Jobs/Housing Imbalance

Since 1980, the east bay cities of Livermore, Dublin and Pleasanton have been one of the epicenters of job creation for not only the bay area, but the entire country. Much of the early employment boom can be attributed directly to Lawrence Livermore Laboratory which created a great pool of highly educated workers in the Livermore Valley. With this base of skilled workers, hundreds of large and small companies were attracted to the area along with many startup companies created by the skilled workforce already residing in the area

Millions of square feet of office and light industrial space was built to house the many employers. Some housing was also built, but not nearly enough to accomodate the huge influx of highly paid workers. The early entrants to the region wanted to preserve the bucolic lifestyle of the area. Due to the nature of local government finance, commercial development--which generates far more revenue than expenditures--was encouraged while service intensive residential development was discouraged through growth limits and sky high development impact fees.

Consequently, much of the region's population growth was exported to east Contra Costa County and San Joaquin County. This exportation has been particularly acute over the past decade. In 1980, there were 97,005 residents living in Pleasanton, Livermore and Dublin. The three cities that have seen the greatest import of commuters (Manteca, Tracy and Brentwood) had a total population of 47,787. During the 1980s, the three job centers added a total of 33,518 residents while the commuter destinations (mostly Tracy and Manteca) added 34,107. During the 1990s, the population growth began to skew greatly to the east with the three job centers adding 36,449 residents and the commuter cities 47,595. Over the past nine years, the commuter towns have added over twice as many residents with a population increase of 71,887 versus 35,456.

In fact, the commuter towns now have nearly as many residents (201,376) as the job cities (202,428). Since 1990, Brentwood has been particularly impacted with its population increasing from 7,563 to 51,908. Most of this increase is due to Livermore's refusal to develop homes in the area north of the 580 freeway. It is just cruel that tens of thousands of Brentwood residents have to navigate narrow and dangerous Vasco Road every day for an hour with the last ten minutes of the commute going through vacant north Livermore land that could have housed every recent resident of Brentwood.

The social cost of requiring all of these commuters to spend most of the time on the road instead of with their families is incalcuable. Our state government, who allowed these cities to ignore their housing needs, has instead paid for billions of dollars in freeway improvements and schools which require huge ongoing subsidies. Our air quality has also suffered from the clogged freeways stretching from the east bay to deep into the valley. Thousands of acres of prime farmland has been gobbled up in order to save marginally useable land in the Livermore Valley.

So where am I going with all of this? Well, it looks like the state is beginning to take steps to address this imbalance. I believe that if there were a level playing field, we'd have a better chance of attracting jobs to the valley. Right now, the job centers collect over twice as much tax revenue per resident due to the huge amount of commercial development in their cities. This revenue advantage allows them to have the funds on hand to attract additional development without impacting their resident's tax bill. In other words, the current situation allows the rich to get richer. Here in the Valley, we are forced to either provide less services or tax our residents more to keep up our quality of life. We simply don't have the resources to compete many times for the high wage jobs.

In any case, a recent article in the "Pleasanton Weekly" gave me some hope. The article, which is mostly discussing a proposed upscale senior housing development, notes the following:

The city is currently under fire for its housing cap, with a lawsuit pending to invalidate it. Just hours before the Planning Commission meeting, California Attorney General Jerry Brown announced he was joining a San Francisco affordable housing coalition in the legal fight, which was filed in 2006.

"Pleasanton's draconian and illegal limit on new housing forces people to commute long distances, adding to the bumper to bumper traffic along (Interstates) 580 and 680 and increasing dangerous air pollution," Brown said in a statement. "It's time for Pleasanton to balance its housing and its jobs and take full advantage of its underutilized land and proximity to BART."

Click here for the entire article. The reader comments are worth reading as they show the anti-growth bent of many east bay residents.

A number of us have been pushing the Attorney General to stop picking on Central Valley planning practices and focus on the genesis of our growth challenges--i.e. the east bay growth policies. Let's hope that this is the beginning of a new day when Valley cities can start competing on a more level playing field. It is up to the state to finally put its money where its mouth is, and force all cities to create a jobs/housing balance.

Condolences

The structure that was damaged by fire in the previous post is the home of Richard Hansen. Mr. Hansen is a regular attendee and participant at our City Council meetings. While I don't agree with most of Mr. Hansen views of city government, I truly appreciate his interest in the City of Manteca. He is one of the few people that take the time out of their lives and attend our meetings twice a month.

Our thoughts and prayers go out to Mr. Hansen and his family.

Manteca Firefighters Combat Blaze in Scorching Hot Temperature

Fire crews arrived on the scene of a Modular Home well involved with fire. Additionally, the adjacent residence was beginning to ignite. Firefighters aggressively extinguished the fires while simultaneously provided for salvage to protect the contents of the residence. They were successful in preventing the fire from extending into other residences and prevented further fire extension within the home. All occupants made it out of the building safely as a result of working smoke detectors. They also heard a loud explosion.

Emergency Callback procedures were initiated and off-duty Firefighters came in from home as well as several Reserve Firefighters. Reserve Firefighters helped at the scene while off-duty Firefighters staffed the stations and responded to several other simultaneous emergencies within the City. Firefighters remained on scene for four hours performing salvage, overhaul, and fire investigation.

The Occupants did a nice job getting out of the residence, going to a safe meeting place, and notifying arriving firefighters that everyone was safely out of the house.

Groundhog Day

From Sunday's San Francisco Chronicle:

...as the state's finances again head off the cliff, the latest California scenario "isn't 'Thelma and Louise,' " observes Hoover Institution research fellow Bill Whalen. "It's 'Groundhog Day.' "
Now Californians, like the Bill Murray character who lives the same day over and over, may be finally forced to confront the roots of the insanity.

The article (click here to access), does an excellent job of summarizing all of the issues that plague California's state government. Problems include partisanship, ballot box budgeting, term limits, Prop 13 and a host of other challenges. At the end of the day, while the article doesn't come up with any quick solutions, the author does believe that the people of this state have the wherewithal to make its government spend within its means. It notes that it typically takes a crisis to effect change. Given the full blown crisis we are in now, there is certainly no better time to reform state government.

This Week's "The Week in Review"

Here are some of the highlights from this week's "The Week in Review" (TWIR). You can read the entire TWIR by clicking on the link on the right side of this page.

Parks and Recreation:
Movies in the Park: The Summer Movies in the Park program is back! The first movie night is scheduled for Saturday, June 27 at Woodward Park. De Cristo Productions is presenting “Journey To The Center of the Earth.” The event begins at 5 p.m. with entertainment, with the movie starting around 8:45 p.m. Admission is $1. The movie series is planned to run each Saturday for five weeks, with movies scheduled on June 27, July 4, July 11, July 18 and July 25. For more information and movie previews, visit http://manteca.publicparkfilms.com/.

Independence Day Celebration and Fireworks, July 3 at Big League Dreams: The City of Manteca and Big League Dreams will host a community- and family-oriented special event that will provide a fun, safe and festive environment for Manteca residents and the general public to enjoy an “Old Fashioned Independence Day Celebration.” The event will feature children’s activities, family fun and entertainment, and will culminate with the annual fireworks show. This year, an admission fee of $2 for adults, and $1 for ages 13-17 will be charged (cash only). Children ages 12 and under are free. Free event parking is available off Daniels Street, just north of the Stadium Shopping Center. The event is scheduled from 4 p.m. through the end of the fireworks show – approximately 10:30 p.m. and is expected to draw 8,000-12,000 visitors.

Police Department:
DUI Checkpoint: On June 20, the Department conducted a DUI checkpoint in the 900 block of East Yosemite Avenue. A total of 567 vehicles passed through the checkpoint. Officers arrested three individuals for driving under the influence, and impounded 11 vehicles for driving on a suspended driver’s license.

Burglary Arrests: At 2:20 p.m. on June 22, officers were dispatched to 1607 Goldpoppy in regard to a residential burglary that just occurred. The resident was home in the shower when the suspects entered the unlocked rear sliding glass door and stole money out of the victim’s wallet. The suspects dropped the wallet and credit cards as they ran out of the house. Neighbors and the victim called the Police Department and gave a description of the suspects and suspect vehicle. Officers found the suspect vehicle eastbound on the Highway 120 bypass. They made a high-risk enforcement stop on the vehicle as the vehicle was merging onto southbound Highway 99. Two suspects were detained at the scene and were identified by witnesses as the individuals responsible for the burglary. One of the suspects had the $84 that had been taken from the victim’s wallet. A firearm was also located in the vehicle. Adam Aguilar of Los Banos and Jesus Antonio Quintana of Atwater were arrested for Residential Burglary, Conspiracy, and weapons charges.

