Compressed Timeline For Budget Discussion Problematic

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citycatTransportation Budget and Pavement Improvement Deemed Seriously Underfunded –

Last night, City Manager Bill Emlen and Finance Director Paul Navazio presented the Davis City Council with an overview of the 2010-11 budget.  Given previous discussions, there was not a lot of surprises in there, though there are a few nuggets worth looking into.

The biggest issue that has emerged is the timeline.  The City is pushing for a May 25 Budget adoption, which means next week there will be a Workshop, on the 18th there will be a public hearing, and on the 25th there will be a budget adoption.  That gives the council only a few days to get proposed changes into the city.

To make matters worse, the city has truncated an already compressed schedule by failing to give the council the budget in advance of Tuesday’s meeting.  The result was that council had not had time to review the document and only non-substantive issues were addressed.  In essence, yesterday amounted to little more than a presentation by Mr. Navazio that could have occurred over the course of the last week.

Furthermore there is no good reason to have a budget passed on May 25, a full month before its due.  According to some speculation, the reason for the compressed timeline is that staff wants the budget adoption before the vote on the extension of the sales tax.  However, at this point there is no real organized opposition to the sales tax measure and it is considered virtually a shoe-in to pass.

The proposed budget, which we will get into a lot more in the coming weeks, cuts roughly $1.66 million from the general fund to close a projected structural gap of $976,000 and also restore the reserves.  One piece of information last night is apparently the city only had to draw $600,000 from reserves rather than $800,000 to cover a budget shortfall produced by the failure of the council to achieve the full $1.25 million in savings during the MOU process.  Mr. Navazio said that was achieved by cost-savings measures, but did not elaborate how the city was able to suddenly find $200,000 in savings and no one asked.

Part of the budget balancing effort is what they are calling a restructuring of city departments, but the bulk of that savings is achieved simply through the deletion of 16 unfilled positions and another 4 filled positions.

How significant are these cuts?  In the 2007-08 budget, the city peaked at 464 permanent employees.  That dropped to 448 in 2009-10 and now plunges to 422.  That marks the lowest level since 1998-99.  In other words, we are now staffing at pre-1999-2000 levels.  That is roughly a 10% drop in the number of employees.

There are of course several ways to look at this.  One is that we have reduced our staffing load to a more typical load as a build up during the last decade in number o employees and salaries.  Another is that we either have drastically cut back on city services after a period where salaries exploded and the city has asked the taxpayers to plop down $3 million in sales tax revenue or the city simply mismanaged our assets the last decade and spent a lot of money that we did not need to spend on additional employees.

The bottom line result is that the taxpayers in Davis are paying roughly the same amount and receiving far less in terms of potential city services.  Hours have been cut back, services trimmed, and there are furlough days.

Looking at the five year forecast, these are more or less permanent cuts.  Right now they are projecting a deficit each year which they believe will be bridged by the permanent cuts to staff that they are calling restructuring.  That is assuming right now that things do not get any worse and that at some point there is a renewed modest increase in revenue, by about 2.5% in the out years.

We just had an interesting debate for the city council candidates over the issue of bicycling and transportation.  Meanwhile the city continues to be strapped for transportation funding with roughly a $1.62 million shortfall.  The city has received a decline in state and federal funding support.  It had utilized one-time funding over the past two years to maintain funding levels.

The current budget provides for sustained funding for transportation programs through the next fiscal year, however it has reduced allocation for Street Re-Pavement contracts.  The report goes on to say that this continues to be a program area with significant under-funding.  Recall a lot of the unmet needs have been in road maintenance.  The report calls for the need to develop long-term funding plans and likely will require significant long-term General Fund support.

Staff did not answer questions from Councilmember Heystek on this area.  However, it would be important to get a sense for what road conditions are like, which roads will not get repavement that need it, and how much danger this will produce for vehicles and cyclists.  How much money do we need here?  What are the conditions out there?  This ought to be an area of serious concern.

