(Originally published in the Alameda Sun April 12, 2013)
Remember the scene in The Godfather where Don Corleone calls upon Bonasera the undertaker to perform the service he promised? “I want you to use all your powers, and all your skills,” the Don says as he stares at the bullet-riddled body of his son Santino. “I don’t want his mother to see him this way.”
It is not hard to imagine similar conversations taking place at Alameda City Hall as staff puts together a budget for the next two fiscal years. Last June, staff projected general fund deficits of $2.3 million in fiscal year 2013-14 and $4.3 million in FY 2014-15. If those projections hold true, the City’s reserve fund will drop below the Council-mandated floor of 20% of budgeted spending.
Public safety costs dominate the general fund budget. Based on last June’s staff report, spending for police and fire is expected to account for 75% of the total $67,104,514 in general fund operating expenditures in FY 2013-14. Personnel costs – wages and benefits – represent 82% and 84%, respectively, of the police and fire budgets.
In any ordinary business facing a budgetary shortfall, the ax would fall on major expense items like these. But not the City. Instead, Council, at staff’s recommendation, saw fit before and after the November election to lock in even higher public safety personnel costs. It’s as if the Don had pumped a few more slugs into Sonny before he let Bonasera begin his work.
First, Council accepted a federal grant requiring the City to keep fire department staffing at its current level – i.e., no lay-offs — through September 2014. Then, it approved four-year contracts with the police and fire unions that will boost the deficit by $685,000 in the next two years (and $1.391 million in the next four). At the same time, it okayed adding a 21st fire captain costing another $218,000 per year.
These actions increased the share of the general fund devoted to police and fire and walled off public safety personnel from any cost-cutting measures. As a result, if cuts are made, they will have to come from other City departments. And since these departments collectively represent only 25% of general fund operating expenditures, making up the shortfall from them alone would require draconian reductions to their budgets. Even eliminating entire functions like human resources wouldn’t do it. And with drastic cuts in spending come dramatic declines in services.
But wait a minute. Isn’t there another way to get the books to balance without offending the public safety unions or inconveniencing the public? Cue Bonasera.
Staff already has shown how “public/private partnerships” can be used to move costs off the City’s books by getting a non-profit group to provide, at its expense, services formerly funded by the City. Last year it was the animal shelter. Can the library, parks, or swimming pools be far behind?
This year’s buzzword is likely to be “100 per cent cost recovery,” which involves charging fees for services the City used to provide for no or low charge. The Recreation and Parks Department recently adopted a new fee schedule that will bring more cash into the City’s coffers. Don’t be surprised to see other City departments follow suit. Want to get a hard copy of an agenda from the City Clerk? Have your credit card ready.
Staff also has mastered the municipal version of three-card Monte. One trick is to pay staff salaries and benefits out of special funds rather than the general fund. For FY 2012-13, the City managed to lower budgeted general fund expenses by “re-allocating” a portion of the City Manager’s compensation to the base reuse fund and charging the athletic trust fund for three Rec/Park department employees.
An even more brazen tactic is simply to transfer money from other City accounts into the general fund. For years, the City siphoned off $1 million a year for the general fund from the Golf Enterprise Fund. More recently, the City injected cash into the general fund by “re-designating” $2.6 million earmarked for discretionary capital improvements and taking a $1 million “advance” from Alameda Municipal Power.
But let’s not give staff too many ideas. They’re perfectly capable of coming up with them on their own. And if they can’t find a solution, they can always follow Michael Corleone and move operations to Las Vegas.