Residential development projections

At the Budget Advisory Committee meeting held on March 26, a question was raised regarding projections for new development, and how the City budgets for that anticipated growth. One committee member said City staff does not contact developers to ask how much growth they expect over the next fiscal year. The City’s Chief Building Inspector, Micheal Hosier, and his staff do in fact contact local residential developers to obtain this information, which is then used in preparing the draft budget for the new fiscal year. On March 20, 2009, Building and Safety Division staff sent an email to developers of nine residential subdivisions in Manteca, asking for their development projections over the next one or two years. The email read:

“It's budget time here at the City of Manteca and we are asking for your help. In these uncertain economic times, it is more crucial than ever that we budget correctly for our anticipated work load in the coming fiscal year.

To that end, we are requesting that you provide us with your projected sales activity for the coming year (either calendar years 2009 and 2010 or fiscal year 2009/2010). If you have projections of how many homes you anticipate building during the next two years, those numbers would be extremely helpful to us in projecting staff time needed for reviewing plans, processing applications, and performing field inspections. We understand that these figures will be estimates only, but the information will be useful nonetheless.

We sincerely appreciate your time and assistance, and we look forward to continuing to work with you now and into the future.”

City staff sent a similar email at the beginning of last year as well. Some of the developers responded to the request this year, while others didn’t. Attached are the results of that survey, showing some projected activity for Calendar Years (CY) 2009 and 2010. Staff appreciates the responses, which certainly help staff in allocating staff resources and funding at least for the 2009-10 fiscal year.


Subdivision%20sales%20projections%202009-10.xls

More Budget Woes

Our neighbor ten miles to the north has a $30 million budget gap to fill. They're going to be attempting to address that gap at their City Council meeting tonight. Just like Manteca, the majority of their costs come from labor, particularly public safety. They've had a real hard time coming to an agreement with their labor groups regarding cost containment, and the proposal described below is what happens when labor and management can reach consensus:

http://www.recordnet.com/apps/pbcs.dll/article?AID=/20090331/A_NEWS/903310331

Budget Strategies

Here are a couple of interesting articles.

The first from Tucson, demonstrates the importance of dealing with budget issues now and not later:

http://www.azstarnet.com/business/286468

The second, reinforces the article in the Bulletin the other day regarding the tradeoff between furloughs/pay cuts and layoffs:

http://www.boston.com/business/articles/2009/03/29/colleagues_pitch_in_to_ease_the_pain/

The Ink is Fading

"The Ink is Fading" states today's Editorial in the Record. The editorial does a great job of pointing out the danger we face if many of our struggling newspapers cease to exist. Let's face it, while many of us get our news via the internet, it isn' a Google staffer reporting the news. It is the local reporter at the local media outlet who is providing the information. Without those reporters, we are left with bloggers who are under no requirement to report the news fairly, factually, accurately and objectively. While we don't always believe that our reporters do our story justice, their version is far better than much of the what we find surfing the web.

Many small communities have already lost their local daily or weekly paper. The editorial points out that the Los Angeles Times, the state's largest newspaper, which also is having financial difficulties, reported last week on the Carbondale (Colo.) Valley Journal, a weekly paper that succumbed after 34 years as that mountain town's only newspaper. Nobody missed it much until residents figured out they had no way to get basic information about their community. "I didn't hear of his death for a couple of weeks," Rebecca Young told the Times of a friend.

Here in Manteca we are fortunate to still have a community newspaper, and one that is still reporting primarily local news and reporting it on a daily basis. We may not always agree with their approach to a story or its conclusions (more on that tomorrow), but we are far better served by having our story told to the community on a daily basis.

Budget Advisory Committee Recommendations

The Bulletin published two articles today that do a great job of describing yesterday's Budget Advisory Committee deliberations. It was a very lively meeting, and all twelve members in attendance actively participated in the discussion. In my 25+ years of city government, I've rarely seen a group that has been this focused, determined and passionate about presenting a workable solution to the City Council.

