We hope everyone was able to enjoy the holiday season to its fullest. The WayneWho staff took some time off and decided to not bother our readers with governmental silliness or political dramas during this time. However, with 2007 drawing to a close and 2008 just a few hours away, we figured it was time to get back to work.
If you have been keeping up with the local newspapers at all, you have probably read the "Year in Remembrance" pieces that they put together as filler this time of year. These pieces are put together so no one has to do any real work requirements over the holiday. In an attempt to keep our unnews stories in line with the "real" media, we would like to take a look back on some of our unnews for 2007.
The year for the WayneWho staff started in March as reports of the demise of Political Activist Doug Guetzloe and his band of merry Ax-the-Taxers filled the airwaves. Of course, what would Central Florida be without the zany antics of Mr. Guetzloe who instead of being silenced, was recently scene at a campaign rally for Mike Huckabee.
In April we had our first court-mandated special election. The newly created districts saw their first election with the District 2 seat being a majority Hispanic district. The first Hispanic was elected to office in more than a decade with much fanfare and celebration. Since that election we would like to note that there has been no radical shift in government as many predicted. Things have basically stayed the same and it has been business as usual. We had hoped for more.
Rumors of a Food Court opening up in Kissimmee City Hall to offset the looming budget cuts were swirling like agitators at the water treatment plant, but the plans never came to be. Depending on how the property tax amendment vote goes, we may still see an Orange-Julius moving in.
The City of Kissimmee decided to put together a Charter Review Committee, but not before making all the changes they wanted to first. They then banned certain parts of the Charter from being reviewed by the hand-picked Charter Review committee. It seems the concept of Democracy is a difficult one for some to grasp.
As the year progressed, discussions on creating and implementing a Fire Fee (Tax) continued to gather steam. In the end, the business community, or as we like to call them - our economy, took the hit while the governments cried about what the State had done to them. The year continued with threats of cutting public safety services if the voters of Florida forced a reduction in taxes by voting for it. While the WayneWho staff understands that services provided by our local governments cost money that comes from taxes paid by our residents, we believe that this year proved that government has lost all touch with reality as it pertains to what services our community demands. Public Safety is the number one request, followed by an effective traffic infrastructure.
Rumors of self cleaning restroom facilities surfaced some time in June. This rumor surfaced after the stinging defeat in the All-America City pageant. It is our belief that the restroom rumor was a decoy issue to divert attention away from the real issue of money spent on entering a pageant when the community was in the middle of a budget crisis. The WayneWho staff would like to know how many Meals-On-Wheels meals could have been served with the money spent on the Anaheim, California junket? Was it really worth it?
June saw the birth of Kissimmee Puppet Commission Theatre which became a great hit in the local online community and gave the local government channel "Access Osceola" a competitive run for its money. Although many that tuned in for the online delights of Kissimmee Puppet Commission Theatre were confused on if what they were watching was real, most realized politics and comedy go hand in hand.
The summer months of 2007 saw local governments deteriorate into a quagmire of ambiguous resolutions and discussions that dealt mostly with the loss of government income and less on what actions government was going to take to insure that service to it residents would remain a priority.
A $200,000 fountain (Aquatic Sculpture) became the talk of the town as Kissimmee prepared to redevelop itself into the next Sin-City. One commissioner declared that she wanted to see fountains all through out the city because they are pretty. The commission threw caution and your tax dollars to the wind and approved the measure.
There were exciting elections in St. Cloud that left a lot of people wondering why School Board members would threaten candidates if they were not in favor in building a housing project in the middle of a residential neighborhood. Was a developer to blame or was there more to the story? Besides all of the silliness, the WayneWho staff believes that this was a great election because of the range of issues and debates that came out during the process. We find it amazing that the current St. Cloud election cycle is probably one of the most boring and issue-less campaigns we have seen in a long time. Elections are about ideas, and from what we are hearing, there are none.