City Manager:
TANC Meeting: The Mayor and I attended a meeting facilitated by Supervisor Ornellas regarding the Transmission Agency of Northern California (TANC) high-voltage transmission line project. The project is designed to substantially increase the electrical transmission network in Northern California. The primary sponsors of the project are the Sacramento Municipal Utilities District, Modesto Irrigation District and Turlock Irrigation District. Property owners and municipalities in South San Joaquin County are very concerned about the lack of planning to date for this project. The first cut at a proposed route for the lines severely impacts future projects in both Manteca and Ripon. The Mayor and others expressed their concern at this meeting, which was attended by, among others, TANC and representatives from the local congressional offices. Comments on the proposed route are due by July 29. I will be bringing back more information to the Council well in advance of the deadline for the comment period.

PBID Steering Committee Meeting: On June 24, City staff and I, along with the City’s consultant, attended the PBID Steering Committee meeting. This is the group of individuals interested in learning more about a PBID (Property-Based Business Improvement District) for the downtown area. There was much discussion about changes that have been made to the downtown – primarily those paid for by the City – and some concerns about the effectiveness of those changes. The group also discussed a survey the consultant had distributed to approximately 600 business and property owners, asking their opinions about the most important issues facing the downtown area and, should a district be formed, in which areas should the funding and efforts be concentrated. An extremely low number of surveys were returned, lending all in the group to agree that this was not an adequate representation on the needs of the business community. The committee members were tasked with providing input on a new survey, and areas of interest that should be asked of the business and property owners. The committee will meet again in August to review this work and finalize a new survey.

Stop the State Raid of Gas Tax Funds

LEAGUE BOARD VOTES UNANIMOUSLY TO CHALLENGE RAID OF LOCAL GAS TAX FUNDS
Bypass of Voter-Approved Ballot Propositions at Issue

The news media flocked as more than 100 city officials joined with the League of California Cities’ board of directors to announce the board’s unanimous vote to take legal action, if necessary, to challenge the constitutionality of a key component of the budget proposed by the Budget Conference Committee to seize $1.7 billion of the local share of the highway users, or gas, tax that is used to maintain local streets and roads. The press conference was held on Thursday, June 25, at the Sacramento Convention Center during the League’s policy committee meetings.

State leaders have proposed bypassing the voter-imposed restrictions to use local gas tax funds to pay off the state’s highway bonds and reimburse the state general fund—a questionable move that seems designed to give the appearance of having a balanced budget. The action comes as close to 130 have already passed resolutions directing their respective city attorneys to cooperate with the League, other cities and counties in pursuing litigation to have any raid of local gas tax funds declared unconstitutional and invalid.

Nielsen, Merksamer, Parrinello, Mueller & Naylor, LLP, a law firm specializing in ballot measure and election matters, concluded that in both 1974 and 1998 voters imposed restrictions on the state’s ability to use gas taxes for debt service on bonds and to divert local gas taxes for the state general fund. The opinion has been shared with all legislators, the Budget Conference Committee, and Gov. Arnold Schwarzenegger. It is online at www.cacities.org/HUTAopinion

Thursday’s press conference carried a simple yet strong message: DON’T KICK THE CAN DOWN THE ROAD!

The Sacramento Bee’s Capitol Alert shortly after the news conference posted “California cities vow to sue if state siphons gas tax funds” www.sacbee.com/1089/story/1977103.html. The League expects considerable coverage later Thursday and Friday based on press attendance at the event.

During the press event, League President Judy Mitchell was flanked by a very large group of city officials all holding “Save Your City” signs. President Mitchell told reporters that the Legislature should adopt a credible budget that is balanced with a realistic mix of state, not local revenues.

When she finished her remarks she passed Modesto Mayor and League Second Vice President Jim Ridenour a can labeled with Save Your City on one side and a quote from the Governor on the other side that read: "I urged the legislature to take this seriously and to not ... kick the can down the road, as they have done in the past but let's solve the problem." Fresno Bee, June 11, 2009.

Mayor Ridenour said that his city will literally go dark if gas taxes are seized because they will be forced to shut off 12,000 street lights. He told reporters that cities are not a state program but separate governments that have suffered the same drastic revenue losses as the state.

The Modesto mayor ended his remarks by giving the can to Clovis City Council Member Nathan Magsig. The council member explained to reporters how his county’s (Fresno) unemployment rate has skyrocketed to 15.4 percent and that the public works projects funded with gas tax are imperative to keeping folks working. He ended his remarks by urging the Legislature to reject these unconstitutional job killing proposals because the promised savings are illusory and will only cause widespread economic harm.

League Executive Director Chris McKenzie was the final speaker and summarized the League’s position.

Press present at the news conference included:

The Sacramento Bee
Capitol Weekly
KFBK-AM
KCRA-TV
Fox 40-TV
Public CEO
Capitol Television News Service

Capitol Public Radio also conducted a phone interview with Chris McKenzie following the news conference. The Riverside Press Enterprise is running a story on Friday, June 26.

Pension Reform

I've noted in a number of posts the ever increasing number of cities and counties concerned about the spiraling costs of defined benefit pension programs. Ventura County is the latest local agency to address the issue head on. Here is an excerpt from Tuesday's Los Angeles Times:

Alarmed by spiraling pension debt, Ventura County could join a growing number of local governments requiring that future increases in retirement benefits for public employees be put on the ballot.Voters in Orange County and the city of San Diego in recent years have stripped benefit-granting authority from their elected officials, reserving that power for the electorate. San Francisco has required voter approval of pension benefit hikes since its founding charter over a century ago.

The Ventura County Grand Jury recently recommended that voters there be given the same opportunity. Two members of the Board of Supervisors said they are willing to consider the proposal.

It goes on to note:

Grand Jury foreman Ron Zenone said the panel investigated pension costs because they account for a large portion of the county's general fund. Pension costs grew 327% over the last decade and are projected to increase 20% to 25% a year for several years.Ventura County is hardly alone. Eight years after granting one of the most lucrative pension plans in the state, San Diego County is trying to rein in costs by creating a tier of employees with lesser benefits. In February, the county's retirement fund had lost $2.5 billion, or about 30% of its value, as the stock market plunged. At that time, Dianne Jacob, chairwoman of the Board of Supervisors, said the county would have to increase its annual payment from $300 million to $700 million in five years.Riverside County government, too, is looking to trim benefit costs after granting costly enhancements, and the Bay Area city of Vallejo declared bankruptcy last year in part because of climbing retirement payments.

Read the full article by clicking here.

Budget Roundups

July 1 is just around the corner, and for most cities, that means a deadline to pass a budget for the next fiscal year. While every city has a unique set of financial circumstances, there are definitely some recurring themes as we review cities throughout the state.

Every city has seen a drop in revenue, I've yet to find one yet who actually is expecting more money in next year's general fund. Since labor is the biggest cost for every city, every city is looking at the three ways you can reduce labor costs: holding positions vacant, reducing employee compensation, or layoffs. While many cities are dipping into their reserves to reduce the impact on services, the deficits faced by most cities can't be covered solely by reserve funds.

Here is a quick summary of what cities across the state did with their budget this week:

Stockton's budget is $45 million than last year. Parks, street maintenance and library programs are being drastically reduced and 55 police officers are losing their jobs. Read about it here.

Lodi's police officers will be taking furloughs and the Fire Department will be browning out stations when staff levels are not sufficient. Here's more about their $2.4 million in budget reductions.

Modesto's story is very similar to Stockton with huge cuts in most services. Ten police officers will be laid off due to the Police union's refusal to reduce compensation. Here's more details.

Watsonville staved off a reduction in their fire department force by agreeing to a 7.5% pay cut. Read more here.

Sacramento firefighters refused to take a pay cut. Consequently, 50 firefighters will lose their jobs and 18 will be demoted. More details here.

Eureka hasn't resolved their budget woes yet. However, the firefighters have agreed to give up their holiday pay. Read the story here.

Santa Barbara adopted their budget, but acknowledged that it is already out of balance due to continuing reductions in revenue. Read here to learn more about the labor concessions to date to help reduce their expenditures.

Irvine's labor groups all agreed to freeze salaries, but that still left a $13 million hole in their budget. A majority of the City Council decided to maintain current service levels by using reserves to plug the gap. Read more details here.