It was also a very well balanced group with very diverse views on most subjects. However, they worked very hard to find common ground--and they made that common ground very clear: times are tough for everyone, and city government needs to make the same sacrifices everyone else is making right now. This means cutting costs, working harder and working for less compensation. They also made it clear that it was not the time to talk about new general revenues. In these difficult economic times, family budgets are not ready to take on an additional cost burden.

I'd like to again thank all of the members of the Committee for all of the time they have spent with staff over the past 7 weeks. Their input has been invaluable, and I look forward to April 7 when the committee will be reporting back to the City Council. I'd also like to thank the City Council for creating this committee and appointing an excellent cross section of our community.

Here are some quick links to the articles in the Bulletin:

http://www.mantecabulletin.com/news/article/2579/

http://www.mantecabulletin.com/news/article/2581/

Budget Advisory Committee Meeting Today

The Council appointed Budget Advisory Committee will be meeting at 3:30pm today at the Senior Center. The Committee is expected to make their final recommendations today and then forward them to the City Council for review.

The Committee's work has been essential to the staff's budget development process as we attempt to close our $11 million budget deficit. I would encourage any interested parties to attend the meeting today to find out what strategies are being explored for deficit reduction.

Speaking of budget deficits, the City Manager of Ventura has an excellent post today on what their City has been doing to address their budget gap. You can read that post here:

http://www.cityofventura.net/cmblog/

As noted in the post, Ventura like every other city is looking seriously at wage cuts and staffing reductions as the critical components of their budget reduction plan. Ultimately, we are each trying to be proactive so that we don't have to take the extreme measures now being implemented in Vallejo. Here's the latest update from Vallejo:

http://www.timesheraldonline.com/news/ci_11965977

and if you are a real glutton for punishment, one more dispatch from Vallejo regarding their latest budget woes--one option proposed is to just dissolve the municipal corporation!

http://www.timesheraldonline.com/news/ci_12000201

Employee Banquet

I’d like to thank the Manteca Bulletin for highlighting our Employee Banquet in Monday’s paper. I’m sure our employees appreciated the recognition. I’d also like to respond to Tuesday’s opinion column criticizing our decision to hold a banquet in these tough economic times.

I fully agree that every City expenditure should be questioned in these tough economic times. I can also understand why some would object to holding a banquet this year. Our management staff also had great concerns about holding the function this year. It was the subject of a great deal of discussion late last year.

Ultimately, we determined that having a banquet this year would be an important component of our goal to work with our employees to reduce the cost of City government here in Manteca. As most of you know, our employees have already agreed to give back $1.1 million in salary that they were contractually owed in fiscal year 2009-2010. With an $11 million budget gap, this is only a down payment on the many changes we’ll need to make in order to balance next year’s budget.

I felt that cutting out the banquet would send the wrong message to our employees. I wanted to make it clear that we appreciate their hard work and that we are going to make it through these hard times as a team. I strongly believe that the banquet cost of $13 per employee (1/8,000th of their average total compensation) is a small investment that will pay great dividends as we work together to meet our budget goals.

Acknowledging the tough economic times, we reduced the approved banquet budget of $9,200 by nearly 50 percent. Management staff and the employee groups kicked in another $1,500 of their own money, and we made sure that every dollar spent for the event stayed in Manteca. We’re also looking at even more cost-effective ways to hold our employee recognition function in the future.

In my short tenure in Manteca, I’ve been impressed with the vision of our City Council and staff to accomplish major goals with minimal resources. Our workforce is far smaller than similar-sized cities, and our revenue base is less diverse than many of our counterparts. In spite of these challenges, we’ve seen huge changes for the better in this community over the past five years. I believe a key to this success was a strategy that balances fiscal prudency with bold, strategic investments. I strongly feel that continuing to recognize our workforce in this small, yet meaningful way is consistent with this strategy.

A Tale of Two Cities

In today's budget environment, all City Managers are closely monitoring the actions being taken in other cities--particularly mid-sized cities in Northern California.

The City of Santa Rosa has been very assertive in addressing its $23 million budget gap. Like many cities, they have asked their labor groups to reconsider the cost of living adjustments due in their current contracts--as the alternate to ever-increasing labor costs is shrinking the labor force and drastically cutting services.

