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Uploaded: Wednesday, May 6, 2009, 1:22 PM
State complicates city budget woes
Sacramento may take $2 million from Mountain View if measures don't pass
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by Daniel DeBolt
Mountain View Voice Staff
As the City Council struggled to resolve a $6 million general fund deficit Tuesday night, more bad budget news broke in the middle of the meeting: The state may grab $2 million from the city's general fund next year.
City manager Kevin Duggan told the council that he had just received an e-mail from the League of California Cities with some bad news: State officials were considering taking 10 percent of property taxes away from cities throughout the state if legislators' six propositions, designed to help balance the state budget, are rejected by voters on May 19.
Duggan said that would mean a $2 million bite from the city's $88.4 million general fund, plus unknown amounts from the downtown and Shoreline tax districts.
"If they can find a way to spread the pain, you can guarantee they will do it," Duggan said.
Fortunately, the city is closing the fiscal year with a balanced budget, unlike neighboring cities, Duggan said. But "unusual economic times" mean a deficit of $6 million next year and no revenue growth for several years, even as personnel costs increase by $4 million every year.
Give and take
After months of discussions with department heads, Duggan says he has proposed his "least conservative" budget ever by using $2 million in city reserves to temporarily fill some of the deficit. About $3.5 million in proposed cuts to the general fund include the elimination of 17 positions in various departments that are unfilled (except for one librarian position which will be funded with "transition funds" until a librarian leaves voluntarily). Another $240,000 would be raised through fee increases for preschool programs, Center for the Performing Arts tickets and ball field use, among other things.
"We would prefer not to recommend any of these actions," Duggan said on Monday. "Unfortunately we can't make a serious dent in the problem without consequences. You can't pretend things are better than they are."
On Tuesday, in a chamber packed with city employees, the council discussed the proposals with the help of an Excel spreadsheet projected on a large screen.
Council member Laura Macias started things off by removing about $260,000 worth of "tier one" proposals by the city manager, including the elimination of a parks maintenance position and increased recreation fees, and replacing them with a roughly equal set of cuts taken from a list of "tier two" proposals, including staff cuts to the finance department, city wide employee training, cuts to library collection costs and complete elimination of the city's "commuter check" transit pass program.
Macias said her priorities were with residents "being able to enjoy living in the city." The rest of he council seemed to support her recommendations.
Mayor Margaret Abe-Koga disagreed with Macias on one point, saying she actually supported new fees for three city preschool programs, at another $2 an hour per child, because they were not the type to be used by low-income parents.
Council member Mike Kasperzak was critical of the city's increasingly expensive union contracts, which are the major cause of a recurring $4 million deficit projected over the next few years.
Residents "are losing their jobs, their wages are being cut," Kasperzak said. "We're asking them to pay more for less. What it comes down to is we have to do all these cuts so we can do wage increases" for city employees. He added that he may not be able to support the budget in June if the labor groups do not share the pain.
Abe-Koga said she thought Kasperzak's remarks were "premature," and pointed out that the some of the labor contracts were only agreed upon six months ago.
"To take back what we negotiated, I have an issue with that," she said.
Not over yet
On Wednesday morning, Mayor Abe-Koga announced that the city clerk and the city attorney have followed Duggan's lead in forgoing pay increases this year to set an example for other city employees considering whether to forgo pay increases.
Duggan said Mountain View will have a tough time compared to other cities in raising revenues under Proposition 13, which restricts tax increases. In a built-out city like Mountain View, there is very little room for new tax-generating real estate development.
Earlier in the decade the city had to make $7 million in cuts after the dot-com bust, only $2 million of which was restored. Duggan has said the city government is actually shrinking over time, while the city is taking more measures than most to increase revenues. At some point, he said, the city will have to ask voters to approve a tax increase, such as a bond measure, to maintain services. A voter-approved tax increase for the city hasn't been attempted since a library bond failed 15 years ago.
The council is expected to consider more cuts in the latter half of the year. By then a deal may be made for hotel in the Shoreline area that could bring $2 million in general fund revenue every year. Without new revenue, possible future cuts could include reducing firefighter overtime pay and cutting about a dozen police department positions, including eight of the city's officers. The public safety cuts could mean slower emergency response times.
Without more cuts, Duggan said, the increasing expenses could compound and quickly diminish the city's reserves.
"It's a short road to Vallejo," said council member Jac Siegel, referring to the bankrupt city.
For the complete list of proposed tier one cuts and fee increases this year, see the city's Web site here and click on Attachment A for the May 5 City Council meeting packet.Are you receiving Express, our free daily e-mail edition? See a sample and sign-up for Express.
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Posted by Peter, a resident of the Old Mountain View neighborhood, on May 6, 2009 at 3:32 pm I wonder if Kasperzak would propose giving city employees a nice raise when times get better? Kasperzak is a typical politician pandering for higher office by talking tough through ignorance. It sure is funny how in good times, working for local government seems like a joke but when private sector jobs dry up, the mob-rule philosophy pounce on city employees like vultures....