Vallejo's budget continues to spin downward. Despite drastic cuts over the past year, 26 more layoffs are proposed. Read it here.

In Los Angeles, the bad news is that 1600 positions are being eliminated. The good news is that 1200 of the positions were already unfilled and 324 of the remaining 400 employees were able to move to other jobs within the city. Here are the details.

Burbank seems to be better off than most cities. The majority of cuts in their budget were met by keeping positions vacant. Their larger issue is keeping their enterprise funds afloat via rate increases. Read more here.

South of San Francisco in San Mateo County, nearly every fire department is looking at possible brownouts and reductions in force. Read more here.

In San Francisco, the debate between cutting public safety and cutting social programs continues. Here is an article which critiques the current staffing levels in the fire department.

Valley Cities hardest hit by Recession

The Brookings Institute released a study last week on the economic condition of the 100 largest metropolitan areas in the country. San Joaquin County and its 700,000 residents did not fare well in the study.

We were ranked dead last in price appreciation, 99th in Foreclosures, 98th in employment (just ahead of Fresno and Modesto), and 96th in economic growth. One bright spot was our 14th place rating in wage growth.

In any case, our congressional delegation is attempting to bring attention to the current and historic economic plight of the central valley. The House Financial Services Committee held a hearing on the Valley's dire economic circumstances. Lawmakers considered, though did not vote on proposals including one by Reps. Dennis Cardoza, D-Merced, and Jim Costa, D-Fresno, that would establish the Valley as an "economic disaster" area eligible for special federal aid.
"We are one step closer to seeing the relief we deserve in the Valley," Cardoza declared in announcing the upcoming hearing.
In a slightly different rhetorical vein, Rep. Devin Nunes, R-Visalia, says he will be bringing more congressional attention to the irrigation water shortages that have aggravated the Valley's farm economy. Starting this week, Nunes plans to offer water-related amendments on House spending bills; he conceded the amendments will lose, but he believes they will still serve a purpose.
"We need to draw a clear congressional record of those people who want to cut off water to the Valley," Nunes said, adding his belief that congressional Democratic leaders "want the Valley killed."
While not addressing the Valley's specific water woes, nor the proposals for an "economic disaster" designation, Berube stressed that the region-to-region disparity will complicate the job of "policymakers seeking to ensure a truly national rising economic tide."

We'll let you know if any thing positive emanates from the hearing.

To read the Brookings Institute study, click here.

Highlights from "The Week in Review"

Here are some excerpts from this week's "The Week in Review" (TWIR). To read the entire TWIR, click on the link on the right side of this page.

Public Works:
Atherton Drive Landscaping: Work on replacing the turf along Atherton Drive across from the Promenade Center will begin this week, and should be complete in another two weeks.

Stimulus Funding for Street Improvements: On June 18, the City received authorization from Caltrans and the Federal Highway Administration to proceed with construction of a street rehabilitation project that City staff had proposed for the first round of ARRA (American Recovery and Reinvestment Act of 2009) stimulus funding. This is one of the first ARRA projects approved in San Joaquin County. The project includes pavement repair and asphalt overlay on various City streets, including portions of Union Road, Alameda Avenue and North Street, among others. The authorized funding amount is in excess of $1.3 million, and will cover 100% of the construction costs. Staff anticipates recommending the City Council approve a call for bids at the July 7 Council meeting, with construction on the project occurring during August or September.

Union Road Improvements: Work on Union Road south of the Highway 120 Bypass will resume as soon as Verizon completes the relocation of its facilities at the intersection of Union and Woodward. Once that work is complete, the contractor will remove the crash cushions, install median islands and landscaping, and then complete the paving and striping. Once the striping is complete, the signals at the Highway 120 ramps will be energized.

Louise Avenue Closure: Louise Avenue, west of Airport Way, will remain closed for another two weeks, due to the extension of a Lathrop construction project, which is improving Louise Avenue through the City of Lathrop. The extension will also allow the joint SSJID/City project some extra time to replace a culvert at the French Camp Outlet Canal before reopening the road.

Parks and Recreation:
Aerial Lift Truck: At the June 16 City Council meeting, some questions were raised by the public regarding the replacement of the 1988 lift truck. The 1988 Altec truck was purchased new, arriving in the Parks Division on November 30, 1988. That truck has 20,461 miles on it, as well as 5,115 hours. The number of hours is equivalent to approximately 307,000 miles. The actual mileage to the working sites may not be much, but these trucks idle for long periods of time while the aerial lift is in place. The old truck was a gasoline truck, which is far less efficient for idling purposes. The new truck will be diesel – better designed for the amount of idling it will require. The Council did take action to approve the purchase of a new truck.

Golf Course – Vandals recently damaged four ball washers, seven tee signs, 17 irrigation heads, and one green. Labor and material costs to make all repairs were $1,360.

Woodward Park – Vandals recently destroyed five young trees in the park. Labor and materials to replace the trees will cost approximately $500.

Parks staff has trained part-time personnel to prepare infields for play and to perform basic swimming pool maintenance tasks on weekends. Utilizing part-time staff will reduce overtime pay and will free up time for regular maintenance personnel to focus on more technical tasks.

Fire Department:
Emergency Incidents: We had a total of 89 incidents this week, which included 5 that were fire related: 4-Structure Fires and 1-Outside Rubbish Fire. Dollar loss for the week was estimated at $24,500. The remaining calls this week were: EMS-54, Vehicle Accidents-2, Service Calls-13, and Other Emergencies-15.

Significant Incidents:
Structure Fire – 450 E. Yosemite Ave., June 10
Noticing visible smoke in the area, firefighters at Fire Station #1 were preparing to investigate as the alarm came in for a structure fire at Manteca High School. Engine Company 244 was the first to arrive on scene to find smoke and flames coming from an outdoor storage building and a portable classroom. Fire suppression operations were immediately started and the fire was brought under control. The fire completely destroyed the storage shed. The portable classroom had fire damage to the west wall, and under the flooring. The fire appears to have started in or near the storage building, which contained hay bales. Crews were on scene for approximately three hours. Engine companies from all three fire stations responded, along with the aerial ladder truck and an engine from Lathrop-Manteca Fire District responded.

Vehicle Accident – South Manteca Road, June 13
Engine Company 242 responded on automatic aid with the Lathrop-Manteca Fire District, Engine Company 32, to a single vehicle rollover on South Manteca Road near Sedan Avenue in the early morning hours of June 13. Firefighters arrived on scene to find a four-wheel drive truck on its wheels, facing northbound on South Manteca Road. It had sustained major damage. Three patients required medical attention and were transported to a local medical facility for treatment.

CalPERS Updates their Rates

This past week, the CalPERS board met to address the 23 percent reduction in portfolio value since this time last year. Back in 2005, PERS had adjusted rates upward in an attempt to "smooth out" future payments to ensure that rates wouldn't skyrocket in bad years. Unfortunately, this most recent investment shock was larger than anticipated when rates were "smoothed out".

A second "smoothing" was approved that will raise rates but allow agencies to absorb the increase over a longer period of time. For local governments, we'll first feel the impact of this increased rate in the 2010-2011 fiscal year. We don't know yet what the actual rate will be, but will receive it soon and begin to factor it in to our long range budget planning. In any case, while some are not happy with the rate smoothing, it will save a lot of jobs over the next few years. Whether we will regret this in hindsight remains to be seen. If the stock market stabilizes, it will turn out to be a good decision. If the market starts heading south again for an extended period of time, we'll end up paying a far greater price in the future.

Here are a number of articles on the subject:

Click here for the Los Angeles Times story. Click here for Pensions & Investments take on the subject. For PublicCeo.com, click here. For calpensions.com, click here.

In a related matter, Orange County is close to putting in place the a two-tier pension system. Here's an excerpt from the Orange County Register:

Here's how it works: existing county employees could decide whether to keep their old benefits, or select a hybrid plan that includes reduced pension and a defined contribution plan, which is similar to a 401k. New employees also would get to choose between the two plans.
For example, an employee who has been working at the county for 30 years and makes $60,000, now pays about $700 a month toward his pension. He can retire at age 55 and collect $4,050 per month.
Under the new plan, employees would retire later – at 65 – and collect less from their pensions – about $2,430 a month for a 30-year employee. But when they're working, they'd pay less each month – about $360 for the employee who makes $60,000. Plus, they could decide how much to contribute to the 401a plan, which the county would generally match up to two percent.
The agreement also establishes a committee of union workers and county executives charged with finding more efficient ways to run the county. Any savings would be passed on to the employees in the lower-tier retirement plan in the form of a higher county matching contribution – a sort of public profit-sharing.