Follow this link to get the latest from Santa Rosa and their discussions with their public safety unions:

http://californiacitynews.typepad.com/californiacitynewsorg/2009/03/santa-rosa-ponders-payasyougo-911.html

While things seem to be going well in Santa Rosa, they aren't going as swimmingly in Salinas:

http://www.thecalifornian.com/article/20090325/NEWS01/903250316/1002/NEWS01

Congratulations to Julie Sweeney, City Employee of the Year

A good time was had by all those who attended the employee banquet this past Saturday night. The Bulletin published a nice article (with lots of photos) about all of those who were recognized that evening.

In addition to what was included in the Bulletin, I thought I'd also pass on the short speech that preceeded Julie Sweeney receiving the "Employee of the Year" award:

The employee who has been selected this year epitomizes a strong work ethic. This individual is 150% focused on doing the best job possible for the City and fellow employees. This person is dependable, dedicated, a problem solver, meets all deadlines, continually expands and enhances job knowledge, is open to suggestions, and focuses on maintaining accuracy in their position. Due to having a strong work ethic, this individual has been promoted in their 7 years with the City to a position where honesty and confidentiality are a must. In addition to being dedicated to their position, this employee is pleasant to work with and always exhibits calm, caring persona. This individual is a pleasure to be around and would be an asset to any department. This member of our staff impacts each and every employee at the City. You could say she treats each of our paychecks as if it were her own. It is with great pleasure that we recognize Julie Sweeney as the 2008 Employee of the Year.

Congratulations Julie!

New Phone System

In these tough economic times, any expenditure of city resources is justifiably questioned by the City Council, the public and our employees. The best type of expenditure is one that saves current and future dollars. Last City Council meeting, the purchase of a new phone system was approved that will not only save funds, but increase productivity and improve customer service. The following column in the Bulletin describes all the benefits from this purchase:

http://www.mantecabulletin.com/news/article/2420/

Comparing 2009 to 1930

A lot of folks are trying to compare today's economic woes to the depression. While I agree with many that we are likely experiencing the worst economic decline since the depression, the chart below does a good job of showing how severe the 1930s were compared to today:

http://blog.prospect.org/blog/ezraklein/job-loss-recess-depress2.gif

CalPERS Lost Decade

Here's an interesting article about what has happened to our pension system over the past decade:

http://calpensions.com/2009/03/20/calpers-lost-decade-from-boom-to-bust/

Dollars and Sense

When the financial markets ride high, local government is often criticized for its conservative investment practices. However, the history of cities investing "outside the box" is littered with stories of entire portfolios being destroyed due to one foray into derivatives or some supposed "can't lose" hedge fund.

The City of Manteca has a long history of being prudent yet very successful in gaining strong returns on its investment portfolilo. This week's "The Week in Review" has a nice summary of how our numbers stack up during these difficult times:

Status of City’s Investments: With the volatility in the stock market that has occurred over the past 12 months, questions regarding the stability of the City’s portfolio may be raised. In April 2002, the City engaged the services of The PFM Group to manage our investments. The benchmark that was selected to compare our portfolio’s performance to was the Merrill Lynch 1-3 year U.S. Treasury Index. When PFM began to manage our portfolio, the portion invested in long-term investments was approximately $43 million, and represented about 59% of our total investments. Today, the long-term investment portfolio has grown to over $127 million and represents over 80% of our total cash and investments. All investments meet the requirements set forth in the City’s Investment Policy. The goals for the portfolio continue to be safety (protection of principal), liquidity, and the return on investment. A total of 44% of the portfolio is invested in 1-2 year investments, with 55% of the portfolio being invested in Federal Agencies (FNMA, FHLB).
With an investment strategy designed to maintain the safety of the City’s investments, while allowing us to take advantage of changing market conditions, we have been able to attain a 5.46% return over the past 12 months. Over the past 6 ½ years, the portfolio has averaged a 4.01% return, as compared to the Merrill Lynch benchmark of 3.87% return for the same period of time, and an average LAIF (Local Agency Investment Fund) rate of 3.06%. During this fiscal year alone, the City has received $1.8 million in investment gains as a result of employing PFM’s investment strategies. As market conditions continue to change, PFM will continue to shape strategy that will allow the City to meet our benchmark targets while ensuring the safety of principal.

