CSCs are governmental entities with the primary purpose of providing preventive, developmental, treatment, rehabilitative and other services for children. Independent CSCs are separate taxing districts, not subject to oversight by the Orange County Commission or the Orange County Comptroller.

These government entities have a governing board, just as Orange County Government has a Board of County Commissioners (BCC). However, unlike the BCC who are elected by the citizens of Orange County, the governing board of a CSC is an appointed board, in which the majority of the governing board members are not elected. However, the CSC Board has the power to impose a tax of up to 1/2 of a mill on all taxable property in Orange County including homesteaded, rental or owner-occupied homes, apartments, commercial and retail establishments, hotels, vacant land, etc.

An independent CSC cannot be created unless the BCC votes to place it on the ballot for a countywide referendum and a majority of the electorate votes in favor of its creation. There are two governing structures permitted by Florida Statute, a 10-member appointed board or a 33-member appointed board (the latter option is only available to charter counties). The initiative proposed by the Children's Trust is to create an independent CSC with a 10-member board which, by Florida Statute, must consist of the following appointments:

As proposed, the CSC would require voter reauthorization in 10 years. There are eight independent CSCs in Florida: Broward, Hillsborough, Martin, Miami-Dade, Okeechobee, Palm Beach, Pinellas and St. Lucie.

There is another type of CSC - a dependent CSC. A dependent CSC is created through local ordinance by the BCC. The county can determine the governing structure and the scope of authority. Funding could be provided through the existing county budget and overseen by the BCC that you, the citizens of Orange County, have elected. Counties may commit a portion of the existing millage rate to the dependent CSCs. There are two dependent CSCs in Florida: Duval/Jacksonville and Manatee.

On April 24, 2018, the BCC held a work session to discuss the Children's Trust proposal to create an independent CSC.

 

During the work session, the Board heard from approximately 50 members of the public. The BCC also received a detailed staff presentation outlining the structure and function of independent CSCs, a comprehensive review of children services currently being provided in the county, an evaluation of the Children's Trust needs assessment report, a high-level overview of other unmet needs including homelessness, affordable housing, opioid epidemic, transportation and public safety. 

While it was evident from the BCC discussion that everyone agreed that children are a top priority, there was a consensus that more work needed to be done before considering this request, including evaluating the possibility of creating a dependent CSC and using existing revenues to fill critical gaps rather than raising taxes.

During my time in public office and as an active and engaged community leader for over two decades, one of my primary focuses has been to improve the lives of children and to strengthen families. So it may come as a surprise to you, given my track record on children's issues that I am not in support of placing this initiative on the November ballot. The path of least resistance would have been for me to just support the Children's Trust proposal. However, to do so would have been in conflict with my obligation to maintain the public's trust and ensure accountability. There is no issue where accountability should be more important than when our children's welfare is at stake.

As a result of a poll conducted by the Children's Trust, the growing mantra is "let the voters vote" - which makes for a compelling sound bite. However, it is the responsibility of the BCC to ensure that the voters are told the truth, that the information they are provided is accurate, complete and unbiased. The BCC also has a responsibility to our children, voters, and taxpayers to make sure there is a sufficient level of accountability to ensure that the outcomes promised can and will be achieved. The Children's Trust proposal does not meet these minimum standards, and upon closer review there are many concerns and, in my opinion, there are better options to address unmet needs of our children sooner and with greater transparency and accountability.

It is also important to point out that my position is not based on politics. In the past, I have supported placing sales tax initiatives and a millage rate increase on the ballot, but only after a deliberate evaluation process, along with transparency and robust public engagement in which specific goals and commitments were clearly outlined to the public and accountability measures were in place and only where the information provided to the public was accurate, complete and unbiased.

With that foundation, I would like to take this opportunity to explain the three primary concerns I have with the Children's Trust proposal:

Orange County's process for addressing needs, before considering a tax increase, is to evaluate opportunities for additional efficiencies or to reprioritize existing funding. If it is then determined that additional revenues are needed, Orange County would start by commissioning an objective needs assessment study, which would outline the gaps in services, the recommended programs to be funded and the measurable outcomes to be achieved.  Simply put, before placing a tax referendum on the ballot, the taxpayers would know exactly what they are voting on. 

The Children's Trust of Orange County, Inc. has produced three needs assessments, as follows: 

The first and second reports issued in 2016 and 2017, contain exactly the same data, with slight changes in the commentary.  The third report was received by the county on April 23rd, the evening before the BCC work session and therefore was not included in the staff presentation or BCC discussion.  Hence, unless otherwise specified, the following review of the needs assessments pertain to the 2016 and Fall 2017 Children's Trust Reports.

In reviewing the Children's Trust Reports, numerous significant errors were discovered. The reports also did not use a consistent methodology.  For instance, the reports used different time frames for measuring different data trends, resulting in a distorted picture of the trend of children's well-being in Orange County. Also, the Children's Trust Reports were based, primarily, on data from 2015 and earlier.  Significant changes and improvements have occurred in the last several years since. 