Click here for the entire story.

Back in the 1990s, the State of California had initiated a two-tier system when revenues dropped during the recession. Here is an excerpt from an editorial this week in the San Diego Union Tribune, which discusses legislation passed in 1999 to enhance state retirement benefits and eliminate the two-tier system that had saved the state hundreds of millions of dollars (be sure to read the section I've put in bold):

Three months after the CalPERS board made its recommendation, Senate Bill 400 swept to passage and was signed by Davis.
It revised sharply upward the formula under which retirement benefits were calculated for state and public school workers; it based the benefits on the final year of pay (normally the highest), not an average of the final three years; it erased a previous money-saving reform by ending a tier system under which new hires received smaller pensions; and it conferred a vast array of pension sweeteners on retirees and their survivors. It also paved the way for local governments throughout the state to offer similar retroactive gifts of public funds to their employees and retirees.
CalPERS' argument that this enormous pension spike would have little long-term fiscal consequence had carried the day. Its official estimate was that in 2008-09, the state's employer contribution would be only $379 million.
The actual figure: $4.6 billion. The likely figure in the next few years, thanks to the stock market's huge slide, will probably be much higher. (emphasis added)
In other words, the annual cost of the allegedly benign 1999 pension spike is likely to be at least a dozen times the original estimate. And if state leaders did the prudent thing and started setting aside money to cover at least $48 billion in unfunded retiree health benefits, that would add at least $2 billion more to the annual tab.

$1.9 Billion hit for State, economic boost for Manteca?

Here is an update on what is happening with the long-standing federal lawsuit over health care for state prisoners. This decision will not only have a major impact on the state budget, but it will also have a major impact on San Joaquin County and Manteca.

If the settlement is approved, the old women's prison northeast of Manteca will be converted to a prison hospital, generating nearly 1800 family wage jobs in the health profession. County officials claim it will negatively impact the County hospital as the state pays far higher wages for health care workers. Others welcome the additional jobs as it will boost payroll countywide--particularly in south County where most of the workers will likely reside.

Judge sets deadline for Calif. prison decision
By DON THOMPSON Associated Press Writer SACRAMENTO -- A federal judge on Tuesday gave the Schwarzenegger administration 15 days to sign an agreement intended to reform the health care system <http://topics.sacbee.com/health+care+system/> for California inmates and end a long and costly legal dispute.
Failure to do so would prompt a potential raid on the state treasury, U.S. District Judge Lawrence Karlton warned.
Corrections Secretary Matthew Cate negotiated the tentative agreement last month with J. Clark Kelso, the court-appointed receiver overseeing prison medical reform.
Benjamin Rice, <http://topics.sacbee.com/Benjamin+Rice/> general counsel for the Department of Corrections and Rehabilitation, said the administration and the state controller's office are reviewing the agreement. The terms haven't changed, he said, nor has it been rejected.
Karlton's patience wore thin when Deputy Attorney General Debbie Vorous said she could not say why the document had not been signed.
"This is intolerable," the judge said.
He gave the state three months to present an alternative if it won't sign the tentative agreement.
"They better come in with a plan with real money. Otherwise, I'm going to start eating into their budget in a real dramatic way," Karlton said during a hearing in federal court in Sacramento.
Seconds later, the visibly upset judge took a breath and said, "Take that back. I'm not threatening anything." It was one of many times during the hour-long hearing that Karlton tried to restrain himself.
"If I sound terribly frustrated, it's because I am," Karlton said at another point after raising his voice.
The agreement would end a series of lawsuits that stemmed from allegations of inadequate care. Federal courts subsequently found the care so negligent that it violated prisoners' civil rights and was a direct cause of inmate deaths.
The $1.9 billion compromise reached by the receiver and Schwarzenegger's corrections secretary calls for building two prison hospitals for 3,400 physically and mentally ill inmates.
It represents a much less ambitious plan than the one originally proposed by the receiver. Under the first plan, the state would have spent $6 billion to build seven hospitals for 10,000 ailing inmates.
Both sides said the compromise was an acknowledgment of fiscal reality, as California faces a $24.3 billion deficit and steep cuts to schools, parks and social programs.
In addition to improving medical and mental health care, the tentative agreement would end competing lawsuits between Gov. Arnold Schwarzenegger and Kelso. The receiver is threatening to seek a contempt of court ruling if Schwarzenegger won't turn over money for prison medical centers. Schwarzenegger is seeking a court order to end the receivership.
At the same time, state Attorney General Jerry Brown has said he will appeal to the U.S. Supreme Court if federal judges seek to raid the state treasury unilaterally.
Under the agreement, the receiver would agree to shift many of his employees and duties back to state control within six months.
Attorneys said they believe the administration has until July 1 to sign the agreement, although the exact date was unclear from Karlton's verbal order.
"We're very close. The state's had this albatross around it's neck for about 15 years," Kelso said in an interview. "The hopeful or good news is we're about a signature away from solving this problem once and for all."
Karlton said he was encouraged by the administration's shorter-term plans, also presented in court Tuesday, to improve care for mentally ill inmates. But he warned that the administration is now obligated to meet the deadlines it has set for itself.
"Those are orders of the court that must be obeyed - not hoped for, not prayed for - obeyed," the judge said. "I'm not kidding."

Response to Bulletin re: LMDs

There still appears to be some confusion about the facts concerning the City assuming responsibility for the Landscape Maintenance Districts (LMD). The intent of this blog is to provide clarity to some of the points made in the opinion column in today’s Manteca Bulletin.

It is possible that the four contractors that are currently maintaining the City’s 24 LMDs, may deploy a dozen workers in any given week to maintain the landscaping. However, keep in mind that they are typically only on site one time each week. Beginning July 1, the City will assign three full-time maintenance workers, plus a half-time lead worker and a half-time irrigation technician to maintain the LMDs. The number of actual personnel maintaining the LMDs appears to be in favor of the contractor. However, the major difference is that the contractor is only on site once a week, where City staff works 5 days a week, and can respond to issues much faster than a contractor who is working in another city.

The move to maintain the LMDs with current maintenance personnel will, in fact, preserve jobs. But, this was not the only reason. City staff evaluated each of the LMDs and determined that staff could maintain current service levels, and that the City’s costs were within 5 percent of current contract rates. That doesn’t necessarily mean that LMD property owners should expect a 5 percent increase in their assessment. In fact, the assessment will not increase at all for several of the LMDs.

A big advantage, and often overlooked advantage, with the City assuming responsibility for the LMDs, is the potential for savings in water. Because a contractor typically only visits the site once a week, they have a tendency to over-water. With City staff managing the water, we anticipate being able to conserve water by as much as 10-15 percent of current use. It is true that all of the LMDs combined have a budget of approximately $1 million. Of the $1 million, $285,000 is for water use alone. Any savings on water costs would be passed on to LMD residents, in the form of a lower assessment. If you consider the potential savings in water costs, and the fact the City’s estimates to perform the maintenance are within 5 percent of current contracted rates, staff feels we can provide the best value to the taxpayer for the dollar.

The question regarding accountability and where maintenance personnel’s salaries are being charged is a good question. The response to that is that each employee maintains a daily record of where they work and how much time they spent at each location. So if an employee does need to work overtime in a General Fund-maintained park, that time would be charged to the General Fund, not the LMD. LMD funds can only be used in the LMD where they were collected.

The issue regarding landscaping along Atherton Drive east of Union Road centered around a private contractor who installed the landscaping as part of the Atherton Drive extension project. The City does not accept public improvements like this landscaping until it has been installed to City standards – clearly not the case to date with this landscaping. This area is still considered an active construction site, and not yet at the point where routine maintenance overseen by the City would begin.

Maintenance of the Tidewater bike path has improved significantly over the years – due primarily to an upgrade of the irrigation system. The previous condition of the Tidewater was the result of an older, inefficient irrigation system – not the maintenance by City personnel.

Oversight of the LMDs will be no different than the oversight of the City’s parks and other publicly maintained areas. Manteca has a very good reputation for maintaining its park system. There is a lot more to it than simply mowing the turf. The majority of park maintenance personnel maintain multiple certifications pertinent to maintaining landscaping, parks and water features – likely at levels beyond what are possessed by the private contractors. Manteca’s workers are experienced maintenance personnel, many of whom call Manteca home. With that comes ownership and pride in what they do.

