For starters, some years ago the city dreamed up a way to tap the cash flow in the sewer plant. The city knew that since the sewer plant is a public facility run by the city it doesn’t pay property taxes like the rest of us. But it sits on land that could pay property taxes provided the city didn’t own the land. So the city charged itself by taking $700,000 out of the sewer fund to pay the city general fund for the property taxes the city doesn’t pay. Understand that reasoning?
This scheme as well as other fee issues became part of a Southern California lawsuit. The lawsuit started working its way through various appeals starting in 2004. It was carefully watched by city attorneys and the League of California Cities On July 24, 2006, the Calif. Supreme Court issued its Bighorn ruling that made the $700,000 removal from the sewer fund illegal. The City of Pacifica now had a $700,000 deficit.
Four days after the ruling, the League of California Cities issued a special alert warning of the effects. The League followed up with a big article in their November magazine. Municipal law reporting services also issued alerts. Three weeks later in August, McDonough, Holland, & Allen the city’s own outside law firm issued an alert to clients. In September, the San Carlos City Council got a heads up memo from their attorney. Palo Alto Council got their memo in early October. The word was out.
But not in Pacifica. Eight months ago a $700,000 budget hole developed and neither a hiring freeze nor a spending freeze was ordered in Pacifica.
Since Bighorn was issued in July 2006, another $400,000 was added to the $700,000 Bighorn deficit. Employee labor agreements were signed knowing the deficit was building. Employee retirement calculations were inexplicably done wrong. No clear explanation on how this happened or why someone did not catch the errors in either math or assumptions on when people retire. Emergency repair spending has not been reimbursed by FEMA. Lawsuit defense reimbursement money has not been recovered. Months have dragged by. Where is the urgency about collecting this money? —people
have lost their jobs because this money is not available. Why isn’t a city councilmember sitting in the FEMA office demanding answers?
We thought we might secure some budget answers by studying the staff reports for the various budget sessions. We were wrong again.
Not a single budget staff report, some amounting to 12 or more pages, was posted on the city website ahead of the meeting. Reports were passed out at the meeting and even then not enough were available for the entire audience. If you watched the council on Cable 26 at home, you had no report available to you and had to take notes.
Moreover, staff reports were finally posted for the May 16 meeting seven days after the meeting; for May 30, one day after the meeting and for June 11, not posted as of Monday June 18—a seven day lapse.
On June 11, you missed the staff report outlining four scenarios for management and funding of the fire department and the ambulances. Important stuff! That report isn’t on the website either!
Pacifica has suffered a structural deficit for the past several years and probably will have the same problems moving forward. Some big ticket items affecting Pacifica are pending.
We have a multimillion dollar library proposal pending that will involve a tax. The $1 million fire assessment tax expires in two years and the city absolutely has no money to cover the $1 million. Presumably the city council expects the public to reauthorize the fire tax, because we will have no choice. The expected Rt. 1 fix to correct the two traffic light bottlenecks needs an additional $10 million or so. That Rt. 1 expense will be due in three or so years. Council has no plan in place to pay it. Linda Mar beach may get parking meters in the next 12 months after at least five years of talking about it. Unclear if the parking meters mean Pacifica no longer has to subsidize the beach, patronized by lots of out of town people.
But city council persists in spending $2 million on the ocean view city hall. Council even still takes their monthly $700 salary and medical benefits to attend council meetings. Clearly, the budget pain hits some people harder than others.
What does it take to fix Pacifica’s chronically sick budget? Full and timely public disclosure for starters. A city website that actually has reports posted before the meetings, maybe even 7 days prior to meeting so we can read and evaluate complex reports for a $22 million budget.
And final memo to city council: when a big lawsuit hit occurs everyone has been watched or should have known about for months, do the right thing. Disclose the problem to the public and freeze spending. Don’t shrug and suggest other problems were a data error from a junior clerk in the employee retirement system that no one in Pacifica finance thought to double check. Provide the leadership. Pay attention to financial details across the board.
Pacifica residents Jim Wagner and Mark Stechbart are still trying to understand the Pacifica budget. Next Council budget meetings are June 20 and June 25
4 comments:
When this was printed, no one paid attention except for the minority. Nothing has changed except Pacifica is more in debt.Is Pacifica waking up a little bit?
The more interesting question is, when that $700,000 was plugged back into the Sewer Enterprise budget, why did City Council then approve a sewer rate hike of 18%? Even when the budget was reduced the next year, and water usage was reduced in a commendable citywide effort of conservation (which is good for the environment), the city still managed to increase sewer rates 3%. WHY? The city very quietly inserted a $4 million line item into the sewer budget for "Sewer Plant Replacement." During the worst economic meltdown and job loss since the depression, Pacifica's City Council felt it prudent to deprive the citizens of Pacifica of another $4 million. WHY?
I know the answers, just wondering if anyone else would care to explain it. HONESTLY.
Jeff, you have long been talking about our collection system. We need money to even begin those very expensive replacements of our collection system which takes in storm water during the rainy season. We also need money when digesters or batch reactors break down. Do we save the money in advance so we do not have an interest expense or borrow it later and have it cost even more?
Mary Ann thanks for posting. You make me smile. I agree with you that our collection system needs work. It could have used that work 8 years ago. We could have used that $700,000 to work on it instead of plugging holes in the General Fund due to the "no growth" agenda of your other members of City Council. The city could have put aside some of that money when the economy was good, when everyone else was building housing, when development could have come to Pacifica. My point was this is no "proactive" approach to our problem. Its 3,000 days late and millions short. Think of the millions we could have saved if this process had begun 10 years ago, when THAT City Council thought the Old Waste Water Treatment Plant and the Quarry would be developed, and more revenue would have been coming into the Sewer Enterprise at less of a cost to the average homeowner.
Think of the millions in interest we could have saved had this current Council 4 not decided to post bonds against the sewer debt a few years ago, deferring payment of principal on the revolving state loan, opting to pay millions in future interest instead of investing that money into fixing the plant and working on our degraded sewer infrastructure. During an economic boom, when the state would have had the money to help.
You don't raise taxes during a recession, and taking $4 million out of the pockets of Pacifica homeowners, to cover for gross financial mismanagement of the Sewer Enterprise for the last 8 years, is irresponsible and (in my opinion) morally reprehensible.
Don't shoot the messenger.
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