It's a lady in a old vacuum cleaner commercial.

also, questions:
#1: I do care. As long as the council peoples aren't spending the money on lambourghini's and humvee's, then the #'s just sorta swirl around in my head, and confuse me, unfortunately.

#2: Your reporting is the only reporting I read on the meetings.

#3: How about both? Does that work? I like hearing your humorous thoughts on how the council members took a vacation to a hippy colony.

#4: They were doing the anti-party ordinance thing on Z-Rock. Other than that, only random things in the CN&R, from reading it with Marissa during lunch break. at spiteri's.

Money is a touchy subject, and I've learned that quite well from living with a mom that was raised in a rich family and then thrown into the world with barely anything to her name. Such a money complex that one has... but she's my mom, and I love her. It shouldn't be an idol, only a tool.

Money Penny in one of her James Bond movie appearances when she wore the uniform of the Royal Navy.

I'm not sure I would trust a citizen's task force to come up with any better recommendations than I've already read about... also how would they (the unelected citizens) be held accountable (pardon my pun) if a bad decision was moved forward?

Eleanor,

They wouldn't be held accountable. Like the city staff they would provide recommendations, which the elected officials could adopt or ignore. Like any other task force or commission they would be selected by the council.

I'm not sure anyone is more qualified to provide recommendations than the city staff who do this for a living. However, I could imagine that if both the city staff and any group of citizens were given the same list of recommendations the two groups might prioritize that list differently.

In reality the public forums will attempt to do this. But my impression is that the public forums will be focused on providing information to the public. I'm curious about the ability the city has to dialogue that information once the public is informed. There are only a handful of weeks available to get this done.

Setting my opinion aside, the decision has been made not to move in that direction.

Lon

Ah yesh, Mish Monneypenny, it ish a requirement of the job to shleep with each and every woman who catchesh my eye. For Queen and Country, Mish Moneypenny.

I care a great deal about what happens in Chico. Although I don't sleep in Chico (and can't vote in Chico), I do everything else there - work, volunteer, go to church, spend money.

I get most of my info from this blog, although now that I have a satellite computer connection I have started watching the council meetings through webcast. Wish I could do the same with the finance committee meetings. They might be important enough to come to town to attend but only if I have other errands as well (trying to reduce that carbon footprint).

What I would like (and I'd like to think I'm not the only one) is a web document or pamphlet or something that would explain the budget in simple terms, explain the RDA (the hows and whys) and explain how councilors are influenced to make the decisions they do.

I think a citizen task force is imperative. When you say that City staff don't appear to have sufficient appreciation for public input, I say, "Hmmm, are you surprised?" I don't think you are. I see both sides to this. Likely, input from the public may appear naive to staff because they know so many nuances the public doesn't. On the other hand, because of their day-to-day immersion in budget issues staff doesn't see solutions that a fresh perspective might bring. Plus, because a major cause of the budget problem is due to employee salaries and benefits, it only makes sense that staff would take only a cursory look at this before sweeping it aside as unimportant or too difficult to pursue.

I enjoy this blog because I want opinions as well as facts, and if I can get a laugh too, that's a big plus.

I am a strong believer in keeping a close watch on government but I also understand why the individual people who work as public servants consider this a pain.

Here's an open request to the City Council. Please provide, via your website, complete verbatim transcripts of City Council meetings and Finance Committee meetings, or provide downloadable videos of those meetings.

Lon,
Thanks for keeping all six of us informed.

1. I do care about this budget stuff because the mismanagement of it is the reason why we're lacking good roads, parks, aquatic facilities and a fully staffed police force.
2. Where were the crack reporters from the ER when city staff were negotiating with the firefighters? I only read the ER online (paper version of SacBee) so I don't get to read Mr Little every day, but as far as i know he has been mum on said contract. OBTW, why isn't the editorial uploaded everyday, i've complained about this in the past.
3. Numbers and staff can skew the truth, so thanks for providing background.
4. ER, CNR. If there is anything better than your blog? I haven't found it.

