Wednesday, June 27, 2007

Behind the Budget Eight Ball

Sorry not to have posted sooner. Real-life (work) has raised its head. I was late to the Council meeting on Monday. The meeting was posted for 7:00 PM but started at 6:30 PM. Oh well, I should have gone early. :<(

Let's take up a bit of bandwidth and look at a couple of things:
  • We found the city was short $600 K on the Dallas Water Line project, not the General Fund. Nevertheless the new City Engineer got up and apologized for not being upfront with the Council until the meeting....taking a shot at the dearly departed ex-City Manager. I guess we really DID need the ticket "scam" didn't we? The interchange between the engineer and council really drove home why Mr. Pfiefer was terminated. There was apparently a serious lack of "upfront" communication between the City Manager, Staff and the Council. This lack of meaningful communication festered into a very unfortunate situation (ultimately) for Mr. Pfiefer.

  • Todd Fuller (see I told you don't want an ice cream) is going to get in there and figure out the "real status of the budget" and present it to council. It was indicated to that revenues are going to be down even more than Ken anticipated when he amended the budget. A question that may illustrate the obvious...did the City Manager knowingly mislead the Council about the status of the budget? If so, why? This type of stuff always comes out in the end. Can't hide M&O needs versus revenues. That's pretty black and white. Good Luck Mr. Fuller. I'd be very interested to be a "fly on your wall" while he's doing the digging. Perhaps the end result will be reality rather than smoke and mirrors.
    I doubt we civilians will ever know however. We probably don't need to know right?

    From where are the revenues going to come to balance this budget? Does the City have the fund balance to kick in and resolve the funding issue with the Dallas Water main project? I smell (pun intended) a Sewer and Water rate increase, perhaps a raise in local taxes, or a raise in licensing fees for City services and permits. Hopefully the rates for permits won't get hiked since we only had one (1) commercial permit all of last year according to a previous staff report to council. We just don't need anymore reasons not to build business in Red Oak.

  • Ken Pfiefer's final severance pay is $55K. This was negotiated 12 years ago. Not bad...guess he can go to Disneyland now. :<) Wonder if that severance is covered by the Fund Balance too?


Anonymous said...


I have been very impressed with your blog and your read on RO politics. In review of your most recent post, someone (Council) should ask "What will be the budget shortfall (projected) due to the spring summer rains and less residential water use. That may be part of your budget shortfall, obviously it is not because of a "someone" but an act of God!.

Steve Miller said...

Good Post!
That was a really quick item discussed several meetings ago when the current state of the budget was presented. The person doing the presentation acknowledged there was a drop in revenue but didn't have the information apparently to do any trending analysis.
I'd ask that question during the "Open Mike" at the next Council meeting. I'm sure it has been discussed by staff but not in open meeting to any degree.

Again..thanks for the post!

Anonymous said...

The rain and the lack of use in water did not cause a $600,000.00
budget shortfall. one person did it KEN

Steve Miller said... BS-O-Meter got pegged when I heard the guy gush in the Council chambers on about how the budget was "ok" but couldn't/wouldn't discuss with any of the Councilpersons WHY it was just "ok" when asked...the questions were just dismissed. OOPS...that kind of arrogance got Ken dismissed.
Now it incenses me because we're 600K in the hole and it WILL come from us indirectly in the form of higher fees for services or directly in the form of higher taxes.
Hopefully the councilmembers can put things right without too large a tax increase or cut in services. The only other way to balance the budget is to cut personnel....that won't happen IMHO.

Anonymous said...

In my opinion, the city doesn't need a cut in personnel. Some departments are operating with the same number of employees they did 5 years ago, yet the city has grown by 50%. The budget just should have been looked at a little closer. We're short because the budget was WAY inflated in the first place. If the numbers (ie: police fines) had been a realistic goal, we wouldn't be "short" right now.

Steve Miller said...

I agree with you. My city services run like clockwork although I'm sure that statement will get me flamed. I just don't have any horror stories about City services. That doesn't mean however that everything is rosy in Oz however. My view is personal at this point.

I'm running the risk of sounding like Joey Dauben :<) or looking at the sky for black helicopters :<) but I do think the budget was a sham perpetuated by the previous City Manager and supported by staff because they didn't want to lose their jobs. The ticket quota scam was the means to "shore up" the lie and give credence to the crap budget. In the final analysis, it just didn't pass the smell test and the ex-City Manager paid the price for the lie.

I've got my flame-proof stuff on...fully expect the trollers to light me up.

Give it a shot! Change my opinion? I doubt it... :<)

Anonymous Mayor said...

I’m a bit reluctant to voice here on a Red Oak blog since I don’t live in Red Oak but having political and fiscal stability in all of Ellis County cities helps all of Ellis County.

Shortfalls in municipal budgets aren’t something new. Adjustments are made so that at the end of the fiscal year you have enough revenue to meet your bills and nearly every city makes adjustments to their operations to counter revenue shortfalls IE: hiring freezes, deferring capital expenses, restricting OT, limiting travel, conference and many other ways.

It’s easy throw around blame and this and other Ellis County blogs do a pretty good job at that. Just remember that the city council approved a budget that had projected higher revenues in courts and did so because they approved a traffic enforcement program that would generate those dollars.

In addition, capital projects need to be managed closely, especially when there are little contingency monies allocated to the project. It’s often a two edged sword when estimating project costs. Estimate too high and there is money left over at the end of the project that has to be spent (I prefer that it be applied towards the first bond payment) and come in with an estimate too low and you have to make up the difference, usually using your fund balance.

Red Oak will take years to heal from this entire rift. Inexperienced leadership at the council level got you where you are. As an outsider, I believe that there has not been a clear vision for your city that is supported by the political constituency. I believe Red Oak has not developed the tools to properly plan strategically for the growth you are experiencing. This plan should include operations, maintenance and capital policy that covers a 10 year window. Getting a bunch of people together to think-tank is a great idea, but if you don’t enact policy to see that the vision is carried out, it is all for naught.

Look at some of your other successful Ellis County cities. Look and see what they are doing to strategically plan for the future. See how they have supported, by adopting policy, the vision of the community. See how they have grown their staff to meet the demands of growth. What tools are they using?

I don’t know too much about your former city manager but I can tell you he wore way too many hats. City Manager, Planning Director, Finance Director and probably others I am not aware of. Other successful cities have key individuals in each of these departments and have a staff of professionals to get the job done. IE: carry out the vision of the council and community. One man can’t do it all. It takes leadership at the top and that starts with the council.

My prayer is that Red Oak gets its act together. The events that have unfolded over the last 3 months have really cast a terrible light over your city and it’s going to take some time to heal.

Good luck,
The Mayor of one of your sister cities in Ellis County.

This post could have been placed behind any of your blogs. Steve, you can post it where you want to.