The year ended on a more quiet note except for the fact that the public learned that risky investments made by a group controlling state funds (local tax money) had all but crashed. The state had gambled with our tax dollars and lost, which left the taxpayers stuck with finding a way to cover the losses.
We know that this is not all that happened this year, but the WayneWho staff all agreed that these were some of most striking unnews issues of the year. While the other local news outlets paint a picture of limited success for the year, we think that assertion deserves a challenge. It is too bad the "real" media is not equipped to cover the issues.
Monday, December 31, 2007
Tuesday, December 18, 2007
Municipal fee poster child
Like it or not, the City of Kissimmee is now the Central Florida poster child for "revenue neutral" fees as a replacement for property tax income loss. Kissimmee was the featured fee-passing municipality in the Sentinel's Sunday article about such fees. In the same article, they noted that the Volusia Property Appraiser has been trying to get an opinion as to whether such fees are legal, and after the state Attorney General declined to weigh in, has now asked for an opinion from the Department of Revenue.
We suspect, and some of the folks on the Topix discussion board seem to agree, that fee adjustment is far from over. Last year it was to overcome "what Tallahassee did to us." This year it's going to be because "property tax revenues declined."
We know the folks in Tallahassee have their hands full with something, but we might have a solution. Require all public safety costs to be payable from the municipality's general fund, as law enforcement services are today. We suspect that elected officials are going to find that their constituents aren't quite as likely to swallow add-on fees that aren't related to public safety.
P.S. There is still time to implement the "out-of-state blogger fee" to recoup some of the costs related to responding to allegations from bloggers who no longer contribute to local tax revenues.
We suspect, and some of the folks on the Topix discussion board seem to agree, that fee adjustment is far from over. Last year it was to overcome "what Tallahassee did to us." This year it's going to be because "property tax revenues declined."
We know the folks in Tallahassee have their hands full with something, but we might have a solution. Require all public safety costs to be payable from the municipality's general fund, as law enforcement services are today. We suspect that elected officials are going to find that their constituents aren't quite as likely to swallow add-on fees that aren't related to public safety.
P.S. There is still time to implement the "out-of-state blogger fee" to recoup some of the costs related to responding to allegations from bloggers who no longer contribute to local tax revenues.
Saturday, December 15, 2007
Kid Nation: We've All Decided to Go Mad!
Well, nothing of any substance happened on the final episode of Kid Nation, so we won't bother you with a summary.
You may wonder, and many commenters have asked, why we have we spent so many entries writing about this pseudo-unscripted "reality" show?
Part of the reason was watching a show that we knew was going to be a train wreck before it was ever aired. No one would really leave 40 kids in the middle of the desert, alone, to try to fend for themselves. Since there was bound to be adult monitoring, there had to be adult guidance or influence into how the kid based community would evolve.
More to the point, the WayneWho staff wanted to look at the issue of "experience" as it applies running any type of group or organization. This was a perfect opportunity, pre-edited into small bits, to watch a political experiment unfold. Consider it the "Are You Smarter Than a Fifth Grader" experiment for the government/management arena.
What we learned along the way was, whether elected or appointed, the majority of those who had a leadership title expected that the title was what got things done. In most cases, the titled leaders relied heavily on the Journal entry that was provided for them each episode to guide their decisions and actions, very rarely even debating the impact of what the Journal called for. By the second half of the season, the tagline of "we read the Journal..." regularly elicited groans and other sounds of displeasure from the townspeople. As the episodes wore on, we also notice the trend of title leaders defending the Journal and the decision they made based on it with out considering other thoughts or ideas. Alternate points of view were often ignored in favor of the Journal entries.
Should we have expected anything different? These, after all, were individuals who had never done anything like this before. The actions of both the title leaders and the townspeople descended very quickly into an adversarial relationship with only brief moments of unity and teamwork shining through during scripted competitive events. Did the pre-destined class structure of community create the results we watched, or was the outcome created by clever editing?
