It is common to begin an important speech with a quote by a prominent person. So, not wanting to break with tradition, I diligently searched for famous quotes only to be disappointed. But former President George W. Bush brought a smile with this remark, “It’s clearly a budget, it has a lot of numbers in it.”
This binder contains the Salinas Budget and it does have a lot of numbers. Numbers which can seem dry and impersonal, until they speak to the possibility of telling a young swimmer that the swimming pool she and her friends helped raise money for might
close, or to the Traffic Commissioner and local neighborhood activist Mary Ann Worden
what it meant to have the timely arrival of a Salinas paramedic on the scene within 4 minutes so she could have two more months with her son before he ultimately died of his injuries, or to the 80 students conducting a poetry slam at Caesar Chavez library on a Friday night. The numbers are about people and services.
Each year the numbers get presented to the City Council for tough decisions, invariably the process has involved finding Band-Aids to put over minor cuts without making major structural cuts. During the past decade, Salinas has been like an intensive care unit patient resuscitated under Code Blue time and again. It would be nice to stop the leak in the budget for the pool, or keep the poetry slam going, but the reality is that the city as a patient is flat line in the budget and it is unlikely even EMT’s can get there in time to save the patient for yet another life. To use another metaphor, we cannot revisit the budget each year like the movie “Groundhog Day.” Certainly, we can’t let the patient die or pull the cover over our heads hoping Groundhog Day will come and go and the budget will survive another year. No, we have to understand the root causes of our budget this year’s “crisis” of finding $9 million in cuts by June – and how we can transform our government and its services to this community so that we don’t have to call Code Blue every year.
In addressing these critical issues, I want to focus on how we got here and what we have to do to provide what I should call the 4 $’s: $ervices, $afety, $ensible $pending, $mart Government.
You see dollar signs up there because all of these involve revenues and costs. EXAMPLES OF EACH???
To truly understand these revenues and costs in planning for the future of this great city, as I have been saying for months, we need to slow down and make hard decisions based not only on information from City Hall, but from our customers in the community, our experts in business and our partners in the community. Thus, the work of City Staff, the independent community study group, the congress of commissions, and the ongoing technical advisory committee on the planning and permitting services of the city should be thanked and commended for all of their hard work and their recommendations should be considered as part of a more comprehensive diagnostic process to transform our budget thinking.
I propose today that, with the backing of the City Council, that a Blue Ribbon Committee take another look at the budget and bring forward recommendations for City Council decisions, the tough ones that they are, by April.
Expanded community involvement is critical to make the process is transparent and guided with as much community input as possible. We need to make sure local residents are as concerned and familiar with the City budget as they are with their own household budget. An independent group of businesspeople has been looking closely at city finances in recent weeks. This group has worked long and hard and deserves the community's thanks. The Budget Congress asked all city commissioners who work with various city departments and community stakeholders on a monthly basis to provide suggestions. Neighborhood meetings will occur in the next few weeks to push the communication and feedback loop more deeply into the community to obtain feedback on the proposed cuts in coming weeks. The media has sought general public input as part of Saving Salinas.
This Blue Ribbon Group will include representatives of City Staff and individuals from the groups who have participated to date but will be expanded to include business expertise in organizational analysis. The task is simple -- to evaluate the City objectively and make sure these cuts and layoffs maintain the maximum amount of direct services to Salinas residents as the first priority in the final cuts.
The timeline for the budget now looks like this. The Blue Ribbon group will be announced no later than February 2nd. All input to that group should be completed by the third week of February. They will have a month to evaluate and make recommendations. The Finance Committee of the Council will receive its information in early April and the Council will make budget cuts in mid-April.
The commitment to the residents of this City to be transparent and make sure we measure three times and cut once rather than cut and re-measure is critical to the sustainability of Salinas. I think everybody in difficult times can appreciate the anxiety about one’s personal future can create. City employees are no different. To ensure adequate time for the process to take place, a general round of layoff notices to those departments will take place no later than the March 2 Council meeting. That list is not cast in stone and it is subject to change but a certain number of notifications must occur.
This just deals with today’s problem. Some have some said you have more problems coming next year. They are right, so do every city and the State. The truth of the matter is this City has not been, and is not currently, on a sustainable financial course.
There is a lot of talk about government reform these days. I support that. My focus is on Salinas. I recognize the issues at the State and Federal level with regard to fiscal sustainability. To me there is only one choice; Salinas must function as an independent City/State that will control its own destiny and outcomes. We will welcome any help we can get from the State or Washington but we are ultimately on our own.
A new consensus must be built around City services. I think the questions are straightforward:
1) What services do we want? 2) What level of those services do we want? 3) What do we think they are worth? 4) How are we going to pay for them?
I would like to talk a bit how we got to where we are today, what the budget situation is and where I believe we should go from here. The process of change at City Hall has been underway for some time.
A review of the City Manager's 2000-2001 Budget Message contains the seeds of the deficit we face today in terms of structural, financial, facilities, public safety and personnel issues that continue to plague the city to this day. Highlights then included: a strong economy and a State General Fund surplus yet the state continuing to take $3 million property tax annually (this began in 1992), staffing in every City department continues to be insufficient to provide the levels of services that residents request and deserve, the City had $402 to spend on each resident compared to Monterey’s $1,131.
