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.

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RT’s $10 Million Streetcar Design Contract

MEDIA RELEASE

Date/Time: April 25, 2016, 4:00 a.m.
Contacts: Erik J. Smitt, Policy Director,
Eye on Sacramento
Phone: (916) 215-2275
E-mail: erik@eyeonsacramento.org

REGIONAL TRANSIT’s $10.2 MILLION CONTRACT

DOWNTOWN RIVERFRONT STREETCAR DESIGN SERVICES

Tonight, Sacramento Regional Transit District’s Board of Directors will consider approving a $10.2 million contract with HDR, Inc. for design services of the Downtown Riverfront Streetcar Project. These design services will cover complete track-routing and all other facets of the proposed 4.2 mile system. The $10.2 million will come from federal Congestion Management Air Quality funds.
But there is more to the story.

The community does not want this useless streetcar. Last June, city of Sacramento registered voters in a proposed assessment district voted a resounding “NO!” to a $38 million bond measure to fund the city’s share of the $195 million streetcar project. This “NO!” vote created a significant hole in the streetcar construction funding. As yet, after ten months, the city has not found a funding source for their commitment to the project. Also, the State of California has not firmly guaranteed their $10 million share of construction.

Now, with significant funding still in limbo, the RT Board is asked to roll-the-dice on this $10.2 million financial commitment, which could be used on more important projects.

Another consideration: As pointed out in our recent report, “EOS’s Recommendations on RT’s Fiscal Crisis,” Appendix 1 (www.eyeonsacramento.org), based upon research by transit authority Dr. Gregory Thompson, annual operational expenses will likely range from $6.3 to $8.8 million. The streetcar project’s operational cost projections are woefully below this range, adding another significant project risk.

We want and need smart, long-range decisions for transit problems. Not needed are decisions, such as the one before the RT Board tonight, that may not only cause chronic operational red ink, but also become a waste of taxpayer funds if anticipated local monies fail to materialize.

Unless construction funding by all governmental agencies committed to this project are firmly identified, Eye on Sacramento urges a “No” vote on this Downtown Riverfront Streetcar design services contract.

(The design contract is #13 on RT’s Agenda. The board meeting begins at 6:00 pm and the meeting chambers are located at RT’s headquarters, 1400 29th St.)

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RT on the Rocks … Fight over fare hikes splits transit board

By Craig Powell

 

To get a sense of how broke Regional Transit is, consider this analogy. Let’s say you’re part of a Sacramento family. You have a fairly well-off, middle-class lifestyle, but in the last couple of years you’ve really splurged, buying yourself a big, new Mercedes and a big, pricey cabin up at Lake Tahoe, all financed to the hilt. Meanwhile, the small business you run, RT Clothing, has never regained the boatload of customers you lost when you decided to jack up your prices by 20 percent in the middle of the last recession (oops), leaving you with a flat income for years. Fortunately, your wife, a retiree who collects both a military pension from the federal government and a healthy state government pension, has been collecting cost-of-living increases for years. She brings home close to 80 percent of the family income these days, bless her. Together, you have a family income of close to $150,000 per year.

The charming new home you bought 30 years ago in Light Rail Estates is showing serious signs of age and, let’s be honest, neglect. Your roof is shot, the paint’s badly peeling, you may need a new furnace and your backyard pool has algae stains and a rather unpleasant odor. Lately, some of the sketchier kids in your neighborhood have been jumping over the fence when you’re not home, swimming in your pool, hanging around for hours on end and leaving their trash everywhere. It’s gotten so bad that many of your longtime friends no longer accept invitations to your summer pool parties. You’ve spotted some of them going into Bob and Nancy Uber’s backyard down the street. The Ubers put in a nice, new pool last year and they let their friends drop in to swim whenever they want.

