Originally published in the Alameda Sun May 23, 2013
City officials never have relished public participation in the budget-making process. Mayor Marie Gilmore often mocks the lack of attendance at budget workshops – this year, she didn’t even show up herself – and those citizens who venture to speak get to hear City Manager John Russo denounce their comments as “fantasies” and “shibboleths.”
With this year’s budget, the politicians’ disdain has reached new levels. City officials calendared for May 28 a “special” meeting at which Council will be asked to pass a budget covering the next two fiscal years. The timing gives the public all of seven days – three of them falling on the Memorial Day weekend – to review a lengthy staff report. Think fast, sports fans.
But that isn’t all. This year, one citizen who actually knows something about business plans asked the City to provide a copy of the budget in an Excel spreadsheet format suitable for analysis. The Sunshine Ordinance explicitly supports this request. But City Attorney Janet Kern refused. Releasing the budget in this format, she insisted, “would jeopardize or compromise the security or integrity of the original record or of any proprietary software in which it is maintained.”
Say what? We’re talking about an Excel spreadsheet!
One wonders whether Kern’s decision – if indeed it was hers – was influenced by the identity of the requester, who was one of the critical voices at the budget workshop. So get out your calculator, Joe.
The temptation to conclude that City officials regard public scrutiny on financial matters as an annoyance is unavoidable. Instead, they prefer the process employed to get the public safety union contracts passed: special meeting, self-congratulatory staff presentation, inadequately informed public. Through this route contracts adding $2.6 million to the deficit over four years sailed under the radar – and through the Council.
But let’s be charitable. Maybe the City Manager is confident that Alamedans are such quick studies that they’ll be able to spot any issues on the fly. If so, he probably won’t mind if we flag a few items from the April 18 staff presentation – the only one available before the Sun’s deadline – about which we’d like to hear more from City officials.
At the outset, staff estimated that the general fund will incur deficits of $2.7 million in FY 2013-14 and $4.4 million in FY 2014-15. The draft budget is supposed to “close the gap.” But how?
Start with expenses. The draft budget leaves the police and fire departments virtually untouched. According to staff, police and fire account for $51 million – 75% – of general fund operating expenses this year. Yet the draft budget cuts their combined spending by only $180,000 in the next two years.
By agreeing to the SAFER grant and the public safety union contracts, City officials made sure that police and fire wages and benefits escaped the budget scalpel. But there must be at least few excess branches hiding in the $51 million forest. Maybe outgoing police chief Mike Noonan and former IAFF local 689 head and current fire chief Mike O’Orazi could be asked why they couldn’t find another dime in savings without compromising public safety.
With police and fire protected, the ax falls on other City services. For example, the draft budget requires the recreation and park department to reduce staffing and maintenance to save $112,000. (This is the third year in a row Rec/Park has taken a hit). Likewise, the City will slash general fund contributions for annual maintenance and capital projects by $460,000 next year and $1.491 million the following year. Maybe rookie recreation and parks director Amy Wooldridge and veteran public works director Matt Naclario could be called upon to share their notes about how to get by with less.
Then there’s revenues. The politicians talk a lot about property and sales taxes, but in fact the City relies heavily on revenue sources other than taxes to cover expenses. The largest benefactor is Alameda Municipal Power, which has been subsidizing the general fund by $2.8 million per year even though it is not legally obligated to do so. AMP also pays another $2 million a year to the City in other fees and charges. Last year, AMP “advanced” $1 million due in future years for these exactions, and the draft budget counts on even larger prepayments in the next two years.
Unfortunately, AMP may not be flush with dough forever. Indeed, AMP staff is projecting operating losses beginning this year. Maybe AMP general manager Girish Balachandran can be invited to comment on how long AMP can afford to keep both itself and the general fund afloat.
We’ll leave the last item for Russo personally. When he proclaims that the budget is “balanced” for the next two years, look carefully at the line item called, “Use of Carryover of Projected Budget Savings FY 2012-13.” Without this item, the FY 2014-15 budget would show a $1 million deficit. With it, the deficit appears to go away.
But where is this money coming from? From the general fund reserves. Here’s how it works: For FY 2012-13, the City projected a $1.2 million deficit, which would have meant drawing down reserves by that amount. But no drawdown turned out to be necessary. Which means – hang onto your hat – that $1.2 million can be “carried over” and “used” to cover shortfalls in future years.
Clever indeed. But the fact remains: whether the $1.2 million drawdown occurs in FY 2012-13 or in FY 2014-15, it’s still a drawdown and it still reduces the reserve balance by $1.2 million. The ordinary householder thinks a “balanced” budget means she expects to make enough money to cover her expenses. Little did she know that she could still call a budget “balanced” even though she will have to dip into her savings to pay her bills. But John Russo is no ordinary householder. We eagerly await his latest lesson in municipal economics.
April 18, 2013 staff PowerPoint presentation:2013-04-18 Power Point for budget workshop
April 18, 2013 staff 5-year forecast: 2013-04-18 5-year forecast