orlando and Apopka. All other communities outsource garbage collection to a private contractor. Many communities charge a franchise fee or tax on garbage service that is a significant source of revenue for government. As property tax collections decrease, government has a tendency to increase these fees as a form of hidden tax.

We estimate the cost for Environmental Services across Orange County to exceed $100 million. It is our recommendation that waste services and garbage collection be provided on a county wide basis to avoid the need for separate departments.


According to Reason.org, private garbage service costs 29 to 37 percent less than publically run garbage service (133). Our experience with garbage service shows


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the City of Orlando charges $589.59 a month for an 8 yard dumpster picked up three times a week while a private vendor charges $331.76 (134). In addition to lower cost to the consumer, private vendors have better access to innovation and technology, and the private sector assumes environmental liability.

Our proposal goes further than any other we have found in the nation. We propose to regionalize garbage services first, and then submit them to competitive bidding. This plan is the most effective way to improve services and lower costs.

REGIONALIZATION OF ENVIRONMENTAL SERVICES IN ORANGE COUNTY

Currently there are 14 garbage service areas in Orange County. Several are publically operated, but all service a fragmented service area. Regardless of whom picks up the garbage, fragmented service areas are inefficient and increase costs. They require more miles to be driven by collection vehicles, increase the costs, and they increase pollution.

Our recommendation is to bid separate contracts for each of the four Orange County zones we have suggested for other services. A vendor can then ensure greater efficiency in collections, the contracts will be larger and thus attract more bids, and the cost to the taxpayer will be significantly less.

Many municipalities across the country already operate on a regional basis, and more are converting to a regional service delivery method. From New Jersey to Connecticut to Pennsylvania, cities and counties are exploring ways to gain better economies of scale in garbage collection.


We estimate that by regionalizing service areas and bidding out all solid waste services, we can save the taxpayer 20% of garbage collection costs. If we remove the franchisee fees and taxes, we can save another 10%, for a total savings of $30 million per year.


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Government should not charge a tax or franchisee fee for garbage collection. It is a significant cost to small business and lower income taxpayers, and it is detrimental to our economy.

ENGINEERING REPORT

As I write this section, Orange County taxpayers spend some $50,000 per day on salaries for public engineering employees (135). This, despite the fact that no new roads have been built in Orange County in the last two years, and most capital improvement plans have been put on hold.

Our study found two areas of waste in engineering departments in Orange County: duplication of services across municipal boundaries, and a failure to use private sector resources.


Engineering services are a function of local government that are repeated in most municipalities, even when the resources are not needed on a full-time basis, in many cases. The following are the governments with city run engineering departments and their annual budgets: Orange County: $10,981,469; Orlando: $ 1,790,614; Apopka: $439,900; Ocoee: $757,690; Winter Garden: $753,760; Winter Park: $845,280.

We estimate the cost for engineering departments in Orange County to exceed $17 million, not including the millions paid to outside vendors. This is a low estimate, because much of the supervisory costs are not included in these budgets, nor are the facility costs. Due to the current economic conditions, virtually no capital projects are being planned for the near term. Currently, central Florida is experiencing a population decline, so our growth forecasts and road networks are overestimated.

REGIONALIZATION OF ENGINEERING IN ORANGE COUNTY

It is our recommendation that we regionalize most government services throughout Orange County, including engineering. Our proposal to regionalize


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engineering will enable local governments, such as Ocoee, Apopka, and Winter Garden, to consolidate their engineering departments into one.

In an average year, a regional department of engineering can serve the public adequately. In boom times, which we do not expect for quite some time, the additional capacity can be outsourced to the private sector to avoid carrying additional overhead during low and moderate periods of activity.

Along with many other government services, the proposed regional Engineering Department will be under the direction of a civilian regional administrator, whose sole function shall be to increase efficiency and improve customer service. Other communities have begun to consolidate engineering departments. Some in Maryland have consolidated the department into Community Development, while others have regionalized engineering services and merged departments. Memphis, Tennessee and Shelby County are planning to merge their engineering departments to save the taxpayers’ money (136).


The other method to achieve better taxpayer service and lower government overhead is to outsource or privatize certain government enterprises. With the exception of a small staff to coordinate project requests and implementation, all engineering services can be performed by the private sector more efficiently.

Private firms, like PBS&J, already perform engineering services for communities and the State of Florida. By outsourcing engineering, communities do not need to carry the overhead when projects are put on hold or during downturns in the economy.

PBS&J's resources, and other similar firms, can provide engineering staff outsourcing to assist local agencies with increasing workload. Their staff can provide capital improvement program management, contract city engineering services, project management, plan checking services, and municipal engineering design.

It is our recommendation that each zone has a small staff to coordinate engineering services and projects that are outsourced to the private sector on a contract basis. There is no need to carry overhead during slow times; and even in good times, the private sector is more cost-effective, as shown in the following report.


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REPORT: PRIVATE DESIGN SAVES MILLIONS

According to the Polytechnic Institute of New York University, using private-sector engineers on public projects could save state taxpayers millions of dollars each year.

A report released by the Polytechnic Institute of New York University states that New York State can save money by using private sector engineers for the design of public projects. Compared to in-house design costs, outsourced design costs were found to be at least 14% lower (137).

The results were formulated using comparative data for in-house engineers versus private sector engineers on: direct salaries adjusted for hours of work per week; fringe benefits including medical insurance, pension plans, survivor’s benefits, workers compensation, unemployment, social security insurance, and overhead.


Based on average demand, we estimate the savings for engineering services in Orange County to range between 20-40%. Outsourcing alone is half of that savings, but the real savings comes in not carrying the overhead when the demand for services is low (like it is currently). This reform can save the taxpayer as much as $4.1 million annually and actually increase the speed at which projects are designed and built, through incentives and penalties the private sector faces.

At the very moment I write this sentence, there are hundreds, perhaps thousands of government workers in Orange County watching the clock. Orange County has not built a new road in two years. Construction is down 80%, and we still have 10,385 people working for Orange County alone. It is not the role of the taxpayer to guarantee lifetime employment to government workers. Our small business economy cannot afford it, and it should be the job of elected officials to ensure that every tax dollar is spent wisely. That is not happening now, as tax dollars are being wasted in every department in local government, including in engineering.


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CHAPTER 21

Analyzing Transportation and Utilities

The fact is that all governments need something to do. Part of the reason we have so many government programs is simply to justify the existence of so much government, and to keep the flow of revenue flowing to government. These programs are the business lines of government, and no program is unworthy in the eyes of government. If your business could collect revenue and assign the expenses to someone else, you would expand rapidly, as well. Nowhere is this more evident than in the area of transportation here in Florida. Below is an article I wrote on the $1.25 billion commuter rail project currently planned for central Florida. Commuter rail has been attempted at least three times in the past two decades, and each time, the taxpayer has voted against it. But our government keeps selling it.

THE TRUTH ABOUT CENTRAL FLORIDA COMMUTER RAIL

The general public has received details about the proposed commuter rail project primarily from two sources: our government and the media. Both groups are firmly supportive of commuter rail and present what can be considered the “best argument” for commuter rail. As part of my study on greater government efficiency (www.TaxpayerBudgetReviewBoard .org), we looked at transportation. Please know that I am not against mass transit. I simply want to ensure that the public is getting a wide array of facts and the taxpayer money is well spent. Commuter rail is a 99-year commitment with billions of local taxes at stake.

I have made available on our website, under “Commuter Rail,” the studies that I reference in this article. The most important report is the November 2007 report by the Federal Transportation Agency, who must approve the funding for commuter rail. Under “Making the Case,” the government agency in charge of rating our project gave our case a “LOW” rating, because “the project shows no justification why a


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significant investment in rail is necessary in a corridor when existing bus service is ’limited’ (138).” What the federal government is telling us is that ridership will be low, otherwise bus service would already be at capacity. They are telling us the $1.2 billion we are considering spending on commuter rail is not a good investment. A similar rating for the Dulles Corridor Metrorail Project “rendered it ineligible,” according to a January 24, 2008 letter from the U.S. Department of Transportation (ibid).

The cost of the commuter rail project is changing daily and the true cost cannot be determined, because the cost of the debt to finance the project is unknown. When the project was initially proposed, debt was 5% and plentiful. Now, debt is scarce and the State of Florida is looking at a downgrade in its credit rating. It may not be able to raise the funds for the project; and if it can, it will cost much more than originally planned. Here is our current projection of costs:

Capital Costs: $605,000,000 Station Construction and other Compensation to CSX*: $150,000,000 Purchase 61 miles of track $ 23,000,000 Relocate Taft Rail Yard to W. Haven $198,000,000 Construction of CSX S-line projects $ 52,000,000 A-line Rand Yard Construction projects

$214,000,000 Construct 5 grade crossing $9,000,000 Toward infrastructure for CSX’s ILC

TOTAL: $1.25 Billion Dollars

The agreement proposes the local governments to pay 25%, or $151,250,000, the State of Florida pays 25% for $151,250,000, and the Federal grant application is for 50%, or $302,500,000 (139). There is no guarantee of federal funds, or any limitations on cost. It is routine for rail projects to be 25%, 50%, and even 100% over budget. And small local governments have a virtually unlimited exposure to the cost overruns. Local funding partners (the State of Florida, Counties and Orlando) will have to pay 50% of “what FTA does not pay.” That means another $150 million, if FTA disapproves a federal grant, plus any cost increases.

The number one reason people support commuter rail is they believe it will reduce traffic congestion. But not even the proponents of commuter rail will suggest


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congestion on I-4 will be reduced. And the traffic in small cities along the route will be forever snarled because of train crossings and stops. In busy Winter Park, a train will stop traffic every 15 minutes in rush hour. In Minneapolis, rail was added parallel to Hiawatha Avenue and rail supporters said it would “reduce traffic a significant degree.” Yet, when the line opened in 2004, drivers noticed a huge increase in traffic congestion. Traffic flows were interrupted and all attempts to mitigate congestion failed. Officials admitted traffic in Hiawatha will forever be impaired. What is worse is that documents uncovered revealed the State had been aware of the future congestion problem, but ignored it because they “wanted to give an advantage to transit (140).” It is likely that vehicle traffic in every town along the rail route will increase and congestion will get worse. Certainly that will be the case when a rail train hits an automobile. In Houston, where they built a 7.5 mile rail section between downtown and the sports stadium, there were 67 rail/auto accidents in the first year, more than one a week (ibid).

It is clear to me after conducting my own research that commuter rail is not a good use of taxpayer funds. It does not reduce traffic, pollution (the trains are 1970s diesel technology), or help the average citizen. Writing in Transport Reviews, April, 2008, Jonathan Richmond of Harvard University has opined, “In no case has new rail service been shown to have a noticeable impact upon highway congestion or air quality (141).” And government projects do not create long-term jobs; they create long-term liabilities.

The financial burden of commuter rail will only cause more businesses to fail, increase traffic, and cut the flow of revenue to important government functions like education.”

ALTERNATIVES TO SUN RAIL

In my study of commuter rail, I found even the proponents of rail did not like commuter rail. Commuter rail uses diesel trains that take two miles to start and stop. It is a far cry from the slick trains promoters visited in Charlotte. But central Florida still has transportation problems; so, now what?

The answer, in my opinion, is an independent transportation task force to study the problem and potential solutions. Not a group of government employees influenced by special interests; but a group of taxpayers who have a stake in the cost and the benefits.


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The group needs all voices, including those who lobbied against commuter rail--because they bring facts to the table that are needed to make an educated decision. Below is an article I wrote the day after Sun Rail (commuter rail) was voted down.

“While some seek to revive Sun Rail, we believe there are legitimate concerns about Sun Rail, and alternatives should be considered. Here are the major concerns expressed by citizens:

1. Sun Rail does not have a dedicated funding source. Once the federal money stops coming in, Sun Rail may cost local taxpayers as much as $100 million a year to operate. Because of Save Our Homes, that burden will fall on small businesses who are already struggling. Any transit system needs to have a dedicated funding source, preferably approved by the voters.

2. Sun Rail will create more traffic than it alleviates. Sun Rail claims it will have 3,200 riders a day, some which already take buses or carpool. The reduction in car traffic will be offset by additional traffic from road closures when the train passes through each community. Time saved on I-4 will be lost getting to and from I-4. Any transit system should be a net gain to commuters, in terms of travel time.

3. Sun Rail is not a convenient route. Most people are not aware of the circuitous route Sun Rail will take. The existing train tracks wind through Seminole and Orange County like a piece of spaghetti. Travel from Deltona to Orlando will take longer by train (with stops) than by car, making the system ineffective. Any transit system should see a net gain in travel time by users.

4. Sun Rail is old technology. The 1970s diesel trains take two miles to start and stop, and are not good for the environment. Any transit system should be environmentally friendly and have the latest technology.

