For anyone planning to attend Tuesday’s Council meeting at which City Manager John Russo will accept congratulations on the FY 2013-14 and FY 2014-15 budget, here’s a short lexicon that might prevent confusion:
- “We’re presenting a balanced budget.”
To an ordinary business owner or householder, a “balanced budget” refers to a budget in which revenues are sufficient to pay expenses. This is not what staff means. Instead, it will be necessary to draw $645,000 from reserves to cover budgeted expenses for FY 2013-14 and $1,793,000 from reserves to cover budget expenses for FY 2014-15. But as long as the general fund balance is expected to be no lower at the end of FY 2014-15 than it was at the end of FY 2012-13, the budgets for the next two fiscal years can be labelled “balanced” under staff’s definition of that term.
- “We’ve asked each department to cut its budget by 1 to 5 per cent.”
Pay close attention to the verb. This ain’t the Bible: just because you ask doesn’t mean you’re going to receive. In fact, the FY 2013-14 budget is higher than the FY 2012-13 budget for the city attorney, finance, central services and public works departments – but only by about $100,000 in each case. The real increases take place – can you guess? – in public safety:
- The FY 2013-14 budget for fire is $960,561 (4.12%) higher than the FY 2012-13 budget. (The FY 2014-15 budget is $2,116,561 – 9.07% – higher than the FY 2012-13 budget)
- The FY 2013-14 budget for police is $2,397,606 (9.51%) higher than the FY 2012-13 budget. (The FY 2014-15 budget is $3,537,606 – 14.04% – higher than the FY 2012-13 budget).
At first blush, it seems as if the fire and police departments must have thumbed their noses at staff’s requests for 1-to-5 per cent budget cuts. But we weren’t in the room. More likely, what the statement about departmental budget cuts really means, as applied to public safety, is: We were able to hold the increases in the fire and police budgets to only 4.12% and 9.51%, respectively, in FY 2013-14.
It’s the same usage the politicians employ in Washington, where the statement, “My health care plan cuts costs,” really means, “My health care plan slows down the rate of increase in costs from what it otherwise would been.” If Congresswoman Lee ever decides to add staff in her communications office, let her look no further than Alameda City Hall.
- About $275,000 “would be saved” by not paying overtime in the fire department and an additional $456,000 “would be saved” at the police department by not filling seven vacant positions.
This statement, reported in today’s Alameda Journal, is attributed to assistant city manager Liz Warmerdam, the administration’s designated apologist on budget issues. Undoubtedly, the intent is to rebut the naysayers who, whenever they can, point out the amount of money the City spends on fire and police. (See preceding bullet point).
But, again, the verb is crucial. According to the May 28 staff presentation, the “savings” to which Warmerdam refers already occurred in the current fiscal year ending June 30, 2013. Indeed, they are part of the infamous “carryover of projected budget savings from FY 2012-13” that staff says will balance the budget for the next two years. For these “savings” to count as expense reductions for the FY 2013-14 and FY 2014-15 budgets, they must be expected to recur in the next two years. Otherwise, they fall into the category of “limited use of one-time funds” that staff says it so assiduously avoids.
The staff presentation provides no details about the fire department’s overtime budget. But it does show that the police department had 120 “authorized positions” in FY 2012-13 – and that it is budgeted to have 121.5 “proposed positions” in FY 2013-14 and FY 2014-15. (The other half of the cop – presumably the new emergency services director — is included in the fire department budget). So what happened to the “seven vacant positions”? Are they going to be filled next year after all? If so, what once was saved will now be lost.
All that being said, Mr. Russo will be telling the truth when he proclaims, as he surely will, that:
- “For the next two years, we’ll exceed the goal of maintaining reserves equal to 20% of expenditures and transfers.”
That, indeed, is what the numbers show. Of course, as City Treasurer Kevin Kennedy pointed out at the May 28 budget workshop, the roughly $20 million in general fund reserves would pay for about 25% of the City’s unfunded liabilities for other post-employment (i.e., retirement) benefits. It’s also about 20% of the amount of the City’s unfunded liabilities for pensions. And it’s less than 10% of the estimated cost of tackling deferred maintenance for such things as streets and sidewalks. But, as Mr. Russo is wont to say, those are problems for another day.
At least on Tuesday, let staff exit to the Hallelujah Chorus. Just don’t berate the cynics too cruelly if they’re hearing the crashing chords of “Don’t Get Fooled Again” instead.
FY 2013-14 & FY 2014-15 budget summary: 2013-06-11 FY 2012-3 thru FY 2014-15 budget summary
May 28, 2013 staff presentation: 2013-05-28 Power Point – REVISED