This is probably not a fair indictment, but in the last 12 to 18 months, it seems that we have forgotten that the city’s fiscal health remains perilous at best. With an improvement in the economy and the passage of the sales tax, the city has moved into a very tentative black area, but that fiscal health is fragile at best.
At the outset I want to make it clear that, while I am supportive of the idea of creating adequate and quality space for athletics in this community, as exemplified by the photo of my daughter playing soccer this past week, I am concerned that the discussion on sports parks will be stacked in favor of support without enough representation on that body to be able to speak authoritatively to the fiscal challenges we have as a community.
I want to very briefly rehash where we stand in terms of the core fiscal health of the city.
First, we are in the black right now. The projections from the city, however, do not offer a lot of optimism here. First, the only reason we are in the black is that we passed a half cent sales tax. When that sales tax sunsets in 2021, we would immediately return to a structural deficit unless we pass a renewal.
While some have argued that the revenue projections are very conservative, I argue that the spending projections are just as conservative. We are assuming basically no increase in salaries over a decade period of time. We are also assuming that the overall economy continues to improve – something that, between the stock market and the modest jobs report this month, should at least be called into question.
Second, economic development will help but it is not a panacea. The revenue projection for the innovation park is about $2.1 million. We can improve that revenue with better cost savings. There may be ways in which the revenue projection was very modest. But remember that is the projection at build out, which is about 25 years away. Even if that number is $5 million, the revenue projections will help, but they will not solve our fiscal problems. Those who believe that economic development will help justify employee compensation increases are not looking at these numbers closely enough.
Third, the city is no longer committed to another round of employee compensation cuts. Last spring, City Manager Dirk Brazil effectively took employee compensation cuts off the table. That means that we are looking at a flat line to slightly increasing payroll costs at best. That doesn’t include likely increases to pensions or health care costs.
Fourth, the city is looking at a huge deferred maintenance deficit. We have laid out the costs of roads. Unfortunately, the state was not able to reach agreement on a transportation bill that at least could have tossed $3 million our way. We credit the city council with creating $4 million in ongoing general funds for roads, but City Manager Dirk Brazil acknowledged that is not enough.
Those costs do not include the costs for current park needs, current swimming pool needs and current building needs. We are hoping to get a number on that this fall at some point.
The bottom line is that the fiscal picture for the city is currently stable, but changes to the economy could push us right back into the red. We have a roads crisis, where we are facing hundreds of millions in costs.
Our priority needs to be to fix the stuff we have, to make sure we are not seeing depreciating roads, bike paths, sidewalks, parks and greenbelts, where costs rise faster than the funding we have to fix them. That needs to be our focus.
I understand why the council wanted to separate the issue of the sports complex from the issue of the infrastructure needs. However, I see a lot of danger embedded here.
First, I think we need to recognize that there is really one pie here. The pie does not have boundaries that end in one jurisdiction or another. So we have a school district that is likely to push for a renewal of the parcel tax that will require a two-thirds voter approval.
The city is looking into a utility user tax – I have expressed concerns about such a general use tax in that the money cannot be assigned to a given purpose. That allows enterprising elected officials sufficient leeway when determining the use.
But now add the potential need for a sports park. That could become a competing need.
My preference would be to solve the biggest problem we have first, which is a lack of resources to do the basic functions of municipal government – that means providing city services and paving our roads.
Once we secure that, I could see us creating a balanced committee to look into the needs of a sports park.
But we need to be mindful of not only the costs to build that sports park and where that money would come from, but also where the ongoing money is going to come from. My concern here is that people who commit to funding the maintenance now will likely not be involved in five to ten years when their kids have exited the system.
The plausible scenario I see is that the sports community steps up, gets some sort of modest tax passed, it gets approved because no one wants to be against youth recreation and sports. They start off funding the maintenance, but then we hit tough economic times, the original leadership group is replaced with people who did not commit to funding the maintenance, and in five years or ten years, they come to the council with a crisis.
The city is cash strapped, but can’t say no, and takes on the ongoing maintenance costs at the expense of other infrastructure needs.
The bottom line for me, however, is we need to prioritize and remember what our number one challenge is: ongoing funding for core city functions. Until we solve that problem, we have no business expanding our commitments.
—David M. Greenwald reporting