2007 Capital Improvement Program Flaws

The City has an excellent software program that allows the staff to identify desired capital improvements for the current year and several years to come. It is quite impressive. The City Council prioritizes projects utilizing a whole host of factors and the staff plugs them in for future reference and funding. Unfortunately the program does not lead to results because of an inherent failure in City procedures.

Ask any member of the Council what capital improvements will be constructed in calendar 2007. Ask them to show you a piece of paper with the answer. They will not be able to do so. They might refer you to two pages in the 2007 budget (pages 59 and 60) as a response but they would be in error. They will be only accurate to the extent that the two pages only show the new or modified projects that have been added to the CIP process.

The CIP program for 2007 lists projects amounting to $9.4 million. Here are the projects to be funded out of the General Fund only: Webster lake shoreline rehabilitation $150,000; Irrigation value replacement $20,000; Playground equipment replacement $30,000; Weld County road #11 realignment design $10,000; Traffic signal cabinet replacement $13,500; Remodeling of 1710 Leroy Drive $16,000; Integrated Technology master plan $200,000; Residential street overlays $750,000; Huron St and Croke reconstruction $3,758,705. TOTAL: $4,948,205

Before moving on with the answer I posed earlier, I would like to share the Council’s highest priorities for the General Fund’s CIP with their score for comparison: 105 Traffic signals cabinets; 102 Street painting and thermo replacement; 100 Arterial street overlays; 95 Residential street overlays; 92 Rec. Center HVAC replacement; 92 Street crack sealing; 90 East 112th Ave. widening; 85 Huron St and Croke reconstruction. There are some matches.

The reason the members of the Council cannot tell you what projects will be done in calendar 2007 lies in the supplemental appropriations they make during the year contrary to the CIP plan and the forgotten CIP projects authorized in prior years but not done or done completely. An example of a supplemental is the 104th trail and landscaping project with a price tag of $876,257. Last July council member Rosie Garner pushed the project through the Council even though it was not listed in the CIP even through 2011. There was a great push for the project and the Council agreed to fund it out of 2006 funds. As we can see, it will not be constructed until 2007 so what was the rush? I will discuss the problem caused in the following paragraphs. I am commenting on the CIP/budgeting process; not the value of the project.

In addition to the supplemental appropriations problems the CIP plan does not take into account uncompleted projects from prior years. Money previously authorized is reported as a carryover and accounted in the reserved General Fund year end balance. For example, as of June 30th of this year the 2006 CIP and the leftover projects from prior years had a combined appropriation of $4,516,105 of which $3,770,416 had not been spent.

The money is committed, tied up, unavailable or whatever you want to call it. Some of the projects were cancelled, others were reappropriated this coming year and others did not need the full amount of the appropriation. The Council should immediately evaluate all of the prior commitments and clean up the mess. Much of the money is being sandbagged for no legitimate reason or need.

In addition to clearing and freeing up money in the all of the reserved year-end fund balances, there are some more steps the Council should consider. 1. Amend the CIP budget early in the calendar year to reflect the status of the prior year’s projects. Either delete and/or reappropriate the money for unfinished projects or reschedule the project for future years if its comparative priority has decreased. 2. Limit the “reserved” year-end fund balances to projects which have a contractual encumbrance. Limit the reserved balances of all funds to only what is necessary. 3. In the future divide multi-year projects into yearly components and only appropriate what is necessary each year. Your CIP program will keep track of future obligations. 4. Do a thorough review of the current year’s CIP progress as part of the budgeting process for the ensuing year. 5. Ask Finance to provide an integrated report of all CIP activities in its monthly report. 6. Do not let the staff choose to abandon a CIP project as has happened each year. You should be the one to formally abandon or modify projects just as you do when adding one.

In paragraph three I listed the CIP projects for 2007. You might want to compare them to the 2007 projects as scheduled in the program during last year’s budget process: Street overlays $400,000; Washington St. overlay 104th-112th $200,000; Washington/Muriel signal mast arm replacement $260,000; School flashers/radar $20,000; Police department remodel $200,000; CH fuel station demolition $30,000; M&O building large truck lift $65,000; Section 36 additional land purchase payment $186,700; Communications enhancement $50,000; Skateboard Park $200,000. As I said in the first paragraph the program is excellent but the City’s procedures and application are very wanting.

When the Council becomes involved in municipal operations as part of its oversight obligation rather than just being the staff’s audience, the residents will be far better off.

In a pre-publication review by an expert, it was pointed out that the carryover procedure used by the City for the last few years is in violation of the City Charter. It appears that my previous suggestions may be of some value in rectifying the problem.