Today that spread remains on a comparable basis with Monterey and other cities. Our available per capita spending per resident is $486 and Monterey's is $1,800. The Budget messages strike a consistent note year after year. A few quick examples: the use of reserves in 2003-2004 to absorb state pension plan contributions, an inability to address critical facility needs for the police, significant increases in cost demands from the County for its services.
In a few weeks, County Board of Supervisors Chair Simon Salinas and I will make a statement on the State of the City and County and how we can work together to cut government costs.
The most dramatic fluctuation occurred with the overall reduction of services of $15 million dollars over a three-year period, resulting in the threat of closure of the libraries until private donations kept the doors open and Measure V was passed in 2005… and, once again, the use of the 10 million dollars in reserves to maintain services.
Today there is much discussion about salaries and benefits locally and statewide which I will address. But the overwhelming evidence is that Salinas has had to do more with less for years. That challenge has been compounded when a cash poor city with a major public safety challenge must compete on a statewide basis for police officers in a City that found itself with housing prices that skewed upward living costs.
State raids on city budgets such as Salinas got so out of hand that the residents of California thought they told the State not to take anything away from local jurisdictions with the passage of Proposition 1A. Unfortunately, there were a few loopholes, which the State has exploited and the League of Cities hopes to close this fall with yet another ballot measure. However, it must be noted that Salinas cannot count on statewide ballot measures. This City must plan to stand on its own with a prudent transformation of government to maximize direct services to its community and minimizing structural costs within City Hall. We cannot be traditional in studying these issues. We must be entrepreneurial, considering attracting revenues through investment in our city;
Additional layers began to get added on in 2008: a national recession, significant foreclosures leading to a significant decline in property values and taxes, and the return of State takeaways despite Prop 1A, accelerating the raids on the city's reserves, in short, a perfect storm.
The point of all of this is not that today's problem didn't sneak up on us; it has been building for years. The fact that virtually every city in the state and the state itself are now crippled just underscores the vulnerability of Salinas as it makes its way through the current economic situation.
But the truth is that it reflects a larger reality of an old order that must give way to a new. Salinas is not, and has not been, on a sustainable financial course for years. Endless hours could be spent on discussing the future of the state or the country with regard to that issue, on how residential neighborhood expansion did not bring the high-paying jobs to support the additional municipal services needed. My focus has always been and will always be on Salinas and that frames the discussion of where we should go from here.
Numerous efforts to look at the budget and how to most effectively deliver city services have been underway for some time. This two year budget cycle was City Manager Artie Fields' first. The two department heads he hired reflect a desire and knowledge that the delivery of city services be looked at differently to prepare for the future needs of the city in the most cost-efficient manner possible.
Police Chief Louis Fetherolf's 90- and 180-day reports to the community. The Chief introduced a new neighborhood-oriented police vision and has committed to provide an annual report that will include a strategic plan that provides accountability and measurements of progress to the City.
Fire Chief Kim Raddatz came to Salinas from Coronado with extensive experience in organizational analysis. His mandate was to take advantage of the high level of professionalism of Salinas' firefighters to explore revenue enhancement ideas ranging from training services or providing ambulance services to name just a few.
I mention these two departments because they represent 60% of general fund expenditures. Some suggestions have been made about salary and benefit cuts and both are spelled out in contract agreements with employee associations. Those issues are in the budget process like all other city programs.
I note with pride other changes that include the re-design of the Parks Department to Parks and Community Engagement, which includes renewed volunteer efforts and increasing neighborhood engagement. Library services have been restored and expanded rapidly and efficiently with the third lowest cost per resident in the entire State, and the libraries have received grants from foundations to support literacy and computer programs.
A Blue Ribbon Committee was appointed to explore the possible re-design of Planning and Permit Center functions. The City's track record has been inconsistent in this area in recent years despite everybody's best efforts, so the department’s customers have been added to the mix to provide input. Even with growth in the city, with an average age of 26, there will be demand for public safety services, which the city must provide even there is insufficient revenue.
While I am optimistic there is opportunity for sales tax growth, the changing realities of the national retail scene do not suggest counting on a significant rebound in revenue. The decline in property values is not likely to be reversed any time soon. We have a choice to continue on our present path or decide that a well run, efficient City that provides desired services is part of what makes Salinas an attractive community that, over time, really can become the crown jewel of the Central Coast. We must not waver from the foundational goals of this city: peace, prosperity and sustainability.
Today nobody has all the answers. But I believe it is important to balance the budget more slowly, more wisely and begin to lay the groundwork for re-designing the Salinas of the future. City Hall needs to hear clearly the concerns of the community regarding all levels of government. And the community will benefit from learning more about their local civic household budget. One of the reasons I enjoy being the Mayor is that it is non-partisan; what we do is for everybody, Salinas is our community household.
Winston Churchill said "If we open a quarrel between the past and present, we shall see that we have lost the future." Let's come together as one community, as we have so many times in the past, around the present financial challenge to lay the groundwork for the future. Let's look at the example of how we saved one of our institutions -- the Salinas Public Libraries -- and rise from the ashes and start a new movement that will echo statewide of a City that rose to create a new City/State model that the whole state can admire.
