6/28/2011 Council Summary – We Have a Budget

A long and difficult night.

We were a man short, because Councilmember Swegles was out sick and unable to attend even by telephone (and I’ll add that we really missed his presence more and more as the night went on).  We started the evening with recognition of Parks and Recreation Month, and after I made a couple of announcements, it was on to business. The consent calendar passed without any items being pulled, and we moved to public comments, which wasn’t brief this time.

Three speakers wanted to address Council regarding the recent murder that occurred on Revere Drive, with the body bagged and dumped elsewhere.  The speakers were obviously concerned with safety in the area and what they perceived as a breakdown in city code enforcement. This combined with the proposed layoff of a neighborhood preservation manager, and residents are concerned that the city isn’t doing its job to abate blight and keep the city free of unsafe dwellings.

After the first speaker, I questioned Acting Chief Pang about the incident, to confirm my understanding of what had happened. In short, a fire severely damaged a home on Revere late last year, making it basically uninhabitable. Several weeks before the homicide, the City contacted the owner about code violations, and the owner began the work of cleaning up the property. In doing so, the owner hired the homicide suspect to do some of the work. While the suspect was working on site, he arranged for the victim, with whom he had a previous relationship, to meet him there for whatever reason. And for whatever reason, the homicide occurred there, resulting in the subsequent body drop. Anyway, the city had been enforcing its codes several weeks prior to the incident, and neighborhood blight was not in fact the cause of the incident. Of course, that doesn’t do much to make residents of that neighborhood feel more safe, unfortunately.

We then moved into general business, the first of which was adoption of the fiscal year 2011/2012 budget.  Since we had the public hearing on this two weeks ago, this was an all-Council issue, with many questions to staff about options and possibilities.  After a staff report by Drew Corbett from Finance, the City Manager clarified the situation regarding the three proposed layoffs.  Due to departures and some other employee shifting, the City Manager stated that the three people whose positions are proposed for elimination would still have positions available to them in the city (albeit at lower salaries), while being top of the list for when promotion opportunities arise.

I started by discussing a study issue which was recommended for deferral – looking into a ban on expanded polystyrene food packaging.  Just the night before, the County Recycling and Waste Reduction Commission (on which I serve) unanimously recommended that all cities adopt such a ban, with a two-tier implementation schedule.  So I wanted to pursue exactly why we were considering deferring this and whether or not funding might allow us to study it as proposed.  Staff asserted that due to the work load for the ongoing study regarding a plastic bag ban, even if we could work out the budget aspect, staff likely couldn’t take on the workload this year.  Given staff’s assertion and the perception that my colleagues agreed, I reluctantly dropped the subject.  This is definitely a year to put off expenditures anyway, so it’s hard to justify this as a necessary expense now.

So then we got into actually approving the budget.  One of my colleagues suggested that we adopt a consent calendar approach to the budget – approve the budget, fee schedule, and appropriations limit minus anything anyone wanted to dispute, then vote on those items individually.  And that was a smart way to handle it, so we voted 6-0 to take that approach.  It was also clarified that the budget as presented preserves the adult pottery program, but it eliminates the city’s supplement for that program.  So that program will need to break even, either through increased fees to the participants, the development of a “Friends of the Pottery Program” organization, or both.  There was also some discussion about the Lakewood Pool.

I then got in a debate with one of my colleagues about the proposed park dedication fee, which is the rate we charge developers for their responsibility to provide parks commensurate to the increase in residents that their projects create.  And we basically went back and forth in an attempt to out-nerd each other (I won, either by being more nerdly or just through sheer stubbornness, and I’m not sure which).  And there was a lot more discussion about the park dedication fee, with widely varying opinions of what the city should be done.

We then got into the votes, and it was proposed to adopt the budget minus four issues – the value of the park dedication fee, the closure of the Lakewood Pool, funding for an after-school program at Sunnyvale Middle School, and funding the senior lunch program.  And after most of us talked about the budget in general, that passed on a 6-0 vote.

