From 2006 through 2010 city expenses rose an average annual 1.3% whereas revenues rose a mere 0.5% annually. Note that the 2010 and 2011 revenue numbers shown in the chart below reflect the projected revenue impacts of the economic downturn.
That modest growth in expenses masks years of steep cuts. The city has endured 11 straight years under the budget axe. As a fiscal conservative, that was probably the right thing. In the past five years, city staffing has fallen 15% from 126 to 107 salaried positions. Middle management, a layer that the private sector long ago eliminated, is gone. And we know have the leanest per-capita staffing for comparable cities on the Peninsula.
Individual departments have shrunk dramatically over that period: administrative service is down 27.2%, public works is down 8.8% and parks and recreation is down 12.6%. Employee benefits have been cut. There has been a one week furloughs for all city employees for six years running. Management has given back negotiated pay raises and bonuses. Salaries generally are 5-10% below average for comparable cities. See the links at the bottom of this post to the full presentation and video playback from the 3/13 budget meeting. But you simply cannot contend that there is fat left to cut. We are cutting meat. Soon it will be bones.
Now there are two paths the city can take. Path #1 is an outsourcing of public safety. That is the path we need to take. But let's look at the alternative first.
Path #2 is a 20% budget cut. That path is painful. We lose the Youth Center. We lose 3 full plus 3 part time police positions. 12 other full time and 2 other part time positions would be chopped around the city government. This includes the only remaining analyst that produces the numbers you are looking at. It also includes a building inspector. You don't want developers and prospective business owners passing over San Carlos, because it takes too long to get approvals. These are bad cuts.
After these 20% cuts, we are going to be back here next year doing this again. Why? Public safety expenses are overwhelming the budget. Police costs are up 30% over the past five years. Fire costs are up 21.2%. And no, the police and fire fighters are not greedy. The city was having a hard time hiring and retaining public safety staff when times were good. Years of cuts left us unable to compete for public safety labor in the market. It does not matter as much during a downturn. But if we don't pay our public safety professionals appropriately, we won't be safe when times are good. And, eventually, they will be good again.
Now, in my last post I equated our path to that of Vallejo. In the past five years public safety has risen from 51% to 60% of the city budget. Under the 20% cut scenario it would be nearly 64% in a year. Vallejo declared bankruptcy at 70%. Bankruptcy people..... That is where our City Manager, Mark Weiss, sees us going without pursuing public safety outsourcing.
So, why is San Carlos so uniquely and profoundly impacted? For starters, Proposition 13 locked in an unfavorable funding ratio. The city only gets back 13.2% of every property tax dollar you pay. It ain't fair, but it ain't changing either. Proposition 13 isn't going away and can not be amended. Pigs will fly first (for the purpose of this discussion).
And, our citizens are extremely tax averse. I am with you on that. Perhaps our obstinacy will result in the leanest, best run and most pro business town in the area. But surrounding cities have passed revenue measures. Maybe they chumps. But they can pay their public safety professionals at a level commensurate with maintaining adequate staffing. We cannot.
Why is our public safety so expensive? Broadly, there are no economies of scale in operating your own police department. Here is an example. At any given time, there are only four cops on the beat. That 1:3 staffing is down from the 1:4 it used to be (commander:officer ratio). But to make sure that the minimum staffing is maintained 24/7/365, you have to have a bench of officers ready to fill in for vacations, injuries and illnesses. When you can share that bench of reserves with many cities, your costs go down. That is an economy of scale.
How about our fire safety. We share our fire coverage with Belmont. As a growing city, the original 50/50 cost sharing is slanting increasingly to San Carlos. But it is the same story, generally.
So, if we cut 20%, the eleventh year in a row, and we are back next year for round 12 of budget cuts, the only place left to cut without compromising public safety or risking crumbling infrastructure will be parks and recreation. It will be eliminated.
The way I read it, outsourcing public safety will not lead to a degradation of these services. On the contrary, it will enhance our public safety. And the projected savings numbers being offered are conservative. But this post is overlong already. Here is our fiscal picture with outsourcing and with 20% cuts. In one, we start running surpluses. In the other, we squeak by only to be in the same position next year.
I will mention that parks and recreation maintenance is going to be outsourced under either proposal and parking meters are likely downtown.
You can see the entire presentation here: Presentation
And you can see a video of the five hour 3/13 budget session here: Video
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