By the way, if you don't already read "The Week in Review", it is a great way of keeping up with all the activities provided by your local government.

Lead Balloon or Life Preserver?

The guest columnist in today's Manteca Bulletin seems to have a real problem with their local government even discussing the possibility of revenue enhancements, and more specifically a utility tax. As I noted in yesterday's blog, we've got a huge budget gap to fill. Undoubtedly there will be cuts in service--the question becomes how large will the cuts in service be?

As the City Manager, it is my responsibility to operate the City to its maximum efficiency. I am mandated with ensuring that every tax dollar is spent as wisely as possible. If the guest columnist had attended any of the Budget Advisory Committee meetings, he would have a much better understanding of the steps already taken to make sure that our tax dollars are being spent in a responsible manner. Every department is doing more with less, every department in this city already operates with far fewer employees per capita than our peer group of cities. Every department also has to continue to find more ways to reduce costs without impacting service. Every employee in the City has taken a reduction in their wages (including yours truly). While the columnist is entitled to his opinion, I think it is only fair that he actually peform a little research before he takes pot shots at the city workforce. Manteca government delivers far more service per tax dollar than any other City in the region.

Historically, like most bedroom communities, Manteca has not had a diverse group of revenue sources. However, the City has always been forward thinking and done more with less and grown more diverse economically. Unfortunately, we are still heavily dependent on property tax and sales tax--the two revenue sources most negatively impacted in the current economic downturn. A utility tax is a much more stable source of revenue, as is a landscape maintenance district or parcel tax. With more stable resources, it is much easier to plan out the future of your community.

Ultimately, it will be the City Council's choice as to whether or not to put a utility tax on the ballot--and IF it is put on the ballot, it will be the majority of the voters in this community who determine whether or not they are willing to preserve city services through additional revenue. This is a local decision as to how we spend our local resources. This isn't colonial Boston--the voters will get to decide and if approved, the dollars will stay right here and not go to England or to Sacramento!

I understand the public's fatigue with taxes, regulation and government programs. Frankly, the majority of this fatigue is imposed by our friends at the State and Federal levels of government. Local government is really the only place where citizens have the ability to influence their quality of life. We are floating these revenue ideas because we want to preserve and enhance the quality of life we have here in Manteca. Additional revenue would be a life preserver to save our high level of park maintenance, our relatively low crime rate and healthy rate of local economic growth.

Back to the Budget

Back in January, each Councilmember appointed three citizens to a Budget Advisory Committee. The purpose of the Committee was to provide a citizen perspective on the budget cuts and revenue enhancements being proposed by City staff. As most of you know, we are facing an $11 million gap in our $40 million City General Fund operating budget. Cuts are inevitable and it is crucial that we focus our cuts on areas that have the least negative impact on the public. In order to prioritize cuts, the Council thought it was important to receive input from a cross section of citizens.

The Committee has held three lengthy meetings to date. They've asked a lot of hard questions and really helped our city staff get a better feel for which city programs are most coveted. While we originally envisioned three meetings, the group has agreed to meet at least one more time to mull over the staff proposals for cuts and revenue enhancements. The next meeting will be held next Thursday, March 25 at 3:30pm in the Senior Center.

I'll be updating the blog next week on some of the discussion I expect will occur at the next meeting. One of the items we'll be sharing was a report provided by a similar group in Turlock four years ago.

I've posted that report here to provide you with the sort of recommendations typically submitted by a citizens committee.


AdvisoryReport.pdf

Bad Times and a New Optimism

I'm typically an optimist--and if you have interacted with a lot of City Managers--you'll find that optimism is the exception and not the rule. It is typically the City Manager's role to ensure that we can pay the bills, avoid the lawsuits and to keep rancorous Council meetings to a minumum. In order to succeed in this role, one must spend a lot of their time coming up with worst case scenarios--and then making sure they never happen. Thus, when most of your time is spent trying to anticipate disasters and then avoid them--you typically supress your ability to see the bright side of things.

