Proposed City-Wide Project Labor Agreement Mandate: Look Before You Leap

Dear Mayor Steinberg and Councilmembers,

We write to urge you to postpone consideration of the proposal to mandate that all city projects of $1 million or more include a project labor agreement, which appears on your agenda for tomorrow evening.

The consideration of such a measure with zero public awareness and no opportunity of the public to adequately express their views would be an affront to any concept of open, transparent government or inclusive public engagement. Slamming this proposal through the city council without adequate time and opportunity for real public input would further undermine the public’s already attenuated trust in city government and city leaders.

This is not the way a participatory, inclusive democracy behaves. This is the way slick politicians who want to sneak things past the public behave. We trust that you wish to count yourselves among the former and not the latter.

The proposed mandate would have a huge and as yet unknown impact on the city’s budget and on the burdens of city taxpayers. We all know that project labor agreements serve to effectively restrict city contracts to union-only contractors, thereby reducing the number of eligible bidders on city contracts, thereby needlessly driving up city and taxpayer costs by 10% to 20%, according to the studies of independent analysts.

Such cost spikes will likely drive up taxpayers costs by tens of millions of dollars each year in Sacramento, depending on the volume and magnitude of city capital improvement projects each year. Over a 10-year span, such a mandate could drive up costs by as much as $200,000,000, all for the sake of benefiting a narrow special interest, the construction trades unions, while unfairly cheating the 90% of skilled trades workers who are not union members out of the opportunity to earn a living.

It would also especially harm minority and women-owned businesses, the great majority of whom are non-union businesses.

We also note that Sacramento residents will vote this fall on your proposal to double and make permanent the temporary Measure U one-half percent sales tax hike that expires in March.

As chair of the campaign to defeat the double-the-tax Measure U, it would behoove me to remain silent and even encourage you to approve such a budget-busting PLA mandate on city projects as it would hand our No on Measure U campaign a vivid example of how our city government is shoveling millions of dollars out to back door of City Hall into the pockets of politically connected special interests at the expense of average Sacramentans.

But I also happen to be a citizen who deeply cares about the long-term fiscal health of our city. I cannot stand idly by while the proponents of this deeply flawed proposal drive the city’s financial future into a ditch.

We urge you to do the right thing and direct staff to do a comprehensive, independent fiscal analysis of the long-term impacts of the proposed PLA mandate on future city budgets, non-union workers and minority and women-owned Sacramento businesses. If you are serious about restoring trust in city government, you must provide the public a reasonable opportunity to learn about this proposal, study it and then communicate with their representatives their views on it.

If you wish to discuss this matter, please do not hesitate to contact me.

Sincerely,

Craig Powell, President
Eye on Sacramento
Phone: (916) 718-3030

cc: Media Distribution List

Eye on Sacramento’s Position on Mayor’s Effort to Double Measure U Sales Tax Hike

MEDIA RELEASE

For Immediate Release

Date/Time: July 31, 2018, 6:00 a.m.
Contact: Craig Powell, President,
Eye on Sacramento
Phone: (916) 718-3030
E-mail: craig@eyeonsacramento.org
Website: www.eyeonsacramento.org

 

Eye on Sacramento’s Position on Mayor’s Effort to Double Measure U Sales Tax Hike

 

Below is a link to a letter that was sent today by Eye on Sacramento President Craig Powell to Sacramento Mayor Darrell Steinberg regarding EOS’s position on the Mayor’s effort to double the Measure U one-half percent “temporary” sales tax hike in the City of Sacramento.

Measure U will be on the agenda of two Sacramento council meetings today, July 31st, one at 2:00 p.m. and a second meeting at 5:00 p.m. Mr. Powell will be available for interviews both before and after the 2:00 p.m. council meeting.

Letter to Mayor Darrell Steinberg

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Is Steinberg Being Reckless? … Mayor wants to double a ‘temporary’ sales-tax hike

By Craig Powell

If all you knew about the performance of Mayor Darrell Steinberg in office was what you read in the pages of The Sacramento Bee, two things would be apparent. First, you’d think Steinberg was that rarest of creatures: a politician incapable of making a misstep or a bad policy choice. Second, you’d be woefully ill-informed about the potential downside consequences of his policies—and some of the cynical political calculations behind them.