Finally, City staff is committed to continuing its evaluation of managed competition, and will work with the City Council-appointed Budget Advisory Committee in this endeavor. Staff and the Council will establish clear goals for all of the services the City provides, including landscape maintenance, to provide a better understanding of how our customers get the best value for their dollar.

Revenge of the State

As I noted in one of Sunday's posts, the Governor seems to be backing off of his proposal to "borrow" a couple of billion dollars from local government. The legislature has made it clear that they don't like the idea.

Unfortunately, the state and the legislature are finding other ways to tap the dollars out of us instead. For example, CalTrans has stopped performing certain studies for freeway improvements, that will likely cost Manteca at least $100 grand this year. On the public safety front, they'll be gouging us on booking fees and charging for the crime lab, adding over $130K per year to our costs. I'm sure we'll be learning about lots of other cuts as the summer continues.

All this is in addition to their theft of road maintenance funds. As noted in the Bulletin today, the Council has taken action to support the League of Cities action to litigate this taking of funds. The state is also taking another shot at our redevelopment funds. In early May, a judge ruled that they couldn't take our RDA funds. Here is the latest from our association that protects our redevelopment funds:

On Monday, June 15, the Budget Conference Committee agreed to include language in a budget trailer bill to take $350 million in redevelopment funds as ERAF shifts for each of three years—the current fiscal year plus fiscal years 2009-10 and 2010-11. The total take from redevelopment agencies would be an astounding $1.05 billion!

The Committee apparently believes that language directing the money be spent on schools in redevelopment project areas would address the Constitutional challenge made by the California Redevelopment Association (CRA). CRA’s attorneys disagree.

The vote was 6-0, with 4 abstentions along party lines. All Democratic members voted for taking redevelopment funds for three years as follows: Committee Chair and Assembly Member Noreen Evans, Vice Chair and Senator Denise Moreno Ducheny, Senator Mark Leno (D-San Francisco), Senator Alan Lowenthal (D-Long Beach), Assembly Member Bob Blumenfield (D-Van Nuys), and Assembly Member Kevin De León (D-Los Angeles). All Republican members of the Committee abstained and did not announce their position on the take.

Once again, there is no bill language to review, no bill number, and no author. For the time-being, agencies should assume amounts to be taken are triple the amounts estimated for this year’s ERAF shift that was overturned in court.

This proposal would extract over $1.3 million per year from our Redevelopment Agency. I'm confident that we'll be able to win in court on both ERAF and the road maintenance funds. However, I'm not confident we'll be able to go to court before the state finalizes its budget. As this is a fast moving situation, I'll continue to update the blog as things evolve.

City Council Headliners

Non-consent calendar items on tonight's Council agenda:
-A hearing to consider approval of the Crivello Estates Subdivision map, prezone, and referral of the related annexation to LAFCo.
-A hearing to consider the appeal of the Police Chief's denial to renew the dance hall permit for Club Leon at 220 W. Yosemite Ave.
-Acceptance of $586,200 in Energy Efficiency and Conservation Block Grants funds; and approval of a grant application for EECBG monies for retrofitting existing City street lights.
-Adopt a resolution finding a severe fiscal hardship will exist if additional city property tax funds are seized and additional unfunded mandates are adopted by the State.
-Adopt resolutions authorizing continuing appropriations and expenditures on the basis of the Fiscal Year 2008-2009 budget for Fiscal Year 2009-2010, until the adoption of the 2009-2010 budget.

Consent calendar items of interest include:
-Award contract to Overaa & Co. (low bidder) for the WQCF Phase III Project - Schedule C for $4,490,000.
-Approve reorganization of the Fire Department.
-Adopt Ordinance No. 1440 rescinding Municipal Code Section 13.12.020 (residential sewer connection fees).
-Solicit applications to fill the alternate member position on the Manteca Recreation and Parks Commission.
-Solicit applications to fill six (6) vacancies on the Manteca Youth Advisory Commission.

A copy of the full agenda packet is available at the following link on the City's website:
http://www.ci.manteca.ca.us/CityClerk/agendas

In the News

Lots of budget deliberations are wrapping up right now, giving us plenty of budget news to share with you.

In San Francisco, there is a lot of heat being generated over the large cuts being made to public safety budgets. Click here and/or here for stories related to this issue.

Up in Yolo County, Woodland is taking a decidely different approach than Manteca. Fire overtime is being increased while hours at the planning counter are being significantly reduced. While salary adjustments are on the table, nothing seems to be resolved yet. Read more here.

In Watsonville, fire staffing is being cut with one crew being reduced down to rescue vehicle status. Other bargaining groups were able to cut a deal with the city, but not fire. Read more about it here.

In Santa Barbara, the discussions have devolved down to public safety versus other services. So far, the Council has opted to treat public safety on the same basis as other departments. Here's the story.

Pacifica is still attempting to reduce labor costs and debating the need for in-house legal services. It looks like their reserve fund will be taking a big hit no matter what they decide. To read, click here.

In Santa Rosa, the budget is now balanced, but they are still recommending to charge a fee for fire paramedic services. Read more here.

Here in Manteca, as I've noted before, our City Council will be considering a continuing resolution tomorrow night. This resolution basically keeps the current year spending in place until a final budget is approved. In the meantime, we'll be waiting for final numbers on our property tax collections and updated sales tax information. Once this information is in place, (likely in August) we'll determine our budget gap and what cut in labor costs will be needed to balance our budget. Hopefully, we'll have agreements in place with our labor groups by September that will preserve our workforce and provide excellent service to the community. The final budget should be presented for approval by late September or early October.

Parks Level of Service Reductions

Park Maintenance Service Level Reductions: There has been much discussion over the past several months regarding park service level reductions. The following is a description of the impacts these service level reductions will have. All City departments are being, and have already been, impacted by the budget deficit facing the City. Park maintenance is no exception. Just two weeks ago, the average number of acres maintained by each park maintenance worker was approximately 14 acres. This is consistent with the industry standard, which has been established by the National Recreation and Park Association. Through a combination of early retirements and personnel transfers to other non-General Fund departments, the number of park maintenance field personnel will be reduced by nine positions by July 1. The average number of acres maintained by each park maintenance worker will increase by approximately 60% - from 14 to 22.5 acres per worker. If more positions are lost, the number of acres maintained per position will continue to go up. Staff realized several months ago that we would have to selectively reduce service levels to match available resources. Maintaining public health and safety would remain a priority, followed by protecting the City’s investment in its park system.

The first step was to categorize parks into three different classifications – Level I, Level II and Level III. Staff then listed maintenance tasks, such as mowing, fertilizing, pruning, etc., and frequency of each task. Finally, every site the City is responsible to maintain was assigned to the appropriate service level category.

Level I sites would continue to receive current levels of service, such as weekly mowing and edging, fertilization/aeration two times per year, trash pick-up three times per week, and routine irrigation system inspections. Examples of sites may include the Civic Center complex, parks with ball fields (when in season), major entries into the City, and other high-profile areas.

Level II sites would receive acceptable levels of service, such as mowing every 7-12 days, trash pick-up 1-2 times per week, turf edging every other week, fertilization/aeration one time per year, reduced frequency of tree pruning, a higher tolerance for weeds, and a slower response time on irrigation repairs. Examples of sites would include neighborhood parks, ball fields when not in season, and less frequented parks. Turf irrigation would also need to be reduced, to slow the growth rate.

Level III sites would receive minimal levels of service, such as mowing every other week, trash pick-up once per week, turf edging monthly, hazard pruning only on trees, a higher level of weeds, and irrigation system repairs would be made when time and resources permit. Examples of sites would include natural areas such as the Tidewater Bikeway, and remote isolated areas.

Example photographs of the levels of service are included in this week's "The Week in Review" (TWIR). You can access the TWIR by clicking on the link on the right side of the page.

Glimmer of Hope regarding the State raid of City Funds

Here is the latest from the Sacramento Bee:

The latest on California politics and government
June 12, 2009
Governor willing to abandon $2 billion raid -- maybe
Gov. Arnold Schwarzenegger said Friday that he is willing to abandon his budget-balancing proposal to borrow $2 billion from local government -- if lawmakers can agree on an alternative.
Schwarzenegger addressed the issue during a question-and-answer session that followed an Escondido speech he gave about the urgent need to mend the state's $24 billion budget hole this month.
"By the way, this is not yet a 100 percent thing," Schwarzenegger told a questioner who complained about the proposed raid of property tax revenue from cities, counties and special districts.
"My Republican colleagues have said they don't like that idea of borrowing from local government, and my Democratic friends have also said that they don't like to borrow from local government.
"So if both parties don't like to borrow from local government, of course we won't borrow from local government, that's clear," Schwarzenegger said.
The governor said the state's finance director, Mike Genest, has developed a list of potential new cuts - in areas ranging from foster care to state employee health care - that could negate the need to borrow from local government.
Aaron McLear, Schwarzenegger's spokesman, said the governor never has wanted to borrow from local government but wants to impress upon lawmakers the trade offs necessary to replace that $2 billion.
"What the governor is doing is stepping in, saying, 'If you don't want to do that, then here are the cuts it would take to avoid that,'" McLear said.
"This is really just a part of negotiation," he added. This is not him backing off of anything, or him changing anything. We need to start negotiating."

