Blogging Bayport Alameda

February 6, 2009

Oh what a circus

Filed under: Alameda, City Council, School — Tags: , , — Lauren Do @ 7:00 am

This weekend you can watch the three ring affair on both Saturday and Sunday, although I imagine that the event on Sunday will be vastly more entertaining.   Sunday, Circus for Arts in Schools will be holding two shows at the Kofman Auditorium to help raise funds for the obvious.  Although, personally, I find clowns to be a little…frightening.   Chalk it up to enjoying Stephen King.   Or maybe it was a result of being traumatized early on in life when I caught the scene from Poltergeist in a video store and slept for years behind a wall of pillows.  Whatever it was, I’m sure the clowns from Circus for Arts in Schools are not like Pennywise or the clown under the bed, but still…

A much safer, but potentially, no less frightening event is happening on Saturday all. day. long.  The City is holding a special City Council meeting to talk about the financial state of the City and it starts bright and early at 8:30 a.m.   I really hope they are recording this because heck if I’m going to be able to drag myself to the library that early and sit through a marathon session.  

Here are the slides from Tuesday’s City Council meeting presented by Treasurer Kevin Kennedy which talks about the general well-being of the City’s finances.   Some takeaways from that meeting include the information that the City has a cash reserve(they call it a “fund balance”) of a little more than $19.6 million, which is 21% of the general fund.    By the way, those financials have been independently audited by Maze and Associates according to the staff report.   And considering how…um…difficult the financial world has been lately, the City getting a positive rate of return on our investments is definitely a good thing.

Amazingly enough, even though all the details are there about what the City is spending money on, people still manage to spin the facts to suit their own agendas.  For example, here is what Bankruptcy-crier, Action Alameda/Save Our City Alameda spokeperson is now saying:

…According to a presentation being shopped around to various groups in Alameda by the City Treasurer, the General Administration category (which includes the City Manager’s and City Attorney’s offices) ranks third in City of Alameda General fund spending behind Public Works and Public Safety (Police and Fire). Why are Alameda residents being forced to suffer service cuts, yet there is no examination of further cuts, including headcount, in General Administration?…

See, when you don’t put any context or actual numbers behind anything it seems really shocking.  This is a common practice, such as saying thing like:  Alameda is the fourth most dense city in Alameda County or thanking City Staff for being the fourth highest provider of traffic to your website when there are only four categories.  It’s meaningless, but a good way to present the facts without really having to tell the facts. In actuality if you look at the general fund appropriations drawn from the slide below from the “presentation being shopped around to various groups in Alameda by the City Treasuer” here is how it gets shuffled:

genfund

  1. Police – 32%
  2. Fire – 29%
  3. Public Works – 11%
  4. General Administration – 9%
  5. Pub Safety 1079/1082 & OPEB – 6%

Yeah, it seems a bit strange to lump the two highest departments into one category, doesn’t it?  Considering both those two together account for more than 50% of the budget and if you add the post retirement benefits (Pub Safety 1079/1082 & OPEB) it jumps to nearly two-thirds of the general fund budget.   And we are worried about the general administration category at 9% of the budget?   Really?   The amount of money we have budgeted for paying for pensions has more money attributed to it than Rec & Parks and we should be worried about having people (City Managers and City Attorneys) to run the City business in our council-manager form of government?   Seriously?

While I think it is important to continually shine a light on what we, as a City, are spending our money on and how the future of the City’s finances look, fixating on whether or not we should have only one City Manager as opposed to having a City Manager with an assistant and a deputy is a small drop in the bucket when it comes to things that the City has deferred payment or future liabilities.    Now is the time for the City to start playing hardball when it comes to negotiating contracts, etc…  While we are not going bankrupt or even on the verge of it, we need to — stealing from the presentation slides — continue to be:

…proactive in identifying and addressing areas of concern.

Areas of concern are not how many City Managers and City Attorneys there are, but issues such as how we can increase our revenue in order to not have to continue to cut away at services for Alamedans.

About these ads

11 Comments

  1. Hi Lauren-
    Actually, I didn’t present this Tuesday at the Council meeting. The only groups I’ve “shopped” this to are Rotary (1/20), Kiwanis (1/21), and the Chamber’s Gov’t Relations Committee (2/5). The goal of the presentation is to explain what the FSC is doing and why people should take an interest. It also highlights a couple of the big issues we’ve been focusing on. Based on the response from people we’ve presented to, we’re considering doing a commuinity-wide presentation too. Not sure how much of an appetite the public has for one more financial presentation, but we’re looking into how/when we could do that.