Since the June primary, the mayor has been a man on fire. His first salvo was to publicly press the City Council and city voters to support his campaign to double the “temporary” one-half-percent sales-tax hike known as Measure U, which was approved by voters six years ago as an emergency response to city service cuts in the Great Recession. He seems not to care that Measure U was sold to voters as a temporary tax designed to fill the coffers of a recession-battered city.

Neither the mayor nor The Bee bothers to point out that city revenues have fully recovered from the recession. City revenues have risen 16 percent over the past two years and were up 6 percent last year. The mayor and The Bee have also failed to mention that the city’s labor costs soared 8.5 percent last year on the heels of pricey new city union contracts and soaring pension costs. How pricey? Under the new police contract, officers with more than four years on the job were given 17 percent pay raises (not counting the impact such raises have on city pension costs), while average annual increases in the CPI were less than 1.3 percent over the past four years.

view/download … Is Steinberg Being Reckless? … Mayor wants to double a ‘temporary’ sales-tax hike.PDF

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Budget Checkup … City Hits List of 20 Most Financially Distressed U.S. Cities

By Craig Powell

After devoting my last two columns to Sacramento’s homeless crisis, I figure we’re due for a review of the city’s financial situation since Darrell Steinberg became mayor.

Among the more than 3,300 issue files that Eye on Sacramento (the civic watchdog group that I head) maintains on municipal issues is one that is often whimsical: our city rankings file. We track every time a study or publication ranks Sacramento against other cities on everything from its appeal to millennials to the quality of our coffeehouses. (There’s considerable crossover there.) But the latest ranking, published by JPMorgan Chase, is anything but whimsical. It’s disturbing.

Since JPMorgan Chase manages about $90 billion in municipal bonds, it’s pretty concerned about whether cities will be able to pay back their bond debt. So it created what one financial analyst calls a comprehensive guide of “which municipalities haven’t the slightest hope of surviving their multi-decade debt binge and lavish public pension awards”—i.e., Chicago, Pittsburgh, Atlanta, Cleveland.

view/download … Budget Checkup … City Hits List of 20 Most Financially Distressed U.S. Cities

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The San Antonio Way … Haven for Hope Focuses on Transforming Lives of the Homeless

By Craig Powell

I first learned about Haven for Hope, a unique homeless facility in San Antonio, Texas, from a close friend, Jill McDonnell. Jill is a professional photographer in Sacramento who doubles as the official photographer of the Land Park Volunteer Corps. Jill rides “shotgun” with me on our monthly park work days in William Land Park. We distribute copious amounts of cold water to hardworking park volunteers and thank them for their indispensable help.

Jill’s overriding passion, however, is capturing extraordinary images of Sacramento’s homeless people. Her photography is reminiscent of the remarkable work of Dorothea Lange, the photographer famous for chronicling the desperation on the faces of struggling migrants during the Great Depression. Jill’s photos of homeless people have been displayed in the photo gallery in the lobby at Sacramento City Hall and other local galleries. We occasionally display her work at the Corps’ Base Camp, a reminder to park volunteers of the struggles the homeless in our midst face. Her pictures of our park volunteers are often featured in this publication.

Jill is no softheaded bleeding heart. She has a steely-eyed realist’s view of the complexity of human nature, both its positive and negative elements. She’s also closely attuned to the players, policies and politics involved with homeless issues in Sacramento. Because she has an abiding human compassion and innate common sense (an all-too-rare combination, I’ve found), I sought out her perspective when I began studying the city’s stumbling responses to the homelessness problem. She had one unwavering piece of advice: Go to San Antonio.

view/download … The San Antonio Way … Haven for Hope Focuses on Transforming Lives of the Homeless

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Sacramento Streetcar Project Hits Major Speed Bump … Properties Owners, Resident Sue To Invalidate Streetcar Tax Election

