This is an edited letter I sent to the NE MAC security leads - people who, like me, volunteer to serve as a liason between the community and the County department that manages the guard houses, which you see on your tax bill each year (the preliminary one just went out this weekend).
As you'd imagine, there is a lot of 'behind the scenes' with these districts, and sometimes a district has no idea what is going on when their rate goes up by hundreds of dollars. Residents just shrug and pay their tax bill. But huge increases in recent years got a lot of people in our area very interested, and thankfully we now have a system with much more oversight and accountability.
One product of this oversight was the switch by many districts (first Highland Lakes/Gardens, then Coventry, and now Oak Forest and Enchanted) to a new provider (Kent Security) that offered significant savings and cameras at the guard gates: more for less (see last blog post for more on this). But even with that kind of 'victory,' no community can afford to rest on its laurels.
So here is a peek 'behind the curtain' about issues discussed among security leads for the guard gates and the area's single roving patrol (where I am the lead):
* * *
"When I didn't receive a 'proposed notice of rate' from Sue Torano [our contact within the County] this year for my district (Oak Forest Roving), I found out [the lead in Highland Lakes/Gardens] got his in May, so I wrote to get rates, and then budgets. Subsequently, I just got my property tax bill in the mailbox, and was a little astounded to see the roving patrol (who had huge coverage holes this year) was basically the same cost as last year (only $30 less). So I reviewed tons of material and had 1.5hr talk with Sue. Here's the summary, which applies to ALL security Special Taxing Districts ("STDs"):
"1. Torano hasn't historically emailed leads if there is NO fee increase. Highland Lakes had a small increase, so [their lead] was emailed. Oak Forest/Enchanted had a decrease, so no email. But because it is always important to be informed, I asked, and Sue agreed, to send emails every year REGARDLESS of direction of upcoming fees. In Oak Forest's case, we really needed to see the notice, because the amount of the decrease for roving was not at all what we'd been told to expect (more on that below).
"2. The financials she sent for Oak Forest/Enchanted gates showed only a slight decrease (hence, no email). I expected a larger one due to the transition to Kent for those 2 districts (saving $41K), but because the transition was 5/12/18, it was too late to budget for - the 2019 budgets actually contemplate the higher USSA rates (approx $402K), not Kent (approx $361)!
"3. I asked 'if the budget assumed USSA, not Kent, then why did the rate go down at all - shouldn't it have gone UP?' The confusing answer, was that big carry-forwards were the main reason (more on that below).
"4. RESERVES. Oak Forest gate for some reason has a whopping $84,100 contingency reserve - about 17% of budget, even though the goal is supposed to be 10%! Crazy! I said that for 2020, that needs to be brought back down to 10%, especially since the switch to Kent from USSA is going to save about $40,000, ON TOP OF that huge reserve. So Oak's Gate should see a big drop next year. If Oak Forest ever contemplated automating one of it's 2 gates (which would presumably involve some capital costs), this might be a good time to consider that, as the surplus would absorb a lot of the cost (and thereafter Oak Forest could be saving $200,000/year in guard costs).
"5. Sue [Torano] agreed to reach out to us in the SPRING next year to discuss budgets, so we can be more proactive, not RE-active. I'm upset about the roving patrol rate not going down a ton (see #8 below), and I could have had that conversation MONTHS ago and saved the roving people like myself some grief (and money!).
"6. On Enchanted Lake, I compared the financials with Oak Forest going back several years. I noted my amazement that Enchanted had paid $5300-7100 for 'landscaping' up until 2017, when that number went to ZERO. For 2018 it is again ZERO, because Enchanted HAS NO LANDSCAPING! So basically Enchanted Lake, for years, was getting f***ed, because people were 'pretending' to mow lawns, and supervisors were 'pretending' to verify the work, when there was never any work TO do. Astounding. Read your budgets!
"7. Signs: yeah, they were expensive. Budgeted at $5000/pair and came in closer to $4000 EACH. Very upsetting. Won't need to be done again any time soon I hope, and yet if we incorporate, would we want those signs to have a city name on them? Ugh. Very depressing.
"8. Oak Roving: FHP missed a whole month after the hurricane, and turned in 50% time sheets other months, so how on earth did the rate only drop $30 on my 2019 tax notice? Where is the money? Well the answer is (i) the contingency reserve for that district needs to be even lower than the 10% for the gates - maybe 5%; (ii) the money is still 'in the district'; didn't go elsewhere (which I have trouble believing); and (iii) the projections for 2018 are WAY off. She calculated them on the spot and we are looking at tens of thousands less than the already-reduced budget. Since they used wrong assumptions for this year, they projected wrong assumptions also! Not only that: the budget for 2019 indicated $1195/household, but for some insane reason the number they submitted to the county to approve was $1329! This is exactly why I wish I'd received a notice of the price (even if it's a decrease), so I could have gone to the meeting and screamed it down. I told Sue that when it comes to this particular district, OPTICS MATTER - we all expected a decrease, we aren't getting one, we need to see one next year. A big one.
"9. Oak Roving switch to MDPD: MDPD was really interested, got Sally Heyman to amend the ordinance, then found themselves in a position where they can't even figure out a way to move forward: the county can't contract with itself (Torano says), and MDPD would need someone from the county 'sign off' at the start of each shift, which is impossible. So anyone with interest in this option: basically forget it (it was more expensive anyway).
"10. Coventry: Sue responded to a lot of my complaints by saying that Coventry also experienced some concerns about it's budget (which I don't have to be able to comment on), and I'm copying [Coventry Lead] to see if he has other thoughts to share on what sounds like a similar experience.
"11. Fixed costs may be going up: After a recent vote (2016?), STDs located within a CITY are able to transfer control from the County (like us), to their city (which we can't do, being unincorporated). Sue said many districts are taken advantage of this, and spreading the same costs across fewer districts means we could see increases even if nothing else changes. That sucks. This may be one reason to incorporate a new city and manage our own districts to reduce costs (a single 2-gate district has a 4-year average of about $35K in County Overhead baked-in, so between our 6 districts... that's a job I'd apply for).
"Conclusion: Rates didn't drop enough this year, possibly to build a 'cushion' for future fixed-cost increases (as more districts defect to city-management), but we should start reviewing earlier in the cycle next spring to ensure rates drop as they should (and reserves will be set at more reasonable levels) at least in the short-term. The 'landscaping' charges in Enchanted alone justify active review, and share experience like in this email. When I'm notified in the Spring of discussions, I'll make sure other leads are in the loop."
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