Your City Council Report: Balanced City Budget — For Now 6/24/14


By Anne Carr

6/26/14

 

Tuesday’s June 24 City Council meeting was an epic night in that for the first time in 10 years, the City passed a structurally balanced budget, i.e., the City’s expenses do not exceed revenues. The 2014/2015 fiscal year starts July 1.

 

However, as early as the next fiscal year, Vallejo is already projected to be running a deficit again, one which increases every year for the 5 years shown. So, the cause for celebration is short-lived.  In case you missed the Council meeting, here are some highlights:

 

PARTICIPATORY BUDGETING. 

Participatory Budgeting (PB) has far and away been the most hotly disputed program in the next budget, bringing scores of diverse, eloquent and passionate speakers to its defense in meeting after meeting.  Yet despite giving lip service to PB and extolling its virtues, the Council approved a hybrid, and some feel crippled approach to PB for 2014/2015:  there are funds in place for City staff to administer Cycle 2 grants, and to start the Cycle 3 grant process — but the 2014/2015 budget does not include new grant funds for Cycle 3.

 

The City says the Cycle 3 money would come from the 2015/2016 budget — but that budget doesn’t get passed until mid-2015.  So, as it stands, the plan would be to start Cycle 3 of PB in early 2015, and decide whether and how much to allocate for grants AFTER the community process has begun. The program also seems to be suffering bureaucratic slippage, in that initially it began in October, then Jan, then Feb — and now the City is saying it would start Feb-March. I do think the City actually wants PB, but it’s pretty clear that Davis and the Jumpstart leaders do not.  Could this be an Oz maneuver, death by delay and budgetary deprivation?

 

At the request of Council members Katy Meissner & Robert McConnell, the Council DID pass a non-binding resolution stating their intent to fund Cycle 3 in 2015/16. McConnell also proposed a budget amendment that would have directed the City to hold a $640k PGE rebate in reserve for PB Cycle 3 grants — but that vote stalled along grassroots/Jumpstart lines, with McConnell, Meissner & Sampayan voting for it, and Davis, Malgapo, Dew-Costa & Verder-Aliga voting against.  McConnell also proposed delaying the start of the Rental Inspection program for a year, and allocating the $50k allotted to PB, but that vote went down 2:5, McConnell & Sampayan for it, and Davis, Dew, Malgapo, Meissner & Verder-Aliga against.  

 

Part of the Budget resolution is a commitment to review the budget status mid-fiscal year (Jan 2015), so hopefully by that time, more Council members will realize that in order to start the PB process, the grant funds need to be in place.  The theme for Cycle 1 of PB was along the lines of “Real Money, Real Projects, Real Power,” a slogan that underscores that without the actual funds, any community activity is just a blue-sky exercise, one we can do that on our own, without city staff.  What has brought out a cross-section of people in so many numbers is the chance to make actual project decisions.  As McConnell put it, it’s time to put your money where your mouth is; if in fact the Council supports PB, it needs to FUND it.

 

STAFFING. The 2014/15 budget includes 52 positions funded out of Measure B, the temporary tax that sunsets in 8 years.  41 of those positions are for police & fire, including a new position, Deputy Fire Chief, at a $313k salary.  

 

On the good side, we are now up to 96 police positions, and Police Chief Kreins says we should reach 110 police officers by year’s end (not sure if he means calendar or fiscal year).  On the worrisome side, once Measure B expires, the funding for these positions goes, too.  The 52 positions add up to roughly 10% of the City’s total employee headcount, and the police positions are more than 10% of the police staffing (18 police, 2 dispatchers, plus 10 cadets).  

 

Local CPA JD Miller highlighted the danger of funding recurring expenses out of non-recurring revenue, a path that ultimately led to bankruptcy. Other speakers asked what happens when Measure B runs out — do we lay all these people off, or do we hope that voters will approve a new tax measure?  The previous Council majority had a policy of dedicating Measure B funds to non-recurring expenses, but the current Council majority is veering away from fiscal prudence.  

 

As a blonde who isn’t always dumb, a dumb blonde joke comes to mind: “I know I still have money ‘cuz I still have checks left!”  With apologies to Pippin, who isn’t dumb, and is already blonde – have all the Jumpstarters secretly become dumb blondes? Hair color aside, it’s more likely a case of kick the can: “Spend now, and hope for the best when the bill comes due!”  That strategy didn’t work before, but hey, they’re optimists!

 

CITY-WIDE LED CONVERSION The new budget includes $1.7 million for a city-wide LED conversion project.  If completed by the end of 2014, the City would be eligible for a $640k rebate from PGE.  Ongoing savings are estimated at ~$380k/year.

 

On the face of it, the LED conversion sounds like a no-brainer; it’s green technology,  and saves green dollars, what’s not to like?  However, there are a couple considerations.  First, the schedule to complete the project by the end of 2014 is “aggressive” according to Director Kleinschmidt of Public Works.  How aggressive?  Well, it turns out that the City is still only about 20% through installing the LEDS that had been funded by PB Cycle 1.  To be fair, many of the PB lights require new power poles and cabling, as some are going in all-new locations, not just replacing a light that’s already there. Still, the big win for the LED project is completing it in time to get the PGE rebate.  9,000 is a lot of lightbulbs.

