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.

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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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Eye on Sacramento Urges City Council: Give Back the Tax!

MEDIA RELEASE

Date/Time: March 21, 2016, 4:00 p.m.
Contacts: Craig Powell, President,
Eye on Sacramento
Phone: (916) 718-3030
E-mail: craig@eyeonsacramento.org

Sacramento City Council Poised to Increase Utility Taxes By

$10 Million/Year as Part of its Major City Utilities Rate Hikes;

Eye on Sacramento Urges Council: Give Back the Tax!

Tomorrow evening, the Sacramento City Council is poised to approve double-digit, four-year hikes in city water and sewer rates. In 2018, the council is expected to seek voter approval of 16% annual hikes – for four straight years – in the city’s storm drainage rate. Collectively, the water, sewer and storm drainage rate hikes, if approved, would draw an estimated $88 million more each year from the pockets of Sacramento residents and businesses once fully implemented.

But there is more to the story.

Because of an imbedded 11% city “utility tax” that is unknown to most city residents, close to $10 million of the $88 million will be siphoned each year from utility customer payments and diverted into the city’s general fund to pay for the general costs of government. The diversions will reduce resources available to keep city water safe and clean, and to keep our sewer and storm drainage systems operating effectively. The diversions also drive up the need for future city utility rate hikes.

“The Council has a clear conflict of interest in deciding whether and how much to increase city utility rates,” said Eye on Sacramento President Craig Powell. “They know full well that for every dollar they increase city utility rates, they automatically divert 11 cents of that dollar into the city’s general fund due to the utility tax. This creates an almost perverse incentive for tax-hungry politicians to raise utilities rates as high as possible so as to inject more dollars into the general fund which councilmembers can spend any way they please,” Powell added.

“The Council can eliminate its conflict of interest and ease the burden on hard-pressed Sacramento residents and businesses quite easily: by returning to the Department of Utilities the $10 million in higher utility taxes that the utility rate hikes would generate each year, preferably with instructions to rebate 100% of the funds to utility customers,” Powell said.

“Several councilmembers have made public statements that major utility rate hikes are needed to upgrade and maintain our water, sewer and storm drainage systems. If that is, in fact, their sole and honest motivation for supporting major rate hikes, they can prove it quite easily by returning the nearly $10 million in higher utility taxes that the rate hikes will generate each year back to the Department of Utilities, instead of snatching it from the pockets of hard-pressed ratepayers for purposes entirely unrelated to utilities service,” Powell concluded.

Just how hard-pressed are Sacramento residents? Based on the most recently available data from the U.S. Census, EOS has computed that the mean household income in Sacramento has declined a stunning 12% from 2007 thru 2013.

The City Council will meet tomorrow evening, Tuesday, March 22nd, at 6:00 p.m. at City Hall, 915 I Street, Sacramento, CA 95814. Make your voice heard by phoning, e-mailing or coming down to City Hall tomorrow evening to make your voice heard on these important issues. Join us in urging the City Council to “GIVE BACK THE TAX!”

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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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Sacramento Voters Were Right to Reject Streetcar Tax

Streetcar ballot measure was flawed

Voters were not ‘naysayers,’ but exercising their rights

 BY JEAN FLEURY

The Big Pink Ballot Box

The Big Pink Ballot BoxSitting on the counter at Sacramento City Hall is a pink ballot box for the Measure B election.  Why is there a ballot box on the counter for a vote by mail election?  According to a clerk at the Sacramento County Registrar of Voters office, the box is at City Hall for the convenience of voters who don’t have stamps.  Really, I’m not making this up.  I inquired, “Who is in charge of the box?”  The clerk tells me that the City is in charge of the box and calls for it to be emptied when it’s full.  This concerns me a tad.

I stopped by City Hall to check on ‘the box’, sure enough, there it sits on the counter at the security station.  I asked the security guard how often it is emptied.  At first he said, ‘every day’, and then when I continued to stare at him he admitted he doesn’t know if it’s ever been emptied.  I asked him if I could pick it up to see if it felt full… my guess is there’s about ten ballots in the box.  I asked what happens to the box at night; he said he thinks someone takes it into their office.

I don’t know about you but this concerns me.  Who is in charge of this ballot box for an election that will grace the City of Sacramento with $30 Million in taxpayer dollars?  The City.  Why?  When I asked the clerk at the Registrar of Voters why the box is under the care of the city she said I needed to talk to the Assistant Registrar.  I left a message.

Sacramento Soapbox! Trolley Folly

Jeanie Keltner hosts the longest running progressive show in Sacramento.

Today’s Guest Craig Powell and Maggie O’Meara talk about the Sacramento Streetcar Project

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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Eye on Sacramento Releases Report on the Sacramento Streetcar Project

MEDIA RELEASE

 For Immediate Release

Date/Time: January 14, 2015; 1:30 p.m.

Contact: Craig Powell, President, Eye on Sacramento

Phone: (916) 718-3030

E-mail: craig@eyeonsacramento.org

 

Eye on Sacramento Releases Report on the Sacramento Streetcar Project

Eye on Sacramento (EOS), a local civic watchdog and policy advisory group, announced today the release of a comprehensive Report on the Sacramento Streetcar Project, along with a 3-page Executive Summary of the Report.

EOS President Craig Powell said, “Currently, little is known about critical details of the streetcar project, including projected revenues and expenses, future operating deficits, impacts of such deficits on the City of Sacramento’s general fund, bond financing costs, governance of the system, traffic impacts on city streets and freeway ramps, construction impacts on merchants, the adequacy of contingency reserves, the consequences of cost overruns, the experiences of other cities which have recently installed streetcars, and, most important to many, whether streetcars would likely have the catalytic effect on local development that supporters of the project claim Our report is designed to help fill this vacuum of public information.

“We are also mindful that almost 1500 owners of property in Downtown and Midtown will be receiving advisory ballots in the next few days on whether they wish to impose a special tax levy on themselves to help finance some of the project’s $150 million total estimated cost. Yesterday, EOS mailed to each of these owners copies of the attached Executive Summary, together with links to our 42-page Report on EOS’s web site – www.eyeonsacramento.org – to help them arrive at a more informed decision on the proposed tax that is best for them.

“Our Report also seeks to correct some misinformation that has been disseminated in the media about the duration of the proposed special tax levy on Downtown/Midtown property owners, and the total tax assessment that such owners can expect to pay if the levy is approved. We also address some matters of particular concern to such property owners, such as the absence of protective provisions that could reduce owner risks, the fairness of how the tax burden is spread among owners and concerns over a special discounted rate for Arena developers that we estimate could save them approximately $10,000,000 in tax levies, at the expense of all other owners in the proposed financing district.”

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view/download … The Sacramento Streetcar Project … An Eye On Sacramento Report

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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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