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Volsky: I.T. = unstopable financial hemorrageBy George Volsky For Gee-Ming Chow, head of Coral Gables’ Information Technology Department – or as disgraced former city manager David Brown allowed him to call himself “Chief Information Officer” of Coral Gables – only the best is good enough. And why not, as the Info Chief might say, “as long the poor local sods pay and nobody’s watching.” Chief Chow has long been the “golden boy” of not only the disgraced ex-manager but also of Mayor Don Slesnick and Commissioner María Anderson. Some seven years ago, the troika was principally responsible for the creation of the I.T. department. Although Miami-Dade County had offered Coral Gables expert information technology services for $1 million a year, the trio wanted the city to have its own department for the same money. It was so but only at the beginning. In the 2002-2003 Fiscal Year, I.T.’s first, the department’s budget was $1.1 million. But the new “baby” grew by leaps and bounds - like weeds some in City Hall say - indeed more than the city itself. By FY 2008-2009, I.T.’s budget increased five fold to $5.5 million and its personnel to 18. (Curiously, according to that year’s budget, I.T. has 18 employees, yet in the city’s official telephone directory the department lists 37 names.) In practically all businesses and organizations, information technology is a useful tool to gauge and improve efficiency and productivity in order to reduce labor expenses. This did not take place in Coral Gables. Instead, I.T. has added a new expensive department to the city’s already bloated bureaucracy. More worrisome, though, were City Hall rumors about the intrusive, investigative (if not ferreting) activities of Chow’s department. Some employees have complained that their electronic communications were being intercepted to and transcribed by I.T., especially if they were critical of Brown and Slesnick. I.T. has also reduced the number of websites that employees can access on the city computers, eliminating those that Chow considered “non-business related.” His action mimicked a practice by his I.T. colleagues in other areas of business. But the procedure is no longer in vogue. Employers have realized that conscientious workers toil efficiently even if they can access all websites. And they know that shirkers always find ways to do nothing, to complain and rest afterwards. But there are signs that the charming days of the “golden boy” might be over. In the 2009-2010 budget his appropriations have been reduced by almost $850,000, a cut of 15 percent, proportionally the deepest of all departments. And there are City Hall hints that Chow is on the radar screen of City Manager Patrick Salerno. Should the above be true, it wouldn’t be surprising in the least. It’s probably because Chow still believes he possesses the operational and spending carte blanche Brown had given him. As a result, his department’s penchant for making purchases regardless of cost has continued intact. I.T. keeps buying services and equipment on an unprecedented scale as though the city was in the business of printing $100 bills. Its “requisition list” from Oct. 1, 2008 – the beginning of FY 2008—2009 which still has six weeks to go – totaled $1,959,571.31. With about six weeks more time for buying in this FY, that already was about $1 million more than IT has in the budget to spend, outside fixed items among them salaries and benefits. In other times, Brown and Finance Director Dan Nelson would have found extra money somewhere – they did that for Chow in FY 2007-2008 – but this year Coral Gables is in a fiscal pickle. That’s probably why someone in City Hall has put many of I.T.’s intended acquisitions on hold when it became known that the Gazette was looking into Chow’s high spending habit. Many of the I.T. purchases, already paid for by the city, are difficult to decipher, understand and technically justify. That begs the question who supervises the department’s buyers? Was, for example, the payment of $46,000 for “IBM Hardware & Software Maintenance” necessary? Why did I.T. buy a $2,428 “Mackbook” when less expensive, well functioning models are available? Why did I.T. pay $2.100 for “Better Place Renewal for Florida League of Cities”? What did the city get for $2,100? A certificate naming David Brown the best and most honest city manager in Florida? I.T. paid $13,284.90 for “Dell Desktops for EDEN User Replacement, and $17,713.20 for the same, both charges authorized by Alejandro Gamundi, who also bought Dell Desktops for “City Wide Deployment” for $8,856.60. Ayanes Apolinar paid $15,214 for Dell Poweredge 2950, which only experts know what is. Again Gamundi paid $10,159.80 for Dell Laptop Replacements. The same man paid $40,000 for Desktop/Laptop Lease Project and $95,000 for Mobil PC/Toughbook Lease Project. (Both purchases are “pending.”) Disaster Recovery Collocation Storage, cost I.T. employee Grethel Salas-Perez a cool $54,499.90; and Mark Herbert paid $84,573.44 for “Tyler EDEN Reconciliation.” (According to one black humor City Hall saying, EDEN will bankrupt Coral Gables.) Donna Rodriguez, by acclamation I.T.’s “Requisition Queen,” assigned several thousands dollars for Chow’s trip to “EDEN Conferences” at a Disney resort, including $50 for “Super Shuttle Transportation to