5. Sun Rail will move freight traffic through our community during sleeping hours. Most people think the freight traffic that comes during the day will now go through Lakeland. But freight needs to get to Orlando, and that freight will arrive after midnight on whistle blowing trains coming through our neighborhoods. Any transit system should not lower the quality of life for our residents.

6. Sun Rail has unlimited liability with CSX. Any transit system should avoid additional taxpayer liability for freight traffic.


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The key to a viable solution is to address the legitimate concerns of our citizens. The following is an alternate mass transit plan that solves the problems with Sun Rail. My solution has the name of Mon-O-Rail, because of the design of the system.

1. Dedicated funding source. The funding for the system and operation will come from a voter approved gas tax in Orange and Seminole County. Not only will this provide the ongoing operational revenue, it will allow the voters a chance to approve the system.

2. Traffic Reduction. Mon-O-Rail will be a raised system, like the Disney monorail, that will not require any road crossings. It will have net reduction in traffic.

3. Convenient route. The initial phase of Mon-O-Rail will travel in the right of way from downtown Orlando east on I-4 to Sanford, with stops at the Florida Hospital, Maitland office center, and the Seminole Town center in Sanford. The direct route will be convenient, quick, and take people to the most common work destinations.

4. Mon-O-Rail will be the latest technology. Quiet, clean electric trains are far better than rumbling diesel trains.

5. Mon-O-Rail will not displace any freight traffic into our communities at night.

6. Mon-O-Rail does not require a liability agreement with CSX and will not require a $660 million payment to CSX for use of the existing freight lines.

7. Along with the Mon-O-Rail system, the dedicated funding source can and will be used for right of way acquisition along I-4 and to reduce the bottlenecks that create traffic congestion.

The reason Sun Rail was proposed was because it was a quick and easy solution. The better solution is usually a little more difficult, but we will live with the system for decades. We suggest that a citizen committee be formed to explore the benefits of this alternative transportation solution before we commit billions of taxpayer dollars on rail projects. One of those solutions might be an express bus system.

EXPRESS BUS SYSTEM

Curitiba, the capital of the State of Parana in southern Brazil, has one of the best-planned, best-implemented and most effectively integrated urban planning and transportation systems in the developing world. The Curitiba approach has had a major


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impact in the efficient and effective management of the growth of a very dynamic, rapidly developing major urbanized area. The bus system is the most important mode of passenger transportation, carrying 70 percent of weekday trips in 1989 (142). Although Curitiba has more cars per capita than any Brazilian city, except remote Brasilia, per capita fuel consumption is 25 percent lower than in comparable Brazilian cities; and Curitiba has one of the lowest levels of ambient air pollution in the nation.

In 1966, Curitiba developed a master plan for the city that includes a bus transit network comprised of several different types of bus service. These include:

• "Express Service"—263 standard, articulated, and double-articulated buses carrying 600,000 passengers per day on approximately 50 miles of dedicated bus ways, operating in five directions to and from the CBD.

• "Feeding Service"—336 buses carrying 350,000 passengers per day on approximately 185 route miles on lines designed to feed passengers to the terminals for the Express buses.

• "Interdistrict Service"—125 buses carrying 200,000 passengers per day on approximately 115 route miles, interconnecting the terminalsthat do not enter the CBD.

• "Direct Service"—161 buses carrying 200,000 passengers per day on approximately 155 route miles that provide limited/express service. This is a faster transportation option for specific trips for which there is sufficient demand to justify the service.

• "Conventional Service"—335 buses carrying 250,000 passengers per day connecting the neighborhoods with the CBD.

• "Special Assistance Service"—28 specially equipped minibuses offering free service for physically and mentally challenged riders

• "Park Service"—buses that operate on Sundays and holidays, using the weekday fleet.

• "Executive Service"—downtown circulator and tourist buses.

• "Circular Service"—15 buses carrying 5,000 passengers per day serving the downtown Central Ring area, connecting to Direct and Express buses and stations.

Each type of service is differentiated by different color schemes (red for Express, orange for Feeder, etc.), which allows riders to easily avoid boarding errors.


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The first four services, Express, Feeding, Interdistrict, and Direct, are the products of the integrated transit plan (ITP). These total approximately 235 routes on 500 route miles serving approximately 90 percent of the urbanized area population, generating approximately 1.8 million unlinked (1.2 million linked) trips per day.

The Express portion of the bus system was, in part, designed to operate much like a subway on rubber tires. Know as "Ligherino" ("Lite"), it was specifically conceived to operate in a fast, comfortable, and efficient manner to serve the populace of the entire area at the same fare as the rest of the bus network. Stops were limited for this high-speed, long-distance travel component of the system, with an average distance between major terminal/transfer points of approximately two kilometers and guideway stops approximately every half kilometer. The 88 Ligherino bus stops are tubes, constructed of laminated glass and steel, with fare collection turnstile entrances and exits, where approximately 10–200 riders can await their buses protected from the weather. Tube size is keyed to demand. There are no stairs on the Ligherino buses. The station platform height is the same as that of the bus floor, which, together with fare payment when entering the station, increases boarding/alighting speed by a factor of approximately four.

The Ligherino buses travel on dedicated rights of way. The North/South Ligherino line carries approximately 15,000 passengers per hour, at peak, in the peak direction, a figure comparable to that of the Rio de Janeiro Metro—and well in excess of the maximum capacity of the Los Angeles Red Line outside of the CBD.

Curitiba also uses double-articulated buses on its most heavily utilized line, the Boqueron-Central Ring Line. Approximately 80 feet long with two flex hinges and five doors, the maximum vehicle load is 270—significantly more than a light rail car. Nicknamed the "Surface Metro," these buses allow daily ridership as high as 130,000 passengers per line—many times the 40,000/day ridership of the Blue Line, the most heavily utilized U.S. light rail line, and more than many heavy rail lines.

The cost of the entire Ligherino system was $45 million—approximately 20 percent of the estimated cost of a single electric light rail line. A subway system was estimated to cost $60-70 million per kilometer, while the cost of express bus guide ways was $200,000–$700,000 per kilometer (ibid).

There are mass transit solutions out there; but before we achieve them, we must give up the romantic and expensive notion that rail transit is the answer to our


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problems. The inflexibility of rail and the expense are leading our mass transit down a dead-end street.

THE END GAME OF URBAN PLANNERS

I attended an Orlando conference in March of 2009 entitled “Strategies for Sustainable Growth” to see what our elected officials and city planners have in store for our future. I gathered maps and facts on the ambitions of our local government and planners. To this group, commuter rail “is just the beginning.”

In addition to the $1.25 billion commuter rail project (that I promise will cost $2 billion), they are proposing future rail projects called: I-Drive circulator; East-West circulator; UCF circulator; Innovation Way circulator; Airport-Convention Center circulator; South Orange-North Osceola circulator, US 192 circulator and the Light Rail Transit North Expansion Area. My rough estimate of the cost of these additional rail lines is $10 billion.

I sat at a table for 30 minutes and listened to the plans. Some objections were made, such as “electric cars might negate the need for rail” and “no one walks in the Florida heat;” but the moderator suggested those might not go over well in “this crowd.” You should expect an article stating “community leaders got together and planned our future,” when in reality this is a small group of people trying to plan other people’s lives. The 100-car parking lot was full, so I had to park in overflow parking. There was a single bicycle in the rack, yet these “leaders” want to determine how future generations of Floridians should live.

I wanted to address the crowd of government planners and elected officials (including Mayoral candidate Bill Segal) and explain to them that every dollar of rail spending will come at the expense of small business. Because of Save Our Homes, almost all future spending will fall on the backs of small businesses that are already taxed to the point of near extinction. But as I watched the events unfold, I realized there is an end game to the urban planning. These people want to convert central Florida into a densely populated city that predominantly uses mass transit, similar to many Soviet-era east European cities.

Sounds dramatic, but listen to the moderator for this group. Linda Chapin is a former County Commissioner and now head of urban planning at the University of Central Florida. She now “thinks up ways to slow down Orlando's growth, and


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humanize it” (143). Obviously, Chapin is secure in her job, while tens of thousands are unemployed because of the lack of growth. Most Floridians are proud of their homes and their communities; but in an interview with National Geographic magazine in March, 2007, Chapin said, “Just because we’ve ruined 90 percent of everything, doesn’t mean we can’t do wonderful things with the remaining ten percent!” What Chapin means by this is she wants to force people to live in urban areas, use mass transit, and use public funds to purchase land in the suburbs to avoid “sprawl.”

I moved to central Florida because I like living in an area with modern conveniences, but with a limited population density and low crime. I moved from the most densely populated state, New Jersey, to get away from crowds and crime. But now “my” government is trying to tax small business to create an eastern European utopia. First, they will tax the “beneficiaries” of commuter rail with a transit district tax like they already do in Colorado. Next, they will tax parking lots like they already do in California. After that, they will add to the gas tax to fund more rail, and then, the final straw; our government will tax you more to live outside the city core. Seems farfetched? Florida is already charging suburbs more for impact fees.

On the following chart is the “Proposed Transit Vision for Central Florida” prepared by the publically funded Metroplan. There are two problems with this approach. First, in Europe, they did not spend billions on highways, like we have in Florida. They chose rail over roads. We cannot afford both, and we already paid for the roads. Second, there has been no vote to covert our society into an eastern European transit-based community. Most of us moved to central Florida because we like the way it is. I strongly believe that the majority of citizens living in central Florida do not agree with Linda Chapin.


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The problem with Linda Chapin and Bill Segal is they have bought into a trendy idea called New Urbanism. This far left agenda paints a rosy picture; but it ignores the costs and consequences. If Bill Segal becomes Orange County Mayor, and makes this “vision” a reality, every small business will be more likely to fail and people will still use their cars to drive to the government jobs that remain. That too, is an eastern European economic model.

LOW-COST SOLUTIONS TO TRANSPORTATION PROBLEMS

The term “intelligent transportation systems” (ITS) is a catchall phrase for a mix of infrastructure, communications, and vehicle technologies, including adaptive signal control, collision avoidance systems, route navigation systems and traveler information systems. A 2001 FDOT study estimated that nationwide ITS can reduce accidents 42 percent and travel time by 41 percent (144). Using technology to reduce accidents (which account for nearly half of all congestion) and traffic will reduce the need to build more roads.

These systems are already in use in America and around the world. The problem in most places is that urban planners and bureaucrats believe mass transit is our future, when clearly Americans have chosen the freedom of the automobile. With greener technology and electric cars on the horizon, the climate reasons to use mass transit will decrease over time (in fact, many studies show trains to be more harmful to the environment than buses).

It is time to consider that our proposed massive investment in rail transit is not a good use of scarce taxpayer resources. We can and should invest in transit; but our investment should be practical like flex busing and technology to reduce accidents and congestion.

UTILITIES

The annual budget for the Orlando Utilities Company is $763,896,000. In January 2009, OUC raised its electric fees 13.7% and water bills 8.7%; this, after OUC raised rates 6 percent the previous October (145). But these increases are not based on the cost of providing the services. The increases are really a tax increase that comes in your utility bill.


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The City of Orlando has a “Utility Services Tax.” This tax is 10% of the cost of electricity, water and natural gas sold within city limits. The tax amounted to $45,308,404 in 2008 (146). But given the build-in cost increases in government, this was not enough. The city receives 75% of the net income from the electric and water systems (up from 60% during the last budget shortfall). The prime beneficiary of the rate increase is the City of Orlando government. They will collect nearly $50 million from their share of the profits of this utility.

So, while unemployment is 10.8% in the City of Orlando and small business is laying off workers by the thousands, the City of Orlando is raising the cost of the second most expensive fixed cost to small business. I have a friend who owns a building in downtown Orlando, where he says the tenants just drop off the keys and say, “I cannot make it anymore.” In Orlando they have doubled the parking fees, raised real estate taxes by upto 39%, and increased utility fees 20%, all during a severe economic recession.

Forgive me for being cynical, but whose jobs do you think our local government is concerned about? The taxpayer? Hell no! They want to save their own jobs, regardless of the consequences to the community.

BRINGING DOWN THE COST OF UTILITIES

Taxing utilities is an extremely regressive tax. By doubling the electric bill for a person below the poverty level, you are taking food off their table. Yes, you can give them money for utilities; but that comes from somewhere, and we do not need subsidies if the utility cost is lower. High utility costs are also a burden on small business and put downward pressure on wages. As a community, we need to keep utility costs as low as possible.

The first step is to eliminate all taxes, fees, and profit-sharing on utilities. Yes, that means local governments will need to trim their budgets and not rely on the hidden utility taxes. The second step is to bring competition to the utility marketplace. We suggest that public-owned utilities be subject to a managed competition for the operation of those facilities. The contract will be for management only, and the operator will not make a profit or loss. The more efficient the operation, the lower the utility cost to the consumer.