MEDIA RELEASE

For Immediate Release

Date/Time: August 24, 2017, 7:00 a.m.
Contact: Steven Bourasa, Chair
Transportation Committee,
Eye on Sacramento
Phone: (916) 889-6657
E-mail: stevenbourasa@hotmail.com
Website: www.eyeonsacramento.org

Erick J. Benink, Esq.
Krause, Kalfayan, Benink & Slavens, LLP
Attorneys for Petitioners
Phone: (619) 232-0331
E-mail: eric@kkbs-law.com

 

Sacramento Streetcar Project Hits Major Speed Bump

Properties Owners, Resident Sue To Invalidate Streetcar Tax Election

 

Last week, two Central City property owners and a registered Sacramento voter filed a lawsuit against the City of Sacramento that seeks to invalidate the results of a recently held city-sponsored Mello-Roos tax election. The suit seeks to halt the levy of a special tax on Central City property owners that is designed to raise $2 million annually to cover a portion of the operating costs of a proposed Sacramento/West Sacramento streetcar project. The petitioners claim that the special tax was not approved by a two-thirds majority of the registered voters of Sacramento, as required by the Mello-Roos Community Facilities Act of 1982 and the California Constitution, and should be invalidated by the court.1

City Ignores Vote of City Residents

Just two years ago, registered voters in Downtown and Midtown rejected a similar Mello-Roos streetcar tax (Measure B) by a wide margin. Instead of respecting the clear and democratically expressed will of the voters, Sacramento city officials have spent the past two years concocting a second illegitimate and illegal streetcar tax election plan (Measure S) intended to disenfranchise city voters and ignore the will of the people. In the second streetcar tax election, which concluded in June, city officials denied the vote to all registered voters and allowed only carefully selected property owners to vote, in violation of the law.

The city further manipulated the Measure S election by weighting the vote based on parcel size and including the massive Downtown Railyards in the proposed tax district. The Downtown Railyards alone represented over one-third of the collective voting power in the election. By cheery picking voters and egregiously gerrymandering the district, city officials assured themselves that they would secure the two-thirds majority vote required to pass the tax.

City of Sacramento Ignored Legal Warning in April

On April 20, 2017, the Howard Jarvis Taxpayers Association sent a letter to Sacramento Mayor Darrell Steinberg and the Sacramento City Council warning that a “special tax approved in an election where only owners and lessees of land were allowed to vote was invalid” and unconstitutional under California law. 2 City officials ignored Howard Jarvis’ warning and mailed out streetcar tax election ballots to only landowners on May 30, 2017.3

City officials have estimated that the streetcar project will cost $5.1 million each year to operate. However, Eye on Sacramento’s nationally recognized transit expert, Professor Emeritus Gregory Thompson of Florida State University, estimates that the streetcar’s actual annual operating costs will most likely be between $6 million and $8 million. The Measure S special streetcar tax was expected to raise $2 million annually, but is now under a very major legal cloud.

Who will pay the enormous looming operating deficits of the streetcar project, which may be as much as $5 million annually? The answer is: no one knows. Are the participating cities of Sacramento and West Sacramento prepared to tap their already hard-pressed general funds to cover the uncertain operating deficits? Without an identified, adequate and committed funding source, the streetcar project is likely to be stalled indefinitely. Or, worse, the project may get built, but will have only enough funding to operate sporadically, killing any chance of it developing a level of ridership that could justify the $200 million taxpayer cost of building the project.

As Professor Thompson puts it, “The Sacramento streetcar project is little more than an amusement ride for tourists and will do virtually nothing to improve mobility or reduce automobile use.”

http://eyeonsacramento.com/wp-content/uploads/2017/08/Verified-Petition-w-Exhibits.pdf
http://eyeonsacramento.com/wp-content/uploads/2017/08/HJTA-Letter.pdf
3 https://www.cityofsacramento.org/Clerk/Elections/3-Measure-Information

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Billion-Dollar Budget … City spending to increase 25 percent over five years

By Craig Powell

First, there’s the headline number: The city is poised, for the first time in its history, to spend more than $1 billion in the fiscal year that begins on June 30. Total general-fund spending (which pays for police, fire, etc.) is set to hit $450 million next year, while “enterprise” spending (primarily, the utilities department) consumes $584.2 million.