Things are going so-so until one day you decide to open up your bank and credit card statements for the first time in six months. You’re stunned (stunned!) to see all of the savings you thought you were socking away each month have somehow evaporated. Not only that, you owe a whopping $18,000 on your Visa bill. (How did that happen?) In a panic, you check the balance in your checking account and your heart sinks further. You have just $3,000 in cash and, at the rate your family burns money, it will be long gone in three months’ time.

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The Pot Tax … Helping kids at the expense of the general fund

By Craig Powell

Jay Schenirer means well, he really does. But programs launched with the best of intentions are no guarantee of sound policy or effectiveness, as Schenirer’s recent proposal confirms.

His basic idea is to dramatically increase city funding of programs for children and young adults by getting voters in June to approve a “new” 5 percent tax on marijuana cultivation, with the proceeds directed exclusively to youth services, bypassing the city’s general fund. Schenirer and his hardworking staff have spent the past year compiling research studies that show the benefits such programs can have on outcomes for kids.

Schenirer is certainly not new to youth issues: He’s spent most of his adult life working on them—in state service, on the city school board, as an education consultant and as the founder of youth-focused nonprofits since his 2010 election to the city council. (He’s raised more private funds for these nonprofits from corporations and foundations than any other councilmember with the exception of our city’s star private fundraiser, Mayor Kevin Johnson.) Schenirer is almost certainly the council’s foremost authority on youth issues, with Rick Jennings—the long-term CEO of the Center for Fathers and Families who served on the city school board alongside Schenirer—a close second.

Schenirer and his staff have prepared a thoughtful 22-page blueprint for how to create a new city department of youth services, an idea that city manager John Shirey threw cold water on by calling it a wasteful increase in city overhead. Shirey prefers to have the parks department, which administers the city’s current youth services programs, handle any expansion of such programs.

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Expansive Plans … The mayor’s budget message proposes wide-ranging ideas

Published on Wednesday, 01 April 2015

Expansive Plans

The mayor’s budget message proposes wide-ranging ideas

By Craig Powell

As I wrote last month, the mayor and city council have taken aggressive steps in the past few months to assert much greater front-end control over both the city budget and the city manager (hiring an independent budget analyst, forming a new council budget committee, public outreach on budget matters). But the process changes were just the beginning. On March 10, the mayor took the unprecedented step of releasing a “Mayor’s Message on Budget Priorities” that lays out what is likely the most expansive plan ever proposed for the role of city government in Sacramento. It proposes a cautious approach to city spending and debt management in the near future while proposing more than a dozen new and unprecedented programs and initiatives.

Notably, the mayor’s plan was not the product of deliberation and consensus by the council’s new budget and audit committee. Instead, it is the mayor’s own vision and was slated for initial council review late last month. If it ends up being approved by the council, it will represent marching orders to city manager John Shirey on how to draw up the city budget for the next fiscal year that begins July 1.

The central premise of Johnson’s plan is that the city must exercise spending caution in the short term as the city nears a fiscal cliff in 2019 (due to escalating pension contributions and expiration of the Measure U half-percent sales tax hike), but that the city must ultimately fix its fiscal problems by taking aggressive steps to grow the local economy, resulting in higher city tax revenues. His ideas for growing the local economic pie are bold: He proposes a slew of new investments, plans and programs that, if approved, would inject the city more assertively into local economic development than ever before.

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Katy Grimes Piece on Measure L, Sac County GOP and our EOS Report

Here’s a revealing article by Katy Grimes on Measure L and the coopting of the Sac county GOP.

