Friday, May 28, 2010

Norco to Get Leaner, Meaner, But Not Greener

Like most unhappy couples, Northampton County Exec John Stoffa and County Council have been bickering about money lately. Stoffa has increased the workforce approximately nine per cent over the last four years, from 2037 to 2220 employees. A tax hike next year is all but inevitable. Still, it was quite a shock when County Council unexpectedly killed a routine budget amendment last week, the first time since Home Rule that a budget amendment ever failed.

Routine or not, that budget amendment accounted for $4.5 million in pass through grants from the state, providing for needy children, homelessness, seniors and people with addictions. Usually unflappable, Stoffa was furious. He eventually stormed out of Council chambers, but not before chiding them, "You'll be looking in the mirror tonight."

What a difference a week can make! At a Finance Committee hearing yesterday, attended by Stoffa and most Council members, Council President Ron Angle set a more conciliatory tone. "Whatever decision we make, we're going to make it together," he said. For his part, Stoffa told Council, "I want to cooperate."

Fiscal Woes

There's no denying that the County has mounting costs. In addition to the cost of a nine percent increase in staff, Budget Administrator Doran Hamann has previously laid out some other pressing fiscal concerns:

* In 2009, the County dipped into its fund balance, to the tune of $6.9 million, to balance the books.

* In the first four months of this year, the County has already had to spend $4 million of the $6 million set aside in its fund balance. Hamann is concerned that the County may have to spend between $16 and $20 million of its fund balance by the end of the year.

* Combining the swaption cost as well as some anticipated state cutbacks, Hamman warned that the County could end up spending an additional $49 million.

* Real estate tax revenue, which is pretty much the County's chief source of income, has only risen 0.223% this year.

* Health costs have increased 43%.

In a productive meeting on May 27, Council members and County Administrators discussed different areas in which the County could save money.

Gracedale

Called the County's crown jewel by its defenders, the County's nursing home also lost $6.29 million last year. In the first three months of 2010, it is down another $300,000. "It's a money pit," complained Angle. Council members agreed to hold off on deciding whether to sell until July, when an $18,000 study by consultant Complete Care is finished. "We're not going to wait between July and October. We're going to look at it in July," warned Angle.

Open Space

In 2006, John Stoffa proposed a half mill tax increase for a "pay as you go" open space plan to generate $84 million over twenty years, and provide a source for matching funds from the state's Department of Conservation and Natural Resources. But the consensus of Council members is to stop using real estate tax dollars for the next few years. Director of Administration John Conklin recommended that the County could devote some of its repository properties, i.e. properties that can't be sold at a tax sale, to continue pursuing open space at no cost to taxpayers.

County Parks

Budget Administrator Doran Hamann told Council members that it costs $2 million annually, just to maintain the county's 1300-acre park system. "I don't think we can afford to be in the parks business," said Angle, suggesting that municipalities be asked to take some of them over or at least share in maintenance costs.

Director of Administration John Conklin told Council that Allen Township may be interested in annexing some park lands.

5% Workforce Reduction

Stoffa made clear that he opposes direct layoffs, but supports layoffs via attrition. Council member Mike Dowd noted, "There are some areas where we are not going to be able to reduce employment. As often as we can, we need to cross-train people." Council member Tom Dietrich worried about shortages in "critical services," but Stoffa answered, "We need to try it and see what happens."

Currently, the County has between 50 and 60 fully-funded positions that are vacant. Council and Administrators agreed to transfer the funding for those positions to the fund balance, giving the County a larger rainy day fund while simultaneously completing half of its 5% layoff.

Mandatory Furloughs

Last year, Northampton County's voluntary furlough was used by 20 county employees. Director of Administration John Conklin noted that some counties have instituted a mandatory furlough program, and suggested it might work here. "There are some contractual issues, so we'd have to do it across the board. The Court would have to get on board with that." Court Administrator James Onembo, who sat in on the meeting, offered no suggestions or response.

Revenue Raising Ideas

Fiscal Affairs Director Vic Mazziotti suggested one way in which the County could increase its revenue stream. People recording deeds and mortgages could be required to pay a $10 fee for a parcel identification search, something already done by Recorder's employees at no charge. That could easily generate over $220,000, enough money to pay for 4 county workers.

When all was said and done, Council member Bruce Gilbert stated he's "very pleased with what has occurred today." Asked whether he thinks a tax hike next year can be avoided, Council President Ron Angle stated, "That has yet to be seen, but I think it's possible."

He concluded, "We're a leaner, meaner machine." But not greener.

27 comments:

Anonymous said...

At this point they are neither leaner, meaner and still not that much greener. Hopefully calmer heads will prevail before they take such drastic steps such as selling the much needed and beloved Gracedale.