Airport.” (The trip was apparently cancelled by the city manager’s office.) I.T. also wanted to spend $134.82 for a manual on “Bankruptcy in Florida;” $103 for a Wall Street Journal subscription; $994 on Dell Ultra Portable Laptop (for whom?), and $209.99 on an AT&T cell phone for Mayor Slesnick. Speaking about Slesnick, it seems that Chow knows very well which side of the toast he has to butter. His buyer Gamundi has ordered two Dell E4200 laptops for the mayor, each worth $951.83. (Possibly so that Slesnick has a replacement in case someone again pinches his computer, as it happened several weeks ago, according to the police, without a violent entry into his office.) Chow does not forget about himself. Gamundi has ordered for him an HP 470 Mobil Printer for a mere $324. (Mobil printer! Give me a break, as a young person might say.) This is not all. A printout of purchases made with the city’s Purchasing Cards by three I.T. employees – Juan Miguez, Mark Lemay and Hebert Ramos – proves that during the last two years they spent $121,300 on countless unexplained – and apparently unsupervised- items and services in various commercial establishments of Miami Dade, as well as on several costly junkets to Marco Island, Disney-Orlando and other places. For example on Oct. 16, 2008 Miguez paid four times $155.25 for “Disney Rsrvtns/tkts;” three days later he gave $297 to Embassy Suits, and on Oct. 20, 2008 he paid $50 for a “Super Shuttle.” After all this – and there is much more documented waste in I.T., unreported here – the only question is how was Chow and his people able to spend millions practically without being checked and demanded to explain whether all that fiscal hemorrhage is legitimate and necessary. Comments
Regarding IT spending, this is nothing new. CFO's and Controller's do not know or understand how much IT really costs and when do you really need to replace your so called out dated equipment.
With an enterprise wide; project steering committee,project management office, a project spending budget priority list and constent audited status reporting/ approval process, spending will not run wild. Understanding line by line expenses needs to be started at the budget approval process and adheared to and reported upon throughout the fiscal year. Project cost increases resulting from change orders need to be brought to the steering committee or higher for approval and not just brushed aside. Furthermore, Forensic Accounting is done after it's too late.
said Tom Thumb at 19-Aug-09 11:21 AM
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This is a copy of a Standard & Poor's Report from six (6) years ago:
Research: Return to Regular Format Sunshine State Governmental Financing Commission, FL Coral Gables; Tax Secured, General Obligation; Tax Secured, Miscellaneous Tax Publication date: 23-Dec-2003 Credit Analyst: John Sugden-Castillo, New York (1) 212-438-1678; Robin Prunty, New York (1) 212-438-2081 Credit Profile US$29. mil rev bnds (Coral Gables) ser 2004AB dtd 01/22/2004 due 10/01/2028 AA Sale date: 22-JAN-2004 DOWNGRADED To From Coral Gables, Florida Coral Gables, Florida Coral Gables ICR AA+ AAA OUTLOOK: STABLE Rationale Standard & Poor's Ratings Services has lowered the issuer credit rating (ICR) on Coral Gables, Fla. to 'AA+' from 'AAA', based on consecutive general fund drawdowns, poor budgetary practices, dependence on enterprise fund transfers to balance general fund operations, and diminished fund balance reserves. In addition, Standard and Poor's has assigned its 'AA' rating to the Sunshine State Governmental Financing Commission, Fla.'s revenue bonds series 2004A and 2004B, issued on behalf of the City of Coral Gables, secured by the city's covenant to budget and appropriate from non-ad valorem revenues. The 'AA+' ICR rating and the 'AA' rating assigned to Sunshine State Governmental Financing Commission obligations reflect: * A strong economic base, characterized by the presence of more than 150 multinational corporations and strong ties to the Latin American marketplace; * An affluent residential population of 40,000, which nearly doubles during the daytime; and * Low direct outstanding debt. Coral Gables' financial position has weakened over the past three fiscal years (2000-2002) as a result of nonbudgeted expenditures and general fund drawdowns for capital improvement projects. The city, which renegotiates its contracts with public safety employees on a yearly basis, does not include a contingency for salary increases in its yearly budget. As a result, the city posted operating deficits prior to transfers of $6.6 million, $3.3 million and $5.4 million in fiscal years 2002-2000, respectively. In the past, management has relied on the general fund balance and transfers from its enterprise funds to make up for nonbudgeted expenditures. Transfers in from enterprise funds, which amounted to $4.2 million, $5.5 million, and $4.8 million in fiscal years 2002, 2001, and 2000, respectively, provided some cushion, but are not sufficient to maintain reserve levels. The unreserved general fund balance, which stood at just under $10 million at the end of fiscal 1998, declined to $6.9 million in fiscal 2000, due to a drawdown for retroactive collective bargaining payments. In fiscal 2001, the city commission approved a fund balance drawdown to pay for capital improvements. The unreserved