    Comment by Kevin Kennedy — February 6, 2009 @ 11:42 am

  2. http://tinylink.com/?XX2NRsAFU2

    Comment by AlamedaNayTiff — February 6, 2009 @ 8:26 pm

  3. The meeting will go up on the city’s web sometime next week.

    I plan on trying to get back to the mtg later, it is informative.

    Some members of CC are asking good questions, others want specific comments repeated for spin appeal, but aren’t asking the obvious follow-up questions, perhaps they don’t want the answers spoken.

    It’s clear we are trying to ‘balance the budget”, but even the mayor doesn’t like the band-aid approach, and Matarrese pointed out one method we are using is by not paying for things we have to pay for, and those chickens will come back for us to deal with. We are experiencing real deficits now, and later this afternoon discussions will include how to deal with OPEBs, which are hugely significant, but not the only trouble in the house. I don’t want to hear that the city wants to “contract out” more services because they can’t properly manage and negotiate city employees and their contracts, but why else would we have to ‘contract out’?

    I am proud of the fact that the city is holding meetings like this – very much in the open, and giving a better opportunity for concerned citizens to learn more.

    I look forward to K. Kennedy’s report, and hope it is openly forthright without ‘spin’.

    Comment by David Kirwin — February 7, 2009 @ 11:56 am

  4. OPEBs – Other Post Employment Benefits

    For us they are real liabilities that we have to begin to acknowledge in our budget.

    Just like if you know you have expenses coming up – you have to not only have a viable plan to pay for them, -you also have to follow the plan.

    Comment by David Kirwin — February 7, 2009 @ 12:00 pm

  5. A big item not present in the list of expenditures is what areas of the City budget bring in money, and how much of the expenditure on them is offset by revenues they generate. If you were to look at the full picture of NET cost, you would have both the revenue and the expense and rank the areas in order of net expenditure. If you were to get REALLY sophisticated about budget analysis you could also look at the expenditure vis-a-vis not only revenues generated, but cost avoidance, as well. For example, does the presence of an additional attorney working on settling claims against the City or preparing suits to recoup damages avoid or lessen expenditures? How much is that position worth to us?

    Is an employee writing effective grant proposals that bring Federal or State dollars in to offset City costs or provide a service to the citizens that the City would not otherwise provide bringing in more than his/her salary and benefits outlay?

    Budget analysis is not simple and the people making the decisions on where to cut have to be looking a the whole picture, not just one side of the equasion. When citizens evaluate our elected official’s performance in adopting a city budget, we need to weigh whether or not they first made a decision on what the cities core values should be ( e.g.: public protection? services for vulnerable parts of the community such as the elderly and children? building more reserve?) and if they adhered to those values in making their choices.

    It isn’t helpful to make claims about the city’s budget based on an incomplete or skewed analysis. More homework needs to be done, here.

    Comment by Kate Quick — February 7, 2009 @ 8:22 pm

  6. Kate –I agree with you, – That was the point of the “seminar” It is obvious that CC needs to have a better understanding of municipal accounting, and how it is being done in the city to be able to make sound policy. It is important for citizens to have that information as well to be able to make reasonable statements about the actions CC members take regarding the budget and fiscal policy direction. Much of those decisions are clearly judgmental. Our city, like our state obviously cannot fulfill all ideas of what you called, “our core values” – such ideas lead to the kind of over-spending as what lead to the state’s, and national terrible fiscal situation.

    And one other opinion I feel is important to express about Kate’s comment about “…an employee writing effective grant proposals that bring Federal or State dollars in to offset City costs or provide a service to the citizens that the City would not otherwise provide bringing in more than his/her salary and benefits outlay”

    My response to that is that even if an amount of spending for work done will bring in more $ than the amount of cost to the city for that work, it is still a cost to the city and the “return” may be less vital than the city’s original $ outlay. For example – Spending hundreds of thousands of dollars to study a project we can’t afford to build, (like the pedestrian estuary crossing), just because there are matching funds is not sound fiscal management. Or rushing to spend money on a Fernside Project that doesn’t cover the needs the project addresses -just to get matching funds from somewhere else and then to go thrrough several more projects to modify the results to get closer to what was perceived as the original need of the project, is hugely wasteful. Spending regional, state, and federal dollars to save local dimes is inappropriate, no matter how much we need to save those dimes. Complimentary to that concept is that any “properly managed” employee whose services do not save our city more than the total cost of that employee for getting those services done should not be in the employ of our city. Even if that “properly managed” employee does provide the savings for providing those services we have to evaluate the necessity of those services in the 1st place. We can’t “throw good money after bad”.

