Posted 3/20/14 – I’ve received the second of three parts of an EDITORIAL OPINION piece by City Council Member John Capoccia regarding the UUT measure on the April 8th ballot. (Here’s Part I). I’ll post the third as I receive it. Differing viewpoints are always welcome, as long as it stays civil. Feel free to use the comments section to voice your opinion (as long as this is the featured article on the home page, you will need to click on the headline to go to the article’s page to make a comment).
Measure UUT: Your City, Your Choice, Part II
Member of Sierra Madre City Council
Last week, I gave some background on the Users Utility Tax. This week I’ll review Sierra Madre’s various departments, what they do and how your tax dollars are spent, and I’ll discuss the possibilities for cuts. The following week I’ll also examine the prospects for other sources of revenue should Measure UUT fail, personnel costs, and I’ll discuss some other risk factors.
But first, a little more background: Measure U, when approved by the voters in 2008, specified that the UUT would be raised in three steps in three consecutive years – to 8% in 2008, 10% in 2009, and 12% in 2010. Measure U was accompanied by a companion Measure UA, which called for a non-binding recommendation that the increase in UUT be used only for public safety. Prior to what would have been an increase to 12% increase in 2010, the City Council voted to suspend the increase, and keep the UUT at 10%. They also further reduced the rate to 9% for water and sewer, to avoid creating a windfall as a result of imminent water rate hikes. UUT revenue has been fairly level since. From the time Measure U passed, the increased expenditures for public safety have exceeded the revenue provided by Measure U. This has been verified annually by the UUT Advisory Committee, and documented in our audited Comprehensive Annual Financial Report (CAFR). The difference was made up by belt-tightening in the General Fund.
Your City Council and staff continued to hold the line on expenses. In 2011 the windstorm hit, with a resultant clean-up expense of over $600,000. The dissolution of the Community Redevelopment Agency also caused a loss of revenue. The Council could have voted to raise the tax to the voter-authorized 12%, but chose belt-tightening instead.
To reduce expenses, your city leadership did several things. Departments were reorganized to improve efficiency. Personnel costs were reduced by avoiding backfilling new positions and reducing part-time hours. We contracted with Waterworks to run the municipal pool, contracted park maintenance, building inspections and plan-check. When open positions are filled, job responsibilities are reviewed and broadened, and then candidates are sought with skills and experience to supplement and enhance evolving responsibilities, further increasing efficiency.
Going forward, I’m always looking for ways to decrease expenses. While I’m confident that incremental improvements can be made, further substantial cuts are impractical without contracting out major departments. Yes, other cities have taken such steps as contracting Fire, Police and Library, but what’s right for others is not necessarily right for us.
Sierra Madre’s General Fund provides for Police, Fire/Paramedic, Library, Public Works, Recreation and Community Services. The General Fund also covers expenses such as Administration, Information Technology, Fleet Management, Facility Management, Finance, Elected Officials and Elections, and Legal
The General Fund breakdown by department is as follows from the 2013/2014 budget:
Public Works $357,265
Community Services $256,561
Approximately 67% of the total is for personnel expenses.
If the current UUT is allowed to sunset, there’s no other meaningful source of revenue to replace what’s lost. We’ll have to do one of the following: Cut 13% across the board, make selective cuts that total $1,000,000 annually, or outsource one or more departments.
Let’s review each of our major departments, starting with Community Services. Since this is Sierra Madre’s smallest department, there’s not much that can be mined for savings. The department coordinates major events such as the Mount Wilson Trail Race, Fourth of July Parade, Concerts in the Park and other events. It coordinates and sponsors programs and contract classes such as tennis lessons and adult softball, coordinates with the youth sports organizations such as Little League and Girls Softball. It manages park activities and facilities reservations, assists with Senior programs and oversees the Water Works pool program. Our Community Services Commission recently completed Sierra Madre’s Parks Master Plan. Even with current funding levels, we’re not able to implement many of the high priority recommendations. I’m not in favor of substantial reductions to the Community Services, and I believe the majority of Sierra Madre’s citizens would agree. It could be argued that more volunteerism could reduce the dependency on city staff, but most of the major events are primarily staffed by volunteers. So at best, increasing volunteerism will only incrementally reduce expenses.
Public Works: Our Public Works department is responsible for maintaining our Parks, Public Buildings, Streets, Sidewalks and Trees. Public Works also manages our Water and Sewer Utilities, both of which are funded separately and not subsidized by the General Fund. Public works is the “face” of our city. The condition of streets, sidewalks and trees reflect on the pride our citizens feel for our community. As a citizen of Sierra Madre, I feel that we’ve neglected our public facilities. We have a “C-” grade from the American Institute of Civil Engineers regarding the condition of our streets. We have over 300 missing street trees, and the trees that we do have are not optimally maintained because we have insufficient funds to properly trim them. Ironically we’re known as a “Tree City USA” in spite of our neglect. Our sidewalks are atrocious. I’m in favor of more public works spending, not less.