We then got into the four individual exceptions, and I had my first failure.  I moved to adopt a $69/square foot park dedication fee, and it died for a lack of a second.  Ah well, my perfect streak ended.  A colleague then moved for a $65 fee, which failed on a 3-3 vote.  I opposed it in no small part because it was arbitrarily chosen.  This fee is one that could be subject to legal challenges from developers, and it’s hard for us to justify the rationale of an arbitrarily-chosen fee.  A colleague then moved for a $72 fee, and that one also failed on a 3-3 vote (I supported the motion).  So then another colleague moved for the original $69 fee that I proposed in the first place (!), and it passed on a 4-2 vote (and I obviously supported it the second time).  I gotta work on my timing, I guess.

A colleague then moved to continue funding the Lakewood Pool, and that motion failed on a 3-3 vote.  As may be obvious now, there were a large number of 3-3 votes this evening.  I opposed this for a couple of reasons.  Staff proposed closing the pool last year, and I opposed doing so last year, because we didn’t see the need for cuts that deep at that time, and I didn’t want to deprive us northern residents of yet another service.  But the situation became a lot more clear this year, we’re now beyond cutting fat, and we’re faced with the necessity of cutting valued services one way or the other.  Staff made a compelling case that of the painful cuts before us, this was one of the least painful and damaging, and I had to agree.  After that failure, I moved (when nobody else took the lead) to discontinue funding, and that passed on a 4-2 vote.  I’ll point out at this point that staff is doing a study for an alternate recreational facility in that area, using park dedication money, and this is an opportunity for us to create whatever recreational use is in the greatest need in the Lakewood Village area, to fill in for the absence of the pool.

A colleague then proposed to restore $12k of the funding for the Sunnyvale Middle School after-school drop-in program (a partial restoration).  That vote also failed 3-3, and again, I moved staff recommendation to de-fund the program.  A colleague then made a friendly amendment to de-fund it by either eliminating it or making it cost-neutral through higher fees, which I accepted.  And this passed on a 6-0 vote.

The final issue was funding of the senior lunch program at the senior center.  To be clear, this isn’t a senior nutrition program – seniors aren’t depending on these meals as a food source.  This is more or less a subsidized social program for the seniors, and it’s one that’s been in sharp decline over the past ten years, due to the difficulty of finding someone to run the program at a reasonable cost.  At one time there were a hundred seniors participating each day, and that’s declined to about twenty per day now.  And it has reached the point where the Council on Aging even supported making this cut.  An initial motion to maintain funding of the program failed on a 3-3 vote.  So I then moved to de-fund the program (or not subsidize it), and that passed on a 4-2 vote.   Either the fees will be raised (from $5 to around $11 per meal) to cover costs or the program will be eliminated.

And that did it for the budget.

I’ll add my comments about the budget here.  There are a number of reasons why we’re in the situation we’re in now – some short-sightedness in decisions made several years ago, the ongoing recession (which is a real game-changer, not just another down-turn) and just the ongoing struggle with expenses being not just higher than revenue, but also increasing faster than revenue, which is the definition of a “structural deficit”.  We had no easy choices this year, and these cuts will be felt by residents throughout the city.  Let’s be clear about what this budget means – it does not solve our structural deficit.  It merely buys us more time to find a way to solve the problem.  We did what we could to improve the situation, given the limits of the existing labor agreements.  PSOA and SMA also stepped up on their own accord, and they contributed to lessening the problem.  But that wasn’t enough to solve the problem, and we still don’t have a solution in place.  So we will continue to operate at a deficit and draw down our reserves until we can solve our problem, through changes to expenditures, through additional revenues, or both.  Until that happens, we will keep being forced to cut deeper into necessary services.  This was the most painful year so far, but it’s not the most painful year to come, most likely.