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For privately owned utilities services, we suggest competition. Allowing utilities to compete for customers will have the same effect that competition had on phone bills. The obstacle to these reforms that would greatly benefit the consumer is your own government. Your government makes millions off of the current utility services, and they are reluctant to give up any power or resources.

If changes are not made, utility costs will continually increase to offset and cover up unfunded government pensions and healthcare costs. The taxpayer needs to be aware of this trend and be protected from rising utility taxes.


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CHAPTER 22

Perfecting Parks & Recreation and Public Libraries

One of the services Florida governments provide more of than many states is recreational activities. Florida is an outdoor state, and parks and recreation are abundant. While we applaud these services, there is still a great deal of room for efficiency and innovation in how we provide these services. The following is our analysis of parks and recreation in central Florida, and the innovations we found being practiced elsewhere.

Our study found three areas of waste in the Department of Parks and Recreation in Orange County: duplication of services across municipal boundaries; a failure to engage the non-profit community; and a failure to use private sector resources.


The parks and recreation function of local government is repeated in most municipalities, even when the resources are not needed on a full-time basis, in many cases. We estimate the cost for parks and recreation across Orange County to exceed $76 million.

REGIONALIZATION OF PARKS AND RECREATION IN ORANGE COUNTY

It is our recommendation that we regionalize most government services throughout Orange County, including parks and recreation. Our proposal to regionalize


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parks and recreation will enable local governments, such as Ocoee, Apopka, and Winter Garden, to consolidate their parks and recreation departments into one.

The new parks and recreation departments will consolidate individual departments into one department in each service zone within Orange County. Services will be more evenly provided and costs will be significantly less. Many communities are considering consolidation of parks and recreation departments, including Topeka, Kansas with Shawnee County (147).


There are many communities that run parks and recreation through the efforts of volunteer and civic organizations. The most visible and successful example is New York’s Central Park. With 843 acres and 25 million visitors a year, the Central Park Conservancy is a private, not-for-profit organization founded in 1980 that manages Central Park under a contract with the New York City Department of Parks & Recreation (148). The group has turned what was once a crime-ridden jungle into the model for urban parks worldwide.

There are dozens of non-profits and civic groups that can and are willing to help our community by volunteering to run our parks and recreation services. In central Florida alone, there are dozens of Rotary clubs. Each club can take on the management of one park or program. In moving the management of parks to volunteers, we accomplish two important tasks. First, we reduce the overhead and are able to divert resources to core missions of government. And more importantly, we are engaging members of the community who take pride in civic services. It is amazing how much experience and ability that volunteers can bring to public service. Right now, we use volunteers to do the minor tasks; but properly organized, the non-profits can likely run parks and recreation better than it currently is and at a much lower cost.


The other method to achieve better taxpayer service and lower government overhead is to outsource or privatize certain government enterprises. Three prime examples of this are the Orlando and Winter Park municipal golf courses, and the Leu Gardens banquet facility in the City of Orlando. All are run at a loss to the taxpayer. All


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can be leased to a private operator for a profit. This has been done in many cases throughout the United States, with the end result being income to the taxpayer, instead of a loss, and higher levels of customer service.

Despite being extremely popular and benefitting from 9,100 hours of volunteer service annually, Leu Gardens lost the taxpayer $1,020,543 in the last year (149). The facility can be rented to a private vendor for as much as $25,000 a month, making the benefit to the taxpayer $1,320,543 annually. The City can still own the facility, but the taxpayers can benefit from it without having to subsidize it. This type of lease is helping taxpayers save money all over the country. Communities across America are privatizing non-core functions of government. In 2000, the City of San Diego leased out its golf course to a private operator, and dozens more are considering doing the same (150).

The Winter Park golf course took in $407,622 in 2007, but lost over $100,000, not including the overhead from the parks and recreation department (ibid). If the facility was leased to a private operator, the taxpayer could expect a profit of at least $100,000 a year, instead of a loss of the same amount, by virtue of of the tendency of a private operator to run the business more efficiently than a government-run enterprise. The City of Orlando spent $9,828,700 renovating the Dubsdread Golf Course in 2007, yet the facility still needs annual taxpayer subsidies (ibid). That means the $10 million investment by the taxpayers is lost, unless the facility is sold.

The taxpayer should not have to subsidize these government enterprises continuously. By getting government out of these enterprises, we better perform our core missions of government. Clint Bolick at the Goldwater Institute (Arizona's free market think-tank) says, “At a time when state and local budget shortfalls are mounting and public officials are facing inevitable and politically painful cuts in areas like education, safety and health care spending, how policymakers could possibly continue to justify governments being in the golf business (or any other type of commercial activity, for that matter) is beyond me. Since when is cheap golf a public good that should be subsidized by taxpayers at large? Since when is operating a golf course considered a core competency of government or an inherently governmental function? There's no nuance needed here—government-run golf courses are unjustifiable under any stretch of the imagination and should be sold, spun off, or turned over to private operation, plain and simple (151).” I cannot agree more.


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Our Parks and Recreation personnel are also very expensive. The Parks and Recreation Director in the City of Orlando makes $131,518.40, and in Ocoee he makes $99,674. And these supervisors are essentially performing the same function: management of fixed assets.

We estimate that by consolidating or regionalizing the management of these services, and by outsourcing certain facilities to non-profit or profit groups, we can save 25% of the cost of parks and recreation in Orange County. The savings to the taxpayer are estimated at $19 million per year.

We can use the savings in Parks and Recreation to build improvements that were promised and postponed due to a lack of funds. An example is the Orange County Trail extension in Pine Hills where they had a ceremony years ago but no park improvements have been made.

PUBLIC LIBRARY REPORT

As the recession deepens, more people are finding the public library. While it provides a valuable service, we need to realize there is a better way to provide this public service at a lower cost to the taxpayer.

Our study found two areas of waste in public libraries in Orange County: a failure to engage the non-profit community, and a failure to use private sector resources. The following report outlines the inefficiencies and recommends reforms for improved services to our citizens.

The Orange County Library System has 15 branches throughout Orange County with 421 employees and a budget of over $41 million. Taxpayers were shocked to learn that the director of the library received a salary increase to $192,000 a year in 2009. As budgets of every government come under continuing pressure, communities across the country are looking for ways to provide services at lower costs. Public libraries are one area where many communities have changed their way of providing services.


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There are many communities that run public services through the efforts of volunteer and civic organizations. There are dozens of non-profits and civic groups that can and are willing to help our community by volunteering to run our public library services. Each charity can take on the management of one library or program. There are 100,000 senior citizens in Orange County who can help lower their taxes by volunteering to help run libraries and other services. Right now, we use volunteers to do the minor tasks, but properly organized, the non-profits can likely run libraries better at a much lower cost.


The other method to achieve better taxpayer service and lower government overhead is to outsource or privatize certain government enterprises. For example, since Riverside County, California contracted its library operations in 1997, libraries are open 34 percent longer, book purchases have doubled, and the number of library staff members has increased (152). All while costing the taxpayer less.

Since 1981, Library Systems & Services, LLC (LSSI) has partnered with communities throughout the U.S. to provide library outsourcing for new and existing libraries, as well as contract library services for Federal agencies. LSSI currently provides library management services across 14 public library systems and 64 branch operations in the U.S.

We suggest a combination of managed competition, where existing staff bid against the private sector for services, along with an increased use of volunteers to run our library system. “Taxpayers win whenever there is competition, even when the competition is won by public sector providers" said Adam B. Summers, policy analyst at Reason Foundation. "They get more accountability, better results, and lower costs."


We estimate that by managed competition and use of volunteers and other non-profit or for-profit groups, we can save 20% of the cost of public libraries in


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Orange County. That means $8 million back to the taxpayer or towards essential government services.

Public libraries and recreation are important parts of the lives of our citizens. But if we assume there is a finite amount of taxes we can extract from a local economy before we reach a point of diminishing returns, spending on these areas will take away from our core missions of public safety and education. These quality of life services need to be even more efficient than our core services.


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CHAPTER 23

Getting the most from Capital Improvement and Public Works

When looking for waste in government, we studied every department, large and small. I believe that a comprehensive approach to reforming government is the only solution. But please pay special attention to this particular area, titled capitol improvements. We spend billions annually in Florida on capitol improvements, but the spending is not vetted properly by elected officials. It is quite possible that government employees will waste a million dollars to ensure their own job security. We need to spend all taxpayer money like it is food off the taxpayers’ table, because it is.

Our study found three areas of waste in capital improvement programs in Orange County and the thirteen cities within it: a duplication of administration, the replacement of assets before the end of their useful life, and a failure to use private sector resources. The following report outlines the inefficiencies and recommends reforms for improved services to our citizens.


The following are the annual budgets of capital improvement programs in each community: Orange County: $ 382,166,185; Orlando: $94,473,358; Apopka: $2,926,000; Maitland: $4,200,000; Ocoee: $23,626,199; Winter Garden: $14,117,398; Winter Park: $6,986,999; Windermere: $97,000; Belle Isle: $1,492,656; Eatonville: $26,000; Edgewood: $30,000.

The capital improvements in Orange County range from renovation of court house facilities to upgraded computers and telecommunications equipment. The bulk of the capital improvement funds are attributable to sewer and storm water capital improvements and roadway improvements.


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We estimate the cost for capital improvements in Orange County to exceed $530 million annually. This is a low estimate, because much of the supervisory costs are not included in these budgets, nor are the facility costs. Due to the current economic conditions, fewer capital projects are being planned for the near term. Currently, central Florida is experiencing a population decline, so our growth forecasts are overestimated. We need to make adjustments to our growth forecasts and the current economic reality.

REGIONALIZATION OF CAPITAL IMPROVEMENT PLANNING IN ORANGE COUNTY

It is our recommendation that we regionalize most government services throughout Orange County, including capital improvement programs. Our proposal to regionalize capital improvement management will enable local governments, such as Ocoee, Apopka, and Winter Garden, to consolidate their capital improvement programs into one program. This will reduce administration costs and allow more resources to go toward the physical improvements.

Along with many other government services, the regional Capital Improvement Management Department will be under the direction of a civilian regional administrator, whose sole function shall be to increase efficiency and improve customer service. Miami-Dade has implemented a consolidated department for the planning and oversight of capital improvement projects. We need to point out that by regionalizing government services and reducing waste and duplication of services, there will be a reduced demand for facilities and equipment in the future. Capital improvement costs will be reduced simply by having less staff to house and provide equipment for.

REPLACEMENT OF ASSETS BEFORE THEIR USEFUL LIFE

Most anyone familiar with central Florida has seen this before: a two-lane road will be made into four lanes; and a few years later, it becomes a six-lane road. The four-lane road has a useful life of 20 years; but the road is expanded in less than five. This wastes billions of dollars in Florida each decade. We recommend a county wide “Capital Improvement Committee,” consisting of taxpayers with expertise in all


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areas of construction and engineering, to assist government in making quality decisions in spending capital improvement money.

This is especially important moving forward, as regionalization results in less duplication and equipment requirements. The Capital Improvement Committee will assist staff in determining the useful life of assets and establishing a rating system for the priority of replacements of assets. In 1992, the State of Oklahoma established a Capital Planning Commission to “advise and assist the legislature in providing capital facilities in the state (153).” Elected officials need impartial advice to make good decisions.


Based on average demand, we estimate the savings for capital improvements services to range between 20-30%. Reducing the number of departments will reduce the need for capital spending on facilities and equipment. Proper timing for replacement of capital items will also reduce capital improvement budgets. This reform can save the taxpayer as much as $100 million annually.

PUBLIC WORKS

Public works are construction or engineering projects carried out by the government for the benefit of the community. In Orange County government alone, there are eight separate divisions with over 600 employees (154). They include two engineering departments, administration (of course), construction, roads and drainage, storm water management, traffic engineering, and transportation planning (ibid). Keep in mind that Orange County has not built a new road in two years (ibid). Our study found two major areas of waste in public works departments in Orange County and the thirteen cities within it: duplication of services across municipal boundaries, and a failure to use private sector resources. Our public works departments have not evolved in five decades. It is time to take public works into the 21st century.


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The following are the governments with city run public works and their annual budgets: Orange County: $169,000,000; Orlando: $10,140,876; Apopka: $2,243,960; Maitland: $11,100,000; Ocoee: $3,200,000; Winter Garden: $1,100,000; Winter Park: $6,973,000. The communities without a specific department are Belle Isle, Oakland, Edgewood, and Windermere.

We estimate the cost for public works across Orange County to exceed $204 million. This is a low estimate, because much of the supervisory costs are not included in these budgets, nor are the facility costs.

The same basic function performed by public works is performed in most Orange County governments. The staff process requests for public improvements and maintenance, and perform repairs. Orange County’s current staffing levels accommodate one of the largest real estate booms in Florida history, and our capacity is now several times what the demand for the services are.

