Florida's Wasted Taxpayer Dollars, Ignoring Auditors and Keeping up with Transit

Plus: government's ongoing war against “the bad guys” and more management news
January 10, 2013 AT 5:00 PM
Barrett and Greene
By Katherine Barrett & Richard Greene  |  Columnists
Government management experts. Their website is greenebarrett.com.

Projections in Florida have indicated the state could have a surplus of over $437 million. All too often, lawmakers take that kind of money as a green light to start spending.

But according to the News Service of Florida, there’s a wrinkle (above and beyond the uncertainty of the looming fiscal cliff that Florida leaders were facing in mid-December): “Lawmakers have long watched a decision in the case challenging a 2011 law that required employees to contribute three percent of their income to their retirement funds along with other changes. It could cost the state around $2 billion if the [state] Supreme Court strikes down the law.”

So, at least one legislator is advocating raising the rainy day fund to $1.5 billion while others are suggesting caution. Smart.

Also in Florida, there’s some news that doesn’t make the state look exemplar: The state has a new budget transparency website that taxpayers have already spent $4.5 million on. But it hasn’t gone live yet because neither the Senate nor the governor’s office will take responsibility for maintaining or paying for the website.

In the meantime, we presume that virtually no one is using the system, which is built to help citizens understand how their tax dollars are being spent.

“There is no Democratic or Republican way of cleaning the streets.” -- Fiorello La Guardia, the former mayor of New York City from 1934 to 1945.

We can’t personally vouch for the idea that all the recommendations issued by Dallas’s audit office -- or any other auditor -- should be implemented. That said, we were struck by a recent document issued by that office, which sure makes it sound like the city has chosen to ignore its auditor most of the time.

Here’s the story: Between 2009 and 2011, the auditor released 58 recommendations to address problems in seven city departments. When city management was asked how many of the recommendations had been addressed, the answer was that five of the 58 hadn’t been implemented. On further testing by the auditor, it turned out that nearly 40 of the recommendations had either been addressed incompletely or not at all.

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The communications and information services department, for example, partially or fully ignored 11 out of 12 recommendations -- some of which had to do with pretty serious issues like securing local government data.

We have to admit that we’re pretty big fans of many city and state auditors and think their work is critical. But leaving that aside, there sure seems to be something wrong with the way things are working now in Dallas.

More auditor woes. Mike Foley, the state auditor of Nebraska, is ticked off -- and based on his comments in the Omaha World-Herald, we can hardly blame him. Apparently a handful of state agencies have stopped answering his requests in any kind of timely manner. He pointed to a four-month delay in getting one records request from the state’s Health and Human Services department. “This has been going on for years,” he told us.

According to the newspaper, Foley singled out the University of Nebraska and State College System as well as three state departments -- administrative services, health and human services, and labor -- as the most problematic.

In response, agencies said they have concerns about the security of some of the privileged information they were asked to share and also noted that they’re unable to respond quickly because their own recordkeeping systems aren’t up to par.

The situation has improved since the newspaper publicized the issue, but "the problem is by no means solved as some agencies are still uncooperative," Foley wrote in an email.

What’s your biggest challenge? That’s the question asked by the National Association of State Chief Information Officers. And here, briefly, are the answers they got: consolidation/optimization, cloud services, cybersecurity, mobile services budget and cost control, shared services, health care, legacy modernization, interoperable nationwide Public Safety Broadband Network, and disaster recovery.

Thanks to GovLoop for this info.

Here’s one to watch: According to National Public Radio, school districts in California are on the hook for huge sums of money, thanks to the use of so-called “capital appreciation bonds,” which allow districts to get quick cash (which they surely need) in exchange for big debt bills that will potentially haunt them for years. According to the NPR report, “In total, districts have borrowed about $3 billion to finance new school construction, maintenance and educational materials. But the actual payback on those loans will exceed $16 billion.”

We understand that tough times call for hard measures, and schools are a resource very much worth maintaining, but the question is this: When do potential fiscal horror shows in the future outweigh the benefits of helping get through an extremely rough patch today?

One more comment, courtesy of NPR, from California State Treasurer Bill Lockyer: "It's the school district equivalent of a payday loan or a balloon payment that you might obligate yourself for. So you don't pay for, maybe, 20 years -- and suddenly you have a spike in interest rates that's extraordinary."

When we talk to friends about the news we follow, there’s often real interest in issues like health care and education. But when we go near the topic of infrastructure, the conversation turns to picking a restaurant or the odd weather we’ve been having lately. We’re confident that those days are quickly coming to an end (and maybe more people will invite us over).

Take a look at a captivating study about public transit in Chicago, published in December by DePaul University. It establishes a clear case for the value of public transit service, including high demand, positive returns on investment and importance to property values and employment. But here’s the kicker: The system now needs at least $2 billion a year for capital investment including maintenance. According to the report:

“If the region only maintains current levels of financial support, the system will see increased failures in infrastructure and deteriorating vehicle stock, leaving transit agencies to face mounting concern for maintaining operational safety as quality declines.”

We know Chicago isn’t alone. We also know that few cities have relatively large amounts of cash available. But this kind of problem can’t just be wished away.

There’s an ongoing war between governments and “the bad guys,” who try to break into state, city and county computer systems for all sorts of malicious reasons. We just came across a special report by one of Governing’s sister publication’s, Digital Communities, that seems particularly useful. It has a great deal of valuable information, including some relatively straightforward preventive measures governments can take.

Consider the relatively mundane issue of passwords. If you’re in a community that’s particularly conscious of cybersecurity, you may be sick and tired of having to frequently change your passwords. The report, however, offers one solution to having multiple, complicated, regularly changing passwords:

“If you have too many passwords to remember, try using a password manager which stores multiple passwords in an “online safe” where users only need one password for access. ‘They let you randomly generate strong passwords for all your accounts and store them securely,’ said Joanne McNabb, chief of California’s Privacy Protection Office, in a newspaper article. McNabb said there are a number of free password managers including KeePass (for Windows, OS X, Linux, Android and IOS), Password Safe (Windows) and Keychain (Mac).”

As a result of the recent elections, about half the states now have veto-proof legislatures. That means that one party, in each of these states has enough votes to render a gubernatorial veto worthless.

It’s pretty clear what this means politically; it’s a polarizing phenomenon. But our concern in this space is management, and so we asked ourselves what effect might this have on managerial reforms? The answer we came up with is that it’s not good news. Reforms that really work tend to have both gubernatorial and legislative support. And if one half of the equation can ignore the other with equanimity, it seems to us like that doesn’t help a whole lot.