It is amazing that this Administration and this Council are so inept that parks, a needed nursing home and services will disappear.

From inheriting the largest surplus of any Administration and a lean workforce this Administration hasliterally "screwed the pooch". What a disaster. Now folks will lose jobs and services. But Abe Atiyah is happy. God save us.

I have to believe there are some former county official that can come back and help Northampton county.

Watching this group on the news and reading their comments is like watching the government of Haiti, they don't have a clue.

Veritas

Anonymous said...

Veritas, I doubt the County has ever been in sadder shape. Word out of the Courthouse is, it's like being on auto-pilot.

Anonymous said...

When our County Council President crashes private meetings of a local municipality and scolds them, what else can you expect? There is absolutely no leadership on this Council and Administration. Seems like all they are worrying about is a pipe dream prison where it will cost more than its worth. Yet, needed social services are not being provided, jobs are not getting done etc. etc. etc.

Anonymous said...

This council inherited a mess and they still have to deal with the incompetent who continued spending and adding when the economy was already in a nose dive.

Let's have a huge bond for stimulus. Maybe we can build $186,000 parking spaces to spur recovery. Happy days are here again! Money grows on trees, after all.

Chris Amato said...

Not allocating the open space funds for what they were intended for would be a travesty.

Anonymous said...

MC's Renshaw Details Allentown's Mismanaged Grants Program
BERNIE,
would you consider submitting this again today FRI so some can comment?

Bernie O'Hare said...

"When our County Council President crashes private meetings of a local municipality and scolds them, what else can you expect? There is absolutely no leadership"

Going to the ZHB over that treatment center is the very kind of leadership that Angle and Stoffa have provided over the years. In Stoffa's case, it's quiet and persistet. In Ron's case, it's flashy. In both cases, it is leadership on an issue that needs leadership. Perhaps you like overcrowded prsisons or all the repeat business at the jail. To his credit, Stoffa has worked hard to minimize that serious problem.

Bernie O'Hare said...

Anon 8:55, You can still comment there. Some folks have done so.

Bernie O'Hare said...

"From inheriting the largest surplus of any Administration"

Stoffa inherited a disaster. Most employees had gone without raises for 3 years plus. Suddenly, there were many new unions. Morale was in the tank. The courthouse project was a mess bc nobody was in charge. A new jail was mypoically full the moment it was built. Money was being slated to goofy roads to nowhere in Wind Gap. Stoffa spent much of his first term putting out the fires set during Reibman's 8 years in office.

Ecen now, the $12 MM payment for Reibman's goofy swaption is due next year.

In that time, Fiscal Affairs Director Vic Mazziotti also found ways to save $10 MM annually, something I chronicled here.

The County is being managed much more prudently and is is soud financial health. it's biond rating has gone up under Stoffa, thanks to the larger fuind balance he and Angle have agreed to generate. But all the problems I mentioned are out there, and point to a tax increase that should have been adopted last year. It requires constant attention.

It was encouraging to see Stoffa and Council work together.

Bernie O'Hare said...

C, I agree.

Anonymous said...

This is incredibly scary. I dont want to lose my job! I work just as hard as the others here and we are overworked and dont even make "Living wages". My paycheck went down about $75 from last year. Inflation rate of the Lehigh Valley didnt drop my payments $75.

Anonymous said...

No money, no honey.

Bernie O'Hare said...

Anon 9:26,

It is incredibly scary. Your income went down $75 in one year. I am self-employed, and my income is about 40% of what it was in 2005 and 2006.

The last thing Stoffa wants to do is lay people off. It is a disaster when that happens. He is trying to save jobs, and 99% of the people at Northampton County work very hard.

The biggest drain on the county right now is Gracedale. If we were to sell that, we could include language in the agreement insisting that the new owner keep all the county employees currently working there.

But when real estate tax revenue rises just 0.223%, we can't pay for the increased costs associated with increased employment, swaptions, a 9th judge, and so on.

If you have cost savings ideas, make them known. You can post them here anonymously.

Anonymous said...

To be honest I wasnt happy about the $75 but I was thankful I had a job. Now I get to worry about not even having a job. Positions were already not being filled here. We are all overworked.

Bernie O'Hare said...

I think your job security here is safer than in the private sector. But when health care costs jump 43% and real estate tax revenue only climbs 0.223%, it puts administrators in a bind. I am glad they are looking at this problem now, while the county still has money, and before there is a real crisis.

If you can think of any specific cost-saving measures, feel free to post them.

Anonymous said...

Bernie wrote "Stoffa inherited a disaster."

I agree! The jail project was inadequate before it was finished.

That ridiculous bond maxed out NC credit card without addressing the real needs of this county.

Then most of the members on council bought into the dog and pony show and agreed to a swaption. Which is one of the problems this council must face.
(Angle warned them against that.) .