REGIONALIZATION OF PUBLIC WORKS IN ORANGE COUNTY

It is our recommendation that we regionalize most government services throughout Orange County, including public works. Regionalization will eliminate much of the waste and duplication of services. Our proposal to regionalize public works will enable local governments, such as Ocoee, Apopka, and Winter Garden, to consolidate their departments into one.

Each zone in Orange County will have a single public works department, thereby shrinking the number of public works departments from ten to four. The departments will work for the regional administrator, who will focus on customer service, efficiency, and innovation. The department will consist of managers and construction managers, who will take in requests for improvements, prioritize based on community input, and bid out those projects. As seen below, our government should bid out and supervise public works projects and leave the field work to the private sector.

Towns both small and large are looking to consolidate public works across America. The cities of Howard Lake, Annandale and Maple Lake, Montana determined that they can save 25% by consolidating their services together (155). Bemus Point, New York residents may soon see a change in their public works


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service, as the village seeks to consolidate its services with the Town of Ellery. According to Mayor Bryan Dahlberg, the public works consolidation is a sensible way for the village to take advantage of the benefits shared services can have for local governments (ibid).

I agree. Our government should take whatever steps it can to economize on public services. We need more common sense leaders like Mayor Dahlberg in Florida.


The other method to achieve better taxpayer service and lower government overhead is to outsource or privatize certain government enterprises. In many communities, the governments do not own service vehicles and equipment. They simply bid out all work to the private sector. This eliminates the need to buy and maintain equipment, to supervise the construction workers, and allows management to focus on the product, not the process.

We recommend bidding out public services wherever possible. Except for routine maintenance work, all projects should be competitively bid out.


Orange County’s public works departments are very expensive. We believe the regionalization of public works, along with outsourcing the work, can reduce the cost of this public service by 20% or as much as $40 million annually. And it will stimulate our economy and help contractors during lean times.

I am not being overcritical when I say that a bureaucrat will waste a million dollars of taxpayer money to save his or her $100,000 job. How else can you explain the funding of projects that no one has asked for and that the taxpayers protest against? The simple fact is that government needs to spend money on something to justify its existence. Central Florida has enough roads for another decade, given the lack of growth and the current economy.

We need to reduce overhead to accommodate the current demand, and spend our capital improvement money more wisely in the future. Every dollar wasted lowers the quality of life for our citizens.


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CHAPTER 24

Economizing on Facility and Fleet Maintenance

This sounds overly simple . . . but if we have a smaller government, we have fewer facilities and fewer vehicles. Facility and fleet maintenance has grown exponentially in Orange County, because the administration costs have risen and the overall need grows as government grows.

Our study found two areas of waste in facilities maintenance in Orange County and the thirteen cities within it: duplication of services across municipal boundaries, and a failure to use private sector resources.


The following are the governments with city run facilities maintenance departments and their annual budgets: Orange County: $44,186,855; Orlando: $7,433,420; Apopka: $599,700; Ocoee: (budgeted within each department); Winter Garden: $398,167; Winter Park: $1,918,915; Maitland: $1,194,115; Windermere: $125,757.

We estimate the cost for facilities maintenance across Orange County to exceed $56 million. This is a low estimate, because much of the supervisory costs are not included in these budgets, nor are the facility costs. The same basic function performed by facilities maintenance is performed in most Orange County governments.

REGIONALIZATION OF FACILITIES MAINTENANCE IN ORANGE COUNTY

It is our recommendation that we regionalize most government services throughout Orange County, including facilities maintenance. Along with many other government services, the regional Facilities Maintenance Department will be under the direction of a civilian regional administrator, whose sole function shall be to


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increase efficiency and improve customer service. We anticipate regionalization to result in the need for fewer facilities, which will significantly reduce the budget for facilities maintenance.

The Town of Sudbury, Massachusetts, prepared an informative report with suggestions to save money on the delivery of government services (156). Regionalizing services, including facilities maintenance, was listed as one of the ways to ensure quality services into the future.


The other method to achieve better taxpayer service and lower government overhead is to outsource or privatize certain government enterprises. For most facilities maintenance work, the contracts can be bid out and completed more cost effectively. Most small communities already outsource facilities maintenance. By using the private sector, government managers can focus their attention off the maintenance of facilities and onto the core missions of government.


With the reduction in the number of facilities and the regionalization of facility management and maintenance, we believe the cost savings will be between 20-30%. This will save the taxpayer $10 million annually.

FLEET MAINTENANCE

Most communities maintain a fleet of vehicles. By consolidating services, we can reduce the size of the fleet by as much as 20%. We also found ways to significantly reduce costs beyond fleet size reduction.

Our study found two areas of waste in fleet maintenance in Orange County: duplication of services across municipal boundaries, and a failure to use private sector resources.


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The following are the governments with city run fleet maintenance departments and their annual budgets: Orange County: $22,997,697 (a 26% increase from last year); Orlando: $28,818,582; Apopka: $768,450; Ocoee: $1,212,155; Winter Garden: $429,530; Winter Park: $1, 491,458.

We estimate the cost for fleet maintenance across Orange County to exceed $60 million. This is a low estimate, because much of the supervisory costs are not included in these budgets, nor are the facility costs.

REGIONALIZATION OF FLEET MAINTENENCE IN ORANGE COUNTY

It is our recommendation that we regionalize most government services throughout Orange County, including fleet maintenance. Our proposal to regionalize fleet maintenance will enable local governments, such as Ocoee, Apopka, and Winter Garden, to consolidate their fleet maintenance departments into one.

By regionalizing this service, we will eliminate the need to buy expensive equipment for each small community. We believe that regionalization will greatly reduce administrative costs, including those in fleet maintenance.

After two years of preparation, the City of Charlotte and Mecklenburg County will be consolidating their fleet maintenance operations under the City’s management. The fleet consolidation project is a cost-effective collaboration between the City and County that will save the County more than $700,000 over the first three years (157).


The other method to achieve better taxpayer service and lower government overhead is to outsource or privatize certain government enterprises. In the private sector, a new study indicates that trucking companies are increasingly outsourcing equipment maintenance work to third parties. Justin Zohn, senior consultant for Toledo, OH-based full service transportation research and consulting firm Havill & Company, noted that a boom in maintenance service providers over the past five years has shifted the focus of many trucking companies back to their core business.


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We recommend that fleet maintenance be submitted for managed competition between the regionalized government service providers and the private sector. This competition will ensure the taxpayer is getting the best value.


If you combine the other recommendation in our report that will reduce the number of vehicles in the government fleet, we feel that the overall savings for fleet maintenance can be 20-30% of the current cost. A combination of regionalization of services, managed competition and a reduced fleet will ensure the greatest efficiency. The savings to the taxpayer will exceed $12 million.

Each department and function of government should be run like a business. The goal is to provide the maximum service to the taxpayers at the lowest possible cost. It is time to stop protecting the turf of each government and do what is in the best interest of the taxpayer.


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CHAPTER 25

The Effects of Fees and Regulations

It makes perfect sense that you can only extract a certain amount of taxes from someone making $38,000 a year (the average wage of the Orange County taxpayer). At some point, that person can no longer afford to pay the tax. Government has turned to fees of every kind in the last decade to fuel their growth. One of the biggest sources of revenue in Florida is the dramatic rise in “impact fees.” These fees are supposed to pay for infrastructure improvements caused by new development. During the boom years, government made so much off impact fees that most communities doubled, tripled and even quadrupled impact fees. Now, economic development, especially for our commercial tax base, is dead in the water.

The concept of an “impact fee” started in the 1970’s, when general tax revenue could not support the need for new roads and public improvements (this timing coincided with the increase in government programs from “The Great Society”). An impact fee is defined by the State of Florida as “a charge on new development to pay for off-site capital improvements that the development benefits from.” Many people consider an impact fee a tax on land paid at the time of permitting. Impact fees are, in reality, a tax on small businesses that rent and own space in commercial projects. Here is why.

Commercial real estate projects are financed with almost entirely borrowed money. Additional costs in the form of impact fees (taxes) raise the total cost and the amount borrowed. The example I use is a $2 million project with 4 tenants. Without impact fees, the rents needed to pay the debt service (interest) are set at $50,000 per tenant annually. By adding the new impact fee (tax),--which currently in Central Florida for a project this size is now an astounding $500,000, --the cost of the project increases by 25%. The debt service increases accordingly, and the rents needed from each tenant to make the project feasible are increased to $62,500 annually per tenant. Each tenant pays an annual “tax” of $12,500 per year to pay for the $500,000


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impact “fee.” The additional cost never goes away, since the cost was capitalized at the beginning of the project. The $500,000 is just for fees paid by the property owner. The tenants themselves often pay “impact fees” for road, water, sewer and building permit fees. In one 1,530 square-foot space for a taco shop, the government assessed $100,000 in fees, when the total cost to build the store was only $150,000. The taco shop makes a profit of $.33 per taco, and therefore needs to sell 300,000 tacos to pay for just that one fee!

Impact fees are not magically passed on to new residents of our state or to consumers. Occupants of these new projects cannot charge more for their product, because their (existing) competition sets the prices for what the market will pay. Subway sandwich shops cannot double the price of a sub, just because impact fees double. Prices for many items are set by the internet. Stores like Best Buy cannot charge more than the prices that are widely available on the internet. We are punishing and pummeling new small business and employers with fees and costs that should be borne by the public at large. Ten years ago, retail rents were under $2,000 a month. Today, rents for the same space in central Florida are $5,000 a month, and with the new impact fees, rents will go above $6,000 a month for the average store. The average small business will need to work harder, pay employees less, and will fail at a higher rate. Currently, one third to one half of all small businesses fails, and it is not because they do not try. The failure rate is high because the cost of doing business is rising too quickly.

Because of high impact fees (and high real estate taxes), the cost of commercial development now exceeds the ability of the average tenant to afford. Because of high impact fees, the cost of new homes now exceeds the ability of the average taxpayer to afford a new home. Because of the wide variety of fees and taxes, employment and economic growth in Florida is at a standstill.

I've always thought it strange that governments “discuss” lowering or suspending impact fees during tough economic times. The simple fact that they are having these types of discussions proves that impact fees are an impediment to new development. Impact fees were a deterrent at the top of the real estate boom. In an average economy, it is the final nail in the economic coffin.

The following is an analysis of the increases for impact fees on a 20,000 square foot commercial building in Orlando. This building typically will support ten small businesses, and each shares the burden of impact fees equally.


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The tenants themselves also pay impact fees, if they are not a standard

mercantile use. I just had a prospective tenant, a sub shop, tell us that his impact fees to get into an existing building are over $100,000. The sub shop decided not to invest his time and money in the community because of the impact fee. This type of chilling effect on our economy happens hundreds of times a day in Florida.

Impact fees are harmful to affordable housing, as well. Below is a graph of impact fees for apartments in Orange County. It is nearly impossible to build new apartments at rents the average tenant can afford, given the new fees. If you add in permit fees, approval costs, and other government-induced soft costs, the additional rent needed to pay for local government may cost the average tenant $400 per month (158).


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The same problem exists with new single-family homes Below is a graph of impact fees on single-family homes in Orange County, Florida, which do not include the so-called “Martinez tax” that has a virtually unlimited ability to tax new residential projects. Is it a surprise—when looking at these fee increases—that new construction is at a standstill and unemployment has tripled?

While the debate rages over whether to reduce impact fees, both sides of the

argument have completely missed the point. Yes, impact fees are an obstacle to our commercial tax base and employment. And yes, they should be lowered. But doing so will not jump-start our economy, and they should be lowered permanently. And here is why.

Impact fees are not paid by rich developers. These fees, like real estate taxes, are passed on to the small businesses that occupy commercial buildings. These fees also become part of the taxable value, forever inflating the assessed value, and therefore the real estate taxes on small business. In residential homes, they are passed on to new home buyers. Across Florida, impact fees have tripled in the past five years. This has helped push our economy into recession and will hamper our economy for years to come.

We should roll back impact fees to 2004 levels, and lower the cost of doing business in Florida, thereby helping our economy for the long term. It may be popular to blast developers; but the reality is that these costs are passed on to the small business community and homeowners. We need to create smart policy based on reason and logic, not on emotion and jealousy.


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But instead of making government more efficient, instead of lowering the tax burden on small business and taxpayers to help our economy, our government is now doing exactly the wrong thing. They are raising taxes on just about everything. The following is the introduction of an Orlando Sentinel article from April 16th, 2009 (159):

The state's budget crisis is about to hit Floridians where it really hurts: their wallets.

Facing an unprecedented economic crisis, legislators are proposing to balance the state's $65 billion budget with hefty fees that will touch almost everyone. Rates will rise on anyone who drives a car, visits a state park or produces household garbage, as well as on some of life's least appealing prospects: foreclosure, divorce and death.