Worse, we have two big hits headed our way.  The City loaned money to both the Redevelopment Agency and the Solid Waste Enterprise Fund many years ago, and those two entities have been repaying those loans each year.  Those loans get paid off about ten years from now, and when they’re paid off, the City loses tens of millions in revenue that it’s currently receiving.  That will create a huge hole in our budget that will need to be filled.

The beauty of our budgeting system is that we see these problems coming a long way off, which allows us to solve problems with less severe changes early on, rather than taking drastic action at the last minute.  But that doesn’t change what’s headed our way, and it’s big.

Anyway.  We then went on to item 3, decertification of the Mary Avenue Extension Project Environmental Impact Report (EIR).  As everyone probably knows the courts ordered the city to decertify the EIR as not conforming to CEQA guidelines, so we had to take at least that much action.  Public comments and some email we received also clarified the language that staff unfortunately used in this RTC – the RTC implied that the courts ordered us to de-certify the EIR and develop a new one, but the courts actually only required us to either de-certify the EIR before going forward or doing nothing and dropping the project.  A couple of public speakers (only three!) spoke against taking further action.  After a fair bit of discussion, we voted 4-2 to de-certify the EIR, to pursue grant funding for the development of a conforming EIR (either a new one or a modified version of the existing one), and to add certain alternatives to the EIR, such as a scaled-down project, alternatives such as bus-only or greater bicycle and pedestrian access, and so on.

Item 4 was approval of the 2010 Urban Water Management Plan (UWMP), and with very little discussion, we approved the plan 6-0.

Our final item was to designate voting delegates for the upcoming League of California Cities Annual Conference in September,  and we appointed Mayor Hamilton to be our delegate, with basically everyone else who attends acting as alternates.

We then got into inter-governmental committee reports, and I expanded on the RWRC’s recommendation regarding an expanded polystyrene food packaging ban.  We then talked a fair bit about the state redistricting, while also touching on the county redistricting.  There was a report on the League of California Cities study of pension reform, specifically the issue where an employee leaves one city to join another city at a much higher wage (in which case the first city becomes liable for a much higher pension obligation).  And there was discussion of the state budget and the attack on redevelopment agencies, even by our own state representatives.

Then we went into non-agenda comments, and I talked about the subcommittee I chair, which oversees council policy regarding boards and commissions.  We’re going to be looking at a bunch of issues for the rest of the year, specifically

  • possibly requiring commissioners to make available some public contact information.
  • a minor change to policy which currently requires election of commission officers in July.  Since it doesn’t say “July, or next scheduled meeting”, this can force some commissions to meet in July when the don’t need to.
  • possibly having the subcommittee take on review of work plans, rather than accepting work plans as a consent item.
  • possibly adopting a policy to support having official council liaisons to boards and commissions.
  • possible changes to the council appointment method for commissioners.  The current “explicit vote on each member separately” method is somewhat cumbersome, as compared to using a paper ballot to deal with all at once.
  • possibly expanding the role of the subcommittee to take on responsibility for disciplinary review.

There was strong support to look at having Council liaisons, so that will be first on the subcommittee’s agenda.

Finally, we adjourned to the redevelopment agency, to adopt the RDA budget for the year.  This included a discussion of the state’s effort to raid redevelopment agencies of all funds, which will be a serious blow to many cities, including Sunnyvale.   It was mentioned that we got no support at the state level for protecting our RDA, and both of our state representatives supported this move, which will hurt Sunnyvale a lot if upheld as legal.  It will be challenged by the League of California Cities and others as a constitutional violation under Proposition 22 (which explicitly prohibits it), but if it is upheld as legal, it will be a real blow to our efforts to complete our downtown.

Anyway, the RDA approved the consent calendar 6-0, and we approved the budget on a 6-0 vote.

And that’s it.

I should add here that staff really did a great job of bringing this year’s budget together and wrestling with conflicting priorities from council, from different departments, and from the public.  This year’s budget effort could have blown up and become a real mess, but it held together and got passed, and I’m grateful to them for their long hours and weekend work to pull it all together.

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