Budget: Development and Communication

Since I recently discussed the personnel proposals in the Community Development proposed 2007 budget, here are a few numbers. In the requested documentation and comparison, the format has changed. In the detail sheets the 2005 actual and 2006 estimated actual are shown under one account: #61711 Economic Development. For the 2007 budget, the requests are divided into three accounts: 61711, 61701 Planning and 61721 Housing and Grants.

These are the totals: 2005 actual $336,096; 2006 year end estimate $627,408 and if that increase is not enough, 2007 proposed $746,684. As has been pointed out in a comment the Center acquired a moderate paying position previously funded in the City Manager’s Office which accounts for some of the $119,276 increase between this and next year.

Now we take a peak at the salary only, not including fringe benefits, portion of the request: 2005 actual $229,632; 2006 year end estimate $491,386; 2007 proposed $481,729. In addition to staff they will need additional assistance listed as Professional Services with the price tag of $110,500.

Let’s summarize what has happened during the last year by recapping total expenses.
$336,096 = 2005 actual
$627,408 = 2006 City estimate

I would now like to change subjects and comment on the outreach, events and activities that make the residents feel that they are part of the well informed community family. In the budget it is called Community Engagement and it will cost you $794,402 in 2007. In 2005 it only cost $547,335. The Council increased the budget for the area to $703,897 in 2006 so the increase for 2007 is not that much in comparison. Especially considering that the staff will over spend the generous 2006 budget by $25,001.

One part of the Community Engagement budget is called, Public Communication. The answer to yesterday’s teaser is therefore $346,668 for 2007. For comparison, the Street’s Operating budget for 2007 is $462,095. Does that make sense? If it does, the other two areas in Community Engagement (Outreach and Events) need an additional $444,734. As stated above, the City Council is going to spend a total of $794,402 to reach out and touch you in 2007.

Public Communication Budget: With a one person operation in 2005 the actual expenses were $79,789 for personnel compensation, $2,848 for operating, $28,531 for professional services and $60,361 for miscellaneous for a total of $171,529. The two person operation in 2006 has expenses of $142,431 for personnel compensation, $13,500 for operating, $94,488 for professional services and $96,875 for miscellaneous for a total of $347,294. For 2007 the 2006 figures are rearranged and the total is $346,668.

At the last meeting of the Council several members were concerned about the lack of money for “on the street activities and improvements.” My suggestion is that you consider the residents’ priorities, the number of employees flooding city hall instead of the streets and the staff’s budget recommendation. The money is there but you will have to look at nonessential expenses and employees and say Adios.

2007 Budgeted Staffing

I have been preaching for over a year about the lack of control exercised by the City Council over the senior staff, municipal operations, financial activities and ethics. Today I’ll provide more detail concerning staffing.

Many of you will remember the so called lay offs in 2004. The number of employees had climbed from just over 200 in 2001 to 253 in 2004. The story goes that the former Finance Director discovered a major shortfall in revenues which caused the need to cut the payroll. Forty-four employees were terminated or convinced to take early retirement. This action reduced the total staffing to 209 full-time employees.

In the subsequent 2005 budget, the Council authorized 215 full-time employees. In the 2006 budget they again authorized 215 employees. So, what did the staff do this year? They increased the number of full-time employees to 242. I understand the staff “consulted” with the Council on a couple of the additional employees but did not on the balance of 27 positions. Think about it. The staff just increased itself without our elected representatives’ involvement. Remind me, we have elected representatives to do what?

Guess what the staff wants for staffing next year? You bet; 252 full-time positions. Now what was that count in 2004? Maybe 253? Our Council is so oblivious to what goes on in the City that they believed in the staff presentations that showed only a modest increase of ten positions. The staff compared requests to actual; not approved and it went right over the Council’s head. I have already picked up some flak by telling some members of the Council that they are increasing the number of employees by 37 over their previous authorization; not ten.

When the supposed mistake that caused the layoffs in 2004 was found before the last Council elections, but kept secret until March of this year, the Mayor expressed her feelings in the March 2nd issue of the Sentinel. “Despite the unfortunate nature of the city’s layoffs in 2004, the increased funds in the city bank account isn’t entirely a bad thing. It gives us more flexibility. The bottom line is that we have $10 million in savings now instead of the $8 million that we had before. This infusion of cash will help council get to its priorities faster.”

As the proposed budget shows, the City staff had its own priority. The staff increased itself by 27 employees this year and the estimated year-end balance went from $11.1 million in 2005 to $8.8 million for this year; and is projected to be only $5.1 million at the end of 2007. As you move around in the city, check out all the improvements done by the City this year with the extra 27 employees. Remind me, we elect a City Council to do what?

Now for a teaser about a future posting. The Council is proud of its great commitment to communicate with the residents. We have the web site, Connection, Channel 8 programming, the televising of meetings, occasional flyers, PR articles and numerous ads. How much are you willing to pay for all this?