Meanwhile, the true leaders were, almost uniformly, those who jumped in and got their hands dirty and did the work that, in many cases, others in the town did not want to do. They were recognized by their peers for getting things done and not for debating issues. They were the ones who got things done while the titled leaders claimed the success for themselves. They had no "experience" that drove them to make sure things happened, but more of an uncanny sense of vision and direction. We have to wonder if the Founding Fathers of our Country would have exhibited these same traits as children?
This brings us back to local reality. We have a number of opportunities in the coming year to select those who will represent us in important decisions from the community level to the national level. Many of those who wish to fill those positions will announce to the voters that they have the "experience" to do the job. They will not only claim that they have the "experience" to do the jobs, but that they have been "tested" and "vetted" to lead us in a direction that only they understand. We encourage you to dig into what that "experience" entails. Is it the "experience" of sitting in the audience watching others agree to information and courses of action that have been presented to them? Is it the "experience" of job shadowing with current and past elected officials to learn the traditional practice of government that has put us on the path we are now on? Or is it the "experience" of building, creating, and doing that will indicate to us that they are the candidate that will take action to get things done?
The answers are yours.
You may wonder, and many commenters have asked, why we have we spent so many entries writing about this pseudo-unscripted "reality" show?
Part of the reason was watching a show that we knew was going to be a train wreck before it was ever aired. No one would really leave 40 kids in the middle of the desert, alone, to try to fend for themselves. Since there was bound to be adult monitoring, there had to be adult guidance or influence into how the kid based community would evolve.
More to the point, the WayneWho staff wanted to look at the issue of "experience" as it applies running any type of group or organization. This was a perfect opportunity, pre-edited into small bits, to watch a political experiment unfold. Consider it the "Are You Smarter Than a Fifth Grader" experiment for the government/management arena.
What we learned along the way was, whether elected or appointed, the majority of those who had a leadership title expected that the title was what got things done. In most cases, the titled leaders relied heavily on the Journal entry that was provided for them each episode to guide their decisions and actions, very rarely even debating the impact of what the Journal called for. By the second half of the season, the tagline of "we read the Journal..." regularly elicited groans and other sounds of displeasure from the townspeople. As the episodes wore on, we also notice the trend of title leaders defending the Journal and the decision they made based on it with out considering other thoughts or ideas. Alternate points of view were often ignored in favor of the Journal entries.
Should we have expected anything different? These, after all, were individuals who had never done anything like this before. The actions of both the title leaders and the townspeople descended very quickly into an adversarial relationship with only brief moments of unity and teamwork shining through during scripted competitive events. Did the pre-destined class structure of community create the results we watched, or was the outcome created by clever editing?
Meanwhile, the true leaders were, almost uniformly, those who jumped in and got their hands dirty and did the work that, in many cases, others in the town did not want to do. They were recognized by their peers for getting things done and not for debating issues. They were the ones who got things done while the titled leaders claimed the success for themselves. They had no "experience" that drove them to make sure things happened, but more of an uncanny sense of vision and direction. We have to wonder if the Founding Fathers of our Country would have exhibited these same traits as children?
This brings us back to local reality. We have a number of opportunities in the coming year to select those who will represent us in important decisions from the community level to the national level. Many of those who wish to fill those positions will announce to the voters that they have the "experience" to do the job. They will not only claim that they have the "experience" to do the jobs, but that they have been "tested" and "vetted" to lead us in a direction that only they understand. We encourage you to dig into what that "experience" entails. Is it the "experience" of sitting in the audience watching others agree to information and courses of action that have been presented to them? Is it the "experience" of job shadowing with current and past elected officials to learn the traditional practice of government that has put us on the path we are now on? Or is it the "experience" of building, creating, and doing that will indicate to us that they are the candidate that will take action to get things done?
The answers are yours.
Tuesday, December 11, 2007
Save vs. cut
We received this quote in an e-newsletter aimed at the construction/contracting industry, and it struck a chord with us. The philosophy would serve not only business owners well, but perhaps some of those entrusted with our civic budgets as well...