This week's "The Week in Review"

Here are some highlights from "The Week in Review". You can access this week's version and previous editions from a link on the right side of this page.

Public Works:
Bid Openings: Public Works held two bid openings this week for key infrastructure projects. Both projects received multiple bids from well-qualified contractors, and bid prices still reflect a fairly competitive construction market:

Sewer Pipeline Rehabilitation Project – This project involves cleaning and lining approximately 5,500 feet of sewer pipe in Louise Avenue from Cottage Avenue to Main Street. The existing Louise Avenue sewer main is an unlined concrete pipe, and it has been significantly corroded over the years by sewer gases. This rehabilitation project will install a PVC-based liner that will protect the concrete pipe and extend its service life by another 25 to 30 years. Five construction bids were submitted, with an apparent low bid of $364,590.

Austin Road Pipeline Extension Project – This project involves installing approximately 20,000 feet of 12-inch to 24-inch water pipeline in Austin Road from Yosemite Avenue to Lathrop Road. The Austin Road pipeline is a major segment of infrastructure needed to convey SSJID treated surface water into the City’s existing potable water system. This pipeline will supply blending water needed to reduce arsenic levels at certain City wells, as well as improve system pressures and system reliability. The project will also support growth in the east and southeast areas of Manteca. Eleven construction bids were submitted, with the apparent low bid of $1,388,426.

Garbage Collection in City Parks: The Solid Waste Division is continuing to work with the Parks Division to streamline garbage collection in City parks. New containers have been installed and the garbage service has been integrated into residential routes where possible.

Information Technology:
New Telephone System: City staff members are undergoing training on the City’s new telephone system. The new system is scheduled to go online later this month. Main telephone numbers for the various departments will remain intact, providing little disruption to the general public. Eventually, callers will receive an automated telephone directory to help guide them to other specific phone numbers that will have changed. The system will not be fully automated, as the individual departments will still have people to answer calls for those who don’t need a specific extension. The new system is estimated to save the City $50,407 over the five-year lease (when compared to the City’s existing telephone system). At the end of the lease, the savings will increase to $118,366 per year.

Police:
Burglary Arrest: At 8:49 p.m. on June 10, units responded to a report of a residential burglary in progress, with suspects running and a neighbor chasing them on foot. It began at 1629 Bermuda Lane. Four suspects were seen carrying items from a residence to a car. The suspects had entered an open bedroom window. A neighbor who witnessed the subjects with the property quickly called 911. The suspects fled on foot after seeing the neighbor. Officers quickly established a perimeter and a yard-to-yard search was conducted with the assistance of a police canine. The canine flushed out the suspects from their hiding place and they began to jump fences in their attempt to get away. Police units from Lathrop and the Sheriff’s Department responded to Manteca and assisted in the search. Three suspects were captured but a fourth managed to elude detection. All of the stolen property was recovered, as well as the suspect vehicle, which was found to be an unreported stolen vehicle from Lathrop. In addition to the items stolen from the home, car stereos were found in the backseat. Two male juveniles and Kevin Hollins, 19, all residents of Lathrop, were arrested for burglary, possession of stolen property, conspiracy, and resisting arrest.

League of California Cities Division Meeting

State Controller John Chiang was the keynote speaker at last night's League of California Cities Division Meeting. This a quarterly meeting of city councilmembers and senior staff from San Joaquin, Stanislaus and Merced counties.

Chiang's address was both enlightening and sobering. State tax collections were $827 million below projections in May--further exacerbating the state's budget and cash crisis. As the Controller, it is Chiang's responsibility for the state to have the cash on hand to pay its bills. With a budget that hasn't been meeting projections all year, Chiang now projects that the state will be out of money by July 28. He noted that education and debt service has first and second call on cash coming into the state. Money that cities and counties receive from the state are further down the food chain.

If a balanced state budget isn't approved within the next few weeks, there won't be time for the state to pull together a financing plan to borrow cash by the end of July. The Governor has also ruled out a backup financing plan that could potentially get the state cash in the event the budget isn't approved shortly (click here for more details).

Chiang noted that we are now paying the price for state budget actions that began in 1999. At the peak of the dot com boom, Governor Gray Davis warned that the spike in state revenues was not sustainable. He recommended that the surplus cash be put towards one time expenditures. Instead, the legislature cut the vehicle license fee and slashed income tax rates to cut $6 billion in ongoing revenue out of the budget. When the boom ended a year later, we had the first of the multi-billion dollar state deficits. The state cash flow has been falling behind ever since and we are now feeling the cumulative effect of ten years of revenue shortages.

Assemblywoman Anna Caballero, D-Salinas also spoke at the meeting. She is contacting all of the former local government officials now in the state legislature (on her side of the aisle) and hoping to get them to oppose the state's "borrowing" of city property tax revenues. She also talked at great length about the broken budget process and its impact on all of California. All local officials in attendance were encouraged to hold face to face meetings with our legislators and let them know the devastating impact their raid of local funds would have on our citizens.

I felt very encouraged that the state officials in attendance understood our plight at the local level. It is now our responsibility to communicate our message to the legislature. They are under a tight timeline to complete a budget, we all need to do what we can to make sure that they don't balance it on our backs. For more information on this subject be sure to go to: http://saveyourcity.net/

Latest Sales Tax Data

Attached is a chart showing sales tax collections for the first quarter of 2009. The Cash Receipts Analysis report (CRA) is designed to give jurisdictions an analysis of sales and use tax cash receipts from the State Board of Equalization (SBE). The CRA includes comparisons by quarter, by fiscal year-to-date, and by benchmark year. The report not only includes the cash receipts for our city, but all jurisdictions in our county-wide area, other counties throughout our region, regions throughout the entire state, and Statewide totals.

While collections are still down overall from last year, you can see that Manteca is not doing as poorly as our neighboring jurisdictions. Part of this is due to the fact that we started losing sales tax dollars sooner than many of our neighboring cities. We had one of the largest year to year drops at this time last year. So our reductions are less this year since we took the hit earlier. In addition, we've now got full quarter totals from Costco and Bass Pro Shop included in this compliation.

However, we don't yet know how much these two entities contributed to our smaller revenue drop. We don't get detailed numbers until next month. If a lot of the increase is attributed to these two businesses, that is a double-edged sword since we have sales tax sharing agreements with each entity. With Bass Pro, they receive 55% of the proceeds, while Costco gets 45%.

Once we get business specific numbers, we'll be able to do a more accurate projection of our sales tax revenue for the upcoming fiscal year. So far, revenue is pretty close to what we expected, but we need more detail before making our final 2009-2010 sales tax revenue estimate.

MANCRA.XLS

Grand Jury Report

There is a link at the bottom of the post for a Grand Jury report from San Mateo County titled: "Summary of Reversing the Upward Trajectory of Employee Costs in the Cities of San Mateo County".

This report is probably the most comprehensive and detailed report ever compiled on the current status of public employee compensation. In this report, the 2008-2009 San Mateo County Civil Grand Jury analyzes examples of wages, post-retirement health care and pension benefits, as well as current benefits and city hiring practices that increase public employee costs.
The report also recommends to cities and voters actions they can implement to reverse this upward trajectory.

The 2008-2009 San Mateo County Civil Grand Jury concludes and recommends that:

-The escalating employee costs can and should be reversed so civic services and infrastructure improvements are not neglected.
-In addition to stop-gap measures, such as temporary wage freezes and furloughs, long- term solutions should be implemented.
-Labor union contracts for newly hired municipal employees should be introduced to reduce the cost to cities of both pension and post-retirement health care plans.
-For current, as well as newly hired employees, salary increases, total days off, the ability to convert sick leave to cash, and vacation pay must be contained.
-The practice of narrowly basing salaries and compensation packages entirely on those of nearby cities should be reconsidered. Hiring practices should be expanded to include competition with the private sector.
-Where cost-efficiencies can be achieved, services should be contracted out to other cities or private sector firms.
-Cooperation between cities to reduce overlapping functions should be pursued.
-Political barriers to change exist because all those negotiating employee contracts--staff, unions and city council members--benefit when wage and compensation packages increase.
-Barriers to change should be neutralized by providing for increased public involvement and, possibly through ballot measures.