 

On a side note, so many lightbulbs prompts an irresistible joke: “How many City officials does it take to change a lightbulb?” Keep it reasonably civil, but give us your best shot in the comments section!

 

CHICK-FIL-A Chick-Fil-A asked the City to delay its hearing until July 22, so numerous community speakers held their comments.  Right now, the Chick-Fil-A project has been approved by the Planning Commission, but there is conflict over a requested left-turn lane.  The Planning Commission says it’s dangerous, the City staff says it’s ok.

 

BADGE & PASS BLDG:  The old Mare Island employment office at Tennessee St and Mare Island Way has declined to crisis point, with the most recent incident being a machete fight on Mondaynight that sent one of the squatters to the ER.  Squatters are increasingly more bold, tearing off the plywood from doors and windows, so that their comings and goings are clearly visible from one of the main gateways into the City. Neighbors in nearby Vallejo Heights, Bay Terrace, St Vincent’s Hill and especially St Francis Park are beyond fed up with the blight.

 

The Council was virtually unanimous in saying that the Badge & Pass (B&P) Building needs to go, and  City Manager Dan Keen said he had good news:  the most recent demolition bids for North Mare Island are low enough that the B&P can be tackled in this coming fiscal year.  In a later email Keen said he will send out a request for specific bids on the B&P in a month.  Hopefully there is a good reason for waiting even that long, as nearby residents would happily swing their own sledge hammers to tear down this social, health and fire hazard.

 

In related news, after the machete fight on Monday night, the City boarded up the B&P again on Wednesday, and evicted squatters again. Keen also planned to raise security at his staff meetingon Wednesday. I hope the answer is security patrols and not just the cameras the City has suggested.  BTW, there is a ticket on this on SeeClickFix, and a thread on NextDoor, should residents wish to vote, and/or register their thoughts…

 

FINANCIAL NOTES.  The city had some good fortune in that the bill for next year’s retirement health costs was actually *lower* than previously projected.  Wow, that doesn’t happen often, buy a Lotto ticket!  Still, pensions and retirement benefits are the principal reason that Vallejo’s upcoming fiscal years will run a deficit, so the respite is one-year only.

 

Speaking of deficits, Davis asked that come mid-year review, the City prepare a budget that would apply gas tax monies to streets, instead of to the General Fund, and that would show the cuts needed for balanced budgets in the “out years,” namely all the years after this one. Yet Davis also said that he wasn’t ready to cut the 52 positions that are being funded out of Measure B.  As yes, the old strategy of have your cake, and eat it too, who doesn’t want that!

 

By the way, this week’s Council report is written only — but we hope the dulcet tones of host Marc Garman will be back in an audio report come next Council meeting. Marc has been burning the fire at many ends, what with the new VIB website design, and his myriad other projects.

 

Enjoy the new VIB website, and we’ll be back with a Council podcast the next time around!



'Your City Council Report: Balanced City Budget — For Now 6/24/14' have 17 comments

  1. June 26, 2014 @ 6:13 pm wharf rat

    rattest rattest

    Reply

  2. Firebug

    June 27, 2014 @ 7:51 am Firebug

    LOL! Balanced budget? Like the Mickey Dees dollar menu is low fat. The Jumpers still have not learned how to write checks with money we do not have. I believe PB will be dead in a few years, not by direct actions, but by the fact our corrupt and inept council majority will need it to balance the budget. The bigger question we need to look at is when will the pension obligations overtake the $10 million?

    Reply

  3. June 27, 2014 @ 10:03 am Clarke Johnston

    Re: Chick Fil-A . . staff faces several known traffic/parking approvals that shouldn’t have been: The Kohl’s entrance (previous theater) is too narrow, awkward. Ditto for the exit south out of the Georgia Street Safeway: Wrong. The ever-entertaining roadway from Avery Greene to Shell on Admiral Callaghan requires attention while navigating. * * * It’s disturbing to see so many positions staffed by temporary means. Brainstorming this sooner instead of later would be wise. Measure B, whatever it’s teething flaws, remains a vibrant and worthy exercise in citizen participation. Entrenched politicians and union leaders (with their Hawaiian shirted fans) of course take offense at an engaged towns-folk, desiring to be heard outside of our normal 3-minute allotments. Expect more hissing and scratching from those quarters every time PB is brought up. Pay them no heed. Let’s have Vallejo continue forward with that experiment. It’s brought us more positive press, and attention than almost anything else happening. Certainly better than trips to Tanzania, ‘fer instance.

    Reply

  4. June 27, 2014 @ 10:40 am Jonesy

    Anne, you and Katy are tied for the good quality of your council reports. Thank you!

    Reply

  5. June 27, 2014 @ 1:12 pm Salty Dog

    When it comes to a balanced budget forcast for the future, does anyone know what role tax assessments play in the planning process?

