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| Photo: The image above is from a presentation given
by city staff that details the history and causes of our budget deficit. Interim City Manager Dave Burkland is suggesting that the Finance Committee change direction at it's upcoming 9/26/07 morning meeting. He's recommending that they skip evaluating the long list of budget recommendations that staff provided a couple of months back. He would like to avoid that complex line-by-line discussion, and move forward with staff providing a consolidated recommendation. From the agenda... Recommendation – The Interim City Manager recommends: (1) that staff be directed to formulate specific recommendations to balance the General and Park Funds Ten-Year Financial Plan (2) that the Finance Committee provide direction on the purpose and content of public meetings that would provide effective public education on the City's financial situation. |
| The Good: City staff
should have been providing recommendations all along. That was a request
made of Greg Jones
that produced the budget matrix. The budget matrix was a list and not a
recommendation. In the Finance Committee meetings that I attended the
implementation information,
ranking,
or fiscal
impact
of
many of the items were missing or vague. One high ranked item was not even applicable
to the General Fund budget problem. By changing course Dave Burkland has the opportunity to remove the passive role city staff was taking in the discussions. Previously they had cast a wide net, and were letting committee members sort out the rotten fish. This is a good decision, and an example of good leadership. Dave Burkland is moving away from directions set by his predecessor. He's moving towards a more efficient discussion of budget woes. And he's assuming the mantle of City Manager |
| The Bad: Based on Finance Committee
desires staff will hold a number of budget outreach and education meetings
for the public. While I don't have a problem with these they are an indication
of existing problems with our city leadership. Why hold the meetings? The probable answer is to inform the public so they can take part in the discussion. The reality? Attending these workshops will not allow you to understand Chico's budget woes. By all means have the meetings, but don't wait for them to move forward on budget solutions. The only people that need to understand our budget problem are our elected officials . If they need workshops we're in trouble. After nearly four months of public meetings that the public forgot to attend no decisions have really been made. The last thing we need is another charrette, the first thing we need is leadership and decision making. |
| The Ugly: Chico's
budget problems are created by internal spending and external regional
economies. Chico spends 74% of its General
Fund on public safety. This is on the high end when compared to similar
cities. Our sales tax rate is the state default of 7.25% which is on the
low side compared to those same cities. Those figures might indicate that
limiting growth in public safety expenditures and a small tax increase
could be an answer. But when you look at the sales tax per capita growth since 2003 you see that Chico's is nosing down at -3%. Our neighbors Oroville, Gridley, and Paradise are all up ~15%. Chico is losing its status as a retail hub in this area. The conservative argument that raising taxes doesn't raise revenue, but depresses economic activity, is probably true with Chico. An increase in sales tax could cause a decrease in revenue, and heavily impact large item retailers who sell things like automobiles. A sales tax increase also has to be sold to the public. Chico's growth has also been a factor in the financial problem, and specifically with regards to annexation. For the last 7 years growth from new development has been a pretty steady ~2%. Growth from annexation is has been sporadic with roughly 6.5% in 2001 and 5% in 2006. Property taxes of annexed areas are shared with Butte County with 55% going to the county and 45% coming to Chico. Annexation has increased the service area of the city and the need for emergency services. And unlike new development we receive no development impact fees and can't deny spotty infrastructure. By law the city must balance its annual General Fund budget. Chico has made increased use of fund transfers to maintain a balanced budget. An example of a transfer is using gas tax income, which is supposed to pay for road improvements, to pay employees instead. These transfers have been ongoing since 2002 and helped to mask the budget deficit from the public. We no longer have the monetary reserves or transferrable funds to cover the deficit. Now we balance the budget or break the law. It should also be pointed out that in July the city signed a pretty nice raise for our local fire fighters of 5% this year, and 4% each year for the next 4 years. This was unanimously approved by the Council. That increase will be a bargaining point for the police and public works unions. So the City Council seems to have decided that limiting growth in payroll expenses is not a step they're willing to take. It's possible that some regional or national change in the economy will solve this problem for us. I think that's unlikely. It's possible that some decisive leadership and unique solutions on the local level will solve this problem for us. That's pretty unlikely as well. It will come down to cutting expenses and/or raising taxes. The good thing is if they don't go with the first option, we get to vote on the second one. |
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CI Challenge: Can you guess what it is? Winner: Tempra Board and Gregg Payne, see comments below for the answer. |
Burkland's Bypass
10 Comments
Lon
About Me: Fasten your seatbelts for an exhilarating trip through Chico's public policy; I guarantee it's marginally better than public access TV.
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Ancient Mechoopda basket design which clearly depicts an alein space traveler that arived by magic skateboard. Archeologists now believe that this legend is based on the appearance of a modern stoned highschool kid that rode through the Plaza Fountain and accidentally transported back in time.
Lon,
You say, "Chico spends 74% of its General Fund on public safety. This is on the high end when compared to similar cities." But I've also read that public safety manning levels are below avg when compared to similar cities and pay is avg. Are benefits the real problem here? If anything it seems to me we should have a police force that is above avg in size when you consider the fact that we import thousands of young, drunken idiots to our beloved city.
Sincerely, Old Drunk Idiot
Sean,
First, those numbers came from a Finance Office presentation. I have no idea if emergency service employees (police and fire) wages or benefits are average as compared to other communities.
Any comparison of communities can be skewed to support a certain argument.
I have read (in the Police Facility Needs Assessment) that the number of police officers per 1000 people is low compared to other communities. I wrote about that last year...
http://www.norcalblogs.com/commission/archives/2006/07/post.html
Or you can see the figures in the "Needs Assessment" located here (the link in my old post is dead)...
http://www.longlazner.com/longlazner/pd_needs_063006.pdf
I'm not sure if that number includes University Police, or the role of University Police in community policing. You may be right that we should want a larger police force because of the nature of our town.
Regardless of what we want for police or fire we're forced to live within our means. I think the liberal council would have a hard time passing a tax increase. There is a wide spread impression that the city employees (not just police and fire) are some of the best paid people in town. The council recently gave the fire fighters a nice raise.
So, if we're not cutting costs, if raising taxes doesn't happen, and if we legally must balance our budget, I have to wonder where were headed. There is a way out of the budget problem, that's by allowing massive new growth. That would increase sales tax income and provide development impact fees. I doubt anyone really wants to go that route.
Lon
Is it a low budget version of "burning man"?
Gregg is talking crazy now. He must be at the First Annual Daiquiri Barbeque. It is clearly a negitive imposed picture of this years early ignited burning man.
Hey guys,
You'll note from the hour of this post that I'm suffering baby induced insomnia. But just imagine all the things you can do with 20 waking hours for work.
But I'm posting to provide a hint. The challenge is a form of currency.
Lon
Re: the challenge - Here's my unimaginative but serious guess: It looks like Native American beadwork. And beads were used in trade, so that speaks to your hint.
Tempra,
I'd say you're on target, in fact if someone else give's me the answer I'm looking for I'll give you co-credit.
What were those currency beads called?
Lon
Thanks Tempra, OK it's a wampum bead design of a time traveling skateboarder.
Yep,
Wampum. What a great word, I just really enjoy saying it.
Wampum, wampum, wampum, wampum
Lonpum