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July 19, 2009

Walnut Creek’s plan to tackle its budget woes in the midst of the Great Recession

City executive staff volunteering to take pay cuts ... The city asking police and other unionized employees to reduce their compensation packages ... Hiring freezes ... A few lay-offs ... Leaving some rooms in the new library unfinished.

These are some of the measures the city is looking at to cut costs as it faces a pretty challenging economic situation. And which the City Council will discuss at its Tuesday night meeting.

After the city adopted a two-year $136 million budget for 2008-10, the global economy plunged into the crapper (as the great economist John McCain said), and the city wound up looking at a $7.3 million shortfall. That includes the $1.7 million the state might take away, but which the city would cover with its emergency reserve fund. Speaking of the reserve fund, the city still has $6.9 million in emergency reserves.

Here are some highlights from the budget balancing plan, which you can read here at the city's website:

MAJOR REVENUE SOURCES SEE BIGGER-THAN-EXPECTED DROPS

--Property taxes: For 10 years prior to 2008-09, property tax revenues increased 8 percent a year. Last spring, expecting the economic slowdown, the increase was projected to only be 4 percent for 2008-09. Bottom Line: Increases only 2 percent; further 4 percent decrease expected for 2009-10.

--Sales tax: Conservative budget estimates in June 2008 held that revenue would essentially be flat through 2009-10; that the decline for 2008-09 would be 2 percent, then a 2 percent increase for 2009-10. In fact: Consumer confidence dipped so dramatically that auto sales (35 percent of city’s sales tax base) and retail sales significantly, estimated at more than $6 million through 2009-10.

--Some sorta good news, coming from arts and recreation programs: Drops in development fees, with the slowdown in construction, and in parking revenues as a result of fewer visitors to downtown were offset partially by earnings increases from recreation and arts programs, including productions at the Lesher Center, where the in-house theater company, Center Repertory Company, has,despite the recession, enjoyed healthy ticket sales.

Note to self/city: Hmm, people are stilll willing to spend on entertainment during tough times. Hey, movies theaters nationally and locally are apparently thriving, as they did during the Great Depression. As for that decline in parking revenues: a sign to the city that they need to not be so, forgive my French, hard-ass in their meter ticketing practices, to make the city more inviting?


EXPENSES GREW
Employee benefits: As with all businesses and public agencies, the city saw medical insurance premium costs grow by double digits each year, and pension costs increased, as the stock market investments—needed to pay retirees—suffered one of the most severe drops since the Great Depression.

Highlights of The Plan for balancing the budget:

--Salary cuts for City Council, 24 percent. Savings: $17,500--Salary cuts for executive staff—City manager, city attorney, personnel director and department directors—of 6.5 in 2009-10 and 8.75 in 2010-11. Savings: $200,000
--Proposed compensation reductions for police and other employee groups. Savings: $3 million
--Staff cuts, changes: Freeze 22 vacant staff positions, convert three full-time positions to half time, accepting retirements of several employees, four staff lay-offs. Savings: $1.35 million


THE LIBRARY

Construction of the library is “proceeding very well.” Projects remains on schedule to open by mid-2010 and to finish within the $42 million budget. In fact, the financial crisis meant that the construction bid came in around $5 million below cost.

However, the city plans to reduce the library project budget by $500,000 by:
--Leaving the conference room, technology center, and business center unfinished and ask the Walnut Creek Library Foundation to raise funds above their $5 million pledge to cover these costs.
--Cutting funds for the Opening Day Collection—that is new books and other materials purchased for new, bigger library. The Friends of the Library have already raised $100,000
--Reduce the public art budget by $30,000, and the remaining budget by $90,000

CROSSING GUARDS:

UPDATE: According to Tuesday's Contra Costa Times, a subcommittee of parents, school leaders, city staff, and City Council members are urging the City Council to agree to cover the entire $110,000 cost for 2009-10 for crossing guards at 10 intersections near Walnut Acres, Bancroft Elementary, Buena Vista, and Walnut Heights elementaries, and at Foothill and Walnut Creek intermediates. But the city and school districts may have to find other ways to fund the crossing guard program in the future.

Note to city/school districts: Aren’t there parent volunteers who could handle the crossing guard duties. That was the case at my son’s Walnut Creek elementary.

