Dollars and Sense

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School is starting and the proposed Key Biscayne budget for 2020 has now been circulated; sure signs that the summer hiatus is ended. With the upcoming budget hearings looming, it seems desirable to take a constructive look at the June budget workshop.

The manager’s presentation in June was well-organized and seemed auspicious in some ways, but the workshop itself was hampered by the notable absence of a budget. That put the Village Council and the administration at an unusual disadvantage in adopting a tentative millage rate without much clarity about expenses and revenue needs.

Also, the abundant community input that animates budgeting typically was diminished, presumably because community organizations were advised – contrary to tradition – that council presentations were not expected. And the council debate was less than energetic (with an obvious exception unrelated to budgeting).

The widespread community reaction was puzzlement and worry for our 2020 prospects. It was ironic to consider that 2020 Vision Plan aspirations for excellence, articulated to build on past successes, might be allowed to deflate in 2020.

Instead of numbers-based preparation with service standards and community-enhancing investments in mind, in June the dour themes were retrenchment and curtailment, portending lower standards and reduced investment.

The deliberative process seemed overwhelmed by dogmatic assertions about small government (compared to what?) and economic decline. These begged for —but failed to elicit— rejoinders. Portents of austerity dominated. “Efficiency,” invoked as a mantra, seemed a verbal proxy for cutbacks. All this contrasts with well-reasoned opinion that more investment is needed now, not less.

Some counter-perspective might help the actual budget process now under way. We’re not in an economic hole, impelled toward austerity. Efficiency is not a synonym for “less” or “cheaper.”

Efficiency describes a capability to accomplish something with minimal waste. That “something” – government services and community investments – must be measured qualitatively, taking into account required levels of service and strategic planning. All councils and administrations champion efficiency, critiquing status quo and tinkering constantly to be more efficient.

This council ranked efficiency as its top strategic priority, de-coupled from any notion of quality. That may be nothing other than semantics. But if the prevailing notion of efficiency is to cut back for the sake of savings only, threatening degraded levels of service and maintenance of community investments in the bargain, then, we’re in uncharted waters.

The legacy of incorporation is not small government, it’s responsible government, resourced and managed appropriately. The council’s primary responsibility is policy-making. Our policy and mission, reaffirmed throughout the years, is to provide excellent municipal services, tailored to community standards and measured by benchmarks (including efficiency).

Whether revenues are up, down or flat, community needs are largely fixed. High service standards are sacrosanct. We’re reminded of this in recurring years as public speakers admonish successive councils to tax appropriately in order to invest as needed. And successive councils have done just that, working with varying revenue levels as required.

The tax base dipped a bit this year and some belt-tightening may result. But we are not facing the abyss. We should look anew at factors that drive demand and how we market Key Biscayne. We should remember that community investments drive higher value. And we should look at history.

During the recessionary years before 2010 or thereabouts, our tax base declined. That strained discretionary spending. It did not compromise governmental services. Beginning in 2010 or 2011, our tax base appreciated, compounding in some years materially. We did not go on a spending spree. We maintained high levels of service and planned as carefully as ever for capital projects, including increasingly, sustainability.

In 2018, our tax base declined slightly for the first time in some time. Budgeting and service levels were unaffected. Every year the administration sharpens pencils and council flyspecks costs and debates millage, always with a desire to set the lowest rate possible consistent with requisite levels of service and investment.

Experience taught us an essential practice: First vet the expenses, checking millage along the way, and then, when the final tally is determined, set millage to fund the approved budget. Setting millage takes a lot of energy; probably too much considering other factors that affect taxes and recognizing that millage decisions are really arithmetic. That may be another lesson. And one more: Our bond rating is excellent in substantial part because we budget sensibly and administer Village finances very well.

This council has challenges, as all do. Many things bear on the successful fulfillment of the Village’s mission statement, which addresses a safe and quality environment through responsible government. Efficiency is both a necessary characteristic and a byproduct of responsible government. But efficiency cannot be untethered from quality. And small government philosophizing cannot subvert a responsible government’s obligation to appropriate resources to meet consensus needs.

Now attention turns to the 2020 proposed budget. First glimpses have raised some important questions. Stay tuned.

—Frank Caplan
Publisher

This post has been updated.