Library: Sierra Madre’s Library just completed its Master Plan, which is ambitious, but yet very modest in that it’s not asking for much in the way of taxpayer resources above the current funding level. Our library offers programs for children and adults that are widely used and appreciated by a large part of the community. Our building is aging, and is very modest especially compared to some of our neighbors such as Arcadia, Monrovia, San Marino that have built new libraries in recent years. Our Library receives a high level of volunteerism compared to other communities. The “Friends of the Library” organization has been instrumental in supplementing funding, supporting programs and helping to bind us together in the community with great events such as the annual Wine Tasting and the Art Fair. Our Library is well utilized by all demographics from children to seniors. Many would like to see our Library service hours expanded. The current hours are minimal compared to Arcadia, Monrovia, South Pasadena and San Marino, all of which keep their libraries open for more hours than we do. Outsourcing to LA County wouldn’t save much and the loss of a beloved home-grown institution would be a devastating blow to many.
Fire and Paramedic: Our Fire Department is legendary and deeply embedded in Sierra Madre’s legacy. Because it’s primarily staffed by volunteers, it is a bargain. Our Paramedic program is becoming increasingly important as our population ages. Our response times at just over four minutes are incredibly fast. Our part-time paramedic technician’s pay is very low compared to other communities. Perhaps we could save money by outsourcing Paramedic services, but would Arcadia or Pasadena offer their services to us for substantial savings? Not likely. We could possibly contract with the County. That in itself won’t come close to closing the budget gap. Again, the opportunity for savings is slim, especially when weighed against the possible degradation of response time.
Administrative: Of the General Fund administrative costs, less than 10% is personnel, primarily for finance. The bulk of the costs are accounting cost-allocations for facilities, fleet management etc. (If that is confusing, thank the GAAP folks, we’re just following Generally Accepted Accounting Practices). Over the years, our municipal accounting has improved tremendously. Our audits are squeaky-clean and are produced on-time. Our budget documents are award-winning (California State Municipal Finance Officers “Excellence in Budgeting”). Sierra Madre also won an award for use of our website and social media to promote transparency. I would not recommend deep cuts and reverting to past practices, where large sums of money were “lost” then “found”, and where lack of internal controls prevented verification that no cross-subsidization between general fund and enterprise accounts occurs.
Police: Police services consume by far the largest part of the General Fund budget. Our department generally provides at least two patrol vehicles giving a highly visible police presence, with available backup that can be quickly deployed from our local headquarters. Our department has made significant strides over recent years. We’ve brought in leadership from outside the organization to implement best practices and to hold our sworn officers to higher standards, while emphasizing “community policing”. The department has increased the use of volunteers to lower cost, and has implemented state of the art technology to improve its effectiveness, efficiency, and accountability.
In 2010, the City Council solicited proposals for Police Services from the cities of Pasadena and Arcadia, and from the LA County Sheriff. Arcadia declined to respond. Pasadena and the Sheriff responded, but the Sheriff’s response was preliminary, a detailed proposal would cost Sierra Madre approximately $25,000. From the preliminary proposal, it appears that contracting with the Sheriff could eventually save $1,000,000 per year, but at a lower level of service. After reviewing, the City Council did not move forward.
What is unclear is how much the transition to Sheriff would cost, and exactly what they would provide. We do know that the Sheriff would not staff our current headquarters, and all police services would be provided out of the Temple City station or the Altadena Station. It’s unknown how response time would be effected. I’ve compared our costs with La Canada, which is a Sheriff contract city. Yes our costs are higher, but our response times are significantly better and our crime rate is significantly lower. We have always been willing to pay more to keep our town safe. That’s who we are.
Public safety is a critical attribute that defines Sierra Madre. Contracting Police Services should not be taken lightly. Thorough analysis is needed, followed by a vigorous public debate. I would argue that given the critical nature of Police Services, a change such as this should be entrusted only to a direct vote by Sierra Madre’s citizens. Once police services are outsourced, there’s no going back. If Sierra Madre wishes to consider this seriously, let’s pay for a detailed proposal from the Sheriff Department, plan on conducting a thorough analysis over the next two years, and put it on the ballot for the 2016 municipal election. Let’s proceed with extreme caution.
Measure UUT is asking that our citizens maintain the same 10% utility tax rate that they are paying today. The reason for extending the utility tax and preserving the current revenue stream is simple: The loss of approximately $1,000,000 per year from our General Fund Budget will have consequences. The City Council will be faced with tough choices. We’ll either have to make deep cuts across the board, or contract out entire operations such as our Police Department.
This is your City and your Choice: I hope you’ll choose to keep Sierra Madre the wonderful place that it is by voting YES on Measure UUT.
I’d love to discuss with you and hear your ideas on the best way to manage the Sierra Madre’s resources. If you’d like, please call me on 355-6407, or you can email me on email@example.com.