The city expects to employ 4,552 people next year, a slight increase over the current year, but an increase of 720 positions from five years ago. The city expects to employ 130 fewer people than it did in 2008.

City officials are forecasting that the budget will sink into major deficit beginning in just two years, when a general-fund operating deficit of $11 million is expected to grow to $26 million by 2022. You would expect that a city manager, facing the prospect of such red ink, would propose a city budget for next year that calls for major cuts in spending to head off the coming fiscal ditch. But you would be wrong. Fiscal discipline is a very foreign, even suspect concept at City Hall these days. In fact, city manager Howard Chan’s recently released budget forecast anticipates sharp increases in general-fund spending on city operations over each of the next several years, rising from $412.9 million this year to $515.9 million in 2023, a 25 percent increase in operations spending over five years—a spending pace that’s more than twice the inflation anticipated during that period.

view/download … Billion-Dollar Budget … City spending to increase 25 percent over five years

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The Regionalist … Under Steinberg, Will Consolidations Be In Our Future?

By Craig Powell

In Darrell Steinberg, Sacramento has an aggressive and politically progressive mayor who is a self-acknowledged change agent. His background as president pro tem of the Senate and former city council member certainly gives him the political juice and local government knowledge to potentially be a high-performance mayor.

Exhibiting the energy and confidence of a man who has been preparing for his new role his entire life, Steinberg has moved quickly to seize the agenda of the city of Sacramento, helped along by the fact that almost the entire city council endorsed his election. Even before he was sworn in as mayor, he persuaded the council to defer selection of a permanent city manager until he could weigh in. A final decision on the proposed expansion of Sacramento Convention Center was similarly deferred at his behest. And he will almost certainly play a major role in the selection of a new police chief, even though the selection is, theoretically, interim city manager Howard Chan’s to make.

Steinberg has made no secret of his intent to serve as a regional leader. He sees many of the most difficult challenges we face as regional in scope: widespread homelessness, growing traffic congestion, economic development, a looming pension crisis, youth underemployment, land-use and environmental policies (i.e., suburban sprawl), poverty, poor educational outcomes, etc.

And Steinberg is a major adherent of New Regionalism, which consistently calls for a regional approach to solving tough municipal problems. After all, Steinberg is the author of the groundbreaking (some would say local-economy-sapping) Senate Bill 375, which mandates that regional planners take affirmative steps to reduce the climate-changing impacts of local decisions on housing, transportation and land use. He’s tried to facilitate sales-tax-sharing agreements between cities and counties to reduce local government competition for major retail developments (like auto malls), which gush the sales-tax revenues that are so coveted by local governments.

view/download … The Regionalist … Under Steinberg, Will Consolidations Be In Our Future?

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Police Shootings … Reactive Window Dressing or Effective Reforms?

By Craig Powell

In July, Sacramento police killed a mentally ill, knife-wielding man on the streets of North Sacramento in a hail of gunfire, striking him 14 times, in an episode recorded by police dash cams and other video. Calls to police dispatchers had reported that a mentally ill man (he had soiled himself and was seen typing on an imaginary keyboard) armed with both a gun and a knife was observed loose on the streets, which, of course, triggered the highest degree of police vigilance. The shooting was preceded by an unsuccessful effort by police officers to run the man down with their squad car.

The Sacramento police department’s response to the shooting was ham-handed, at best. It refused media requests to obtain multiple dash cam and other video of the episode, despite growing public pressure to release it. But once The Bee released a video of the incident weeks later that had been recorded by a private party, the SPD ended its stonewalling and released all of its videos of the episode within a matter of hours. What ensued was a growing chorus of calls, particularly, but not exclusively, from groups and individuals in the black community, for the city to adopt major reforms in how it handles police misconduct complaints.