To read the entire report, click here.

Deal struck with Manteca Firefighters to open Union Contract and Reduce Salaries, Benefits, and Overtime

On Tuesday, June 9, 2009, Firefighters agreed to the Manteca Fire Chief’s proposal to open their Union contract and reduce salary, benefits, and overtime. The heart of the proposal includes Firefighters giving up a 4% cost of living raise, reducing the number of firefighters allowed off each shift, reducing overtime, and the rollout of a command staff reorganization plan. The reorganization plan will be brought to the Manteca City Council for approval Tuesday, June 16th.

The entire proposal will result in savings to the City’s General Fund in excess of 1 million dollars. This plan is the latest of many efforts by the City of Manteca to deal with the downturn in economy and City’s budget deficit.

Labor Issues in City of Sacramento, and a bit of State Budget News

At tonight's Sacramento City Council meeting, a huge utility rate increase is on the agenda. There is some Council opposition to this rate hike. Coincidentally, newshounds have revealed an internal memorandum noting that 430 utility workers may face layoffs. Click here for more information on the layoffs and click here to read more about the proposed utility hike.

In addition, City of Sacramento firefighters have now proposed to forgo raises until 2012 in exchange for an assurance from city negotiators that no firefighters will be laid off and staffing on fire engines will not be reduced in the next 30 months. 68 positions in the fire department are at risk if a labor agreement can't be reached. Read more about the situation here. Click here for the Bee's editorial today on the issue and click here to read one Bee columnists take on the situation.

There is some good news from Sacramento today--from the state government of all places. Senate President Pro Tem Darrell Steinberg has unveiled a counter to the Governor's budget proposal that eliminates the $2 billion loan from local government. It also proposes softer cuts to many social services and proposes less reserve funds to offset the reduction in cuts. While this is only the first of many counter proposals, it is nice to see that the majority party is not endorsing the short term loan from us locals. Read more here.

One more slice of good news...

In my never ending quest for positive economic news, I present the following sample from today's Sacramento Bee:

The latest on California politics and government
June 8, 2009
Could be worse... we could be Oregon
Today's "Recessionary Silver Lining" comes from David Crane, who is Gov. Arnold Schwarzenegger's special adviser for advice on jobs and economic growth. Crane points out that even as deep in the toilet as California's economy has been in the past 18 months, it's still diverse enough that it actually grew (albeit by a tiny 0.4 percent) in 2008.
According to stats compiled by the U.S. Bureau of Economic Analysis, the Golden State's "real Gross Domestic Product" (money spent on goods and services, plus investment and foreign trade, adjusted for inflation) withstood declines in construction, finance and insurance by enjoying slight growth in information, professional and technical services.
Moreover, Crane said in a memo to "interested parties" last week, the Federal Reserve Bank of Philadelphia reports that through February of this year, California ranked 16th in terms of late-2008-early-2009 economic performance. (Alaska was first, Oregon last.)
Alas. Crane points out that because California government is so heavily dependent on income tax revenues from wealthy people, and wealthy people's incomes are often dependent heavily on the fortunes of Wall Street, state budget revenues remain pathetically low.
"A tax system that looks more like California's economy will be much more stable than the current system," Crane says.
Heck, we'd probably settle for one that looked like Alaska's...

Good News, Bad News

While most of the economic news is still negative these days, I try and include a pocket of sunshine every once in a while. So, I'll do the good news first.

As the stock market has rebounded from its 50 percent drop to only a 30 percent drop since last summer, CalPERS has benefited as well. In a news release from Dow Jones (click here), CalPERS states that it gained 12.5% over the past quarter, putting the fund back at $180 billion. Now CalPERS is still tens of billions of dollars below its mid 2008 value, but it is at least a nice reversal of the current trend. Unfortunately, CalPERS is going to need a lot more double digit gains to stave off a huge rate increase next year.

Now for the bad news. The latest state budget proposal not only includes a loan of property tax revenues, but another "loan" of $750 million in gas tax funds from local government. That is 75 percent of all the gas tax funds received by local government--and about a $1.6 million hit for Manteca. These cuts would more than wipe out the gain in local funding from the federal stimulus package. As noted in the story you can access here, maintenance and repair of local roads would be virtually eliminated--which would exacerbate the already deteriorating condition of many of our roadways. Delaying repairs only makes things far more expensive in the future, as road overlays now are far less costly than the reconstruction of roads in the future.

Once again, the state has come up with the worst possible solution to their budget problem. They are once again proposing a short term fix that barely makes a dent in their budget gap. A fix that in the long run will cost ten times the short term budget savings. It is this type of short-sighted budgeting that got the state in this mess in the first place.

To learn more about the potential options that the state is looking at to divert gas tax funds, click on the link below.

Transportation_Overview_05_29_09.pdf

NOTICE OF ROAD CLOSURE

I thought this item would be of interest to all Manteca residents:

FOR IMMEDIATE RELEASE

NOTICE OF ROAD CLOSURE

WEST LOUISE AVENUE

Louise Avenue, between Airport Way and McKinley Avenue, will be closed to traffic on Monday, June 8 through Monday, June 22. Louise Avenue will reopened to traffic on Tuesday, June 23.

The road closure is needed to facilitate two infrastructure projects being constructed by the South San Joaquin Irrigation District (SSJID) and the City of Lathrop. SSJID's project involves the replacement of a pipe culvert that conveys irrigation drainage and stormwater under Louise Avenue. The City of Lathrop's project involves installing a new potable water pipeline in Louise Avenue.

Detours will be provided to route traffic around the road closure, and access will be provided for emergency vehicles at all times.

For more information on the pipe culvert project, contact Sam Bologna of SSJID (209) 249-4617. For more information about the water pipeline project, contact Ryan Bouley with the City of Lathrop (209) 941-7430.

GM Bankruptcy hits home

Manteca's Sexton Chevrolet permanently closed its doors on Friday morning. Our thoughts and prayers go out to all the families impacted by the closing. We had all hoped that the dealership could make it through these tough times in the auto industry, but apparently the GM bankruptcy was the last straw.

For city government, every auto dealer closing is another hit to our budget. While we aren't allowed to disclose sales tax information from individual businesses, we can tell you that the closing will have a noticeable impact on our budget. Auto sales make up about 11 percent of our sales tax revenue, and sales tax revenue is about 25 percent of our General Fund revenue. Sexton was a big contributor to our local auto sales.

Public safety sales tax dollars are not impacted by the closure. While the base one percent local sales tax stays with the community where a car is sold, tax override measures such as our public safety sales tax and county transportation tax go back to Manteca no matter where a Manteca resident purchases their vehicle. Conversely, when a non-Manteca resident purchases a car in Manteca, they don't pay the public safety tax.

Click here to read more about the closure in today's Bulletin.

New Website to Save our Cities!

The League of California Cities has started a new website to publicize the state's proposed money grab of city funds. Check out the website
SaveYourCity.net

The State is trying to take money from cities and counties despite that fact that we amended the State Constitution in 2004 to stop them from doing this. As I've noted previously, the state has proposed to "borrow" about $1,000,000 from Manteca. Given that we've already had to reduce our budget by nearly $10 million, this would further devastate our ability to provide services to the community.

As of today, the site includes videos from over 300 local and state officials protesting the State's raid of our local funds.

By the way, the latest budget news out of Sacramento includes a suggestion from the Governor that the State Commission on tax reform consider a "flat tax" of 15%. To quote the story:

Advocates of a flat tax, which applies a single tax rate to all income, say it increases compliance with the tax codes because it is so simple and easy to understand. But opponents dislike that it taxes the wealthy at the same rates as the poor.

Steve Forbes and Jerry Brown both pushed for it during their presidential campaigns.

To read more, click here.

Aggressive Team Effort Prevents Conflagration

Firefighters from all three City of Manteca Fire Engines and the Aerial Ladder Truck responded and worked together to combat this house fire. A Fire Engine from Lathrop also responded and assisted. The fire burned so intensely that two additional homes ignited and fire began to spread rapidly from building to building. An effective workforce and aggressive team effort limited the fire damage to only three residences within the neighborhood.

