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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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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Balanced in Name Only … Small budget surplus is no cause to break out the champagne

Published on Sunday, 01 June 2014

Balanced in Name Only

Small budget surplus is no cause to break out the champagne

By Craig Powell

There is only a tiny handful of policy wonks who actually look forward to the release each year of the city manager’s proposed city budget for the fiscal year that starts on July 1. I’m one of them. City budget manager Leyne Milstein drove that point home in my interview of her last month, joking that I was one of only three people who have actually read the document that only a wonk could endure, much less enjoy.

But endure it I did and, knowing that most of you don’t spend your nights curled up with the city budget, I’m offering you the CliffsNotes version of it this month.

The good news is that after five years of battling chronic budget deficits, city manager John Shirey is proposing a $383 million general-fund budget that actually ekes out a small $2 million budget surplus. (The total city budget, which includes fee-collecting “enterprise funds” like city utilities, the convention center and marina, is actually $872 million, but most attention is paid to the city’s general-fund budget, which funds basic city services such as police, fire, parks, etc.) That means no cuts next year in services or city employees.

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Uncertain Future … Before upgrading the community center theater, homework’s Needed

Published on Saturday, 03 May 2014 20:05

Uncertain Future

Before upgrading the community center theater, homework’s Needed

by Craig Powell

One thing my experience with city government in Sacramento has taught me is that city policy is too often driven by an often unhealthy deference to conventional wisdom. The great pitfall of herd mentality governance is that key assumptions go both unquestioned and unexamined. A proposal to renovate the Sacramento Community Center Theater at a cost of as much as $53 million is chockablock with unexamined questions.

For example, why is the city council poised to spend tens of millions of dollars renovating a civic asset like the theater when it has received no briefings on the asset’s current financial performance? Is the theater a moneymaker or a money loser? If it’s losing money, how bad are the losses? Since the council hasn’t been briefed on its performance, it hasn’t a clue.

Eye on Sacramento (the watchdog group that I head) issued a report in September on the combined financial performance of the three city assets that make up the “convention center fund” assets: the Convention Center, Memorial Auditorium and the theater. EOS reported that the three assets have been losing a whopping $12 million annually for years, but EOS did not break out the operating losses of the theater. City staff should.

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Summary of Eye on Sacramento’s Transparency and Budgetary Reforms

June 12, 2012

Transparency Reform Proposals

EOS Reform #1Post the city’s organizational chart on-line.  The chart should list every city job position and the name and contact information of every city employee other than lower level employees whose jobs involve no interaction with the public.  Without such information, the public frequently has no clue whom to contact in the city hierarchy when they have a problem.

EOS Reform #2:  Post the city’s check book and other payments on-line in Excel format so that the public can see for themselves how every city dollar (general fund and enterprise funds) is being spent.  City activists and enterprising local media will pour over these records and seek out explanations for payments that strike them as potentially inappropriate.  When city check writers know that every check they write and payment they authorize will be scrutinized by the public, they will be on their best behavior.

EOS Reform #3:  Post all credit card charges and itemized travel expenditures of city council members and city staff on-line, which will ensure that public eye balls are on this most commonly misused and abused form of spending by city officials.

EOS Reform #4: Post the expenditures that city council members make out of their individual $55,000 annual discretionary accounts on the council member’s city web page.  These funds are designed to give council members some flexibility in funding local needs without going through the formal city budget process.  There is a public perception that such accounts are being misused by some council members as slush funds to advance members’ political interests.  By posting such expenditures on a council member’s web page for all to see, the funds will be less likely to be spent in self-aggrandizing ways (i.e. golf tournaments, electronic toys).

EOS Reform #5: Post all campaign contributions to a council member on that council member’s city web page so that the public can see at a glance who has invested money in each of our elected officials.  Currently such information is only available through a portal on the city clerk’s web site which is difficult to find and cumbersome to navigate.

EOS Reform #6: Create a Twitter feed for real time public comments on the action at live city council meetings and place the feed on the city council’s web page along side streaming video of council meetings, making such comments part of the public record of council meetings.  A live Twitter feed for council meetings would allow members of the public to share comments, interact with one another and raise public engagement in the policy-making process to a new level.

EOS Reform #7:  Seek city council approval for placement on the November 2012 ballot of an initiative creating an independent city redistricting commission.   This is a proposal being jointly developed by Eye on Sacramento and Empower Sacramento, a coalition of ethnic groups and leaders organized in the aftermath of the council’s redistricting decision.  Removing council members’ power to draw their own council district lines and shifting that power to an independent redistricting commission will protect the public interest from being subordinated to the narrow and often self-serving political interests of incumbent politicians.

EOS Reform #8:  Adopt an ordinance that prohibits the approval of any major contract and any labor contract until at least 14 days after its terms have been fully disclosed to the public via media release and prominently posted on the city’s web site, coupled with city staff’s good faith projections of both the short-term and long-term total costs to the city of such contract, as well as specific disclosures of the assumptions that underlie staff’s cost projections.  These disclosures will give the media and the public the time and opportunity to scrutinize and comment on the fairness of labor contracts to the city and its taxpayers.  With labor costs now constituting close to 80% of the city’s general fund budget, public scrutiny of proposed pacts is vital to democratic governance in the city.

