Richmond City Council grows skittish amid ominous signs of budget deficits
By Robert Rogers
Contra Costa Times
Posted: 04/17/2013 03:57:14 PM PDT
Updated: 04/17/2013 05:46:34 PM PDT
RICHMOND -- Growing wary of the city's financial health, City Council members this week put the brakes on some spending projects ahead of 2013-14 budget negotiations scheduled for next month.
"We've been kicking the can down the road," City Councilman Nat Bates said. "We have an expenditure problem, and we are going to have to come to terms with that."
Bates raised the specter of a fiscal crunch during Tuesday's council meeting. He said he had recently spoken with Finance Director James Goins and that Goins anticipated a nearly $20 million General Fund deficit based on department budget requests and projected revenues.
After Bates' remarks, Councilman Jim Rogers rescinded an agenda item that called for restoring $2.3 million to the city's street repair budget pending the sale of a city-owned apartment complex. The council deferred action on several other spending measures as well.
Richmond faces budget deficits widening through 2016, according to a five-year projection released by the Finance Department in September.
But the report projected the 2012-13 fiscal year as balanced, with $136 million in revenues and expenditures, widening to a $10 million-plus deficit by 2015-16. Bates said Tuesday the gap appears to have opened much faster, and he said it was the result of profligate spending by the council coupled with unfunded liabilities for retired workers.
"This council just spends money and has no idea what it's doing," Bates said.
Goins did not respond to calls and emails requesting comment as of Wednesday afternoon. As of late last year, City Manager Bill Lindsay said the city had reserves of about $10 million.
Lindsay said Wednesay it was too early to say where cuts might come. "It's not who is going to suffer but who is not going to enhance their programs as much as they'd like," he said. "It's not easy for any city to balance their budget in this economy."
Councilman Tom Butt said Wednesday he is skeptical of Bates' budget assertions but that he would hold off judgment until he got more information in the coming weeks.
"That $20 million in the red figure, I've never heard that before," Butt said.
Rogers said Richmond has done a good job of rebuilding its finances since the fiscal crisis of 2004, when the city had to lay off workers to balance the budget.
"Rather than kicking the can down the road, we bit the bullet and made the hard choices," Rogers said. "We've been moving in the right direction."
The heads of the city's most expensive departments said they were cautiously optimistic that the coming budget could spare cuts to public safety.
"The (budget) statements made at the council meeting were new news for everyone," fire Chief Michael Banks said. "The situation seems pretty fluid right now, but we have faced tight budgets for years, so we're prepared."
Banks said he would request an increase of more than $1 million to his department's $26 million annual budget, in part to fund seven new fire and administrative positions.
Police Chief Chris Magnus said Wednesday he is "confident that the council views public safety as a top priority and will continue to fund it at adequate levels."
Bates said the reality is there will be cuts to the budget in the next year. He mentioned that the policy of providing high-level administrators privileges to drive city cars to and from work could be a place to find savings.
An investigation earlier this year revealed that Human Resources Director Leslie Knight misused city funds by driving a city car and collecting a $400-per-month allowance to drive her own car.
"We have too many attorneys, for starters," Bates said. "But we have to look at everything -- at library, parks, public works -- nothing is a sacred cow. I love our police, but there is some fat over there, too."
Contact Robert Rogers at 510-262-2726 or email@example.com and follow Twitter.com/roberthrogers.
City Council votes to disburse Community Development Block Grant money
The City Council on Tuesday approved the disbursement of funding for low-income services, added RichmondBUILD to its general fund, and voted to end the reading of its own Code of Ethics before each meeting. (Photo by: Tawanda Kanhema)
By Zach St. GeorgePosted April 17, 2013 12:46 pm
The City Council on Tuesday approved the disbursement of funding for low-income services, tentatively agreed to help support RichmondBUILD, and—after more than an hour of argument—voted to end the reading of its own Code of Ethics before each meeting.