Reibman and company raised taxes 63% tax increase in only two years and had wage freezes and layoffs

The ones demanding that the budget reserve should be used up were Dertinger and McClure.

Spending down the reserve was not Angle's idea.

Now, I’m scared that’s twice I’ve defended Angle. I’m going to hell for sure.

My question is the about the losses at Gracedale. Are they because State funding has been cut or the cost of doing business has increased so dramatically?

Also, what about the 43% increase in healthcare costs? No one is explaining that in any detail. That seems high even in today’s environment. Does anyone know?

I'm just grateful someone is asking the questions now. Sitting around blindly approving budgets is not any kind of a solution.

Bernie O'Hare said...

"Also, what about the 43% increase in healthcare costs"

As I understand it, there's been no sudeen influx in claims or anything of that nature. As you are obviously aware, the county is self-insured. It had special deals with hospitals for charges on certain items, but the hospitals have raised rates.

Bernie O'Hare said...

"My question is the about the losses at Gracedale. Are they because State funding has been cut or the cost of doing business has increased so dramatically?"

That question will be answered in July. Over the last 10 yrs, Gracedale has actually made money. But in the last 3 years, it has lost money. Some of this is due to non-recurring items like the windows project.

But as patient levels continue to decline, the trend is that it will lose money, I suspect. We will see.

The money generated by a sale would solve a lot of problems.

Anonymous said...

This cannot be fixed. Everyone has their own personal "necessary expense" that is THE most worthy and would just be inhumane to eliminate.

Private companies that survive the type of situation Norco finds itself in do so not by raising prices, but with a multi-faceted strategy which includes reducing headcount, salary freezes or reductions, selling off assets, defaulting on debt, shedding pension obligations, breaking unsustainable union contracts, etc.

If the public will not insist that the County take a similar approach, then they must pay. Period.

Anonymous said...

It is amazing that this Administration and this Council are so inept that parks, a needed nursing home and services will disappear.
-True

Anonymous said...

We need to ask Charlie Dent what to do? He has expertise in municipal management according to his attacks on decisions made by a municipal leader.

Charlie Dent said...

I recommend not spending more money than you take in. I also recommend keeping casino tax relief promises.

Anonymous said...

Stoffa should start looking at layoffs in the prison, and start at the top. You aren't going to save money by laying off the rank and file. Are all those administrative positions there really necessary? Bernie, this would be worth your while investigating the positions that have been created in the prison over the past 3 to 4 years. I wonder if people actually know what's going on over there anymore.

Anonymous said...

Boat Race
The Americans and the Japanese decided to engage in a competitive boat race. Both teams practiced hard and long to reach their peak performance. On the big day they felt ready.

The Japanese won by a mile. Afterward, the American team was discouraged by the loss. Morale sagged. Corporate management decided that the reason for the crushing defeat had to be found, so a consulting firm was hired to investigate the problem and recommended corrective action.

The consultant's finding: The Japanese team had eight people rowing and one person steering; the American team had one person rowing and eight people steering.

After a year of study and millions spent analyzing the problem, the consultant firm concluded that too many people were steering and not enough were rowing on the American team.

So as race day neared again the following year, the American team's management structure was completely reorganized. The new structure: four steering managers, three area steering managers and a new performance review system for the person rowing the boat to provide work incentive.

The next year, the Japanese won by two miles. Humiliated, the American corporation laid off the rower for poor performance and gave the managers a bonus for discovering the problem....

Anonymous said...

Anon 10 AM, you just very smartly summarized smartly the Stoffa Administration, well done. That was great!!!

Anonymous said...

Since "Maz the magician" is saving $10 million a year and the Administration knew the $12 was going to be due, this should be no problem, right?

Fact is they are incompetent and Oahre's list of achievements might as well include re-numbering the courthouse floors. Now the fourth floor is the third floor. These are the real accomplishments of the Stoffa regime.

Please. Morale is as low now as it ever was. Council always controlled the Bond money as your buddy Angle proclaimed and the road was cancelled when found unfeasible.

The only fires Stoffa has had to put out are the ones he clumsily started himself by breaking promises to employees and hiring his team of "no-clues" to run the County.

After five years your defense of this failed group is pitiful. For all his supposed success the County is hemorrhaging money. 45% healthcare increase, really? Maybe the great Blue-Cross Stoffa wanted so badly is really fleecing the County for Administrative costs. Please Ohare. This group is a reactionary crowd and couldn't plan their way out of their own way.

Logic, Reason, Truth!

Anonymous said...

Why at the prision are there 3 people doing the job 1 person used to do.The good old boys strike again!As for Ron Angle I do believe he had a hand in aproving some of the jobs he now wants to cut,Ron can you please make up your mind which way you want to go!