A Dismal Future for the General Fund

Care for a shocker? As a starter you need to review the General Fund Comparative Budget Statement (page 50 in the Reader) in the proposed 2007 budget. I will enter some links for your use later to use in reviewing the following comments.

More deficit spending is occurring currently and planned for the future. Staff projects the general fund revenues will continue to increase from the $18.5 million of 2005 through 2008’s $21.0 million. Note the impact of the deficit spending as reflected in the Year End Balances shown at the bottom of the document: 2005 $11.1 million actual; 2006 $8.8 million estimated; 2007 $5.1 million estimated and 2008 $5.2 estimated.

The operating expenditures are as follows: 2005 $17.5 million actual; 2006 $18.2 million estimated; 2007 $20.4 million estimated; 2008 $21.0 million estimated. The staff is keeping the operating expenses slightly below or equal to the NEW annual revenues each year. They estimated that for 2006 the operating expenses will be less then the new revenues by $831,958. In 2007 they plan on using all of the new revenue except for $12,996.

In looking at the section below the Expenditures, another major problem becomes apparent. The amount of Intergovernmental revenue for capital improvements drops by half a million between 2006 and 2007. The repayments for the Marketplace advance from NURA drops from $669,663 to its final payment of $196,072. Two of the proposed expenditures, Capital Outlays and the subsidy to the Northglenn Neighborhood Development Corporation increase a combined $1,152,756 from 2006 to 2007. When you add in the Debt Service payment transfer and the Contingency you can see why the year end fund balance is decreasing from $8.8 to $5.1 million between 2006 and 2007.

In the second paragraph I pointed out that the proposed year end fund balances for 2007 and 2008 are almost identical. Why is this so? The staff deleted a subsidy in 2008 for NNDC and reduced the amount available for Capital Outlays from $4.9 million in 2007 to $1.3 million in 2008. If the staff had put the same effort in capital outlays in 2008 as they did in 2007, the year end balance would be $1,538,761 or 7.3% of expenditures. Guess how small 7.3% is compared to the General Fund’s expenses? It will cover operations for three weeks. The Council’s current policy is to maintain a 25% balance in the General Fund, therefore the staff will stay and the capital improvements and outlays will go.

What has the staff said in the document? There is still money available to be used before we hit the minimum 25% floor established by the Council. We will use it up in 2007 and to hell with capital improvements and outlays in 2008. In 2008 and future years we will provide the bare bone maintenance activities necessary while securing our jobs.

To see the document I am referencing either click on the title of this posting to access the available budget download on the City site (page 50 in the reader) or go to a friend’s web site: http://www.northglenn-watch.org/ I will be offering some suggestions, obviously, in another posting.

Council Shirks Budget Responsibility

The City Council recently authorized the commencement of the formal budget adoption process. They listened to the presentations over the last few months and authorized the staff to prepare the formal papers. In late November or early December a public hearing will be held on the adoption ordinance. The first reading will occur most likely latter this month.

Many members of the Council are not comfortable with the budget but they know that, with a new manager to be under contract this Thursday, changes will be likely after he arrives. Oh, by the way, the new manager is A. J. Krieger. The Mayor released the information at her Monday coffee even thought all nine members of the Council agreed in Executive Session not to make any public comments until the negotiations were completed and a contract signed.

The budget as proposed is an instrument fraught with “gimmes” wanted by the staff before AJ’s arrival. Because of the overhead costs related to the gimmes, there is once again an absence of major maintenance and capital improvement projects. I will be commenting on the gimmes in a few postings starting today and continuing during the next few weeks.

Terence Quinn reestablished the Community Development Department that Leslie Cullen and Phil Nelson abolished last year. You may remember my earlier posting concerning the number of people in the area as compared to the CD Department that existed in previous years. In 2001 there were four individuals. This year Terence increased it to five plus a contract employee. For next year he wants nine full-time, one part-time and one contract employee. If Terrence knew how to do rather than direct, even he would not be requesting new worker bees. Gimme a kingdom!

“Heavens to Betsy” we must be either a rapidly expanding city or one that needs to be “redeveloped”. With all the development that occurred in the late nineties through the efforts of four, what does Terrence have in store for us with eleven City employees? And, get this; I’m not counting the employees in the already enlarged Building Department. The very sad part in all of this is that our Council members did not ask why or say no to one single thing Terence or the staff wanted.

I will be saying this over and over again so please keep it in mind now and in the year to come. “The budget is an unscrutinized compilation of unadulterated staff requests.” The requests were not analyzed by a City Manager or our elected representatives. AJ has a tough, important job on his arrival. At least most of our Council members recognize the budget document for what it is and will be wide open to his suggested modifications.