    We also need to be careful as a city where we try to take funds from in order to cover other needs– taking money away from public works or equipment replacement funds may have very adverse affects – esp if replacement costs are based on old purchase costs. (Unless we are going to replace city vehicles with bicycles.)

    One thing I hope we all can agree on is that we should never try to use “saving money” as an excuse to limit providing information to the public.
    Another of the big investments stated yesterday is a need for an upgrade for IT, because some machines are too old to accept 2003 application software. This is the type of issue that I hope the public can weigh in own and be heard – I’m not one of them, but there are a lot of people in the community with vast knowledge on how this could be efficiently corrected, and AUSD may have needs that could be jointly addressed for our community.

    One of the things that make me proud of Alameda is the City Web Center and the availability to view online most public meetings such as the one yesterday and which also provides links to so many city documents. I hope AUSD becomes as open as the city as far as putting meetings, agendas, and informational packets online.

    From yesterday’s presentation – Clearly the city is not in a rosy financial condition, AND the way the city has demonstrated our budget inflates the amount to available general funds available. For example; All of the $ the city is req’d to put aside for Worker’s Comp claims (>$2M) is included in our General Fund Balance, but obviously that money which is allocated to other needs should not be included in a General Fund Balance. CC wants to know how much money the city actually has, what is actually available for general needs, and where the rest is going. While we (most of the public & CC), are not accountants we get the picture that city shouldn’t “count the same money twice”. Either it is tied to a legally required set-aside, or its part of available gen fund – but can’t be both.)

    On some of the “Other Post Employment Benefit” liabilities we have been hearing so much about – City 1079 (hired prior to 1953) & 1082 (post ’53, pre-PERS) retirement plans (which I believe unlike PERS in this situation, includes health benefits) are the plans prior to the city (and it’s labor contracts) linking to PERS. There are only 40 total beneficiaries including retired workers and spouse still living with an average age of 85 under the 1079 & 1082 plans. I did not catch total liability of these plans alone, but combined with the PERS related OPEBs -the total liability was stated as $75.8M – our pay-as-we-go plan was stated as growing in annual cost at a rate of >12% while Gen Fund growing at 2%. The city is looking at interesting options for these two different classes of post retirement liabilities. While I did not follow the suggested concepts completely – (With so little accounting education my accounting sponge is small or inefficient, -my mind can only absorb so much at one sitting then the sponge is full).
    The basic idea is to avoid the current increase of costs each year by bonding a large amount ($25m) into a “savings account” from which the benefits will be paid. The city now has OPEB payments budgeted at $2.5M, but the actual costs are growing each year. Under the proposal, the city would maintain the same payment amount, which, if the city bonds at a debt cost of 4.5% return to investor, would provide just under .5M surplus each year going to a surplus account – (a “lockbox”) with a 2% interest return. At the end of a 30 yr term the “lockbox” would have over $27.75M, they suggest all OPEB could be financed from the original $25M bond “savings account”, and the city would have been able to maintain a steady, projectable $2.509M thru the year 2039 – the amount we are paying now. I was unclear as to whether this was just to cover 1079 & 1082 costs or if this was for total OPEB, in which case, how could a $25M bond cover a $75M liability?

    If anyone can add to this, regarding the overall budget or just the H&W obligations, it would better inform us all.

    Comment by David Kirwin — February 8, 2009 @ 10:29 am

  7. DR, Comment #6. Glad to see you went to the workshop and broadened your understanding of how municipal budgets work. Also that you see how much the City is posting to help those interested better understand its workings. I think the City is doing much better than past times in terms of transparency.

    There are few who “get” budget; it is complex and difficult. I worked at the County Auditor’s office for many years and feel I have only a rudimentary understanding of the whole picture. However, I am happy to see the City trying so hard to find creative solutions to work our way out of the liabilities problem, which is a plague to every municipal district.

    Comment by Kate Quick — February 8, 2009 @ 8:30 pm

  8. HOMES appreciates those who recognize the difference between ideology and being “on the take.” I can assure Mr. Jones that our group is definitely not receiving “big or small bucks” from any interest group, and that we have consistently been focused on achieving a truly mixed-use/ transit friendly/ environmentally friendly development at Alameda Point since 1993 when many of us started to consider the impact that development of this 1/3 of the Island would have on our community, especially after seeing the model for Measure A compliant housing built without much/any community involvement. Before the City had a developer, during APCP’s 5 years of dominion over the development rights, and now with SunCal, we have consistently supported the same principles.
    As with present Alameda, homes are a necessary ingredient to a vital community. But HOMES isn’t just about homes, and neither is the proposed SunCal Plan. Of the 1700 acre former NAS lands, the redevelopment area is 560 acres. Of that, 145 acres is for parks, trails, and sports fields, etc. and 47 acres is for civic space. That is 34% solely for public and open space.