general fund balance had declined to $607,000, or a very low 0.8% of general fund expenditures at fiscal year end 2001. In fiscal 2002, the unreserved fund balance increased to $4.6 million, reflecting an $18.9 million upward adjustment in the beginning fund balance due to the blending of several funds into the general fund under GASB-34. Although financial statements are not yet available, management anticipates the fund balance to stabilize in fiscal 2003, despite the impact of retroactive collective bargaining payments. Management plans to bring the unreserved fund balance to 10% of expenditures in the next three to four years, but there is no plan to achieve this target and the city has no formal fund balance policy. Coral Gables' debt levels are low. Although the city has no GO debt, it has $65 million in direct outstanding debt, including this issue. Self-supporting revenue debt is $7.6 million, with the balance made up of special obligation bonds issued through the Sunshine State Governmental Financing Commission. The city's net direct debt is a low $1,358 per capita and roughly 1% of market value. Overall net debt is also low at $1,661 per capita and 1.1% of market value. Prior to this issuance, all of the city's debt was variable-rate debt. This issue will bring the city's fixed-to-variable debt ratio to a more balanced level. Bond proceeds will be used to convert $11 million in variable-rate debt to fixed, and to fund $16.3 million in new projects. Outlook The stable outlook reflects the expectation that the city will address budgeting issues in order to maintain or improve its general fund balance. Further deterioration of general fund balance reserves would indicate credit deterioration and could lead to additional rating action. Economy The City of Coral Gables, located southwest of Miami, Fla. in Miami-Dade County, is a premier residential and business community. An affluent residential population of 43,000 in 2002 is complemented by a significant business employment center of roughly the same size. Per capita income levels are very high in the city and average over twice the state and national levels. The city's tax base continues to expand and has grown by an average 6% annually since 1999 to reach $6.5 billion in 2002. Home to over 150 multinational corporations representing a variety of businesses, the city benefits from its proximity to Miami International Airport and the Port of Miami. It continues to expand its commercial base, with 600,000 square feet of office space being added to its existing 6.5 million square feet inventory. Additionally, the city is home to the main campus of the University of Miami (10,000 students). Leading city employers include the university (4,000 employees), HealthSouth Doctor's Hospital (1,225), the City of Coral Gables (864), and Dade County Public Schools (737). City employment levels have consistently reflected the diversity and resilience of the city's local economic base. Copyright © 1994-2005 Standard & Poor's, a division of The McGraw-Hill Companies. All Rights Reserved. Privacy Policy
said Let's go and STEAL sum' mo' from CG taxapyers!!! at 19-Aug-09 01:54 PM
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My homeowner's association is meeting on this matter and I hope we can get at least 10 people to show up and protest this tax increase
said Show up and be heard at 20-Aug-09 12:03 PM
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How the Government Works:
Once upon a time the government had a scrap yard in the middle of a desert. Congress said," Someone may steal it at night." So they created a night watchman position and hired a person at $18,000.00 a year for the job. Then Congress said, "How does the watchman do his job without instruction?" So they created a planning department and hired two people -- one person to write the instructions for $22,000.00 and one person to do time studies for an additional $22,000.00 per year. Then congress said, "How will we know the night watchman is doing the tasks correctly?" So they created a quality control department and hired two people. One was to do the studies for $31,000.00 and one to write the reports for an additional $31,000,00 per year. Then Congress said, "How are these people going to get paid?" So they created the following positions: a time keeper for a $35,000.00 annual salary and a payroll officer for an additional $35,000.00. Then they created an administrative section and hired three more people -- an Administrative Officer at $155,000.00 per year, an Assistant Administrative Officer at $125,000.00 and a Legal Secretary at $100,000.00 per year. Then Congress said, "We have had this operating for one year with a budget cost of $574,000.00 and we are $18,000.00 over budget. We must cut back costs." SO THEY LAID OFF THE NIGHT WATCHMAN.
said How government works at 20-Aug-09 08:22 PM
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Give me a break. In this city you can ask the same question, in simple terms to five employees and get five different answers. This IT dpt has such gift. Ask this idiot (Gee-Ming Chow) the one question and by himself, he will give you five different answers.
said Fed Up in CG at 21-Aug-09 02:49 PM
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Chow Mein is the Golden Boy. Have you seen IT's offices in the police station?