Knowing staffs as I do, they are already making contingency plans to implement their requests. In fact, upon Council approval they will be taking concrete steps to assure their bennies immediately. For example, they will be advertising and interviewing for all the new positions before the ordinance goes into effect. They know if they can get a person hired on paper before AJ appears, there is no going back. Don’t let it happen!

Budget Process in General

The adoption of the 2007 budget by the City Council is just around the corner. The Council will get a look at the draft this Thursday evening. I certainly hope they receive a printed copy so they will be able to study it in great detail. Slides and online documents do not provide a good means of comparative analysis.

When the process is completed the Council will be adopting a very short document which will detail the budget only in the aggregated totals required by State Law. This is done to maintain a tremendous amount of flexibility due to the fact that the budget is a “plan”.

With a new City Manager around the corner, I’m hoping that the budget will not become an unused shelf item as it has been for the last five years. To me, it should be an expression of what our elected representatives want to accomplish during 2007 and the allocation of revenues to accomplish it. If it is to be changed by the staff, as has been the past, the Council and the residents should be informed of all of the Whys in advance and the Council should specifically and publicly approve of changes in the plan as they are deemed necessary.

Why did the former Manager and Interim Manager create and fill fourteen more positions than authorized by the Council in the 2006 budget without Council knowledge? Why did the staff ask for an additional multi-million dollar addition to the 2006 budget in December of 2005 when the ink was still wet on the adoption of the 2006 budget? Why were nearly all the 2006 authorized capital improvement projects not constructed? The answer lies primarily in the budgeting process and adoption as allowed by the Council.

This summer and early fall the Council watched a multitude of slide presentations from the staff addressing the anticipated budget needs for 2007. In addition to providing justifications for the requests, the staff compared their various budget categories to the present budget and offered reasons for the proposed increases in all areas including detailed personnel changes. A very similar process was followed in prior years.

The problem with the process is that the proposals the Council has been receiving for months will not be specified or detailed in the budget proposed for adoption. Instead they will see millions dollars only listed as Commodities, Operating Expenses and Personnel in increments of hundreds of thousands with no additional details. The dog and pony shows of the last months were only that; shows. It doesn’t have to be that way and I assure you the Manager will not object if the Council chooses to require more detail.

In my July 31st posting I detailed some of the problems that have resulted due to a lack of specificity by the Council in the Appropriation ordinance. The ordinance is adopted immediately after the budget is adopted and it is the document that has the teeth. I hope the Council will step up and assume control of the City’s financial operations as specified and allowed in the Charter.

Verification of Bogus Theatre Groundbreaking

Since last October I have been countering all claims made by the City with regards to the then proposed Century Theatre. In order to enhance the election of incumbents at the November 2005 election, a bogus groundbreaking was staged.

I knew it was a political lie because the information I had verified that 80% of the construction plans had not even been submitted to the City for review. I posted my information before the groundbreaking was held. The Mayor and former City Manager could have cancelled the event but chose to go for its political benefits. It should not have even been scheduled in the first place. Were ethical standards placed in the back seat of the Excursion or left on the road side?

When no work began on the site in November or December, the City leadership countered that it would start later in December or January. Again they lied. The bulk of the plans were not submitted until the end of the year. I told you that February might be the really start date if even then. I did not know that the plan review would not start until later in January. During the Spring I told you that I had just received a document verifying my claims.

At last Thursday’s meeting of the City Council the document was made public in a discussion concerning a payment to the former Deputy and then Interim City Manager; Leslie Cullen. Below I have typed the full text of the document. If you would like the PDF copy of it, please email me using the link on the right side of the screen. The author of the email is the Economic Development Director for the City. The recipient is the Department Head that was in charge of public works and engineering.

Subject: “Century Site Construction”
From: “Katy Press”>katypress@hotmail.com>
Date: Tue, 04 Oct 2005 07:57:04 -0600
To: kkowar@northglenn.org
CC: lcullen@northglenn.org

I received Leslie’s voicemail yesterday about making sure that the site appears to have things going on after the ground breaking next week.

From Northglenn’s side, we had talked about:

· Staking the site.
· Putting up a silt fence.
· Possiblity of having one of the contractor's scraping the site.
· We are talking today about the ROW improvements and moving up the timing on 120th.

I am talking to Bob Hemati about where they are at with their contractor and when they can “mobilize”.

We can strategize this afternoon when we meet at 2:00 PM.

That is the email document as written. Your Mayor, her friends on the City Council and City Staff lied for political gain. Remember this next November.

As to why Ms Cullen received a bonus of $5,406.50 on a 5-4 vote two months after resigning has to be questioned in light of the “favor” last October. When this email was revealed at the Council meeting, neither the Mayor nor any of her friends commented or responded. You might ask them to respond to the email at a formal Council meeting since denial is out of the question.