Sunday, May 22, 2011

We have no right expect munipalities not to default...

Hollywood Beach Florida is apparently a little late checking the balances in their checking accounts and the expected receivables on their account rolls. The interesting thing, and example of the credit fueled complacency that the world has adopted, is that a town with revenues of less than $8,500,000, needs a $7,900,000 fire house and I'll estimate a $1,250,000 disabled water tower so you can see it from the expressway. How interesting, when you find out how it really works when your complete business model is built on spending money you don't have, before it comes in and in amounts that can only be visualized on a perpetual exponential curve...These guys must be taking lessons from BURNanke. They certainly have eaten his cooking and believed his rediculous fairy tales.

None of these people are taking into account he collpase that is going to happen in their assets and their constiuent's assets and homes...I can hear the default bells ringing.
During Wednesday’s City Commission meeting, leaders learned Hollywood was short $8.5 million of the money needed to stay afloat through the end of the budget year, which is Oct. 1.

The commission approved raiding its emergency reserves — leaving just $2 million in the city’s coffers — and making $2.1 million in cuts to upcoming expenses.

But Mayor Peter Bober said the fact that Hollywood was poised to be millions of dollars in the hole should have been reported to commissioners months ago.

Bober is now calling for the removal of Hollywood Director of Budget and Procurement Services Cynthia Forrester, although the decision ultimately rests in the hands of City Manager Cameron Benson.

If you look at the numbers from months ago, a budget person would have seen that things are not shaping up as they should be," Bober said in an interview Friday. "It should have been brought to the attention of the commission sooner. It would have allowed us to have taken strategies earlier to make necessary reductions.

He pointed to several projects approved by the commission in the last couple of months that might have been reconsidered — including using $500,000 from the current budget to finance a $7.9 million fire station being built along Hollywood Beach and approving an additional $86,000 to refurbish the city’s light blue water tower visible to motorists driving along Interstate 95 and Sheridan Avenue.

"If the rest of the commission had known then as they know now, then every expenditure from copy paper to fire stations, everything would have gotten a much higher degree of scrutiny," Bober said. "The fact that this information was not brought to our attention sooner is negligent."

In order to shore up reserves and address any financial shortcomings for the 2011-2012 budget year, Bober said the city should look at cost saving measures like outsourcing some jobs or determining if certain tasks can be handled by "new technologies."
To bolster the city’s finances, the city may also have to take a look at raising its tax rate, said Matthew Lalla, the city’s director of financial services.

Last year the city commission approved raising the rate to $6.71 for everything $1,000 of a property’s assessed value, but even then, because of declining property values, the city was projected to bring in $2.6 million less than it had brought in the year before.
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