EOS Reform #9: Require city employees who testify at city council hearings to be sworn.  Regular and close council observers have witnessed occasions, albeit rare, in which city staff making statements or presentations to council have been less than fully candid in their remarks, sometimes spinning or shading the facts or professing ignorance of embarrassing or uncomfortable matters, typically to avoid upsetting one or more council members.  To assure that the council and the public have the benefit of candid, independent and impartial information and advice from staff, city staff statements to council should be sworn under penalty of perjury to be the whole and complete truth.

Budgetary Reform Proposal

EOS Reform #10:  Adopt an ordinance that prohibits the city from entering into multi-year labor agreements.  In recent years, the city council has been unable to effectively manage its labor costs due to the existence of multi-year labor agreements.  A city bound by multi-year labor agreements can only close deficits by threatening unions with lay-offs to secure needed labor cost concessions.  The practice has led to the decimation of city services in department after department.  Barring multi-year labor pacts will preserve the council’s vital fiscal flexibility to reduce labor costs through negotiation and, if need be, mediation and arbitration.  The city should end the practice of savaging city service levels as a response to union intransigence.  A less preferable, but acceptable alternative, would be to limit the term of labor pacts to not more than two years.

D1276

 

INITIATIVES/PROPOSALS OF EYE ON SACRAMENTO

May 2012

Major Transparency Reforms

After examining transparency policies in other California communities and assessing Sacramento’s needs, Eye on Sacramento has compiled a list of ten proposals to make city government significantly more transparent to its citizens. Two of the ten proposals, however, stand out in terms of their importance to the city and the need for prompt City Council adoption:

1. Sunshine Rule on Major City Contracts. We propose that the City Council amend its Council Rules to require the full disclosure of all proposed major contracts at least 14 days before the Council takes action on such contracts. Major contracts would include all contracts with a value of over $5 million, including all labor pacts.

In addition, the Sunshine Rule would require that city staff publicly, concurrently release a complete analysis of the financial impact of every proposed major contract on city finances, as well as a disclosure of all material staff assumptions underlying its projections.

2. Ballot Initiative Creating an Independent Redistricting Proposal. We propose that the City Council refer to the November 2012 ballot an initiative to create an independent redistricting commission to draw future council district lines. Working in collaboration with other community groups, Eye on Sacramento is preparing a proposed charter amendment initiative that would create a redistricting commission whose members would be chosen by judges on the Sacramento Superior Court, a model based on the successful experience of the City of San Diego over the past 12 years. Extensive public hearings and outreach by the redistricting commission would also be mandated.

Major Budgetary Reforms

Given the complexity of the city budget and resource limitations, Eye on Sacramento has elected to focus its policy efforts on three initiatives for the balance of 2012:

3. Council Rule Prohibiting Multi-Year Labor Agreements (or “Fiscal Out”). In recent years, the City Council has been unable to manage its labor costs due to the existence of multi-year labor agreements. When faced with a budget deficit, the city can only threaten bargaining unions with lay-offs to obtain needed labor cost concessions. This practice has led to the decimation of city services in department after department. By limiting labor pacts to no more than one year, the City Council will preserve the necessary fiscal flexibility to reduce labor costs through negotiation and, if need be, mediation and would no long be compelled to savage city service levels in reaction to union intransigence. Alternatively, all labor pacts should include a “Fiscal Out” granting the city the right to terminate all labor pacts if the Council declares, in its sole and absolute discretion, a fiscal emergency.

4. Launch Task Force to Save City Pools. In next year’s budget, virtually all city pools will face closure absent major budgetary reforms. Eye on Sacramento is launching a six-month project to examine the operations and costs of city pools. It will be appointing a task force comprised of community leaders, pool industry representatives and experts, private swim club executives and parks and recreation department managers to comprehensively study ways to reduce the costs of operating city pools, to explore alternative ways of managing and maintaining city pools and to identify additional resources to support city pool operations.

5. Community Study to Restore City Parks. City parks have borne the brunt of city budget cutbacks and staff layoffs. Many city parks are dependent on volunteers for basic maintenance. The current “triage” approach to city parks is not sustainable and long-term solutions must be identified. Eye on Sacramento, in conjunction with park volunteer groups, community leaders and city staff, will launch a “community study” of alternative solutions, assessing tax options, outsourcing options and the launch of park conservancies.

General Fund Budget Analysis; “Open” Labor Pacts

In addition to pursuing the above policy initiatives, Eye on Sacramento, in discharging its “watchdog” mission, will be offering critiques of various aspects of the city manager’s proposed 2012/2013 general fund budget during budget hearings The central theme of our critiques will be to identify and advocate for long-term, multi-year budget reforms that will help arrest the city’s structural deficit and provide opportunities for the restoration of badly frayed core city services.

The city has two labor pacts expiring this year, including its pact with the city’s largest union, Local 39. The city should use these expiring pacts as opportunities to permanently realign its labor costs to conform to budgetary realities. We applaud the Library Authority for its recent action in submitting a “last, best” contract offer to Local 39 to realign labor costs in the face of union opposition. Cost-saving opportunities in labor pact re-negotiations include:

(a) controlling future pension costs by creating a lower tier of pension benefits for new hires;

(b) eliminating pension spiking by shifting “pensionable pay” from the final year of employment to the final three years of employment; and

(c) requiring employees to contribute to reserves to cover the currently unfunded cost of retiree health care costs (now over $380 million).

EOS 2012 Policy Agenda pdf

Find Out More About Proposed Utility Rate Hikes

Find Out More About Proposed Utility Rate Hikes