Always keep the attitude of: "Where can we save", not "Where can we cut".
The attitude of "Where can we save" means thoroughly analyzing the subject at hand. What is it, where and how is it used? Can we use it differently or in conjunction with other things? What can we do to reduce the cost of owning or operating the item? Can we extend its life, can we reduce the maintenance required for successful operation? Saving costs requires taking a long-term view and making a smart, well-thought out decision.
The attitude of "Where can we cut?" is an emotional reaction. It means eliminating something completely so you can save money today, but it doesn't take the long term view. Normally this happens after little thought to anything other than eliminating that expense.
The two are as different as daylight and dark and the prudent contractor will always focus on saving rather than cutting.
In the interest of full disclosure, this e-newsletter quote came from Michael Stone, who has written a number of books for the construction trade. His website is www.markupandprofit.com
Always keep the attitude of: "Where can we save", not "Where can we cut".
The attitude of "Where can we save" means thoroughly analyzing the subject at hand. What is it, where and how is it used? Can we use it differently or in conjunction with other things? What can we do to reduce the cost of owning or operating the item? Can we extend its life, can we reduce the maintenance required for successful operation? Saving costs requires taking a long-term view and making a smart, well-thought out decision.
The attitude of "Where can we cut?" is an emotional reaction. It means eliminating something completely so you can save money today, but it doesn't take the long term view. Normally this happens after little thought to anything other than eliminating that expense.
The two are as different as daylight and dark and the prudent contractor will always focus on saving rather than cutting.
In the interest of full disclosure, this e-newsletter quote came from Michael Stone, who has written a number of books for the construction trade. His website is www.markupandprofit.com
Monday, December 10, 2007
Dear homeowner: Your taxes will still go up
Many have commented that, now that the "housing bubble" appears to have deflated, property taxes will decrease as housing values recede.
The Sentinel has mentioned an item to the contrary in a couple of their stories, but we'd like to put the WayneWho Math Spotlight on the issue.
Say Joe Homeowner purchased a local home in late 2003 (pre-bubble) for $98,500. The housing market did what it did, and by late 2006, Joe's house was valued at $145,000 (about a 47% increase). This house is Joe's primary home, so he has Save Our Homes protection, keeping his house's taxable value from rising more than 3% a year.
Tax value-wise, Joe's house went like this:
2004: $98,500 x 1.03 = $101,455
2005: $101,455 x 1.03 = $104,498.65
2006: $104,498.65 x 1.03 = $107,633.61 vs. market of $145,000
So say, for 2007 taxes, the market decreases Joe's market value by 20% (which seems like a very high number for one year). $145,000 x .80 = $116,000. That's still a higher number than the 3% allowable Save Our Homes valuation increase for the year ($107,633.61 x 1.03 = $110,862.62), so even though Joe took a 20% market value hit on the house, he still gets to pay an increase in property taxes.
The voters may give, and Save Our Homes may take away. Something to keep in mind the next time there is a complaint about what Tallahassee is doing to local governments' tax revenues.
The Sentinel has mentioned an item to the contrary in a couple of their stories, but we'd like to put the WayneWho Math Spotlight on the issue.
Say Joe Homeowner purchased a local home in late 2003 (pre-bubble) for $98,500. The housing market did what it did, and by late 2006, Joe's house was valued at $145,000 (about a 47% increase). This house is Joe's primary home, so he has Save Our Homes protection, keeping his house's taxable value from rising more than 3% a year.
Tax value-wise, Joe's house went like this:
2004: $98,500 x 1.03 = $101,455
2005: $101,455 x 1.03 = $104,498.65
2006: $104,498.65 x 1.03 = $107,633.61 vs. market of $145,000
So say, for 2007 taxes, the market decreases Joe's market value by 20% (which seems like a very high number for one year). $145,000 x .80 = $116,000. That's still a higher number than the 3% allowable Save Our Homes valuation increase for the year ($107,633.61 x 1.03 = $110,862.62), so even though Joe took a 20% market value hit on the house, he still gets to pay an increase in property taxes.