PS Lon, are you aware of any groups already in existence in Chico that meet periodically to discuss these kinds of issues? Maybe a group that exists to make information easily accessible to and understandable for the public would be useful. Am I being naive?

Trevor,

Public financing is incredibly complicated. There are numerous funding sources. Ongoing changes in the way the state government takes and provides money to local government significantly add to that complication. Regional agreements between county and city, and payments to districts (like school and recreation) add to the confusion.

When you add in other aspects of funding like grants and redvelopment agency activity its very hard to understand.

I think there is a high degree of transparency related to current conditions, but less than ideal transparency related to historic decision making or the effectiveness of financial decisions previously made.

I'm really on year 2 of developing an understanding of this stuff. You guys are basically along for the ride.

Lon

Shatzi,

I think your request to the council is a direction the city will move in. Currently the minutes of meetings describe "actions" taken. I think verbatim minutes are a good idea. Perhaps software could be used to produce those as separate from the existing minutes produced. Streaming video will likely occur one day. The City of Chico does a good job of providing online material, in my opinion. I would expect they'll continue to improve in that area.

Here's a brief summary of the three main financial "blocks" in the community.

General Fund:
This money comes from tax kickbacks from state government and is mostly funded by sales tax (43%), property taxes, and property taxes in lieu of vehicle license fees. This funds most of our staff and maintenance for the city. We share taxes with various districts (school, recreation), the RDA, the county, and the state, before they get to our General Fund.

Capital Improvement Program:
Grants, bond acts, and lots of other monetary funds (including the RDA) are used to build things. Every now and again a Nexus Study is produced linking growth in new development to ongoing needs in the community. Development Impact Fees from new housing are drawn to purchase things like land for parks and road improvements. Some would argue not enough money comes from development impact fees. There is a balancing act that has to occur that allows continued growth which grows tax income and impact fees and doesn't drive housing prices too high. I'm not sure we're in balance.

Redevelopment Agency:
The RDA is separate from city government, but it's officers are city staff and its board are the city councilors.

I like to think of the RDA as a giant credit card. The RDA is sometimes used to borrow money to build projects like roads or buildings. You can save money by paying for something today that might be much more expensive to build in ten years. Our RDA has also been used for property purchases, public art, parks (downtown plaza-Children's Park). It has also funded things out of the RDA zone. The RDA cannot be used for ongoing maintenance or staffing costs.

The city creates it's own RDA debt by forming a list of RDA projects. The debt accrues interest. Money into the RDA comes from something called "tax increment". Any property in the RDA zone (most of Chico) that is re-appraised at a higher value creates this incremental income. For example, if a home was valued at $50K when it was sold in 1970 (before the RDA), and is sold at $350K in 2007 the difference in property taxes (property taxes on $300K) are tax increment income to the RDA.

Here's a web page the city maintains related to the RDA.
http://www.chico.ca.us/econdev/Redevelopment.asp

That's a brief summary, which I hope is mostly on target. I think it would be a good idea for the city to provide its own summary of its finances.

I don't know of any group that meets to review and discuss these items. We do it here, but of course that entails me driving the topic of discussion.

Of course I'm open to people suggesting topics of discussion for future posts.

Lon

#5,

I'm not sure where the E-R was on the Fire Fighter MOU. I was behind the eight-ball on that as well. I had seen it on a council agenda, but it wasn't scheduled for discussion, just approval.

The MOU negotiations occur as part of private discussions, although there is no law requiring that.

I'm going to try to read through the IAFF MOU this weekend. Here it is if someone wants a head start.

http://www.chico.ca.us/Human_Resources_and_Risk_Management/Labor_Agreements/IAFF_MOU.pdf

There are a couple of points I should make regarding it. I'm not sure what kind of pay/benefit increase it represents compared to historic increases. I'm not sure what pay/benefit increases look like when compared to recent inflation. Also, I was told the negotiation occurred over a long period. The fact that the adoption of the MOU landed right in the middle of budget discussions is coincidence.