    Property values have increased very significantly over the past three years and that computes to a much greater increase in tax revenues. Granted, the schizophrenic bubblelicious property market that California is known for doesn’t guarantee revenues down the road, but current forecast looks good for the city coffers.

    Any comments?

    Reply

  6. Firebug

    June 27, 2014 @ 1:59 pm Firebug

    @Salty,
    Because of prop 13 increased property tax revenue only applies to homes that have been sold in the fiscal year, and considering that Vallejo’s property values are still 20-30 percent less than Benicia, American Canyon and other nearby cities the increases of prop 13 home values is 2 percent for existing homes and 1 percent of assessed value for homes recently purchased. Not the money they need when 90 percent of the budget is employee compensation and the pension increases are going to be nearly double digits over the next few years.

    http://en.wikipedia.org/wiki/California_Proposition_13_%281978%29

    Reply

  7. June 27, 2014 @ 2:07 pm wharf rat

    Well Salt there has been a shift for 2 or so decades from traditional municipal management and service delivery to administrative centric non delivery all while spending more than was required with the old model which was far too efficient and required people to actually do productive work .
    Then the County comes into play they suck an inordinant amount of the tax revenue for the socalled services they provide . Just ask yourself when was the last time you recieved any bennifet for your tax contribution to County .

    Reply

    • June 27, 2014 @ 2:18 pm Salty Dog

      @ WR:
      er….what county is this again? Yes, I am hard pressed to discover what benefits flow from that grandiose, spare no expense ediface up there on Texas Street.

      Reply

  8. V

    June 27, 2014 @ 7:06 pm V

    This is where Vallejo was in the late 1990s, and early 2000’s. Union paid for council members who made decisions to spend money on high salaries that were not sustainable. 52 positions paid for by monies that will expire in less than 8 years? By the end of this 8 year period, I bet that number is close to doubled. What are we going to do then????? Cut all services again to pay for salaries.

    AND what about CalPers and unfunded pension liabilities. How can we have a “balanced” budget when we owe millions.

    This is smoke and mirrors for this year to make everyone feel good. It’s a magic show, with really bad magicians.

    Sooooooo disappointing.

    Reply

  9. June 27, 2014 @ 10:03 pm Iñigo

    How many city officials does it take to replace a light bulb?
    Seven. One to hold the light bulb, and six to rotate the ladder.

    Reply

  10. June 28, 2014 @ 5:08 pm wharf rat

    Or 200 one to hold the lightbulb and 199 to rotate the building .

    Reply

  11. June 29, 2014 @ 10:20 am wharf rat

    Pension spikung ?? todays times herald “overtime costs at bay area governments soar since recession”

    Reply

    • Silas Barnabe

      June 29, 2014 @ 4:22 pm Silas Barnabe

      @Wharf,
      the TH only highlighted the OT because Vallejo did not make the top….but they mistakenly linked us to a database that shows Vallejo employees consistently at the top of compensation despite OT.

      Reply

  12. June 29, 2014 @ 10:15 pm wharf rat

    This math a bitch !!! these Mathmatical problems are , tough and propose major complications for us challenged Residents ,, What do you think ?? Do We have to perform in the mathe dpatment ??? or are the
    these challenge<s indemic / Guaranteed … The system only existe'ts due to mutual aide , Vallejo and Benicia , as a combined Strike force ," A mutual aid group " Work verey well together , to surpress fire destruction of numerious structures …. ( the format of this site needs attention) Allwhile the edinator is a pretty cool Cat !!!!..

    Reply

  13. June 30, 2014 @ 6:20 am Bong Hit

    Do We have to perform in the mathe dpatment ???

    Yes, modern man needs to have full command of math to get people on the moon and build roads. The Supreme court will rule today on the question of mandatory union dues for public employee unions. If SCOTUS rules that it is unconstitutional to compel workers to pay dues, therefore supporting democrats which may be counter to the individual workers political preference, then you may take away some hope for reform.

    If SCOTUS rules in such a way that the status quo remains, then don’t hold your breath for any improvements. democrats and their political machine have become the enemy of the people. We shall see what happens.

    Reply

  14. June 30, 2014 @ 7:27 am Bong Hit

    Well, what do you know. The SCOTUS has given a victory to free people and beaten back the communists in our midst.

    A great day for freedom!

    6/30/2014 7:22 AM

    Reply

  15. June 30, 2014 @ 8:23 pm Wharf rat

    @ bong hit
    A wholesale and somewhat crappy retort to a somewhat universal question !! ireguardless of the Umbuctious math (looming) as it will , and the horible spelling , by many of us posters , many of us actually have a”SOUL” …. If you would like this to be defined ,, forget aboutt it ,,, aint gona happen , it is just what it is ………….. And is the essence and core of our scociety , perhaps the bed-rock of an evolving Scociety , perhaps the Grit that bind’s the aluvium of Scociety together , perhaps an evoultion from a mere slurry to actual concreate , a matrix , both bound and , cured , hardened by time
    and solid in all respects , in fact monolithic ……………..

    Reply


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