    Yet no development can be built at Alameda Point without roads, utilities, water and other infrastructure costs – no VA hospital, no sports complex, no schools – nothing. A public trust would be lovely, if it were feasible. But the infrastructure costs alone require the help of a developer who can make it all economically feasible. Just look at the Presidio Trust – in spite of having a special dispensation from the government that enabled its founding, they are now working with private developers to make their project survive economically – and that will include building houses.

    I’m unclear on the weariness on hearing about “affordable” housing. Affordable housing is a legal requirement to guard against people of lower income being left out of their communities. Those who qualify for “affordable” housing are often service providers, teachers, police, those that work in our restaurants and retail shops. Second, it is important to every community to have a ladder of housing so that students, couples just starting out in life, older people who are retired and don’t have financial aide from others- all have options of housing types. It’s what makes a vibrant, healthy community. Just look at…well…Alameda. Alameda Point should be mirroring what we love so much about our City, not rejecting it.

    Helen Sause, HOMES President

    Comment by helen Sause — February 9, 2009 @ 3:56 pm

  9. Helen,
    I am quite sure you meant to post this on the other thread, but I will respond here. (And I already accidentally posted it on the other thread where perhaps this conversation can continue.)

    If HOMES is really concerned about affordable homes and you have been working on that for over 15 years – what have you learned about CLT’s – community land trusts that are geared for providing affordable housing as part of the mix? Why do you only suggest comparison to the SF Presidio? Is it because that is what someone else thought of when the idea of Land Trust was recently brought up?

    It sounds to me like you have never researched these CLT or other types of Land Trusts, yet there are hundreds of them to use as examples that help provide affordable homes, and they do not have to limited to 25% of the homes – it becomes a community decision what that percentage is – (25% is the legal minimum in Alameda) – not a developer decision to maximize their profit.

    It has always sounded to me like you are really focused on breaking the only voter controlled density-limiting Measure in Alameda. HOMES wanted to break it city-wide, then 8 years ago reduced their aim to just be within the city’s re-development zones throughout the city and Park and Webster St , (and Northern Waterfront?), as well as at the Point (or did that include all DOD land; NAS, FISC, CG & Navy housing areas…?)

    I think most Alamedans are comfortable in our community, slower paced as it may be. It seems that because you worked your career helping developers infill SF, and Leslie Little worked to build up San Jose that you two feel the same infill is appropriate for Alameda. You are unfailing in your lack of acknowledgment that Alamedans may simply not want the same things you want for us. We don’t want the un-mitigatable traffic, the hyper-rush to nowhere. We don’t want the different style of ‘big-city-life’ and therefore chose to live in Alameda. We are comfortable with giving up the benefits of ‘big-city-life’ to maintain the calmer style we currently enjoy.

    You also are unfailing in your lack of acknowledgment that Alameda is an island with no mass rapid traffic, yet you support the kind of development done where mass rapid transit is available.

    And just to be redundant because there has been no response yet;

    How can you support a plan for which have still not heard credible, believable answers to the very important questions relating to traffic, projected sea level rise, the pollution out there they want children to live on (I do feel residential should have a different level of safety than industrial). Nor have we heard real answers as to how it will be financed?

    Comment by David Kirwin — February 9, 2009 @ 4:48 pm

  10. Helen,

    Since you agree that a public land trust would be lovely if it was feasible, have you actually looked at the community land trust model used by dozens of communities for their affordable housing needs? Not a preservation trust, like the Presidio, but a community trust, like the ones listed in this link http://www.iceclt.org/clt/cltlist.html. Have you ever contemplated possible sources of funds for acquiring land on which to build such model? As a long time advocate of affordable housing, I can’t imagine you haven’t encountered or given at least some thought to the possibility. If so, what’s wrong or impossible with attempting it at the Point, or portion thereof? Thanks.

    Comment by AD — February 9, 2009 @ 5:05 pm

  11. I see that me and David both had the same question. More reason to answer it I suppose.

    Comment by AD — February 9, 2009 @ 5:07 pm


RSS feed for comments on this post.

Sorry, the comment form is closed at this time.

Theme: Silver is the New Black. Get a free blog at WordPress.com

Follow

Get every new post delivered to your Inbox.

Join 820 other followers