Coincidence aside, if the wage/benefit increases are substantial some councilor should have pulled it from the consent agenda for public discussion.

Sometimes portions of the negotiations can be re-negotiated based on re-opener clauses. However the IAFF seems to have negotiated a pretty good position on re-openers. See below from the MOU...

Lon

5. REOPENERS.
5.1 No General Reopeners. There shall be no general repoeners for the term of this MOU. However, this shall not preclude reopening through mutual agreement by both City and IAFF.

5.2 Increase in Certain Insurance Premiums. In the event that the premium rates for the medical and dental insurance plan, the vision insurance plan, or the longterm disability insurance plan increase during the term of this MOU, the City’s contribution level may be reopened, at the request of either the City or IAFF.

5.3 City’s Fiscal Condition.
IAFF acknowledges that City’s fiscal condition will be a factor in City’s agreement to future changes to this MOU. City agrees to provide revenue and expenditure information as requested by IAFF and to provide review meetings, as needed.

6 WAIVER OF OBLIGATION TO MEET AND CONFER DURING THE TERM OF MOU.
City and IAFF acknowledge that, during the negotiations which resulted in this MOU,each had the unlimited right and opportunity to make proposals with respect to any subject or matter not removed by law from the area of consultation or meet and confer, and that understandings and agreements arrived at by the parties hereto after the exercise of that right and opportunity are set forth in this MOU.

Therefore, City and IAFF , subject to the exceptions contained herein, each voluntarily and unqualifiedly waive the right, and each agree that the other shall not be obligated, to meet and confer with respect to any subject or matter referred to covered in this MOU. With respect to any subject or matter not specifically referred to or covered in this MOU, in the event that either party desires to meet and confer or consult in good faith during the term of this MOU regarding such subjects or matters, the parties hereto agree to abide by Government Code Section 3500 et seq., relating to obligations to meet and confer in good faith.

It is Moneypenny, and Eleanor was the winner of the CI Challenge.

Lon

On the Chamber task force… Rather than roam all over the broad issue of the City Finances, we decided to try to focus on smaller pieces of the puzzle. I believe the presentation that you saw was the result of our first meeting with Finance Director Jennifer Hennessey and City Manager Dave Burkland... Both are fine folks who know their stuff…

In that 2 hour meeting, we wanted to focus our attention on the revenue portion of the City’s position.

The primary goals were 1) better understand the variety of city revenue sources in general, their historical patterns and why those patterns might exist. 2) Better understand how the city prepared their 10 year revenue projections. 3) Better understand the level of revenue volatility & predictability, and how reliable projections might be. 4) Search for ‘benchmarks” and/or relevant comparisons to other similarly situated Cities to see where things might be askew.

Even a simple comparison such as this one raises some interesting questions:
http://www.marksorensen.net/cic-2007-comparisons%20to%20other%20cities.pdf

We have a bit more to do on the revenue side, including an effort to better understand the City’s cash flow picture to better understand the urgency of the problem…..

Then, it is on to expenses…. Since personnel costs are about 80% of the GF expenses, it seems likely that this subject will get the most attention within the area of expenses… Yea, OK, that is something of an understatement.

Or, someone will have to view this situation as a “revenue” problem. Meaning a lack of revenue. Meaning that they’ll support one or more tax or fee increases to close the gap.

I applaud Dave Burkland for indicating that he will make recommendations. Can you imagine the CEO of some private company putting this kind of a monkey on the back of his board of directors as it has been here? I can’t…

You mentioned linkages that existed between General Fund growth and the growth in rates of pay. A few months ago I did read the “old” IAFF contract, which did appear to have linkage which did tend to increase their rates of pay when General Fund revenues increased (minus one time sources)…. It is very instructive.

I’m not singling it out for criticism; it is just the only one that I’ve read so far…
http://www.marksorensen.net/cic-2002-IAFF-MOU.pdf

Read exhibits C & D beginning on page 57 of the PDF.