The voters may give, and Save Our Homes may take away. Something to keep in mind the next time there is a complaint about what Tallahassee is doing to local governments' tax revenues.
Friday, December 7, 2007
Kid Nation...Who needs a Town Council?
This week on Kid Nation, we open with the town sheriff introducing us to the concept of property rights, when she claims a square of property in the center of town. The otherwise nondescript square of dirt then is in high demand, as the townsfolk perceive it as now having value and exclusivity.
The Council Backup Journal tells the Town Council to explore beyond their borders, so they go off on a hike, leaving the sheriff in charge of the town.
The townspeople initially protest having a single, unelected leader. They quickly decide that the town is running as well, if not better, without the over-the-top personalities of the Town Council around.
Meanwhile, the Town Council comes to an Indian encampment, where they are told that children are the future of the world, and receive the suggestion that perhaps they should be using the gold star to invest in the future, rather than reward historical participation.
The townsfolk, minus the Town Council, win their weekly showdown, commenting "we did fine without the council...we didn't need them." The sheriff single handedly selects the weekly reward, and the townsfolk go off on their hot air balloon ride, returning just in time to see the Town Council return from their journey/retreat.
Next week is the finale for Kid Nation. According to the preview, lacking a Fire Fee, the townsfolk will have to fight their own fires.
The Council Backup Journal tells the Town Council to explore beyond their borders, so they go off on a hike, leaving the sheriff in charge of the town.
The townspeople initially protest having a single, unelected leader. They quickly decide that the town is running as well, if not better, without the over-the-top personalities of the Town Council around.
Meanwhile, the Town Council comes to an Indian encampment, where they are told that children are the future of the world, and receive the suggestion that perhaps they should be using the gold star to invest in the future, rather than reward historical participation.
The townsfolk, minus the Town Council, win their weekly showdown, commenting "we did fine without the council...we didn't need them." The sheriff single handedly selects the weekly reward, and the townsfolk go off on their hot air balloon ride, returning just in time to see the Town Council return from their journey/retreat.
Next week is the finale for Kid Nation. According to the preview, lacking a Fire Fee, the townsfolk will have to fight their own fires.
Thursday, December 6, 2007
Green Fast Food
No, not the kind you call the health inspector about.
The Sentinel reports that Subway opened its first "eco-store" in Kissimmee. The U.S. Green Building Council helped Subway design the store, which is said to include energy-efficient heating and ventilation, natural lighting, low-flow water fixtures, and building materials and décor from sustainable resources, as well as napkins made of 100% recyclable materials.
Anyone know where this store is? Can you tell it is "eco-friendly" by looking at it?
The Sentinel reports that Subway opened its first "eco-store" in Kissimmee. The U.S. Green Building Council helped Subway design the store, which is said to include energy-efficient heating and ventilation, natural lighting, low-flow water fixtures, and building materials and décor from sustainable resources, as well as napkins made of 100% recyclable materials.
Anyone know where this store is? Can you tell it is "eco-friendly" by looking at it?
Wednesday, December 5, 2007
Spotting a Flawed Leader
Dr. Terry Leap recently wrote an article called "Keys to Spotting a Flawed CEO - Before It's Too Late" for the Wall Street Journal. We'd like to excerpt the section called "The Warning Signs" and suggest that you paste this entry into your word processor, and then use the Find/Replace command to replace "CEO" or "Executive" with "Elected Official." Take it away, Dr. Leap:
"The Warning Signs"
An overt zeal for prestige, power and wealth. A manager's tendency to put his or her own success ahead of the company's often is evident long before that person is ready to assume the CEO post.