While I respect the custodial role I've been given--I believe I can be more effective if I properly balance my cynicism with constant doses of optimism. Therefore, instead of devoting today's blog to budget woes--which is the dominant theme of today, and most days--I'm going to post a great Sacramento Bee article that Maria Henson wrote several weeks ago. Ms. Henson has tired of the daily flow of negativity that has dominated the news media since last fall. She has resolved to seek out those who see our current sitation in a more positive light.

In her first dispatch, she interviews William Isaacs, who has spent the last few decades helping senior leaders create "visionary transitions" for their organizations.

From Isaacs she acquired a new lens through which to see the downturn.

"Any circumstance that looks terrible and scary can be an excuse to feel bad," Isaacs told her. "It can also be an opportunity to say that this could easily be a moment where we finally redefine what it means to be around. What matters in times like this? Well, who you trust. Who you relate to. How you live in a more balanced and sustainable way."

You can read the entire article at sacbee.com and I'd also recommend you read this quote from Emerson that he references.

Budget Woes

It is never a good thing to wake up in the morning and see the word "layoffs" dominating the front headline of the newspaper. Granted, our local editor was careful to note in the opening sentence of the news article that I never uttered the word "layoffs" during the duration of the meeting. He was also correct in noting that in order to reduce our budget deficit, we have no choice but to reduce the number of employees being paid in the General Fund.

This does not necessarily mean that we'll be actually be doing any layoffs. It will mean that fewer positions will be funded with general city revenues. It will mean that vacant positions will be eliminated from the budget. It will mean that a number of positions may be redirected to other funding sources. It will mean that we will actively assist employees in moving into non-general fund positions that are currently vacant. For example, new positions in our Solid Waste Division are being filled by workers currently funded with general tax revenues. Divisions such as Wastewater and Solid Waste are funded solely via user fees and do not impact the General Fund.

As a service organization, it is my goal to preserve as many positions as possible. Manteca has never been a staff intensive municipal corporation. There are many cities with more employees per capita. As Manteca has grown from 30,000 to nearly 70,000 residents, general fund staffing in particular has not grown commensurately. Our workforce has understood the importance of adopting technological innovations, working smarter, and accomplishing more with less resources.

In these tough budget times, I've asked our Department Directors to do everything they can to reduce costs without reducing service to the public. I'm confident that they will do everything in their power to preserve the staff provides the needed services to our community.

In future posts, I'll be asking Department Directors to talk a little about what they are doing and what they will be doing to preserve service levels for our citizens.

Introductory Blog

Greetings:

This marks the first post in the City of Manteca City Manager blog.

I'm hoping that this blog can serve as a means of discussing the wide range of issues that the citizens of Manteca face each day.

I'm a firm believer that government is MOST effective when it is a collaborative effort between the citizens and its civil servants. In order to encourage facilitiation, it is critical that government operate as transparently as possible.

Transparency encourages open, honest discussion and allows citizens a larger role in determining the range and level of services provided by their local government. As our financial resources diminsh, and we are forced to do more with less, it is critical that we continue to provide our citizens with the services that the public determines are the highest priority. Additionally, much of the criticism of government typically occurs due to lack of information. If the public was provided with full information, it is likely that citizens would better understand why government sometimes does things that seem counterproductive or contrary to the wishes of its citizenry. Of course, there are times when we screw up, and we as civil servants would be better served to fess up instead of attempting to justify what we did.

I am hoping that this blog can be that vehicle to let the citizens know what we do, why we do it, and to ask forgiveness when we screw up. Most importantly, I'm hoping that this blog can be part of a larger dialogue that can help Manteca continue to grow in a way that preserves its small town values yet provide the services that it citizens want.

So here it is, I'll try to contribute something new just about every day and I hope that you, the citizens of Manteca will find it informative and a starting point for working together to keep our community a great place to live.

P.S. I'll try to include photos, articles, and other informative materials in every post. In this first post, please excuse my need to be the proud papa! Daniel James was born this past Monday, March 2. He and mom are doing great!