It would take a bit of work to do the calculations to see the exact impact of increasing General Fund dollars, but it is fair to say that the formula did shift a chunk of any GF increases to the Firefighters – regardless of any other factors. Regardless of any performance factors, work load, public demand, population growth, or any other factors regarding other GF expenses… I certainly found the linkage fascinating.

While Exhibit C sets out defining how much of a General Fund increase flows to the firefighters, Exhibit D appears to cap the maximum so that no top tier of any one position exceeds 115% of the average comparable maximum rate in Merced; Sacramento; West Sacramento; Modesto. Those certainly seemed to be odd choices for comparable cities, and 115% seemed like an odd multiplier….

What if those “comparables” also used Chico as a comparable and also used a 115% multiplier of the “average”… It would seem that they would endlessly spiral upward, as each leveraged the other…

Anyway….Much of that changed earlier this year with the new contract which can be viewed here:
http://www.chico.ca.us/Human_Resources_and_Risk_Management/Labor_Agreements/Labor_Agreements_Home_.asp

There appears to be a significant shift away from a General Fund growth linkage. I do not have any idea what drove that change, as it seems that these things happen behind the scenes. See recent CN&R article by Richard Ek on this subject.

I have not yet read the other contracts to know if there are other examples of GF growth linkage or how their increases are calculated…

Here’s some interesting brief reading:
http://www.marksorensen.net/cic-2007-benefit%20summary.pdf
http://www.marksorensen.net/cic-2007-benefit%20trends.pdf
http://www.marksorensen.net/cic-2007-summary%20of%20salaries.pdf

It would seem that explanations of “why” these levels of compensation exist would involve the notion of the City being competitive enough to recruit talent and to maintain certain low levels of employee turnover – one wonders what sort of payroll survey information and/or comparisons there is to support the compensation levels.

I suspect that they do have wage surveys and studies (ad nauseam) to support the movements…. But, within some reasonable amount of time, it would be a wee bit difficult for any us to judge the veracity of that data….

Plus, in some (perhaps many) cases we might find that they compared themselves to other municipalities who have similarly, seeminly overspent… Perhaps they all leveraged each other, fighting to pay “more than average”. Perhaps their employment market is in the midst of a market correction?

While the entire picture is made up of many relatively simple and easy to understand pieces, there are so many individual pieces that it becomes a wee bit complicated. Or is it convoluted?

Anyway, what ever the situation is, it is abundantly clear that our fair City is overspending its limited revenues, and that we need some course corrections very, very soon…

There is another facet to the annexation issue…

You’re right in that the City of Chico already received about as much sales tax revenue from the residents of the annexed areas before annexation as after annexation.

But, previous to annexation the city did not have to deliver services to those populations. Such things as police and fire protection (though mutual aid obscures this a bit), and the wide variety of public works sorts of things are now City expenses. That is what makes the per capita numbers relevant.

Particularly as you wonder about how much it should cost per capita to run our local government and how or why other cities seem to get the job done at a lower rate per capita… No ratio is a perfect measurement system, but it you can’t measure it, you can’t manage it.

We had similar annexation discussions with regard to the RDA… how new construction pays impact fees whereas annexed areas pay nothing toward city support infrastructure, and how so much about the line between our City Government and our RDA Government is blurred

Mark S.,

Thanks for the informative posts.

Lon

Another interesting footnote in the current hand-wringing over the increases in on-going operational costs to the City and the various one-time infrastructure costs to the city as a result of annexations is that the situation was pretty well laid out about 15-20-years ago.

I believe it was Prof John Ebeling (probably along with Frederica Shockley) who wrote a 'study' for the city in the late 80's or early 90's which chronicled all those various costs, and plainly stated that the increases in various tax revenue would not pay for the increased costs to the city.

I'll see if I can find it, and post it... You'll read it and then give yourself a palm to the forehead... It's the same stuff that we talked about on the RDA Committee, all very nicely laid out in black and white.

Plus, that situation was frankly stated many many times over the years by various folks in City Gov... They knew it was coming.

I believe that unification of the City was the correct thing to do... but perhaps we should have be doing these 5, 7 or 10-year projections a little earlier than now....