The State will double vehicle registration fees, almost double car title fees, add taxes to new Floridians who get a special higher tax for car registrations, and triple drivers license fees. Court fees will rise from $295 to up to $2,000. The state added a new “death tax,” increased fees to use state parks, and will charge up to $5,000 annually for “registering” billboards.

That last one seems particularly abusive, because in no way does the fee represent the cost of providing the government service of processing the paperwork year after year. My point is this: unless we focus our energy and efforts at making government more efficient, fees and taxes will continue to escalate, until there is no business left standing.

REGULATIONS

“BUREAUCRACY IS THE PROCESS OF TURNING ENERGY INTO SOLID WASTE”

In 2002, Americans spent 8.22 BILLION hours responding to government requests for information and regulations (160). The Rochester Institute of Technology estimated federal laws alone cost Americans $863 billion in 2000 alone, or $8000 per household. Small firms spent an average of $6,975 per employee on federal regulations alone, and in my experience, local regulations are more time-consuming than federal regulations. Florida is perhaps the most highly regulated state, next to California, when it comes to land use and permitting.

The fact is that time spent on regulations is time not dedicated to the core mission of a business. It makes American business less competitive and lowers the


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wages for all Americans. Many of the regulations are unnecessary and should be phased out; but the ones that remain should be easy to comply with. In order for Florida to compete for business, we need to streamline the regulatory process on a state level, but more importantly, on a local level.

Every five years, each community should review its regulations and see if they help the general public. A cost benefit analysis should be done to see how much compliance costs, and if the regulation is worth it. If the regulation is deemed worthy, it should be made simple to comply with. In a global economy, the speed to market is often the most critical factor in determining which companies succeed and which ones fail. We need to help business in Florida succeed, and speed up the regulatory process.

In Silicon Valley, California, they came up with a “Smart Permit.” All permit forms were standardized across the region, as well as the process. Most permits can be completed and submitted online without any travel time or expense. Things like sign permits can be completed online with the government form asking questions and the applicant filling in the details. Based on the property address, the application can format the sign criteria and the applicant can make sure they are in compliance. Sign permits in Florida now require a notarized authorization letter, manual submission, and a review period. In the future, these permits can be issued without any human effort on the part of government.

EXPERT SYSTEMS

Developed in the mid 1980s by Stanford scientist Ed Feigenbaum, “expert systems” are a form of artificial intelligence allowing the computer to solve problems. The system enables the user, the taxpayer, to ask general questions about regulatory issues, and the software will give guidance similar to online help. A small business owner can ask, “How large can my sign be on the front of my building?” The system will ask the address and other pertinent questions, and the answers will be generated. The answers will also be uniform, whereas with people, the answer often depends on who you ask.

The federal agency, OSHA, developed the Hazard Awareness Advisor, which saved the taxpayer $272 million over five years in compliance costs (161). This system offers “electronic compliance assistance” on the OSHA-sponsored website at


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www.businesslaw.gov. This same type of system on a local level can save thousands of hours for small business owners who struggle to get through an increasingly bureaucratic system.

Vicente Fox, president of Mexico, said: “E-government should not be just about digitizing red tape, but about cutting much of it (162).” Online business licensing, e-permitting and other measures can bypass the bureaucracy. Instead of asking permission, we can allow our professionals to proceed forward using “expert system” assistance and online permitting. But we first need our own government to accept the fact that this technology will help our economy. Our own government is the obstacle to innovation, because they fear loss of jobs and power.

Our former Governor Jeb Bush took a radical approach when reforming the State’s license bureau (DBPR). He said, “Eliminate what you can and digitize what you can’t (163).” Florida used this reform as a once-in-a-lifetime opportunity to redesign the state’s business licensing and registration process. When the license process was web-enabled, every employee had to re-apply for employment, because most of the former positions no longer were needed.

With web-enabled permits and licenses, we can eliminate waste, decrease the time needed to employ people, and make small business more successful. This transformation is known as G2B Services, or Government to Business. It will help small business succeed, but the people must demand it from local government.

GOVERNMENT ON GOVERNMENT RED TAPE

As I write this section, I am a member of the Orange County Transportation Task Force (I can’t make fun of this name, because I came up with the Orange County Taxpayer Budget Review Board). The mission of the OCTTF is to find savings in public school transportation. While the 30 members of the committee have come up with some good recommendations, 90% of the waste is government on government red tape.

Federal regulations like “No Child Left Behind” require public schools to bus students as far as 90 minutes away. Homeless children are bused to the school of their choice, sometimes in other counties. While this is nice policy, it costs serious money. In Washington D.C., the transportation cost alone for special education children is $32,000 per student (164). In Orange County, Florida, that figure is


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estimated at $12,500 per student (165). We spent under $9,000 per student for the entire education of each child (ibid). Spending massive amounts of money transporting children around is detrimental to the education of our children. Even our education community will tell you that.

I have not heard of a figure on how much government on government red tape costs the American taxpayer. My guess is that it approaches $1 trillion a year. My solution is very simple. Any time you propose a law for anything, there needs to be a price tag associated with it. Before the law is approved, permanent funding needs to be identified.

We need to eliminate government on government red tape, government on business red tape, and reverse the tidal wave of fees, taxes and regulations that are destroying our economy and our way of life.

For this to happen we need elected officials to constantly be improving their own governments. Not adding new lines of business, but improving taxpayer service and efficiency every day. We need thousands of new leaders who believe that change is a continuous process. The pursuit of perfect government is un-ending.

Our government is currently stuck in neutral.


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CHAPTER 26

Government 2.0.: Technology Transforming Government

The title of this chapter happens to be the title of a book written by William Eggers. For anyone interested in making government more efficient, his book is a must read. For my part, I will touch on some of his ideas and suggestions, and give examples of how technology can improve the lives of citizens.

Most people think that our government has adopted technology, in part, because most governments have websites. But as Williams Eggers points out, this “meant merely putting a pretty face on a slothful, clunky edifice” (166). For the most part, technology has not increased the efficiency of government, which continues to cost more each year. The problem, as Mr. Eggers points out, is that “doing anything of importance still requires navigating an obstacle course of multiple bureaucracies at multiple levels of government.” As we have pointed out earlier in this book, government has no incentive to be more efficient, and thus has no reason to introduce innovation and technology that makes our lives easier. We, the people, must force this change.

A brief look at the chapters of Government 2.0: Building a Citizen-Centered Government; Knocking Down Walls; Wired Roads; The Transparent State; and Overcoming Hidden Hurdles. Since the government exists to serve the public, one would think the government is citizen centered. But that is not the case. The government provides services around its own needs. Think of the Division of Motor Vehicles with a twenty divisions. That is your local government.

Mr. Eggers envisions a government designed around the taxpayer, the customer. He asks, “Why can’t government be more like Amazon?” . . . Where each time you contact the government they know who you are and, likely, what you need. The reason, quite frankly, is that any reform in government is seen as a potential for the loss of jobs. And job protection is “job number one” in government.


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CHANGE IS GOOD

I recently spoke to a ninth grade class about the need for greater government efficiency. I used the example of the Pony Express. I asked the students why the Pony Express is no longer in business. Correctly, they said it was replaced with quicker means of moving the mail. Better technology, including trains and trucks. And today, e-mail delivers more information worldwide in a day than the U.S. post office does in a year (167).

Let’s pretend that the Pony Express had a strong labor union and managed to still be the dominant method of communication today. How would that affect the United States economy? That is the best way to describe our local governments. They still do things the old-fashioned way, because they fear job losses. But the antique and bureaucratic methods have a devastating effect on our economy, and lower the standard of living for our citizens.

We need to accept that change is good. Even though it may displace some government workers, the economy will improve and those very same workers will find more productive uses in the private sector.

GOVERNMENT WITHOUT BOUNDARIES

The above title is a lifelong initiative of Frank McDonough. Frank headed the federal government’s information technology in the 1980s, and later was the deputy administrator at the General Services Administration (168). McDonough lists the barriers to seamless government: lack of leadership, turf battles, and the large number of different governments. Frank states, “There are 3,700 municipal governments and 3,300 county governments in the United States, in addition to state governments and agencies. Each one has a dozen or so elected officials at the top, all of whom think they are God, and in their environment, they are right (ibid). “

The challenge in building a better government is not finding the solutions. The challenge is in winning the turf battles and convincing the 100,000 elected officials in this nation that giving up some of their power is best for the greater good. One way to achieve this change is to reduce the barriers to civic engagement.


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ELECTRONIC TOWN HALLS

Sociologist Robert Putnum states, “By almost any measure, Americans’ direct involvement in politics and government has fallen sharply over the last generation. Voter turnout is down 25%, participation in town halls, public meetings, and school board meetings have plummeted by a third, cynicism toward political institutions and political parties is rising, and political loyalties are waning (169).” In my dozens of appearances before elected officials, almost everyone in attendance is there because they want something out of their government. The general public is not represented at public meetings.

William Eggers suggests an “Electronic Town Hall.” If the government puts proposed measures on their website, they can allow taxpayers to comment (blog) on the issue before they are voted on. They can even create a poll to see how the taxpayers feel about a particular initiative. This will give the elected officials insight on how the citizens feel about a certain issue; but more importantly, it will engage the citizens. I want to go farther and allow citizens to attend public meetings virtually. From the comfort of their own home, citizens should be able to view the public meetings and interact with their elected officials and ask questions.

Most citizens cannot take off work during the day, and at night, they have family obligations. By allowing citizens to interact with their government more easily, it increases public input and makes for better policy.

GREATER ACCESS

Anyone who attends a public hearing knows that public access to elected officials is minimal. Taxpayers have 90 seconds to three minutes to state their case, and elected officials quite often are not even paying attention. In most cases, the elected officials have made up their mind long before the evening of the vote and the public comments.

To illustrate this, I give the example of the Orange County Commission and the 2008 budget hearing. Dozens of taxpayers, myself included, pleaded with their government not to raise taxes during the time of economic hardship. They begged for relief from government spending. Incredibly, Orange County Mayor Richard Crotty asked the taxpayers “to hurry up with their comments, because staff has a party to go


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to after meeting. Every year staff has a party when the budget is completed.” Not only had Richard Crotty already made up his mind on the budget vote, he was telling the taxpayers to stop whining and get on with it.

If I were elected Orange County Mayor, I would propose much greater access for the citizens. I suggest a “Meet the Mayor” session weekly from 4 p.m. to 7 p.m. on Friday’s, when more citizens can attend. Allow the taxpayers to ask the mayor any question, and be able to ask follow-up questions. This type of dialogue will keep the elected officials accountable. Right now, public policy is often determined behind closed doors, and is typically influenced by special interests.

Greater access to elected officials will result in better policy decisions. By putting these sessions on-line and allowing taxpayers to ask questions from the comfort of their own home, we will engage more citizens in their government.

PERSONALIZED GOVERNMENT

The goal of your government should be to serve you in the best way possible. They cannot do that if they do not know who you are or treat you like a number. The technology exists for your government to treat you as an individual and cater to your needs. One of the obstacles to achieving this goal is having to find your way through the dozens of government departments that you deal with every year. We need to center the government around you, the citizen.

William Eggers gives six ways we can make that happen:

1. Reorganize government around citizen needs.

2. Make choice-based service delivery more viable.

3. Provide neutral information to help citizens make decisions.

4. Customize services between government and citizens.

5. Allow citizens to complete government transactions anywhere, anytime, and from a variety of devices.

6. Reduce the costs of government.

Eggers is critical of efforts to “reinvent” government, stating, “Government has made little progress at working better, smarter and more efficiently.” He points out that


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public bureaucracies built for the Industrial Age can’t adapt to the Information Age. That is why I have called for Transformation Government Reform, meaning to start the design from scratch.

Next time you meet any elected official, ask them if they have read Government 2.0 (or for that matter, my book). If they say no, ask them why they aren’t learning everything possible to improve our government and help its citizens. You may offend them, but they need a wakeup call! Our elected officials are not reformers, despite what they may say. They are the Hatfield’s and the McCoy’s, arguing over issues that do not affect your lives.

We need leaders who are willing to invest the time to study the problems and that have the courage to change the system. I doubt we can reform our current group of elected officials; so, I encourage you, the reader, to run for office or find people to run on a reform platform. It does not matter how small the government is. Change starts from the bottom up.


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CHAPTER 27

Completing the Study and Taking it Public

There is an inherent problem with the study of greater government efficiency. The problems are so widespread that the study can go on forever. At some point, you need to stop studying, write the report, and move on to the reform stage. My suggestion is to follow your schedule. If your study is six months long, start writing the report at the end of that time period. You can edit until the day the report goes to the printer; but you need a specific date that the study ends.

Once the study period ends, the members need an opportunity to review the report. In our 30-member group, I sent the revised report to each member electronically every week, as it was being complied. I received hundreds of comments during the process. I received dozens of ideas and suggestions from the members, many of which made the report more meaningful.