The city is now dipping into redevelopment in order to provide police services in the downtown area.  They are talking about $123,000 shift to support police services in the downtown area and an additional $70,000 to back-fill funding that allows for re-assignment of an additional police officer to Patrol the downtown.

Councilmember Sue Greenwald was concerned about this shift and wanted to know how much we were shifting.  She is concerned as the city raids the redevelopment funds that the city will not have the money for the economic development projects she is hoping it will back in the coming years.

To make matters worse, there was the announcement that a judge upheld a state budget bill which will require redevelopment statewide to transfer $2.05 billion in local redevelopment funds for state purposes over the next two years.  According to Paul Navazio, that means a likely $3.2 million bill from redevelopment due to the state.  He did not act as though that were a major concern, but he did suggest that this might mark the end of redevelopment in California which would be a huge concern.

Needless to say the raid on redevelopment is a major concern to local communities that rely on the money for the type of core area projects that Davis is looking toward in the coming years.

The California Redevelopment Association’s Director John Shirey issued a scathing statement in response to the court ruling,

“We strongly disagree with Judge Connelly’s ruling which effectively says the Legislature has unlimited discretion to redirect local redevelopment funds to any purpose it wishes.  Under that logic any state program could be called redevelopment.  The Legislature needs to deal with its budget problems by making hard decisions using its own limited resources — not by taking away local government funds.”

“Despite this ruling we continue to believe taking local redevelopment funds and using them to fund State obligations is unconstitutional.

“What’s more, siphoning redevelopment funds away in this tough economy is short-sighted and bad policy. Redevelopment stimulates billions of dollars in economic activity and supports thousands of jobs, which is exactly what we need right now to boost California’s sagging economy.”

A final note, it was mentioned that the cost savings derived from the new MOUs fell about $400,000 short.  Paul Navazio suggested that that difference would be made up in future MOUs.  But that’s sketchy math, first, the new MOUs will not be implemented and thus the cost savings will not be realized until 2011-12.  Second, the council passed that goal for the 2009-10 year and those MOUs and those MOUs fell short of the very modest goal set forth by council, in a compromise with Councilmember Lamar Heystek.

These are just a few issues that immediately came to mind upon the presentation of the new budget.  It seems to me, that the accelerated approval schedule is a political rather than a policy decision.  Given the lack of organized opposition to the Measure Q ballot measure, it seems imprudent to rush along such an important document.  It also does not make sense to essentially waste the first meeting by not having the budget done a week prior.

—David M. Greenwald reporting

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About The Author

David Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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4 thoughts on “Compressed Timeline For Budget Discussion Problematic”

  1. roger bockrath

    At the risk of beating a dead horse here, it rather sounds ,from David’s reporting, like city staff is telling the council how the budget process is to work. I thought that staff answered to the council, not the other way around.

  2. David M. Greenwald

    In this city, the city council answers or more to the point, defers to staff all too often. The council majority, with the exceptions being Sue and Lamar, will rarely overrule staff.

  3. roger bockrath

    Sounds like, in the upcoming election for a new council, we need to look for candidates who are willing to govern, not just let city employees run the city for their personal benefit. With three new members and the entire direction of city governance up for grabs, it’s becoming important that we keep our friends informed about the issues and where the potential decision makers stand. If we can’t get back some control over the deficit in city expenditures the quality of life we all take for granted could slip away, fast! Narrowcasting seems to be the only reliable source of information these days, so lets all keep talking!

  4. Ishmael

    While we’re on the topic of fiscal responsibility, I’m wondering how much money was wasted during the last fiscal year on mismanagement of the NewPath and DACHA SNAFUs? Will the costs be higher this next fiscal year fiscal year?

    As the CC and staff quibble over relatively small line items, it would be very illuminating to have an educated estimate on the table regarding the magnitude of waste-fraud-and-abuse that is baked into the budget.

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