Local ‘Thought Leaders’ Bamboozle Sac GOP on Measure L

Op/Ed in Today’s Bee – EOS Report on Measure L

Sacramento city charter should not be overhauled without good cause | The Sacramento Bee

Eye on Sacramento Policy Report On Measure L, The Sacramento Checks and Balances Act of 2014

EXECUTIVE SUMMARY

  1. EOS believes that the Sacramento city charter should not be overhauled without a showing by proponents of good cause and strong justification for doing so. The campaign literature of the “Yes” campaign argues that the current charter is “outdated” and that while the city is not broken, Measure L “is just better.” We find such justifications to be exceedingly weak.
  2. The proponent’s core justifications are that the measure will improve government accountability, responsiveness, efficiency, effectiveness and transparency.
  3. While direct election of the city’s chief executive officer is an important indicator of accountability, we believe that real accountability involves “being held to account” for performance. On that score, we find that a city manager is subject to far greater accountability than an elected executive mayor.
  4. Governmental responsiveness comes in several forms: responsiveness to citizens needs, responsiveness to the policy preferences of citizens and, importantly to Sacramento, responsiveness to opportunities for economic growth. We find that Sacramento’s current council-manager system is likely to be more responsive to the needs of citizens, but that there would likely be no appreciable difference in each system’s responsiveness to the policy preferences of citizens. An executive mayor may be more responsive to opportunities for economic growth.
  5. Research clearly demonstrates that cities that employ city managers are more efficient and effectively managed than cities run by executive mayors.
  6. Components of Measure L will increase the transparency of city government, but the details – and thus the effectiveness – of such components are left largely to the future discretion of the city council.
  7. Measure L would likely reduce the power and influence of councilmembers to a considerable degree. Since the influence of neighborhoods depends tremendously on the power and effectiveness of councilmembers, we conclude that Measure L will significantly reduce the influence of neighborhoods on city policy. The possible creation of a neighborhood advisory committee will likely do nothing to arrest a decline in the influence of neighborhoods under Measure L.
  8. Measure L may politicize the appointment of senior city managers and result in a loss of manager professionalism and potential difficulties in management recruitment. At the same time, Measure L may open up management positions for dynamic and action-oriented managers from the private sector.
  9. Measure L may weaken the bargaining position of city government in labor negotiations due to political influence of public safety unions on an executive mayor, potentially leading to higher taxpayers costs and/or reduced service levels.
  10. Measure L may very well lead to an accelerated processing of development projects through the city’s environmental and planning processes, and could possibly lead to a lowering of environmental and planning review standards.
  11. It is highly uncertain whether a sufficient pool of qualified candidates for mayor will run for office following adoption of Measure L. If qualified candidates do not run for mayor, the city will almost certainly experience a deterioration in the quality of city management.
  12. The creation of an independent redistricting commission and a strong code of ethics, as called for by Measure L, will improve the integrity and transparency of city government. However, the city council must truly commit to creating an ethics commission with the authority to enforce a code of ethics.
  13. The increase in mayoral powers under Measure L will likely lead to increased political fundraising by the mayor and greater risks of corruption and “pay to play” abuses involving private interests seeking taxpayer subsidies for private projects, increasing the importance of a strong and effective ethics code and ethics commission.
  14. EOS has major concerns over the steady erosion of democratic values and democratic practices in city government in recent years. We encourage voters to evaluate Measure U, in part, on whether they believe it will enhance or diminish our collective ability to democratically govern our city now and in the future.

For the full report click  Eye on Sacramento Policy Report On Measure L, The Sacramento Checks and Balances Act of 2014

Eye On Sacramento To Release Report and Hold Public Forum on Measure L on October 2nd

MEDIA RELEASE

 For Immediate Release

Date/Time: September 24, 2014; 2:45 p.m

Contact: Craig Powell, President, Eye on Sacramento

Phone: (916) 718-3030

E-mail: craig@eyeonsacramento.org

 

Eye on Sacramento Will Issue an Independent Report and Hold a Public Forum on Measure L at 6:30 p.m. Thursday, October 2nd at the Clunie Clubhouse

Eye on Sacramento (EOS) President Craig Powell announced today that EOS will be presenting its own independent, comprehensive report on Measure L (Strong Mayor) at a public forum and panel discussion at 6:30 p.m. on Thursday, October 2nd at the Clunie Clubhouse in McKinley Park, located at 601 Alhambra Blvd. in Sacramento. The public is invited.

