Fanning the Flames of PSL’s Budget Problems
October 11, 1871 (reporter from the Chicago Sun) Mrs. O’Leary, any comments about the fire for the press? Mrs. O’Leary – “I think leaving a lit lantern in my barn, next to my cow, was a great idea, and I’d do it all over again.” I doubt this interview ever happened after the Chicago fire of 1871 but if it did it was replayed at the Port St. Lucie budget retreat by city manager Jeff Bremer. The budget retreat is where the individual city departments report to the city council and tell them why they need more tax dollars. Or at least why they shouldn’t be on the budgetary chopping block. In Bremer’s report to the city council about our $12 million deficit he gave a quick rundown of what we know, and his view of things. Bremer said that the decisions made in the 2000’s were “sound”. Bremer was alluding to the 100% financing of Digital Domain, VGTI and Torrey Pines. One business with no history of ever being profitable, and two others that exist only on government handouts. “The idea of diversifying our economy was supported by the state, county, the public and the newspapers,” said Bremer in defense of the city’s misguided foray into venture capital. Yet, it is only the city left holding the bag. Everyone will support spending money, as long as it isn’t theirs.
$12 million deficit based on sound decisions- Jeff Bremer
Bremer pointed to sequestration as the reason for the downturn in Torrey Pines and VGTI. As if to say our inability to control our debt is a direct correlation to the federal government’s inability to control theirs. Bremer spoke about the recession as if the word had not existed prior to 2008. He talked about lessons to be learned from the housing market. Which lesson? The one where house prices fall? Which time was that? Was it 2008? Or the 1890’s, the 1900’s, 1920’s, 1940’s, 1950’s, 1960’s, 1980’s or 1990’s? Housing prices rise and fall all the time. Here’s a 100 year chart by Yale economist Robert Schiller of the Case-Schiller housing indices. It’s not a straight line. The only lesson learned is that government on all levels refuses to believe that they are bound by the laws of economics, that they believe that they have the power to avoid cycles, and they need only to spend more money to make things better. Nothing against Mr. Bremer. He was left to muck out the barn and he’s spinning the muck as best he can. That’s his job. His job is also to spend your money so he talked about increasing revenue. Which is code for raising taxes. IMHO the best way to increase revenue is to stop decreasing it and prioritize spending. For instance put an end to the non-stop purchasing of land. The purchase and annexation of McCarty Ranch (over $10 million) comes to mind. So does the purchase of the Liberty Medical building. The city purchase of the defunct Liberty Medical building does many things. It takes the property off the tax rolls, about $200,000 between the county, city, school board and all the other taxing entities. It also increases spending, not only the cost of the building ($4.4 million) but the blank check that exists in renovating it for the city’s use. Once again, nothing against Mr. Bremer. He’s an addict. He is addicted to spending other peoples’ money, and like most addicts he’ll be fine after just one more hit. Like most addicts they will tell you in a most convincing voice this will be his last high, then he’ll quit altogether. This time the hit is a 15% tax increase on the residents of Port St Lucie to pay for what Bremer calls “sound decisions” and decisions he’d make all over again. (In Bremer’s defense he didn’t make those decisions in the first place.) Mr. Bremer is part of government and therefore is solid in the belief that more government is the answer to everything. Bremer also showed surprise at the recent downgrade in the city’s credit rating. Ratings are based the size of your debt compared to your income, which correlates to your ability to pay off your debt. Also considered is your willingness to pay off your debt. Port St Lucie does not pay off its debt. It refinances it, not all of it, but too much of it. This downgrade is due to the failure of all those “sound decisions” Bremer spoke about. I’m surprised at Bremer’s cavalier attitude towards our tax dollars and the future of the city. Here’s a list of what Bremer called sound investments in our economy just in case you forgot. Digital Domain, VGTI and mortgaging the City Hall Complex for Torrey Pines combined tallies the initial borrowing at $149 million. If you want to add in the interest to maturity you come up with a figure of $267.5 million to build 3 buildings. Let that sink in for a moment because we recently sold one of those buildings for $13 million. I chose not to include the money borrowed to build the Civic Center and City Center because I don’t want your heads to explode. Running a city is not an easy task. But not acknowledging the fact that sometimes those in government are wrong makes it more difficult. It makes it impossible to learn from mistakes, if only because you refuse to see mistakes for what they are. Just tag the taxpayer with the bill, shrug it off as “legacy”, and move on to the next disaster. That’s exactly what will happen unless the citizens wake up. It will happen unless taxpayers fill the city chambers and demand accountability. Wait, I’m wrong. If you don’t fill the chamber you won’t see Bremer’s proposed 15% tax increase . It will be 18% that was approved by the council, with a single dissenting vote by Mayor Greg Oravec. I want to give kudos to Mayor Greg Oravec. He was the lone dissenting vote on the purchase of the Liberty Medical building. He was also able to quiet Councilwoman Shannon Martin down without having to use a Taser on her. Martin is a member of the ‘better government through ever increasing government’ club. Martin was ranting on and on about how the city needed more full time employees to keep up with mowing absentee owner lots. The city has become the landscaper of last resort. Oravec was able to calmly talk her in off the ledge and suggested that it would be better if the city just prioritize which lots must be taken care of first. Well done Mr. Mayor.