9 comments:

Anonymous said...

The Crossing Guard recommendation (which will be considered by the City Council at Tuesday night's meeting) is to transfer management of the contract to the 2 school districts, and to give the districts $80,000 ($40,000) each for the upcoming budget year, and then evaluate the crossing guard program with community input in context of all the other City programs and services during the next budget cycle. (By the way, volunteer crossing guards have been raised as an option. However, some have expressed concern about the reliability of volunteers to provide this support on a consistent, ongoing basis.)
Thanks, Soccer Mom, for posting the link to the City staff report so everyone can get all the background information if they want to have all the facts. Your thoroughness is appreciated.

Soccer Mom said...

Anon 9:58 a.m.: Thanks for that clarification about the Crossing Guard issue. I'll add that information above.

Anonymous said...

Why are they cutting funds for new books for the library but keeping $90,000 in the budget for "public art"? One would think that books would get higher priority seeing that this is, after all, a library.

Eliminate the art budget and use the money for books.

Anonymous said...

There is a City ordinance requiring that a minimum percentage of certain building projects be dedicated to public art.

There's no City ordinance regarding library books. The Friends of the Library and the county library system are other resources.

Anonymous said...

If there is an suc an ordinance, then what public art is the Neiman Marcus project dedicating to WC? If the library's budget is $90,000 then then NM must be $180,000+ since it's more than twice the size of the library.

Anonymous said...

Instead of mindlessly following "the rules", why don't we revoke the requirement that a certain amount be spent on public art, at least during this recession? Surely books are more important for the library than a piece of art? Why don't we use some common sense?

Dan Simoes said...

Leaving rooms unfinished... that gives me an idea for the library.
How about using some volunteer labor to get the project done in less time and under budget? I'm sure unions would have a fit and there are safety concerns, but I'd gladly spend a weekend hanging sheetrock, painting, etc for the library.

Anonymous said...

Dan,

I like your suggestion, although there is probably some rule or regulation against it. I'm sure many in WC would turn out and work to finish the library.

It's high time we get back to using common sense in this country.

Soccer Mom said...

Anon 1:45 p.m. As Anon 11:03 a.m. said, there is an ordinance that requires that new developments have public art. Here's a link to a story, originally published in the Contra Costa Times or Walnut Creek Journal:
http://findarticles.com/p/articles/mi_qn4176/is_20090107/ai_n31193881/

Also, Anon 1:45 p.m.: Neiman Marcus is required to provide public art.

In fact, the city's Arts Commission was to discuss that this afternoon. Neiman Marcus has proposed spending about $134,000 on glass art works that consist of 11 sculptural "fins" to be installed to the outside of the store walls. The artist says the fins "would present a 'live' reflection of wind dynamics and also provide patterns of light and shadow during both the day and night.

The Bedford Gallery's Advisory Council was very supportive of this project, although discussions are ongoing about the placement of public art at the proposed Neiman Marcus site. Read more here:
http://walnutcreek.granicus.com/MetaViewer.php?view_id=12&event_id=48&meta_id=28797

Finally, Dan Simoes: Interesting suggestion about getting volunteers to finish those library rooms that would be left unfinished.

The whole issue of people volunteering professional services interests me for a couple reasons. First, I spoke with a man who helps run a well-regarded job-networking program out of Danville. It sounds like if you're an out-of-work professional, this is the place you gotta go. www.jobconnections.org

His view is that if you're laid off from your job, yes, you need to look for work. But, in the meantime, volunteer for a nonprofit that interests you. It's another way to keep your skills up, network, and benefit the community. And maybe that volunteer work will lead you to your next career option?

I suggested that parents could volunteer to serve as crossing guards, for those positions that the city can no longer wholly fund.

There are a fair number of people in Walnut Creek who care about this new library. I'm sure some of those might have connection to building contractors who actually might be hurting for work. Not necessarily to get paid, but to just enjoy the experience and build their portfolio.

Sure, there might be union and other rules about who can work on this project...

I'm in this mode--being the pro bono journalist that I am--that a lot of the rules that we have long operated under no longer apply.

Perhaps that applies to who works, for pay or not, as a Walnut Creek crossing guard, and to who finishes the rooms in the new library.