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Posted by smart growther, a resident of the Old Mountain View neighborhood, on May 6, 2009 at 4:23 pm Peter,
Sounds like you are a city employee. Mr. K did nothing like you suggest. He merely pointed out the fact that the the county economy is not doing well. Hard to justify raises when people in the private sector are losing jobs and homes. Most of the city employees receive higher pay and significantly higher benefits when compared to the private sector. Easy to get away with this when you dont have to justify your performance
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Posted by Peter, a resident of the Old Mountain View neighborhood, on May 6, 2009 at 4:46 pm Re: Smart Growth;
I am a retired 30 year resident of mountain view who merely appreciates all the work that city employees have done for the community i live in.
If you are correct when you state that " most of the city employees receive higher pay and significantly higher benefits when compared to the private sector" then i admit i was wrong, but i am under the impression that private sector employees receive higher pay than city employees.
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Posted by WTF, a resident of another community, on May 6, 2009 at 8:21 pm "Most of the city employees receive higher pay and significantly higher benefits when compared to the private sector."
What world are you living in? Why don't you ask a City employee how much of their paycheck goes toward funding their own retirement...
You also said "Easy to get away with this when you dont have to justify your performance."
Since when is a public sector employee's performance not watched and rated? Since you are comparing to private sector... there are plenty of private sector companies that don't even know what a peformace appraisal is. They handed out stocks and bonuses like there was no tomorrow, maybe that's why they went bust. Heck, many of the dot-com/start-ups didn't even have an HR dept.
People really need to educate themselves about public sector employment before posting such comments.
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Posted by That's what I thought, a resident of the Blossom Valley neighborhood, on May 6, 2009 at 8:27 pm "On Tuesday, in a chamber packed with city employees..."
If the public (or as Kasperzak described them residents who are losing their jobs, their wages are being cut") are so concerned with the state of the City and the budget, why weren't they in the audience or making any public comments?
The public/residents need to try to help and not just complain. If you're not willing to participate in the problem solving, keep your mouth shut.
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Posted by Debbie, a resident of the Old Mountain View neighborhood, on May 7, 2009 at 8:54 am According to the PADN, the Mayor's full quote was:
"There are tradeoffs," Abe-Koga said of people who chose to work in the private sector and may be facing hard times now. "Government is a little more secure versus maybe hitting it big in the IPO world. These are the choices people make."
First, there are many jobs in the private sector that are not part of the IPO world, and are facing job losses, pay cuts, and pay freezes, not to mention hiring freezes that force workers to work longer and longer hours. Second, I know teachers facing 5-10% pay cuts. I don't think the Mayor is in touch with her constituents, and I don't think it is too much to ask city employees to halt pay increases considering the economic climate. Mountain View does not have a magic force field that will protect us from the economic crisis.
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Posted by Reader, a resident of the Old Mountain View neighborhood, on May 7, 2009 at 10:50 am If employees give up merit increases, COLA, etc...it affects the peons and not Police, Fire and SEIU contracts will never be broken
and then Mountain View will turn into City of Vallejo.
Thank goodness some department heads are helping out.
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Posted by WTF, a resident of another community, on May 7, 2009 at 11:03 am Again, please do your research before you post... SEIU does not have a contract right now, you can see for yourself on the City's website.
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Posted by GDM, a resident of the Blossom Valley neighborhood, on May 7, 2009 at 11:18 am Public Safety Employees are extrememly well paid, plus they receiver a retirement benefit of up to 90% of their highest paid year. Plus they can retire at age 50 or 55. This retirement benefit alone costs the tax payers a bundle. They also receive retirement health care benefits.
They provide a great service to Mountain View, but can we afford it? I don't have a problem with asking them to forego pay increases that were previously gained through bargaining.
I applaud Council Member Kasperzak for his comments and am very concerned by the apparent willingness of Mayor Abe-Koga a dip deeply into reserves.
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Posted by curious, a resident of the Cuesta Park neighborhood, on May 7, 2009 at 1:19 pm WTF said "What world are you living in? Why don't you ask a City employee how much of their paycheck goes toward funding their own retirement..."
Take a look at the other news article about so-called cuts by the City Manager. He did not fill 2 open positions in the Planning department at a 'saving' of $270,000. That's 270K or 135,000 per position. The city employees are doing very well indeed.
And the city retiree pensions and health benefits are way underfunded. Do a google news search on the over 5000 government employees here in CA who are receiving retirement pay of over $100,000 per year plus full medical benefits.
What world are you living in where you think city employees are paid less than private sector?