There’s bound to be some disagreement between the members. In our study, one of our members strongly disagreed on our stance on commuter rail. In our report, we made note of the disagreement, but 29 members agreed with the stance on commuter rail, so we included that section in the report. I suggest when a disagreement arises, simply have a vote.

Once the report is complete, you will want either an editor or education professional to proof the document. You will lose credibility if you use “effect,” when you should use “affect.” Former teachers are a great resource, as are writers. If the membership can afford a professional editor, I recommend it.

Until the study is sent to the printer, you may present copies that are printed and placed in a simple binder. Any office supply store has binders with a clear front that you can insert your report title in. For our study, we converted the document to a PDF, and sent it to a printer for professional publication. Our report looks just like a book out of a bookstore. If professional printing is out of your budget, make the study


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as professional as possible before giving it to your elected officials and the media. Credibility matters.

TAKING THE STUDY PUBLIC

Long before you take the study public, government staffers and elected officials will be aware of the study. Government staffers, especially fire department unions, fear consolidation as much as anything. It is not necessary or practical to keep the study a secret. In fact, there are many benefits to being out in the public eye.

For starters, you attract more qualified members with the more attention you draw to the study. If you are polite in the study questions, you gain more respect with the elected officials and the staff. In order to bring public attention to the need for local government reform and our study, I went directly to the media. I created a “MEDIA MASTER” and listed all of the AM radio stations, newspapers, and television stations in Florida. I put their e-mails in my Constant Contact e-mail database under a separate folder, and e-mailed them with every significant step. About twice a month, I was invited to appear on the radio or television to discuss our taxpayer study.

I also appeared before the elected officials and introduced myself early in the process. The following is my first speech to Orange County, Florida, in the second month of our study, which I repeated to the City of Orlando on December 15th, 2008:

Good morning. My name is Matthew Falconer and I reside in Orange County, Florida. I come before you today as a concerned citizen and taxpayer. My concern is that our local government has become too much of a burden for our local economy to support, and my larger concern is that we are headed for another round of massive tax increases, service cutbacks, or both.

Orange County is not unlike General Motors, in that we have the same union salary and benefit problems and the same bureaucracy and inefficiency. And like General Motors, our local economy will hit the wall if we have not already done that. Our government cannot continue to spend more and more and expect the taxpayers to shoulder an increasing tax burden. In an internet economy, business cannot pass on the additional cost of government. At some point, business becomes unprofitable and they close, like hundreds of small businesses have already done in central Florida.


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For these reasons, I have formed the Orange County Taxpayer Budget Review Board. Our website is www.TaxpayerBudgetReviewBoard.org. Our Board is a group of 30 volunteers, some of the brightest people in central Florida. We are studying the budgets of all 14 governments in Orange County and will prepare a report that will have recommendations for efficiency in every function of government. Our six-month study will be done in May, when we will present it to each government in central Florida. Any member of the public is welcome to join our study group.

We are not looking to consolidate governments, rather the services they provide, when it will increase efficiency. We can regionalize some services, such as transforming the eight 9-1-1 call centers in central Florida into two centers. We can regionalize fire rescue from eight different departments and reduce the number of expensive fire trucks in half, without reducing safety. We can regionalize things like planning departments, building departments, and code enforcement. Not only will this reduce waste, but it will improve customer service, as well.

I have prepared a binder for each commissioner, with some of our initial findings. In the binder, you will find an Orange County zone map, where we suggest public safety be regionalized to avoid separate fire departments on opposite sides of the street. We also have ideas to improve public safety; but the most important document in the binder is the New Jersey Consolidation Report. New Jersey, a very blue state, has enacted state laws requiring efficiency in local governments and consolidation of services. I ask that you take a few moments of your time to read this study, because this is the potential future of our local governments.

Please remember that our group is not anti-government; we are simply trying to create a more efficient government. At some point, the level of taxation reaches a point of diminishing returns. That is where Florida is right now. There are virtually no businesses in Florida making a profit today. Additional taxes will only mean additional layoffs. Please consider our recommendations.

Lastly, I ask that this Commission consider creating a permanent commission on local government consolidation, regionalization, and alignment. In the binder, I have included the New Jersey law establishing such a commission.

Thank you for your time.


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I wanted to publicly present our study group with information binders, for several reasons. First, I wanted to let the elected officials know that I am working on behalf of the taxpayers, not a special interest group. I came in a suit and tie, and was polite and professional, so they could not dismiss me as some angry anti-tax group. Next, I wanted them to get familiar with our group, so my final report does not come as a surprise. All of the elected officials in Orange County went on my e-mail list; so, they received weekly e-mails outlining the need for reforms and some of our suggestions.

GETTING THE GOVERNMENT ON YOUR SIDE

Once the study was complete, I personally presented the study to every government within Orange County, one at a time. It is preferable to be placed on the agenda to allow time to present the study and your ideas. Fifteen minutes is all that you will need. Many governments will not put you on the agenda, and you will need to speak as part of the public hearing process. This gives you three to five minutes to make your point; but even that is preferable to sending the report in the mail. Elected officials get a lot of mail, and the vast majority of it goes unread.

I learned another trick during the process. If you attend a Rotary meeting in each town, you will likely meet one or more of the elected officials in that town. Ask them personally to get you on the agenda. They will refer you to the City Clerk, but now you have been referred to them by their boss. Here is an e-mail I sent to one city:

Hi, Kathy. I met briefly with Councilman Buchanan yesterday. He suggested I contact you about getting on the agenda to present the final report of the Orange County Taxpayer Budget Review Board to the city.

The report outlines cost savings for local governments. Please place me on the agenda for an upcoming meeting.

Thank you.


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It worked. It is important to give every elected official in your county a copy of the report. More than half will not read it; but that is good ammunition for when you run a candidate against that person in the future. When you address the elected officials, make sure not to place blame on them. Below is my speech to the City of Maitland, which spreads the blame on government leaders over the last five decades:

Good afternoon.

My name is Matthew Falconer, and I am one of the founders of the Orange County Taxpayer Budget Review Board. I want to thank the Mayor and Council for allowing me the opportunity to present the City of Maitland with the results of our six-month study. I also want to state that our study group is not out to blame any elected officials. The problems within our local governments have evolved over the past five decades. Our goal is merely to outline the problems and suggest solutions to enable elected officials to make educated decisions.

I am not anti-government; I am for a small and efficient government. I am here to tell you that the current model of government services is not sustainable. Our government is not unlike our automotive industry, in that we have the same bureaucracy and pension problems. To save our economy, we must make structural changes to the way we provide government services.

Please take the time to read this report and let me know your thoughts and comments.

You can lead a horse to water, but you cannot make him drink. The same applies to your elected officials. If they were reform-minded, our governments would not be as bad as they are now. If one out of five reads it, and one out of ten agrees with it, you have done your community a great service. But we did not write the report solely to give to your current elected officials. We wrote our report looking forward to our future elected officials.

I plan to give the report to every candidate for local government in Florida. I have met with a dozen already, and told each of them, “Here is a platform for you to run on. Greater government efficiency is a hard thing to argue against.” Of course, Democrats will be concerned with losing the support from the labor unions, and some Republicans will be concerned about being attacked by labor unions. One Republican


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candidate asked me, “How do I campaign on reform without upsetting the labor unions?” My answer was that you cannot. Labor unions are hyper-sensitive to reform.

My advice to this candidate was that greater government efficiency is a tri-partisan issue. Even Democrats (not in a government labor union) will agree that their cause is harmed by wasteful government spending. In central Florida, a third of registered voters are Independent. You will win 100% of the Independent vote on this issue. Take time to find the future candidates, and sell them on greater government efficiency.

Here are my suggestions in taking your study public:

1. Warm the waters. Give each government a sample before the final report.

2. Keep the media informed. They are desperately seeking new stories every day, and are a good tool in your reform effort.

3. Present the study publicly to all elected officials in your county, including small towns.

4. Give the study to candidates for public office and suggest they run on a reform platform.

A true grass roots reform movement requires an “all of the above” approach. We need to educate current elected officials, support new candidates for office who understand the need for reform, and we need to get off the bench and get into the game ourselves.


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CHAPTER 28

Actions to Take When Elected Officials Ignore the Study

Each elected official has a different reason or set of reasons why they allow the waste and inefficiency to continue in local governments. Some have chosen not to study the various functions of government, and claim not to know there is massive waste of taxpayer funds. Others are career politicians who actually benefit from the waste themselves. But most politicians do not want to make a serious effort at reform because the government labor unions can and will make their careers difficult and short-lived. That is why it is important for the taxpayer to mandate to the elected officials that they must reform government.

Below is the first draft of an amendment to the Orange County, Florida charter. We will seek to gain the necessary amount of signatures to place the amendment on the election ballot, and let the taxpayers speak their mind to the elected officials.

REFERENDUM PETITION

BALLOT TITLE:

REQUIRE COUNTY COMMISSION TO PROVIDE SERVICES EFFICIENTLY THROUGH REGIONALIZATION AND ELIMINATION OF DUPLICATION.

EXPLANATORY STATEMENT:

This Amendment to the Orange County Charter requires the Orange County Commission to provide government services as efficiently as possible where this can be done through regionalization and the elimination of duplicative services. This


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Amendment also provides for the creation of a permanent commission to study regionalization and consolidation of government services.

PROPOSED AMENDMENT TO THE CHARTER OF ORANGE COUNTY, FLORIDA.

FULL TEXT OF THE PROPOSED CHARTER AMENDMENT:

Section 1. Section 214 of Article II (“Legislative Branch: Board of County Commissioners”) of the Charter of Orange County, Florida is created to read:

Section 214. Eliminating Duplicative Services. The taxpayers of Orange County deserve to get the most from their hard earned tax money. Orange County government should, therefore, provide government services as efficiently as possible.

a. To that end, if government services are duplicated by nearby governments, the County Commission shall consolidate such services where savings to the taxpayer will result.

b. To that end, if regionalization of government services will reduce costs and increase customer service, the County Commission shall regionalize service units to increase efficiency and eliminate waste.

c. To that end, if the County Commission refuses to enact efficiency recommendations consistent with the above, any Orange County taxpayer shall have standing to sue to require the County Commission to enact such measures.

d. The County Commission shall create a permanent Commission on Regionalization and Consolidation (“CRC”) of local government services.

1. The CRC shall consist of nine members. The County Commission shall appoint two employees of Orange County and seven members from the public at large. Each member shall serve two-year terms and may seek additional terms.

2. The CRC shall hold hearings monthly and interview each representative from each department to determine where consolidation and regionalization is merited. The CRC shall hold its hearings in the County Commission chambers.


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Section 2. If any portion of this measure is held invalid for any reason, the remaining portion of this measure, to the fullest extent possible, shall be severed from the invalid portion and given the fullest possible force and effect.

I, the below-signed elector of Orange County, Florida, request a referendum election be held on whether to amend the Charter of Orange County, Florida per the above, pursuant to Section 101.161, Florida Statutes, and Sections 601 and 602 of Article VI of the Charter of Orange County, Florida:

/ / _____________________________________

There is much debate amongst my tax reform friends about whether or not a taxpayer petition is worth the time and effort. A petition requiring greater government efficiency is likely to win approval by the voters. But the process is cumbersome and often unfruitful. More often than not, the courts will strike down the petition language for being vague (even though there is a strict limit on how much you can put into a petition). The court can find any reason to strike down anything, and in Florida they usually do.

My concern with our local petition is the short window to gather signatures. We have 90 days to gather 60,000 signatures on our petitions. That is a very difficult threshold to overcome. In Orange County, it is more likely we will elect a leader who will place this issue on the ballot for voters to decide. If your county has easier petition collection requirements, I do suggest a citizen initiative for maximum efficiency in government.

In San Diego, they have “Proposition C.” The ballot question was: “Should the Charter be amended to allow the City to contract services traditionally performed by City civil service employees if determined to be more economical and efficient while maintaining the quality of services and protecting the public interests?” The answer San Diego voters gave was a resounding (66.5%) “yes,” especially if you consider as many as one in five voters work for the government (170).


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Petitions are a powerful tool to reform your government. If you gather enough petitions to place mandates on your government, it has three effects: first, it will place the limits you seek; second, it will engage the taxpayer in the effort; and third, and perhaps just as important, it will show the elected officials how much the voter wants reform. Your elected officials work in a government “bubble,” and rarely see the taxpayer. A petition drive of thousands of voters will usually get their attention.

PROTESTS

Across America now, there are hundreds of “tea parties” (“tea” stands for Taxed Enough Already). While the major focus of these events is the obscene amounts of spending on federal level, the people who go are upset with spending at all levels of government. I speak at every tea party that I attend, and I try to take the anger and frustration and focus it on local government, where we can do the most good.