At the forum, the authors of the EOS Report will summarize their analyses of Measure L while representatives of both the “pro” and “con” campaigns will offer their responses. Additionally, Chester A. Newland, the Frances R. and John J. Duggan Professor Emeritus of Public Administration of the University of Southern California, will provide critique and commentary on the measure and EOS’s findings.

“We made the decision to dive into the choppy waters of the Measure L debate because we were concerned that voters weren’t getting an accurate picture of the proposal nor a fair and complete assessment of its likely and potential impacts,” said EOS President Craig Powell. “We feel it would be a civic mistake for voters to decide whether to approve a major rewrite of the city charter without the benefit of an impartial, independent and comprehensive assessment of its impacts. We hope our report and October 2nd public forum help to meet the voters’ need for high quality information on the important question that’s before them,” Powell added.

“Our guiding principle in preparing our Report on Measure L has been to ‘call them as we see them’ and to let the chips fall where they may,” Powell concluded.

EOS’s forum on Measure L marks the first of a series of upcoming EOS-sponsored public forums on major policy issues that are challenging local governments in Sacramento.

EOS has invited both the “pro” and “con” campaigns on Measure L to staff information tables outside the Clunie Clubhouse to give voters a chance to learn more about the measure from the perspectives of each campaign. Refreshments and snacks will be available at the forum.

Copies of the EOS Report on Measure L will be distributed at the public forum and will be transmitted generally to the media, as well as to the “pro” and “con” campaigns, via e-mail at Noon on October 2nd. An executive summary of the Report will be included. The Report will be posted on EOS’s website following the public forum. Requests for copies of the Report should be directed to Anna Robertson, EOS Executive Assistant, at anna@eyeonsacramento.org or by calling (916) 403-0592 extension 3.

You may register for this event ahead of time by visiting our Events page and clicking on the link, or you may register through Eventbrite here.

Police and Pension Reform … Burden of new contributions erased by pay hikes

Published on Friday, 01 August 2014

Police and Pension Reform

Burden of new contributions erased by pay hikes

By Craig Powell

After three long years of informal and formal bargaining, mediation, more formal bargaining and, finally, a binding determination by an arbitrator, the city has a new labor contract with the Sacramento Police Officers Association. City police will finally join all other major city bargaining unions and be required to contribute the full employee’s share into the California Public Employees’ Retirement System (9 percent of their salaries)—and then some. In addition, city cops will be required to pony up another 3 percent of their salary to pension contributions—replacing a portion of the city’s existing contribution to cop pensions—for a total contribution by cops of 12 percent of their salary. In contrast, members of the next highest contributing city union, the firefighters, contribute 9.2 percent of their salaries to pensions.

To ease the pain of such a major reduction in take-home pay, the arbitrator awarded the police salary hikes, starting next year, of 3 percent in each of the next 3 years, totaling 9.3 percent once fully implemented. (Sergeants will get 7 percent raises.) The new contract’s near-term impact on the city’s general fund budget: a savings of $1.25 million in the current fiscal year and $2.24 million in 2014-2015, shifting to a net cost of $300,000 in 2016-2017 and $1.59 million in 2017-2018.

The arbitrator’s decision caps off a three-year effort by city manager John Shirey to require all city employees to contribute 100 percent of the employee’s share of their pensions. Until Shirey’s initiative, most nonpublic-safety city employees paid between 3 and 4 percent of their salaries to their pensions, while police, firefighters and city managers paid zip toward pensions. Shirey kicked off his campaign to require full contributions by setting a good personal example: He insisted that his own employment agreement require him to make a full 7 percent pension contribution. (Of course, that’s a little easier when you are making $258,000 per year.) Next, he required all nonrepresented city employees, including all city managers, to pony up. Then, as each city union contract expired, he insisted that each contract require workers to make full contributions.

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