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Posted by Steven Nelson, a resident of the Cuesta Park neighborhood, on May 7, 2009 at 2:23 pm (the real one) A $2 million per dollar income from a hotel would be paid for - up front - by a Shoreline subsidy bond to the builder of the hotel. Let me see - $25 million (or so) - borrowed over 30 years (or so)- is how much per year? If the city must pay a couple of million in bond payments a year - to get 2 million in revenue - where is the great gain? GOOGLE did not think a hotel/center next to their headquarters was a great investment. As a citizen of this city - I would rather see $2 million a year in property taxes from Shoreline returned to the schools, rather than invested in a hotel.
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Posted by i know, a resident of another community, on May 7, 2009 at 2:47 pm When you see in papers and elsewhere that city employe receives X amount of money each year, what you don't realize is that the X amount includes all the employe's benefit costs. So, when you see that a position is paid $150,000 per year, the employee doesn't see a big chunck of that money. That $150K is the ENTIRE amount it costs the city for that employee. It includes the costs either the city or employee pays for healthcare, benefits, etc. Don't think that's what the employee is actually getting paid. For example, my friend is listed as making $130-something thousand in her government positon, but her ACTUAL salary is about $90-something thousand. Still not a bad salary for sure, but it's a far cry from $130-something. And I'm not talking about salary vs. take-home pay because of taxes. I'm just talking about the fact that gevernment employees salaries are reported/listed differently than private sector salaries because the government has to include all sorts of extra "stuff" in that number. In the proviate sector, if you make $100,000 per year, in government terms, your salary would likely be listed as something more like $140,000. You can see how different the numbers are.
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Posted by Kevin, a resident of the Cuesta Park neighborhood, on May 7, 2009 at 3:00 pm Kasperzak is so off base when he speaks of Mountain View residence lossing their homes and jobs. That is so a small precentage. He did not hear the news that only a couple months ago the Biz Journal listed Mountain View as one of the top ten in the state for medium priced homes. "Statewide, the 10 cities with the highest median home prices in California during March 2009 were Santa Monica, $755,000; Danville, $738,500; Santa Barbara, $735,000; Mountain View, $700,000; Redondo Beach, $630,000; San Ramon, $621,000; San Clemente, $620,000; San Francisco, $617,000; Santa Cruz, $610,000; and Yorba Linda, $561,500."
As far as the City Mangager talking about what California is going to do he was talking past tense of what they were going to do if they did not pass their budget. He uses that kind of talk to put a scare into people get his agenda passed.
Additionally, I haven't seen an foreclosed homes in my neighborhood. Stop comparing the private to public sector. Just because the private sector is taking a beating right now doesn't mean you get to freak out about public sector salaries and benefits. I don't know about you but I want the BEST OF THE BEST working and protecting my friends and family. Regardless if that is a police officer keeping burglars out of the neighborhood, to fire fighters getting me to hospital when I fall off a ladder, to the guys that keep streets in repair. THANK YOU CITY OF MOUNTAIN VIEW EMPLOYEES...You deserve the best. Thank you for your service...don't listen to these malcontents - defined (A chronically dissatisfied person).
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Posted by smart growther, a resident of the Old Mountain View neighborhood, on May 7, 2009 at 3:58 pm Peter,
There a lot of public jobs that pay way more than the public sector. Take landscaping. Private workers are barely paid minimum wage while public employees are paid much more plus receive on average over 30% more in job benefits. Most senior dept heads are close to 200k plus benefits. Ask some senior managers at Lockheed what they get paid. It's mid 140-160K plus benefits and bonuses but they manage departments with budgets close to billions. There are probably some public jobs that pay similar or below the comparable private market job. As some noted above, the total compensation costs are high because they include the full pay of salary plus benefits.
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Posted by Johnny Robots, a resident of the North Whisman neighborhood, on May 7, 2009 at 6:52 pm City employees are MUCH better compensated in every way than their private sector counterparts, anybody who says otherwise is a shill. We could do very well without them. There is no reason for union representation for federal, state, county, or city employees. All such contracts should be voided as easily as they are in the private sector. Let's go to a volunteer government, and see what we are really made of, see if we really DESERVE to survive.
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Posted by Mr. Rational, a resident of the Old Mountain View neighborhood, on May 7, 2009 at 8:20 pm Re: Johnny
Yes that's right, lets go to a volunteer government (wink wink, nudge nudge). Maybe one of these days you will wake up and smell the coffee. Gezzzzzzz Oh! And did you ever hear of a small document named the U.S. Constitution? Maybe you should read it sometime ;)
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Posted by Crazy, a resident of another community, on May 7, 2009 at 10:39 pm If you had volunteer City workers I guarantee you MV residents wouldn't get the great customer service they value so much (yes, there was a recent survey of the community to verify this).
City workers deserve the money they are being paid because they have to deal with a bunch of whining idiots like you all.
You try pleasing the public on a shoestring budget and see how easy it is.
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