Only a select few top law firms in the country have plusher digs than Chow. Leather hi back chairs, top of the line "land line" phones with every do-hickey known to man. Cell phones with all the toys, all sorts of expensive gadgetry, nice city cars to cruise around in, etc. Chow has "cart blanche" to spend as he sees fit...all on P-Cards. The "P" stands or Pick Up...as in the residents "pick up" the tab. Chow should be fired immediately...and be made to pay restitution to the City for his EDEN fiasco.
said Chow's plush offices at 21-Aug-09 08:42 PM
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Mr. Chow was warned by me PERSONALLY about Eden in 2006, but paid ABSOLUTELY no attention to detail. He wanted something really fancy to boast about, and now this junk is happening. Citizens of the Gables must be super rich, supid stupi, super dumb or just plain Super combination package........just like the Chinese Menu........Geeeeeeeeeee...............Ming Chow figured that out, so he added menu item#51...Gables Chop your heads off Suey ($5.5M)
said Reality Check at 26-Aug-09 11:53 PM
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me chinese,
me make joke, me go through 5 millon like Chipster blows through coke.
said G-unit-Ming Chow at 27-Aug-09 03:52 PM
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"For example on Oct. 16, 2008 Miguez paid four times $155.25 for “Disney Rsrvtns/tkts;” three days later he gave $297 to Embassy Suits, and on Oct. 20, 2008 he paid $50 for a “Super Shuttle.”
WHAT? Is this a joke? Someone need to look into this RIGHT NOW!!!! How can this be allowed to go on? Who is this Juan Miguez and why is allowed to purchase disney tickets for four and hotel stays at Disney World? Are the taxpayers supposed to pay the city employee vacations too? PAT SALERNO: You better start looking into these things and cutting the heads off the snakes before they bite you too!
said Po'd in Gables at 28-Aug-09 10:51 AM
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Juan Carlos Miguez is a crook and a thief. He was the one that was bedding his old boss Carmen Gaspa, the Purchasing Director, until they sent her packing. He is such and arrogant SOB and so despised by Danny Bendit, that when he was still in the good graces of David, requested him transferred. And so Juan Miguez landed in IT as the “buyer” for that department. And although he HATED Gee when he was sleeping with Carmen, he now spends his time sniffing Gee’s butt. It is interesting to note that no other department has its own “buyer” working in the department itself. All the buyers work out of the Purchasing Division. Not IT, which might be part of the reason why you have such a spike in spending. Look at the trends. When did Juan Miguez get to IT and how much was being spent before that? The Purchasing Division is overseen by Finance Dept. why does he report directly to Gee, who oversees his spending and approves his projects?
said Wake up Coral Gables, you are getting screwd! at 28-Aug-09 11:11 AM
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The Bond Buyer: The Daily Newspaper of Public Finance Vallejo Union Digs in Heels Plans to Appeal Court-Sanctioned Rejection of Contract Bond Buyer | Friday, September 4, 2009 By Andrew Ward SAN FRANCISCO — In an action that stands to drag out Vallejo, Calif.’s already 16-month-old bankruptcy proceedings, the International Brotherhood of Electrical Workers plans to appeal a court ruling allowing the city to reject its collective bargaining agreements. Michael McManus, chief judge of U.S. Bankruptcy Court for the Eastern District of California, earlier this week allowed the city to reject the union contract. A lawyer for the IBEW, which represents frontline non-public safety workers, said the union plans to appeal the ruling to the Ninth Circuit Court of Appeals. “This is the first time a court has ever really rejected a public employee collective bargaining agreement,” said union bankruptcy attorney Dean Gloster, of Farella Braun + Martel LLP in San Francisco. He said the precedent is bad for public workers across the country, unfair to Vallejo’s lowest-paid workers, and based on an incorrect interpretation of the U.S. bankruptcy code. The union’s legal team can appeal to the Ninth Circuit or the Bankruptcy Appellate Panel in Pasadena, Calif. Gloster said he plans to file with the Ninth Circuit because its judges are more accustomed to dealing with labor law and may be more willing to question the idea of throwing out a contract than bankruptcy judges. McManus subjected the city’s motion to reject the labor contracts to a three-part test defined in the U.S. Supreme Court’s 1984 case National Labor Relations Board v. Bildisco & Bildisco. The Bildisco standard required the city to prove that the contract was burdensome; rejection of the contract was equitable to the parties to the bankruptcy; and the parties had tried to negotiate a solution and were unlikely to reach an agreement. McManus this week said Vallejo met that standard. If his ruling stands, the IBEW will have to renegotiate its contract, which was good through June 30, 2010. The city is pushing for new contracts because it believes overly generous labor agreements bankrupted it. Labor costs account for about three-fourths of the Vallejo general