LowerTaxesNow.org had volunteers at 14 tea parties in Florida on April 15th, 2009. We collected 6,000 petitions for the Taxpayer Protection Amendment, a statewide effort to limit government spending. We gathered 1,500 e-mail addresses to add to the 7,600 we already have. We used the event to build our army. We also talked with people who are considering running for office in 2010, and encouraged them to read our budget study and run on a reform platform.

Public protests get the attention of elected officials. Even if you have 100 people protesting government spending in a small town, it is still quite effective. Gather e-mail addresses and invite your new friends to attend the next budget hearing at city hall. Bring your protest indoors, and demand that your elected officials lower taxes by making the reforms I have outlined in this book.


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RECALL EFFORTS

In Orange County, there is an effort to recall current Mayor Richard Crotty (www.recallcrotty.com). I have not joined that effort, because I view him as a pimple on a cancer patient. Yes, Richard Crotty is largely responsible for our county budget nearly tripling in eight years. Yes, Richard Crotty is at the center of the “culture of corruption” in Orange County. But he is termed out in 2010 and on his way out.

Your community may have a long-term elected official who is hard to defeat in local elections. Many times, the incumbents are hard to defeat because they have long-time networks of volunteers and a donor list a mile long. One way to reduce the power of an incumbent is through a recall effort. Your fellow citizens do not pay much attention to local government. If they see their neighbors volunteering their time to recall an elected official, two things will likely happen. First, people will pay more attention to the facts. And second, and perhaps more importantly, the stain of a recall campaign will hurt the incumbent in the next election.

The recall is not the first tool in the reform arsenal. But used properly and at the right time, it can help remove elected officials who prevent reforms from being made.

GETTING INTO THE GAME

I spoke a few months back at a Republican Liberty Caucus event. The group received my ideas of limited government and greater government efficiency warmly. During the question and answer period, a young man by the name of Michael Patterson asked me this question: “How are these reforms going to work without committed reformers in office?” I said it will not; I suggested that members of this group consider running for office. He then asked me if I planned to run for office, to which I said I have no plans to.

Being a brash young man, he pressed further. He asked, “Who understands the problems and the solutions better that you?” I said probably no one. He then asked, “Who has more passion for reform than me?” To which I gave the same reply. In short, he was asking me to put my feet where my mouth is.

I thought about his comments, and the next day, I agreed he was 100% correct. If I am going to lead a revolution of greater government efficiency and reform local government, I cannot do it from the bench. I need to be in the game. After my six-


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month study of Orange County, I realized that the most important position to hold is Orange County Mayor. The county surrounds every city, and without cooperation from Orange County, reform is nearly impossible.

On July 1st, 2009, I announced my candidacy for Orange County Mayor. I will outwork my opponents and become the next Orange County Mayor. I will attempt to make every idea in this book a reality. And in doing so, I hope to set an example of local government reform for others to follow. A revolution needs to start somewhere, and I plan to start it in central Florida.

Please take a moment to visit www.MatthewFalconer.com to see how I am planning to make that a reality. Our President won his election on change. I believe that what we really need is reform.

I ask that everyone who reads this book consider running for local office. If you do not have the skill sets to be effective, ask your friends. Ask anyone who will make good leaders that possess common sense and will create policy that benefits the taxpayers, not special interest groups. Real estate brokers, small business owners, and successful people with critical thinking skills. In the next chapter, I will detail how LowerTaxesNow.org will help reform candidates gain elected offices.

Please consider getting into the game. After you have read this book, you know more about the problems within local government than your current elected officials. And you will have a road map for reform and solutions to go with those problems.


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CHAPTER 29

Spread the Revolution

My goal in starting the Orange County Taxpayer Budget Review Board was to create a roadmap for elected officials and activists to reform local governments everywhere. Now it is up to you, the reader, to spread the revolution. There are a number of ways that you can help. Start by giving this book to a friend, have them read it, and then give the book to another.

The next step is to form a Taxpayer Budget Review Board in your own county. Gather all of your friends or business associates. Find members by searching for tax reform groups in your area on the internet. Create a Meet Up group on meetup.com for local government reform. There are thousands of people in your local community who are fed up and frustrated with high taxes, poor services, and local government. You will find them in Republican clubs, Republican Liberty Caucus meetups, Libertarian clubs, and just about anywhere. Reach out and find them. Inspire them, and show them the way.

Speak to every group that will let you. Make a list of every civic group in your county, from Rotary, Toastmasters and Tiger Bay, to every political party, and even your local government. Take my speeches, put them into your own words, and make a plea for greater efficiency in government. Educate the listeners to the fact that government spending suppresses our economy, even on a local level.

LOWERTAXESNOW.ORG

During the writing of this book, I formed a 501c4 to help others repeat the budget study in their county. LowerTaxesNow.org is what we call an educated tax reform movement. We are different from most others, because we first explain why


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high taxes are harmful to our economy. We next explain how government will provide services on less revenue (the ideas in this book).

I was honored that Margie Patchett, one of the founders of Volusia Tax Reform, became our full-time executive director on April 1st, 2009. Margie is by far the most passionate taxpayer advocate I have ever met. Her job is to find people in all 67 Florida counties and help them repeat our budget study. To date, we have budget study groups forming in 20 counties, but we need all of the help we can get. Send Margie an e-mail expressing your desire to build a better government in your county ([email protected]).

Like the salesman who says, “I love appliances,” Margie loves tax reform. She is a grandmother, comes from humble surroundings, and believes tax reform is critical to our future. As a title agent, she talked with hundreds of people who have been hurt by high taxes. She has dozens of stories like the putt-putt golf course whose taxes went from $11,000 to $40,000 in a single year, and a marina whose taxes went from $33,000 to over $100,000 in a single year. She believes in tax reform, not for her own sake, but for the sake of her fellow citizens.

One of the goals we have at LowerTaxesNow.org is to find 1000 reform candidates to run for local and county office in 2010. Let Margie know if you or someone you know will run for office, or if you can volunteer time to help LowerTaxesNow.org grow the government reform movement. Having educated reformers in elected offices is critical to the success of the reform movement. Our efforts to change existing politicians will have limited affect. Bringing new people who have read this book into office is the real solution.


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CONCLUSION

Small business in Florida is facing a “perfect storm.” Because of Save Our Homes, taxes on small business have tripled in a decade, while competition from the internet erodes their sales. Additional government spending on commuter rail, venues, and corporate welfare can only be assessed on small business. And worst of all, the cost of the labor union policy of jobs for life, pensions at 50, and benefits galore will continue to drive small business out of existence.

Fifty years ago, no one in America could imagine manufacturing would disappear from American soil. Today, very few understand the very real prospect that small businesses, that employ 80% of the private sector, will cease to exist in Florida. It is not only possible, but a mathematical certainty, given the course of events in Florida.

Florida went from the number one economy in the nation to number 47 for a reason. The only way to reverse our course is to reverse the policies that brought us to this point. Eliminate wasteful spending programs, corporate welfare, and white elephants. But to reverse course, we need real reform and real leadership.

So, my friends, you have the knowledge, you have the connections, and you have the desire. Now, it is time to take the next step. Now, it is time for you to get in the game. Send an e-mail to Margie. Join a local tax reform group. Do anything that will help our movement of local government reform. George Washington did not win that revolution by himself. He had an army; but not just an army of soldiers. He had an army of activists. In the American Revolution, everyone, including the women who sewed the flags and uniforms, mattered. And in our local government revolution, anything you do to help will matter. Please get off the couch and into the battle. If we unite as taxpayers and never give up, victory will be ours.

Let the revolution begin.


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FOOTNOTES

Chapter | Source

1a 1 sobering facts from the U.S. Census Bureau on state and local government spending in Florida www.census.gov/govs/estimate/0210flsl_1.html

1b INT combined budget of $7,000,000,000 Public information requests, data available at www.TaxpayerBudgetREviewBoard.org

2 INT has barely evolved over the past one hundred years NY Times, April 19th, 2009

3 INT Vallejo, California bankruptcy Gilroy Dispatch, July 14th, 2008

4 INT NY State tax increases CNN.com, Thursday December 18th, 2008

5 INT City of Orlando Purchasing Dept blogs.orlandosentinel.com/news_politics/2008/07/orlando-faces-b.html

6 1 sobering facts from the U.S. Census Bureau on state and local government spending in Florida www.census.gov/govs/estimate/0210flsl_1.html

7 1 Illinois has 27% less people than www.infoplease.com/ipa/A0004986.html

8 1 1998 Orange County had a budget of $1,379,869,000 www.orangecountyfl.net

9 1 Orlando Sentinel Jane Healy | Feet to the Fire, Orlando Sentinel, Nov. 23, 2008

10 1 Orange County consolidation study www.orangecountyfl.net/cms/CSSC/reports.htm

11 1 senator gaetz /gulf1.typepad.com/gulf1egaetz

12 1 Public schools have roughly five times the administration as private schools reason.org

13 1 Florida Government Employment Source: Florida Agency for Workforce Innovation

14 1 Based on a study by Michael Hodges mwhodges.home.att.net/

15 2 Milton Friendman incentive quote "Capitalism and Freedom" Milton Friendman 1962

16 2 unemployment increase Dept of labor

17 2 Palm Beach County http://www.co.palm-beach.fl.us/

18 2 looking to create additional revenue streams Maitland Fire Rescue Strategic Plan March 2008

19 2 Complying with government regulations www.sba.gov/advo/research/rs207tot.pdf

20 2 costs $3500 every time the fire truck goes on a call based on total budget divided by total repsonses


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21 2 STOP THE EXTERMINATION OF SMALL BUSINESS Orlando Sentinel private advertisement

22 3 we have yet to hear one elected or administrative official www.ocala.com/article/20070821/OPINION/208210317/0/APS

23 3 City of Charlotte, for example, has extensively used competition since the mid-1990s, reason.org

24 3 lease the Pennsylvania Turnpike www.tollroadsnews.com/node/3547

25 3 Eggers states “every citizen Government 2.0 by William Eggers

26 3 Arkansas created the Murphy Commission www.hoover.org/publications/policyreview/3566537.html

27 3 Ocala Banner An embarrassment of state riches Published: Wednesday, January 21, 2009

28 7 total pay one employee in the City of Orlando; Joe Robinson PIR city of Orlando

29 8 Proposition C San Diego www.smartvoter.org/2006/11/07/ca/sd/prop/C/

30 8 Lawrence Reed of the Mackinac Center for Public Policy sa reason.org

31 8 study of 20 California Cities demonstrated savings of 28 to 42 percent from privatization reason.org

32 8 San Diego Citizens Budget Project www.sandiegobudget.org.

33 8 Government Consolidation and Shared Services www.njleg.state.nj.us/PropertyTaxSession/OPI/jcgo_report111506.pdf

34 9 City-County Consolidation and Its Alternatives Jered B. Carr; Richard C. Feiock, July 2004.

35 9 Government Consolidation and Shared Services www.njleg.state.nj.us/PropertyTaxSession/OPI/jcgo_report111506.pdf

36 9 Warwick, Rhode Island, , the City Council Warwick News, March 2008, Russell Moore

37 9 Maine, the Maine Municipal Association www.memun.org/

38 9 Lessons U.S. Officials Can Learn From New Zealand Ian Ball, Tony Dale, William D. Eggers, And John Sacco

39 10 average annual wage in the State of Florida is $37,260 http://www.bls.gov/oes/current/oes_fl.htm#b00-0000

40 10 average salary in the City of Orlando is $36,323 www.bls.gov/cew/msa

41 10 public servants who work at the expense of the Orlando taxpayers make an average of $64,231 public informaion requests

42 10 list of the most dangerous occupations in Florida http://money.cnn.com/2005/08/26/pf/jobs_jeopardy/

43 10 300 emp made more than $10,000 a year; Cris Raymundo, who pulled in $56,241 in overtime pay in 2008 public informaion requests


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44 10 Orlando is in the middle of a budget crisis and just raised taxes 19% last year City of Orlando web site

45 10 Turek, 27, will receive a raise to $127,000 a year. Orlando Sentinel March 31, 2008

46 10 Joe Robinson. With benefits from his new job he is pulling in $225,000 a year public information requests

47 10 Dade County Attorney Robert Cuevas Jr Miami Herald 12.08.08

48 10 there are 100 firemen that make over $100,000 plus pension and benefits public information requests

49 10 government wages are 31% higher than private sector by U.S. Department of Labor Bureau of Labor Statistics in September 2004

50 10 City of Orlando make more than double the annual salary of the taxpayers that support them. Orange County Taxpayer Budget Review Board www.TaxpayerBudgetReviewBoard.org

51 10 taxpayers picking up the other 98-99%. mwhodges.home.att.net/

52 10 major public pension plans paid out $78.5 billion www.businessweek.com/magazine/content/05_24/b3937081.htm

53 10 fireman gets 250 hours of vacation pay per year IAFF Contract City of Orlando