City’s Rapid Response to the Problem

On Sept. 20, Mayor Kevin Johnson appointed a council committee to research ways the city could upgrade police accountability and transparency. Three days later, the committee, headed by Councilmember Larry Carr, visited Berkeley to discuss its police review commission. (Berkeley, home of my alma mater, wouldn’t have been my first choice as a place to look for sound local government policy.)

view/download … Police Shootings … Reactive Window Dressing or Effective Reforms?

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Eye on Sacramento Issues Report Challenging Sacramento Convention Center Expansion

MEDIA RELEASE

For Immediate Release

Date/Time: October 17, 2016, 10:30 a.m.
Contact: Dennis Neufeld, Director of Research
Eye on Sacramento
Phone: (916) 539-1054
E-mail: dennis@eyeonsacramento.org
Website: www.eyeonsacramento.org

 

Eye on Sacramento Issues Report Refuting Economic Premise

For Expanding the Sacramento Convention Center

 

At a press conference held this morning at the Sacramento Convention Center, Eye on Sacramento officials released a comprehensive report revealing the long track record of growing financial losses at the Convention Center, as well as challenging the proposition that a nearly $200 million taxpayer-funded 70,000 sq. ft. expansion of the Center will provide any net economic benefits to Sacramento.  Among the report’s findings:

The Convention Center will lose $19 million this year.  Center losses have been growing at a pace of $1 million annually for several years.  The Center has lost an astonishing $268 million in taxpayer funds over the past 17 years.

From its construction in 1974 to its major expansion in 1997, the Center has failed to generate revenues anywhere close to official projections, leading the city council to double the city hotel tax to cover its mounting losses in the early years and to extend $10.4 million in emergency bailout loans to the Center following its 1997 expansion, loans which remain largely unpaid today.

Because of the heavy drain of Center losses, Sacramento devotes 87% of its annual hotel taxes to covering Center red ink.  The nine cities that Sacramento competes with for convention business uses an average of only 45% of their hotel tax revenues to fund its convention centers, with 55% of such taxes going into their general funds.

If Sacramento reduces its allocation of hotel taxes to the Center to match the 45% average allocation of its nine competing cities – which it can do over time by simply avoiding the proposed Center expansion – EOS projects that the city would see an additional $8 million of hotel taxes flow into the city’s general fund each year to fund police, parks, road maintenance and other vital services.

The municipal habit of expanding convention centers in pursuit of greater center attendance has been a grotesque failure in city after city in the U.S., leading to a veritable “arm’s race” of center expansions and resulting in a massive glut of space, while actual demand for  convention space has been declining.

The theory of “Build It and They Will Come” may work in Hollywood movies, but the evidence clearly shows that it does not work with convention center expansions.  The following cities have each expanded their convention centers in recent years only to experience an actual decline in attendance following expansion: Chicago, Las Vegas, Seattle, Philadelphia, St. Louis, San Francisco, Orlando, Washington, D.C., and Boston, as well as many smaller cities.

The common culprit in the growing number of failed convention center expansions throughout the country (including Sacramento’s 1997 expansion) has been the grossly inaccurate projections of future center revenues generated by professional convention center consultants hired by cities.

Following Boston’s failed convention center expansion in 2004, the then executive director of the Massachusetts Convention Center Authority, James Rooney, was quoted as saying:

When I talk to people from other cities about making a public investment in a convention center, I’m equally blunt about the feasibility studies these consultants use to justify [such] investments…some of these guys ought to be taken out and shot.”

EOS has also determined that, in the lead up to the Sacramento city council’s key May 3rd policy decision to proceed with an expansion of the convention center, city staff presented the council with a staff report that relied heavily on the city’s primary convention center consultant, the firm of Conventions, Sports & Leisure International (CS&L).  City staff cherry-picked data and findings from the CS&L study, but staff failed miserably to provide council members with crucial findings in the CS&L study that clearly state that an expansion of the Convention Center is not needed nor justified given market conditions.

In short, the city council was misled by its staff into believing that its principal convention center consultant was solidly in favor of the proposed expansion when, in fact, it was opposed to it.

The city staff’s proposal to expand the Sacramento Convention Center is on the city council’s meeting agenda for tomorrow evening.

The EOS Report is viewable and downloadable via this link.

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