A reputation for shameless self-promotion. Executives who constantly seek publicity, are always looking for a better job or trumpet their successes while quickly distancing themselves from setbacks are sending strong signals that their egotistical ways may eventually cause major problems.
A proclivity for developing grandiose strategies with little thought toward their implementation. These executives may assume that others at lower levels will magically turn strategy into reality.
A fondness for rules and numbers that overshadows or ignores a broader vision. This is the flip side of the preceding problem.
A reputation for implementing major strategic changes unilaterally or for forcing programs down the throats of reluctant managers. CEOs have to be consensus builders.
An impulsive, flippant decision-making style. CEOs who approach decision-making with clever one-liners rather than with balanced, thoughtful and informed analyses can expect to encounter difficulty.
A penchant for inconsiderate acts. Individuals who exhibit rude behavior are apt to alienate the wrong person at the wrong time.
A love of monologues coupled with poor listening skills. Bad listeners rarely profit from the wisdom of their associates.
A tendency to display contempt for the ideas of others. Hypercritical executives often have few stellar accomplishments of their own.
A history of emphasizing activity, like hours worked or meetings attended, over accomplishment. Energy without objective rarely leads to improved organizational performance.
A career marked by numerous misunderstandings. There are two sides to every story, but frequent interpersonal problems shouldn't be overlooked.
A superb ability to compartmentalize and/or rationalize. Some executives have learned to separate, in their own minds, their bad behavior from their better qualities, so that their misdeeds don't diminish their opinions of themselves. An important internal check missing. Others are always ready to cite a higher purpose to justify their bad decisions.
"The Warning Signs"
An overt zeal for prestige, power and wealth. A manager's tendency to put his or her own success ahead of the company's often is evident long before that person is ready to assume the CEO post.
A reputation for shameless self-promotion. Executives who constantly seek publicity, are always looking for a better job or trumpet their successes while quickly distancing themselves from setbacks are sending strong signals that their egotistical ways may eventually cause major problems.
A proclivity for developing grandiose strategies with little thought toward their implementation. These executives may assume that others at lower levels will magically turn strategy into reality.
A fondness for rules and numbers that overshadows or ignores a broader vision. This is the flip side of the preceding problem.
A reputation for implementing major strategic changes unilaterally or for forcing programs down the throats of reluctant managers. CEOs have to be consensus builders.
An impulsive, flippant decision-making style. CEOs who approach decision-making with clever one-liners rather than with balanced, thoughtful and informed analyses can expect to encounter difficulty.
A penchant for inconsiderate acts. Individuals who exhibit rude behavior are apt to alienate the wrong person at the wrong time.
A love of monologues coupled with poor listening skills. Bad listeners rarely profit from the wisdom of their associates.
A tendency to display contempt for the ideas of others. Hypercritical executives often have few stellar accomplishments of their own.
A history of emphasizing activity, like hours worked or meetings attended, over accomplishment. Energy without objective rarely leads to improved organizational performance.
A career marked by numerous misunderstandings. There are two sides to every story, but frequent interpersonal problems shouldn't be overlooked.
A superb ability to compartmentalize and/or rationalize. Some executives have learned to separate, in their own minds, their bad behavior from their better qualities, so that their misdeeds don't diminish their opinions of themselves. An important internal check missing. Others are always ready to cite a higher purpose to justify their bad decisions.
Tuesday, December 4, 2007
Tuesday Night Game Show
It's another Tuesday night and Access Osceola will run another episode of our favorite Tuesday night game show, “Who’s the Mayor Anyway?”. This is the game where the other commissions try to receive points by doing the Mayor’s job for him. If they are successful without the Mayor actually stopping them, they receive double the points. They can receive triple the points if he throws in a dirty look their way. It has already been an eventful season with Commissioner Van Meter seemingly racking up the most points and Commissioner Irizarry coming in at a close second.
However the Mayor can take their points away if he yells at a tax payer, so commissioners… look out!