54 10 USA Topday article By Dennis Cauchon, 4/10/09

55 10 the University of Phoenix - a position that paid $33,000 money.cnn.com/2009/01/01/news/economy/pay_cuts/index.htm?postversion=2009010111

56 10 Kissimmee, Florida, there are a dozen garbage truck drivers who make over $50,000 a year public information requests

57 11 Goss retired four years ago, at 42, Forbes

58 11 American family owes $500,000 in under-funded pensions for public workers www.pensionriskmatters.com/

59 11 Tampa has seen their pension fund contribution increase from $1.5 million in 2003 to $16 million in 2006 www.baynews9.com

60 11 Florida Retirement System www.myfrs.com/

61 11 city of Orlando on their pension plans public information requests

62 11 Miami-Dade College President Eduard J. Padron www2.tbo.com/content/2008/may/20/na-state-taxpayers-cover-shortage-when-pension-inv/

63 11 Florida Retirement System (FRS) had $137 billion Pensionriskmatters.com

64 11 assets plummet by $62-billion www.tampabay.com/news/business/article905919.ece

65 11 pension plans for the City of Orlando public information requests

66 11 City of Orlando guarantees an 8.65% return public information requests

67 11 Jacksonville is in the hole for $534 million www.jacksonville.com/tu-online/stories/090708/met_329408585.shtml


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68 11 Americans Lost Over a Quarter of 401(k) Savings in 2008 (January 28, 2009) bulletin.aarp.org/yourmoney/retirement/articles/americans_lost_over_a_quarter_of_k_savings_in_.html

69 11 retirement checks to 25 people for every 100 active workers. By the end of 2006, the ratio was 47 to 100 www2.tbo.com/content/2008/may/20/na-state-taxpayers-cover-shortage-when-pension-inv/

70 12 One in four Florida residents under the age of 65 lacked health insurance U.S. Census Bureau

71 12 Harvard Medical School determined that some 31% of U.S. health care dollars go towards administration en.wikipedia.org/wiki/Health_care_in_the_United_States

72 12 Jeffrey Barber, a medical claims auditor with Accu-Rate in El Paso, Tex. www.alberscompany.com/Forbes%20Slicko%20Article81307.pdf?cid=154

73 12 State of Florida has not funded any of the post retirement healthcare benefits Pensionriskmatters.com

74 12 California paid $4 billion in retiree health care costs in 2006 and is projected to pay $27 billion in 2019 Pensionriskmatters.com

75 12 2007 study by the Kaiser Family Foundation en.wikipedia.org/wiki/Health_care_in_the_United_States

76 13 U.S. spends more per pupil on elementary and high school education than most developed nations Time Magazine, Amanda Riply, Washington Times Nov. 26, 2008

77 13 Florida has 50% more retirees than the average state www.marketwatch.com/story/in-florida-retirees-could-rock-the-vote

78 13 Terry Moe. Mr. Moe Terry Moe, Wall Sreet Journal 1/22/2005

79 13 Pennsylvania Virtual Charter School was named “Parents’ Choice, images.businessweek.com/ss/09/01/0115_best_schools/40.htm.

80 13 Ohio and Texas, teachers unions have filed lawsuits to stop cyber charter school from being funded www.hoover.org/publications/ednext/3354616.html

81 13 William Eggers states “the changes Government 2.0, by William Eggers, Jan. 2005

82 13 Charter school student enrollment for 2007-2008 was well over 100,000 students www.floridaschoolchoice.org/Information/Charter_Schools/

83 13 small schools in the Chicago Public Schools Small Schools: Great Strides. A Study of New Small Schools in Chicago. New York: The Bank Street College of Education, 2000

84 13 The state of Florida saves $1.49 for every dollar invested in the program http://www.oppaga.state.fl.us/reports/pdf/0868rpt.pdf

85 12 overall budget went from $729,424,000 to an eye popping $1,461,000,000 https://www.ocps.net/fs/budget/Pages/default.aspx

86 13 Michelle Shepherd is president of the Rochester Community Schools Board www.rochester.k12.mi.us

87 13 Restoring the Balance www.heartland.org/custom/semod_policybot/pdf/21147.pdf

88 13 public schools have five times the administration as private schools www.reason.org


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89 13 school population is down by 5% statewide public information requests

90 14 2006 F.B.I. Annual Crime Report www.fbi.gov/ucr/cius2006/

91 14 Orange County we spend $700 million a year on public safety public information requests

92 14 Wenham selectmen chairman Peter Hersee http://www.wickedlocal.com/hamilton/homepage/x100360869

93 14 central Florida there is an average of less than one structural fire per day public information requests

94 14 cost roughly $3500 each time a fire apparatus goes on a call www.reason.org

95 14 Conwell, chairman of Cleveland’s council's Public Safety Committee www.firerescue1.com/fire-news/280490

96 14 reduction in deaths by fire nationally from 12,000 in 1974 to 3,570 in 1999 www.usfa.dhs.gov/statistics/

97 14 Station 2 had 502 EMS responses public information requests

98 14 Cherry Hill achieved savings www.njleg.state.nj.us/PropertyTaxSession/OPI/jcgo_final_report.pdf

99 14 corrections department in Orange County Florida cost taxpayers $175 million www.orangecountyfl.net/cms/GOVERN/budget/default.htm

100 14 private corrections facilities can save at least 10-15% Reason.org studies

101 14 one made $46,050 of overtime pay in a single year public information requests

102 14 Jackson County Tennessee is planning to consolidate its four 9-1-1 tn.gov/commerce/911/documents/AnnualReport.pdf

103 14 Residents in the Orlando neighborhood of Metro West MetroWest HOA budget

104 14 state transportation managers estimate that rangers have made close to 2 million assists tbo.com/content/2008/apr/15/na-budget-cuts-drive-rangers-off-road

105 14 three south Florida police officers www.drugpolicy.org/docUploads/police_corruption_report.pdf

106 14 dozen current and former Miami SWAT www.drugpolicy.org/docUploads/police_corruption_report.pdf

107 14 two current and former Hialeah police officers www.drugpolicy.org/docUploads/police_corruption_report.pdf

108 14 Sarasota woman brought a $3 million lawsuit www.drugpolicy.org/docUploads/police_corruption_report.pdf

109 14 Orange County Sheriff's captain Victor Thomas www.clickorlando.com/news/19057847/detail.html

110 14 crime in Orlando has increased 396% en.wikipedia.org/wiki/Orlando,_Florida

111 14 May 1997, a thousand Newcastle soccer fans May 1997, a thousand Newcastle soccer fans


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112 14 2004, there were 4.4 million traffic tickets www.dmvflorida.org/traffic-tickets-2004.shtml

113 14 tiny Windermere, Florida, population 2003, the police department issued 60,000 traffic tickets in 2005 www.topix.com/city/orlando-fl/2009/04

114 14 The number of officers on the street was revised to deploy officers at peak crime periods www.law.duke.edu/shell/cite.pl?66+Law+&+Contemp.+Probs.+99+(Summer+2003)

115 14 You’ve Got Their Back, We’ve Got Yours www.sheriffs.org/userfiles/file/AR06proof%20final.pdf

116 14 American gangster www.americangangster.net

117 15 Indy mayor Stpehn Goldsmith www.mackinac.org/article.aspx?ID=2143

118 15 Sunnyvale's success with output-based budgeting www.outsourcing-journal.com/jun2000-wpaper.html

119 16 Wilkinson said “government should not be in the business of taxing people www.americanchronicle.com/articles/view/74762

120 16 second homeowner in Volusia County www.volusiataxreform.com

121 16 670,000 second homeowners in Florida realtor.org/rmodaily.nsf/d930f593a85e1a1486256ca800627f1d/9bfe958b9

122 16 11,000 a year to $40,000 in a single year www.volusiataxreform.com

123 17 Texas expects to save $1 billion www.mackinac.org/5913

124 17 Missouri IT infrastructure supports the systems that serve the state’s 5.8 million huliq.com/15549/missouri-state-government-increases-efficiency-through-it

125 18 Atlanta reports the following estimated savings Alliance for Building Reform (FIATECH)

126 18 Rochester (MN)-Olmsted Planning Department was formed in 1975 www.co.olmsted.mn.us/departments/planning/index.asp

127 19 following “Incentive Programs www.cityoforlando.net/economic/business/Business_Asst_Team.htm

128 19 Connecticut Governor Rell www.ct.gov/ecd/cwp/view.asp?a=1104&q=435580

129 19 of Orlando has a budget of roughly $32 million www.cityoforlando.net/index.htm

130 19 Orange County Convention Center has a budget for 2009 of $366,844,866. www.orangecountyfl.net

131 19 Orange County Commissioner Mildred www.orangecountyfl.net

132 19 According to the Houston Chronicle reason.org/blog/show/1007042.html

133 20 Reason.org, private garbage service costs 29 to 37 percent less www.heritage.org/Research/Regulation/bg238.cfm

134 20 Orlando charges $589.59 a month for an 8 yard dumpster picked up three times a week while a private vendor charges $331.76 Falcon Development records

135 20 Orange County taxpayers spend some $50,000 per day on salaries www.orangecountyfl.net


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136 20 Memphis Tennessee and Shelby County are planning to merge their Engineering Departments to save the taxpayer money smartcitymemphis.blogspot.com

137 20 Report: Private design saves millions Consulting-Specifying Engineer, 12/15/2008

138 21 project shows no justification Federal Transportation Agency, Nov. 2007 report

139 21 agreement proposes the local governments Federal Transportation Agency, Nov. 2007 report

140 21 wanted to give an advantage to transit Reason.org 2004 Rail Disasters

141 21 Writing in Transport Reviews, April, 2008, Reason Public Policy Study #243

142 21 Curitiba, the capital of the State of Parana www.reason.org/ps230.htm

143 21 thinks up ways to slow down Orlando's growth, and humanize it” National Geographic, March 2007

144 21 nationwide ITS Government 2.0, by William Eggers, Jan. 2005

145 21 Orlando Utilities Company is $763,896,000 Orlando Business Journal, Feb 2nd 2009

146 21 The tax amounted to $45,308,404 in 2008 www.ouc.com/news/pub/ar-2008.pdf

147 22 Parks and Recreation including Topeka, Kansas with Shawnee County www.wibw.com/localnews/headlines/47266197.html

148 22 New York City Department of Parks & Recreation www.centralparknyc.org/aboutcpc

149 22 Leu Gardens lost the taxpayer $1,020,543 in the last year public information requests

150 22 City of San Diego leased out its golf course www.sfgate.com/c/a/2000/01/21/MN8874.DTL

151 22 Clint Bolick at the Goldwater Institute www.reason.org/blog/show/1007463.html

152 22 Riverside County, California contracted its library operations in 1997 www.privatization.org/database/policyissues/libraries_local.html

153 23 the State of Oklahoma established a Capital Planning Commission www.ok-bonds.state.ok.us/LRCPC011206.pdf

154 23 Orange County government alone, there are eight separate divisions with over 600 employees www.orangecountyfl.net/cms/DEPT/pw/default.htm? REDID={7D4E780A-2F6D-4C12-9FC7-571425B27B88}

155 23 Howard Lake, Annandale and Maple Lake Montana determined they can save 25% www.reason.org

156 24 Town of Sudbury Massachusetts www.boston.com/news/local/massachusetts/articles/2008/06/01/

157 24 City of Charlotte and Mecklenburg County www.government-fleet.com/News/Story/2008/07/City-of-Charlotte-and-Mecklenburg-County-to- Consolidate-Fleet-Maintenance-Operations-on-July-1.aspx

158 25 additional rent needed to pay for local government may cost the average tenant $400 per month ContraVest analysis

159 New Florida fees By Josh Hafenbrack | April 16, 2009, Orlando Sentinel


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160 25 Americans spent 8.22 BILLION hours responding to government requests Government 2.0, by William Eggers, Jan. 2005

161 25 OSHA developed the Hazard Awareness Advisor Government 2.0, by William Eggers, Jan. 2005

162 25 Vicente Fox, president of Mexico Government 2.0, by William Eggers, Jan. 2005

163 25 Eliminate what you can and digitize what you can’t Government 2.0, by William Eggers, Jan. 2005

164 25 Washington D.C., the transportation costs alone for special education children is $32,000 per student Orange County Transportation Task Force

165 25 Orange County, Florida that figure is estimated at $12,500 per student Orange County Transportation Task Force

166 26 pretty face on a slothful, cluncky edifice Government 2.0, by William Eggers, Jan. 2005

167 26 And today email delivers more information in a day than the U.S. post office does in a month http://email.about.com/od/emailtrivia/f/emails_per_day.htm

168 26 Frank McDonough Government 2.0, by William Eggers, Jan. 2005

169 27 Sociologist Robert Putnum Government 2.0, by William Eggers, Jan. 2005

170 28 Voters approve prop c Voice of San Diego, Dec. 6th, 2007


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