All occupants made it out of the building safely as a result of working smoke detectors. Firefighters remained on scene for approximately five hours performing salvage, overhaul, and fire investigation. The fire started in the garage area near a hot-water heater.

Emergency Callback procedures were initiated and off-duty Firefighters came in from home as well as several Reserve Firefighters. Reserve Firefighters helped at the scene while the off-duty Firefighters staffed the stations and responded to other emergencies within the City.

Highlights from "The Week in Review"

Here are some highlights from this week's "The Week in Review" (TWIR). To read the entire TWIR, click the link on the right side of this web page.

Public Works:
Atherton Drive Extension/Union Road Widening: Imperial Landscaping has been engaged to re-sod the turf strip along the south side of Atherton Drive. The project kickoff meeting has been held with the contractor and work will begin within two weeks. PG&E has removed the transmission poles in the center of Union Road between State Route 120 and Woodward Avenue. Comcast is relocating its facilities along Woodward Avenue. Verizon is awaiting the delivery of wire so it can relocate its facilities along Woodward Avenue. DSS Company/Knife River will start road work in approximately two weeks, with an expected completion in mid July.

SR99/SR120 Interchange Landscaping: The bid opening for this project will be June 18, with a July 7 award. Staff is working on a maintenance agreement amendment with Caltrans. Once the amendment is in place, Caltrans can issue the Encroachment Permit and the project can be awarded.

Parks & Recreation:
BMX Track: The installation of the fence that will separate track users from spectators has been
completed. Parks staff and the Assistant City Manager met with Jon Anderson to review the status of projects that the Anderson209 volunteer group has committed to complete. Parks staff will review and provide comment on the design submitted by the Anderson group, to ensure that the installation of improvements meet City standards, and will stand the test of time. Once approved, Anderson209 and its volunteers will proceed with their improvements.

Mosquito Fish – On June 25 from 8:30 to 11:30 a.m., San Joaquin County will be providing free Mosquito Fish to the public. These are for those individuals with ponds in their backyard. Pond owners are encouraged to put the fish in the pond, where they feed on mosquitoes in an effort to reduce the mosquito population and potential West Nile Virus.

Community Development:
Residential Development Projections: After initiating discussions with several developers, staff anticipates a total of 342 single-family homes will begin construction in the 2009-10 fiscal year. Community Development Department staff is in regular contact with developers to keep maintain current projections for new development. These figures will help determine staffing priorities for the upcoming fiscal year.

CenterPoint: Staff on June 4 initiated the first meeting on the Environmental Impact Report (EIR) for the CenterPoint project. In addition, work has also started on the Master Plan for the entire 500+ acres along Airport Way, between Lathrop Road and Roth Road.

Promenade Center: Staff will be meeting next week with the developer of the Promenade Shopping Center and Craig Realty to finalize the process for reviewing plans to build out 250,000 square feet of retail space at Orchard Valley for use as “luxury outlets.” This work is anticipated to begin in August and be completed in February 2010, with the spaces leased shortly thereafter.

Crunch Time for Budget Adoptions

As I've noted before, June is typically the month most cities adopt budgets for the coming fiscal year. Typically, these are fairly proforma actions for most cities--but not this year. Not with nearly every city seeing 20 percent plus drops in revenue. Drops of this size mean that cuts have to go far beyond discretionary items--and that labor costs must be addressed. Most of us have revenue numbers that are so low that public safety labor costs are in excess of total general fund revenue. In other words, even if every non-safety position was eliminated, there still wouldn't be enough money to sustain police and fire staffing.

With these drastic drops in revenues, police and even fire are facing cuts that many agencies haven't experienced in the past 30 years, if not longer. Here's a quick trip around the state (and Nevada) to see what is happening this week...

Petaluma has cut their deficit from $4.5 million to $1.1 million but they need at least five percent out of each labor group to close the rest of their budget gap. Read about it here.

Menlo Park, which has some of the highest safety salaries in the State, have agreed to alter their contracts. Read about it here.

Reno officials have made it clear that even if the fire fighters make concessions, it won't guarantee their jobs. Click here for more.

Down south in Norco, the City and their fire fighters continue to battle over the impacts that a reduction in service would create. Here's the story.

In San Francisco, the city's largest labor union has blinked after the reality of 1776 layoffs were imminent. The SEIU made $16 million in labor concessions and were guaranteed no layoffs until November 15. The Mayor has agreed to put a tax measure on the ballot in November--and its passage is necessary to stave off further cuts. Read the Chronicle story here. For a less objective view of the situation, click here for the story written by the Tenderloin Housing Clinic, whose entire city contribution is slated for elimination in this year's budget.

Management Retreat Follow Up

Last week's Quarterly Management Meeting has set the tone for change and innovation at City Hall. A good chunk of the morning was spent discussing ways to run the City more efficiently. At the conclusion of the meeting, managers were all asked to participate in at least one working group. While management participation is mandatory, I expect many other city staff members to participate as well.

I call them working groups because the word "committee" is not action oriented. I expect these working groups to address issues, make improvements, and then move on to the next issue.

Working Groups were formed to:
-pursue changes to our fleet management operation
-evaluate our level of service in a number of areas
-set the criteria for managed competition
-make the city more energy efficient
-review position consolidations and cross training
-implement the sharing of interdepartmental resources
-coordinate the development review process
-find more areas for cost recovery
-centralize the purchasing process

I'm hoping that every meeting will generate changes in the way we do business. I expect that many of these changes will be implemented immediately. While some will take longer and may take Council action, I believe that the majority of the work we do will create immediate improvements. Given our budget situation, speed is critical as we must find ways to continue to provide a high level service with diminished resources.

As groups meet and implement changes, I'll try and document the progress in the blog. So please stay tuned.

State pays City of Manteca back for borrowing Firefighters

The City of Manteca recently received reimbursement from the State of California for the City’s willingness to send a crew of Firefighters to assist the community of Santa Barbara in combating their Wildland Fires. The good news is the compensation exceeded City expenses by more than $12,000 due to the inclusion of administrative costs and local government fees. The excess will be applied to supplement the City’s General Fund.

The City of Manteca’s partnership with the State to house an Office of Emergency Services (OES) fire engine and respond to wildland fires continues to be a Win-Win proposition:

• Communities throughout California receive valuable emergency assistance.
• The OES fire engine can be used as a backup to serve the emergency response needs of the City of Manteca throughout the year.
• State reimbursement for personnel staffing costs typically exceeds City expenses.
• Firefighters gain valuable experience that is brought back to the City of Manteca and serves the citizens well.

Governor's Latest Budget Proposal

The good news is that the Governor has a plan to close the deficit. The bad news is that the State Controller tells us that this plan needs to be implemented by June 15. After that, the State has a cash crunch of herculean proportions.

As expected, the Governor's plan includes "borrowing" $1.982 billion from local government--which equates to about $1 million from us. It also attempts to divert $750 million in local road funds. The plan also severely impacts every aspect of state funding, including many that will threaten our quality of life here in Manteca. For example, the budget proposal includes a $4.5 billion cut for K-12 education. It also takes over a billion dollars from our community college system and a like amount from the 4-year colleges.

It guts the safety net for the tens of thousands of families living below the poverty line in this County. Programs such as Medi-Cal and Healthy Families are gutted and CalWorks and Child Welfare programs are severely reduced. The State Prison system will release thousands of prisoners and our severely overcrowded jail system will be expected to handle many more recidivists.

Click here to see the detailed listing of all the programs impacted.

While the impacts are devastating, it may lead toward the need to restructure and downsize our state government. As I've mentioned before, those of us at the local level believe there are a lot of areas where state government could just go away--and let the local citizenry run the show. Click here for an op-ed piece in last week's Sacramento Bee that talks about this in more detail.

City Council Headliners

Consent items of interest on Tuesday night's Council agenda:
-Approve reallocation of $40,032 of Supplemental Law Enforcement Funds, including accrued interest, for the purchase of an Electronic Citation and Traffic Report Writer/Printer System.
-Accept the Office of Traffic Safety (OTS) Grant of $87,800 and appropriate the funds as outlined in the Police Chief's staff report.
-Award Contract for the Airport Way Water Main Project to D.A. Wood for $184,495.
-Award Contract for the Lincoln Avenue Water Main Project to Rolfe Construction for $318,170.
-Award Contract for the Parks Irrigation Well Project to Amerine Systems for $449,012.

A copy of the full agenda packet is available at the following link on the City's Website:
http://www.ci.manteca.ca.us/CityClerk/agendas