More About That $38 Million Overrun

train wreckCudjoe Regional isn’t Monroe County’s only disastrously over budget train wreck .  That’s “only” $49 million over and counting.  As it turns out there are another five capital projects that are now $38 million over budget.  According to KeysNet.com, these projects started out at $25 million.  The projected costs now stand at $63 million.  This mind-blowing incompetence seems to be the norm for Monroe County government.

I wrote about this in an earlier post, which was really just me throwing my hands up in the air.  I was just so disgusted I didn’t know what to say or do.  Since I’m a glutton for punishment I actually watched that segment of the February 10, 2016 BOCC meeting.  (It won’t work in all browsers.  I watched it in Internet Explorer.)  I didn’t see anything new or enlightening.  It’s the same old dysfunctional dynamics that have caused the county to fail over and over again.  If you watch enough of these meetings, a pattern starts to emerge.

My observations are recorded below.

  • The capital project overrun isn’t presented out of the gate as a capital project overrun.  It started with Strategic Planning Director, Kevin Madok, launching into a presentation about the need to borrow more money.  Why do they need to borrow more money?  Because the cost of capital projects have more than doubled.  Uh-oh.  Bring Kevin Wilson up.  Kevin Wilson is the Assistant County Administrator in charge of capital projects.
  • Kolhage and Carruthers started in with their “money doesn’t grow on trees” speech.  This is very silly and hypocritical coming from them.  They’re not fooling anyone.  As you may recall, these are the two commissioners who initiated and supported every cost increase on Cudjoe Regional.  At one point, Carruthers basically tried to stifle discussion by saying that she was ready to vote immediately.  Lecturing staff on controlling costs does not equate to actually controlling costs.  Commissioners have to walk the walk.
  • Murphy’s idea was to simply tack on some percentage to the estimates.  Here’s the thing, the projects under discussion far exceed any normal contingency amount.  Costs increased by $38 million – from $25 million to $63 million.  That’s a 250% increase!  Contingency amounts are usually between 10-25% depending on how well developed the estimate is.  Murphy’s idea is a band-aid that doesn’t get at the root cause.  It won’t do anything to improve the accuracy of the estimates.
  • There is something very wrong with the estimating process and there has been for years.  I find this all so bizarre.  I came from the construction industry.  I can’t even get my head around the fact that you can be off by $38 million on a $25 million project and still remain employed.  And this is immediately following a $49 million overrun.  It’s incredible to me.  Kevin Wilson claims the problem was worse when he came on board nine years ago.  Good grief.  Nine years is plenty of time to improve the estimating process, isn’t it?
  • There were the familiar staff excuses.  Apparently construction costs have escalated by 250% since last year.  Wow!  Who knew?  I’ll accept that construction costs have increased, but not by 250%.  There was also the usual mild suggestion from staff that the BOCC probably should not take actions that increase costs their own selves.  While that’s true, it doesn’t get staff completely off the hook.  Accurate, timely reporting made public would help circumvent a lot of that.  That’s why we’ll never see accurate, timely reports  on the regular.
  • Constant talk of “bail-out” money.  Neugent and Carruthers initiated this discussion.  This is where the iPhone Bandit finally jumped in after letting his staff twist in the wind for a while.  (He likes to pretend he has nothing to do with projects gone haywire.)  Pursuing state and federal money is good and necessary.  But Monroe County must control costs as well.  They received $30 million from the state for the Cudjoe Regional project, but costs subsequently escalated by $49 million.  When the $10 million give-away to Cudjoe Regional customers is included, the overall cost burden increases to $59 million.  The BOCC dug a hole far deeper than state and federal money has been able to fill.  The other capital projects are headed in the same direction.  The BOCC needs to control costs and they need to stop expecting a bail-out.

I believe there’s a single issue at the root of all this, and that is fundamental dishonesty.  The county lies constantly – to themselves, to the taxpayers, to everyone.  Here’s the latest very sad example.  As a result, the decisions they make inevitably go wrong.  Unfortunately, reality always catches up with you.  The BOCC has managed to keep ahead of it on the wastewater projects for two reasons.

  1. The state came through with $30 million in funding for Cudjoe Regional. As I said above, the taxpayers really didn’t see a benefit from that because it only caused the county to ramp up spending.  In the end, the cost escalation far outpaced what was received from the state.
  2. The county underfunded the Key Largo project by $126 million in comparison to the projects in the other unincorporated areas.  This forced a $26 million over contribution from taxpayers in that area.  Essentially, Key Largo taxpayers are financing the overspending elsewhere to their own detriment.

Here’s the thing, the state isn’t always going to be standing by with a huge check.  They’ve got other needs and other priorities.  The BOCC’s cries of poverty will eventually get old especially since they refuse to control spending.  That is likely to come back and bite the Keys as a whole.  I hope the Florida Keys Stewardship Act* passes and its certainly looking good this year.  But the BOCC has to put as much effort into controlling costs as they do into securing state and federal money.  “Other people’s money”** won’t always be there to paper over the financial messes created by the BOCC.

Here’s the other thing, the county cannot continue to pump Key Largo (or any of the taxpayers) dry.  You can’t get blood from a turnip.  In general, BOCC members are very smug about Key Largo’s failure to incorporate 15 years ago.  They take that as permission to treat the area in a grossly unfair manner.  I would like to think that folks in Key Largo will eventually get fed up and take some sort of action.  But they haven’t so far.  Too busy working two jobs I guess.

Whether Key Largo citizens take action or not, Key Largo tax money is not an unlimited resource.  There are signs that the economy in the area is already lagging behind.  Business in the Keys has been brisk for the past few years, and that masks the issues to a certain extent.  What happens when business drops off and the county is halfway through their bloated slate of projects?

I believe drastic changes are necessary.  The current BOCC will only continue to overspend, counting on the state or local taxpayers to bail them out.  As mentioned earlier, a major contributing factor is chronic dishonesty.  The BOCC lies about animal control.  They lie about the  Emergency Services Surtax.  They lie about wastewater funding.  And I’m sure this is only the tip of the ice berg.  I hate to think what other unpleasant surprises might be lurking around out there.

 

*Ideally Sen. Gaetz’s ethics bill will pass as well.  This might help to ensure that money received from the state is used in a way that actually benefits the taxpayers rather than a few well-connected insiders.

**”Other people’s money” is an odious term that the BOCC once used to describe state and federal money.  I hated it because it was always used in a way that implied that this was a windfall they could spend carelessly.  As it turns out, they’re careless with all money – state, federal and local.

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