Since the points don’t really matter (kinda-sorda like any citizen input), at the end of the game they are offered as a consolation prize to the taxpayer who received the verbal abuse. However, just like the United Cities Currency, don’t try to pay your light bill with it.
However the Mayor can take their points away if he yells at a tax payer, so commissioners… look out!
Since the points don’t really matter (kinda-sorda like any citizen input), at the end of the game they are offered as a consolation prize to the taxpayer who received the verbal abuse. However, just like the United Cities Currency, don’t try to pay your light bill with it.
Monday, December 3, 2007
No they didn't
We were reading our online version of the Saturday Osceola News-Gazette and turned to Page 5, where the City of Kissimmee had their full-page ad of upcoming community events. Our eyes quickly turned to the sign-up section for the School of Government. We couldn't help but notice that it appears that the city, in its creative wisdom, took the All-America City logo, and replaced the logo wording with "City of Kissimmee School of Government" and the city logo.
We wonder if it is All-America(n) to copy another organization's work without giving proper credit.
We wonder if it is All-America(n) to copy another organization's work without giving proper credit.
Helping Government With Their Money
A major issue in the news of late has been the state fund used by local governments to earn interest on the tax money they collect before they have to spend the money on the things that local governments spend money on. Usually these are things such as payroll that need to be budgeted, but are not spent right away.
Last week there was a rush of withdrawals from the fund after it was learned that the fund managers had invested in some investment products that had a dependence on the subprime mortgage market. Late in the week, the board that oversees the fund (including such little-known people as Charlie Crist and Alex Sink) had to suspend withdrawals from the fund to prevent it from having to sell securities at a loss to fund the withdrawals. In other words, this board prevented local governments from accessing the funds that they had trusted with this state group.
Again, the purpose of the fund was to give local governments a place to park their revenues for a short period until they needed to be spent, and earn interest on that money, while preserving the capital. Obviously, the fact that the state has such a fund, complete with their own advisors, board, and structure, means that there wasn't anything commercially available, right?
Well, someone did some research and found that the state fund's returns through September of this year were 5.56%. They compared that to an index money market fund which had a return of 5.51% through September. You may have heard about index funds... they're a common recommendation for retirement funds for individual investors, and they approximate the return of a given stock index (like the S&P 500).
So, for that additional 0.05% return, we have this little mess going on, and the local government funds turned out to not be as safe and secure in their own investment fund as the local governments had been led to believe. This situation also begs the question of governmental roles. Is it the government's responsibility to act like Wall Street financial wizards with other people's money? After all, it is tax money from the taxpayers of Florida that has been put at risk, with no input from anyone from the general public. Is this a government that trusts the private market?
Last week there was a rush of withdrawals from the fund after it was learned that the fund managers had invested in some investment products that had a dependence on the subprime mortgage market. Late in the week, the board that oversees the fund (including such little-known people as Charlie Crist and Alex Sink) had to suspend withdrawals from the fund to prevent it from having to sell securities at a loss to fund the withdrawals. In other words, this board prevented local governments from accessing the funds that they had trusted with this state group.
Again, the purpose of the fund was to give local governments a place to park their revenues for a short period until they needed to be spent, and earn interest on that money, while preserving the capital. Obviously, the fact that the state has such a fund, complete with their own advisors, board, and structure, means that there wasn't anything commercially available, right?
Well, someone did some research and found that the state fund's returns through September of this year were 5.56%. They compared that to an index money market fund which had a return of 5.51% through September. You may have heard about index funds... they're a common recommendation for retirement funds for individual investors, and they approximate the return of a given stock index (like the S&P 500).
So, for that additional 0.05% return, we have this little mess going on, and the local government funds turned out to not be as safe and secure in their own investment fund as the local governments had been led to believe. This situation also begs the question of governmental roles. Is it the government's responsibility to act like Wall Street financial wizards with other people's money? After all, it is tax money from the taxpayers of Florida that has been put at risk, with no input from anyone from the general public. Is this a government that trusts the private market?
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