(This post also appeared in the Benicia Herald Opinion column, 1/4/2011)
“The city sure has been taking a beating,” a merchant told me last week in front of his shop. I couldn’t agree more. His comment was referring to the letters, columns and blogs with constructive — and some not so constructive — opinions about how to run the city.
This column is about where we — the city of Benicia, its staff, commissioners and Council members — have been and where we are going. Readers are welcome to respond on my blog (www.elizabethpatterson.blogspot.com), in the Benicia Herald, or during my open office hours.
They may also attend the workshops, study sessions and Council meetings we will conduct in 2011. Last year we held more than 30, posted surveys, and ran community open houses. This coming year I invite those who write letters, columns and blogs, as well as residents who read them or not, to participate in the extensive city outreach effort to: a) access and vet information; b) explore volunteer opportunities; and c) consider more new and untried budget solutions. Your participation is vital for the important decisions that will be made for our city in 2011.
Earlier this year, I affirmed at Council meetings that “we are all in this boat together” as we enter the third year of the Great Recession. The country’s financial meltdown is the result of many factors, but especially the reckless risk-taking by financial institutions, the ripple effect of which affected our neighborhoods, jobs, available funds for small businesses — and public anger.
The city of Benicia has done better than any other city in Solano County in terms of home values, loss of property tax revenue, declining sales tax and maintaining public services. And while we have had fewer losses, we also benefited from strong preemptive measures to avoid budget deficits while maintaining a 20 percent reserve.
Our assets in the city? First and foremost, the city employees who, as Greg Gartrell so succinctly wrote in a recent letter to the editor, keep drinking water safe, make sure toilets and wastewater are treated, respond to emergency calls, protect our property and businesses, maintain streets (with less and less money), provide recreational opportunities that larger cities envy, and do so many of the little-noted, day-to-day services at which this small city excels.
Our other assets are independently owned businesses, locally managed franchises, an internationally based refinery, a port and the multitude of businesses that serve them. These businesses provide sales tax that is more stable than big-box retail stores and malls.
But the biggest revenue source for the city of Benicia is from property taxes. In the past, Benicia has weathered economic recessions better than most cities because our property tax base was stable. Unfortunately, the decline in housing values throughout the country, and especially in California, means a property tax revenue reduction that may take at least 10 years to “recover” through property sales.
Sales taxes, property tax revenues, franchise fees (pipelines, natural gas, telecommunications, solid waste) and utility taxes make up the revenue for the city’s General Fund of approximately $31 million as of fiscal year 2010-11. All of these are down, and a slow crawl out of this Great Recession means stagnant or declining city revenues for more years to come. Indeed, in 2010 the city declared an annual structural deficit of $1.2 million; and a structural deficit needs structural fixes.
To meet a loss of $1.2 million and not rely on our 20 percent reserve for operations and services, we had to do three things immediately:
1) City departments reduced operation costs across the board.
2) We reduced some of our services, but we protected the Human Services Fund that supports many essential safety net programs.
3) We had layoffs of city staff that mostly affected part-time positions. These layoffs, plus our hiring freeze, put extra workload on the city staff.
We have reduced salary compensation of all executive, management, supervisors and line staff in all bargaining units except one (because of contract open dates, this will be addressed in 2011). There is no cost-of-living increase and there is no automatic step increase. This was employees’ “share” of the immediate budget needs. (In 2010, the Council unanimously agreed to seek $600,000 in reductions in employee compensation and $600,000 in city service and program reduction). We also restructured contracts to establish a health care benefit cap and a two-tier retirement rate structure thus securing future structural changes to our budget.
The new year will mean more of the same.
Without argument, 2010 has been a profound challenge. We — the Council, city staff and residents — have met the challenge and the city is in a stable position for 2011.
Benicia is better off than most cities that suffered greater losses. Because we rely on property tax more than other cities, we weather recessions better than most. However, in an unprecedented residential and commercial property value decline not seen since the Great Depression, property assessed valuation revenue to the city declined by $1.4 million, a loss that cannot be made up quickly with rising values because of Proposition 13. Thus we have a structural budget deficit for at least 10, and possibly more, years.
Although it has been tough going in 2010 and 2011 will be a challenge, we have opportunities to seize by investing in our assets: The largest industrial park in the county, which includes a port and diverse businesses; a vibrant and historic downtown with award-winning stores; full-service shopping centers; a professional, experienced and dedicated city; our schools, which are the best and to which the city remains committed; service organizations without which Benicia would not be Benicia; and my favorite — the public, which serves on our boards, commissions and committees and comments at our public meetings, bringing energy, knowledge, experience and dedication that money can’t buy. Many Benicians volunteer their time to boost city functions and programs and enhance the community and our quality of life.
What can we do now to grow jobs and the economy — to maintain the Benicia quality of life? Steps the city can and should take:
• Creatively invest in fiber optic infrastructure for the Benicia Industrial Park.
• Ensure a timely, efficient and effective Arsenal solution so that the Army pollution and ordnance are not a barrier to private investment.
• Continue collaborating with our Benicia Unified School District to ensure first-rate schools.
• Enhance and restore our services to continue the quality of life that makes Benicia a great place.
• Maintain our high public safety standards for police and fire.
• Working with our new city manager, find efficiencies and management solutions to continue to deliver services — even with a workforce reduction.
• Work together to move forward together. As part of this I believe there is a need for continued public participation to explore, vet information, educate and recommend ideas to the Council.
• Take pride in our city and have a city neighborhood improvement program, including a zero-litter goal. Who knows — perhaps there could be a contest for the most improved.
• Utilize our commissions, boards and committees to implement sustainability, the arts and culture programs, smart planning, historic preservation, open government, community needs and recreation.
In summary, I compliment this Council for its steady, firm and undivided actions to address employee compensation, recruit a new city manager, stand firm on negotiations over franchisees and fees, and seek solutions to protect our city services and programs. Being “in the same boat” means we all pull our share, rowing in the same direction for the same destination — a safe harbor for our special city of Benicia.
Here’s to a better New Year!
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