The Children's Trust Reports identified a $27.3 million annual funding gap in children's services (exclusive of costs to implement recommendations made by the Mayor's Youth Mental Health Commission).  Initially, this funding gap was being used to justify an increase of a 1/4 mill property tax levy which would generate approximately $29 million; however, shortly before the BCC work session, the request was increased to a 1/2 mill, with no justification for doubling the proposed tax.  At this level, the CSC would generate almost $60 million in property tax revenues, a significant amount of funding and well in excess of the needs identified in Children's Trust Reports of $27.3 million which, as you will see below, was overstated by nearly $5 million.

Further, a closer look at the funding gap analysis reveals major errors.  For example, both Children's Trust Reports and the UCF report state that just 33 of the 73 Title I elementary schools in Orange County have after-school programs.  All three reports attribute a $4,680,000 funding gap in order to provide all Title I schools with after-school programs.  However, Orange County Public Schools confirmed that all Orange County Title 1 elementary schools have after-school programs. Hence, there is no funding gap in this category.  This glaring error alone should be enough to warrant a red flag to conduct a more thorough, independent and objective needs assessment, especially since this proposal would create a new governmental entity, not accountable directly to the voters of Orange County, with taxing power of approximately $60 million annually.

The Children's Trust Reports also compare Orange County's 2016 level of funding for children from our general revenue and from grants we receive to that of other counties with CSCs.  In that comparison, the Children's Trust Report finds that we are providing the lowest investment per child.  However, the report contains numerous errors.  First, the Reports state that our general revenue allocation for children's services in 2016 was $24.7 million.  In actuality, Orange County's allocation in 2016 was $34.4 million. A $10 million error is a significant error.  The Reports also understate the grants we have received and allocated towards children's services by approximately $2 million.  But by far the largest oversight is that several major federal grants received by CSCs in other counties are actually received and administered here in Orange County by Community Coordinated Care for Children; therefore, this funding isn't reflected in Orange County's budget, but those federal dollars are still being used in Orange County to benefit our children. After adjusting for these errors, Orange County's funding per child is substantially higher than what was represented in the Children's Trust Reports and very competitive with other counties with CSCs. In other words, our citizens are already paying a commensurate amount towards programs and services for children, they are just paying their taxes directly to Orange County rather than paying them to an independent taxing district.

For a more detailed analysis of the Children's Trust Reports, I encourage you to watch the county staff presentation included in the following link http://netapps.ocfl.net/Mod/meetings/1.

As outlined above, the majority of the governing board members of the CSC would be state appointees, not elected by Orange County citizens. Nevertheless, they would have the authority to levy up to a 1/2 mill countywide property tax. To put this in perspective, 1/2 mill generates nearly $60 million annually and is the equivalent of an 11% increase in the countywide millage rate. I firmly believe that taxing power should rest with elected officials that are directly accountable to the citizens. If the public becomes disenchanted with an elected official, they can vote them out of office. Appointed board members don't have this same level of accountability.

In fact, our community has experienced issues with non-elected boards. In 2002, LYNX went through much controversy and embarrassment after the agency paid for 20 officials to attend a convention in Las Vegas. A local news channel went undercover and showed video of officials gambling during the convention and being wined and dined by private companies that could be interested in gaining LYNX contracts. Shortly thereafter, the board was restructured to include mostly elected officials.

As another example, in 2004 I proposed putting more elected officials on the Orlando-Orange County Expressway Authority (OOCEA) Board. OOCEA's board at that time only had one elected official out of the five board members. My proposal failed. Subsequently, the authority suffered from one controversy after another ranging from questionable spending, allegations of "pay to play" and "hush money." A grand jury report concluded that a "culture of corruption" permeated the agency. Even with these problems, the legislature still did not change the structure of the board.  In 2013, an investigation was launched and the state attorney at that time issued over 500 pages of evidence, which resulted in one of the non-elected board members being indicted on bribery charges, convicted and incarcerated. Many years after my proposal to add more elected officials, under the leadership of Senate President Andy Gardiner, the state passed a law terminating the OOCEA and created the Central Florida Expressway Authority with six of the nine members being elected officials.

In addition, other CSC's in the state have had problems, like Hillsborough County. In 2012, the executive director of the Children's Board of Hillsborough County was forced to resign due to multiple issues including excessive spending, evidence of poor management and, most alarming, reports of awarding millions of dollars in no-bid contracts, several of which reportedly went to organizations with personal ties to top Children's Board executives. During this time, the county commission was powerless to audit the Children's Board of Hillsborough County because it is not authorized to do so under state law. Under mounting pressure, the CSC did hire a consultant to conduct an organizational assessment. In the conclusion of the assessment, the consultant concluded  "Simply stated, the majority of employees feel that key leaders of the executive team lack integrity and ethics." Ultimately, they brought in a new executive director to address the problems.  