fund, or about $60 million a year. By contrast, the city’s general fund municipal market debt is small. It has just over $50 million of certificates of participation outstanding. Gloster said the U.S. Congress overturned the Bildisco precedent when it enacted Section 1113 of the Bankruptcy Code, which says a company can void labor contracts only if that action is necessary to prevent liquidation of the business. Gloster also argued that the bankruptcy court couldn’t simply allow the city to ignore California’s public sector labor laws. McManus rejected those arguments in a legal memorandum he issued in March. At the time, he wrote that the Congress had declined to incorporate the changes into the Chapter 9 municipal bankruptcy law. He also said the state had waived local labor law when it authorized its municipalities to file for Chapter 9 protection. The March memo was his interpretation of the law. He applied it to the Vallejo case by rejecting the IBEW’s contract earlier this week after forcing the parties into mediation with a bankruptcy judge for several months. Vallejo, which has four public employee unions, reached voluntary agreements on new contracts with the Vallejo Police Officers Association and the Confidential, Administrative, Managerial, and Professional Association. The International Association of Firefighters last month agreed to rejection of their contracts and to begin an expedited schedule of negotiations that will either yield a new contract agreement or a contract that’s imposed in binding arbitration within several months. Vallejo, a city of 117,000 people, sought Chapter 9 bankruptcy protection in May 2008. It’s the biggest municipal bankruptcy since Orange County, Calif.’s in 1994. “There aren’t many municipal bankruptcies, and I think Vallejo is one of the first — if not the first — to really concentrate on employment contracts,” said James Spiotto, head of the head of the special litigation, bankruptcy, and workout group at Chapman and Cutler LLP in Chicago. He agrees with McManus’ interpretation of the law. He said the judge’s ruling is “unusual, but not unanticipated” because of the law and the economic conditions of local governments. Spiotto said he hopes the ruling and Vallejo’s experience will show public officials and public employee unions that they need to negotiate seriously to avoid bankruptcy. Vallejo’s lawyer, Marc Levinson of Orrick. Herrington & Sutcliffe LLP, said the IBEW’s appeal is a waste of time and money for both the city and its workers. He said the city has already spent millions on legal fees that could have been put to better use paying firefighters and IBEW members. “If they’re going to appeal it, which is their right, it’s just more time, more money, more delay,” he said. Levinson said it’s better to start negotiating a plan to adjust Vallejo’s debts. A “plan of adjustment” is a legal term for a schedule of payments that the economically battered city can actually afford to pay after the bankruptcy. It’s the last stage in a bankruptcy, and requires the parties to come to an agreement on the damages that unions and bondholders will be paid for their losses under the bankruptcy. “We still have to fight about damages, which could be substantial, but at least we’re at the point now where we really have to move forward on the formulation and negotiation of a plan,” Levinson said. Bankruptcy damages are generally paid at pennies on the dollar from the leftover funds in a bankruptcy. The payments are often stretched out over years or decades. Gloster said the IBEW will continue to negotiate on a new labor contract, even as it appeals McManus’ ruling to higher courts. He said the city could end the case now if it would offer its front-line workers the same sort of terms as it offered managers. His comments suggest the union’s appeal may be both a principled stance on the sanctity of its contracts and a way of keeping pressure on the city to offer the IBEW the best deal possible. Gloster said he couldn’t discuss the precise details of the labor negotiations, but said the main point of contention for the IBEW is that its workers — Vallejo’s lowest paid — are being offered less generous health benefits than police, firefighters, and management employees. © 2009 The Bond Buyer and SourceMedia Inc., All rights reserved. Use, duplication, or sale of this service, or data contained herein, except as described in the subscription agreement, is strictly prohibited. Trademarks page. Client Services 1-800-221-1809, 8:30am - 5:30pm, ET For information regarding Reprint Services please visit: http://license.icopyright.net/3.7745?icx_id=20090903NKRAS2H0
said Bankruptacy solves the problem at 04-Sep-09 11:53 AM
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Eden is as corrupt as Liz. When the City purchased Eden 6yrs ago, Liz hired her neighbor as the attorney to handle this transaction, though an attorney was not required.
said Eden at 06-Sep-09 10:08 AM
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One of the comments asks a great question: Why does IT have its own buyer? Going through the City's purchasing department may be a bit more cumbersome, but at least provides a check on the purchses.
said LBHialeah at 17-Oct-09 11:02 AM
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