I also have concerns about creating another agency that provides similar or the identical services as the county. This model seems to be fraught with inefficiencies and additional administrative costs. For example, Hillsborough County's CSC saw their administration percentage climb to nearly 30% before reducing it to approximately 17%. The Children's Trust Reports state that the average administrative cost for all CSCs is 11.26%. However, based on the data contained within the 2016 and 2017 Children's Trust Reports, the average percent of funding that is consumed by operations, administration, government fees, capital expenses and other expenses, in other words the percent of tax revenue not being used by the CSC to benefit children is 16.5%. It is also important to note that most CSCs utilize nonprofit organizations to provide many, in some cases all, services and programs for children and each nonprofit uses a portion of the funding they receive for their overhead costs, as well.

If this average of 16.5% for operations, administration and other costs to the proposal for Orange County is applied to the roughly $60 million tax revenue collected, the CSC - alone - would consume $9.9 million. On the other hand, if the county were to provide the additional children's services directly, the incremental administrative costs would be significantly less.

Prior to asking the voters to tax themselves, I believe the county has an obligation to determine, first, if a $22 million funding gap can be met by reprioritizing existing resources. After all, the county's budget is in excess of $4 billion, and a main function of the mayor and county commissioners is prioritizing needs.  In my discussions with the Children's Trust, I inquired whether they would be willing to look at other options of funding the additional children's programs. They were not, at that time. I hope, in the end, we can all come together around the goal of enhancing programs and services that benefit our children.

I also questioned the rush to get this on the ballot now, rather than having a more transparent process and accurate information upon which to make such an important decision.  In an email from the Children's Trust, I learned that there would likely be a transportation initiative on the ballot in 2020 and they didn't want to compete with transportation.  It seems to me that if there is a plan for multiple tax increases, this information should be known to the public now so the public can gauge their level of support for this or any other initiative based on the cumulative effect of these potential tax increases. Especially as we seek solutions to the affordable housing crisis facing our nation but hitting our region particularly hard, the impact of multiple tax increases should be taken into consideration. We need to be mindful of the impacts tax increases can have on the ability of families with children to afford housing.

It has occurred to me that some supporters may believe that a 2018 referendum is the fastest and perhaps the only way to address the purported $22.6 million funding gap (less than 1/4 of a mill). They may not be aware that there are other options available to Orange County, including the option to allocate additional funding as soon as this year.

Pursuant to the April 24, 2018 BCC work session, I have directed staff to immediately begin the process of hiring a qualified consultant to conduct a thorough review and evaluation of all services provided to children in Orange County using public funds. I expect the consultant to:

The consultant will provide our board with a status update during the July budget work sessions .

Furthermore, I directed county staff last November to identify additional funding within our budget to enhance children's services. This direction was in response to conversations Mr. Batchelor and I had on this very important issue in the past. In keeping with that direction, I intend to allocate additional dollars for children's programs and services in our budget for fiscal year 2018-19.

 

It is my expectation that with the assistance of a consultant, and in consultation with two of Orange County's advisory boards - Citizens' Commission for Children and the Children & Family Services Advisory Board - the BCC can come together to address critical level-of-service and funding gaps for various children's programs in fiscal year 2018-19, which begins this Fall. This is considerably sooner than the proposal of the Children's Trust, which is contingent upon gaining the confidence and support of the BCC. If it were successful in gaining the BCC's support to place it on the ballot, it must then gain the electorate's approval to create a new government entity of predominantly appointed officials with the power to tax up to 1/2 mill. If it reaches this milestone, the majority of funding from this new tax would not be available until December of 2019 or January 2020.

                                                                                     

Further, after the completion of the consultant's study, if this increased level of funding provided by the BCC this year, is determined to be insufficient to address the future needs of our children, the BCC has the option to raise the millage during next year's budget hearings. The latter option could be accomplished by a simple majority vote of the BCC, as was done by the City of Orlando in 2014 when the City Council raised property taxes by one full mill. If the BCC chose instead to seek the electorate's approval, this could be done through a straw poll or referendum by mail ballot.

 

Additionally, I will be scheduling several BCC work sessions in the near future to discuss other pressing challenges we face as a community. These BCC work sessions will include staff presentations on Homelessness, Affordable Housing, Opioid Epidemic, Transportation, and Public Safety.

We all agree that children are of the utmost importance and investing in them and their well-being must be a priority. But I also believe it is crucial that we maintain a high level of transparency and accountability in order to protect the public trust. And I do not believe that there is any issue where accountability and public trust is more important than when it pertains to the oversight of public funding that is intended to benefit our children.

 

I look forward to our continued dialog on community needs as we finalize our budget for fiscal year 2018-19.