When the session began, the room was crowded with people in purple T-shirts from the Service Employees International Union Local 1021. They’d gathered outside the main doors a few minutes before, 35 or 40 of them, holding signs that said, “Fund Our Libraries, Fund Our Parks,” and, “Outsourcing Jobs = Loss of Public Accountability.”
“Who are we?” a woman yelled.
“S…. E…. I…. U!” The crowd responded, gradually speeding up until they were shouting, “SEIU! SEIU! SEIU!” as fast as they could.
Then they cheered, and filed inside. “We get good acoustics out here,” someone remarked from the back of the group.
Millie Cleveland, the Service Employees International Union 1021 local representative, said that the rally was to show the City Council that the public employees union, whose contract is in negotiation, isn’t going to accept cuts. “We want to make it clear to the council that we’re not going backward,” she said. “There has been no wage increase in four years.”
The Pledge of Allegiance was read, and then the council quickly approved letting Tim Jones, the executive director of the Richmond Housing Authority, work on a document outlining how to use the proceeds from the sale of the Westridge at Hilltop Apartments.
The next item was the routine reading of the code of ethics, which Mayor Gayle McLaughlin asked the city clerk to perform.
“Madame Mayor, point of order,” said Vice-Mayor Corky Booze. According to the rules, either a youth or a senior must read the code of ethics, he said, and Clerk Diane Holmes is neither. “Am I correct or incorrect on that point of order?” he asked the city attorney.
You’re correct, said the city attorney, but –
“Thank you very much,” Booze said. To the mayor, he then said, “Choose an elder and I’d be more than happy to listen.”
“It was my understanding that there was no implementation plan,” McLaughlin said. “We can talk about it later. Short of overturning my decision, I’d like to continue with the city clerk reading the code of ethics.”
After several more minutes of argument , mostly between McLaughlin and Booze, Booze acquiesced, predicting a long meeting.
The clerk began to read: “We should be respectful, courteous and ethical…” until she was drowned out by laughter from the crowd.
Community Development Block Grant
After the public comment period, during which multiple SEIU leaders and members stood up to warn the council of their resolve in the coming negotiations, the room emptied to about 50 people.
Patrick Lynch, the city housing director, gave a brief presentation before asking the council to approve the Amended Annual Consolidated Action Plan for the Community Development Block Grant—that is, a list of how to spend the money that the U.S. Department of Housing and Urban Development gave Richmond to provide housing and services for people with low incomes. The list had been thoroughly vetted by both the public and the council, Lynch told them, and includes items like legal counsel for seniors and adult daycare.
The council approved the two related items.
“It’s exciting,” Lynch said, pointing to a list of organizations and their slices of the pie. “Now everybody gets funded.”
Code of Ethics
The next item on the agenda was to “Review and Discuss the reading of the Code of Ethics Policy.”
Booze said he had wanted a youth or a senior to read the code of ethics in the beginning of the meeting not because he cared whether a senior or a youth read the code of ethics, but rather because he thought the rule was unfair to non-youths and non-seniors. His attempted enforcement of the rule, he said, was actually in protest. “Why would we want to keep someone in the audience who is a citizen from reading it?” he said. “We don’t even follow it most of the time.”
Several public speakers admonished the council for their mockery of the code of ethics. “Why do we even have to read it before the meeting?” said Don Gosney.
“You can’t even come together to vote on anything,” said Reverend Wesley Ellis. “I think you need to get a code of ethics for yourself and then follow it.”
“There are real issues!” said Mike Parker.
McLaughlin argued that the city clerk should be the regular reader. The clerk is non-political, and can read the code of ethics in a non-partisan way, McLaughlin said.
After close to an hour, Councilmember Tom Butt introduced a substitute motion to cease reading the code of ethics before each meeting.
“I’m abstaining,” said Councilmember Jael Myrick. “I just think this conversation is a waste of time.”
The motion was approved unanimously, with Myrick abstaining.
After that, the council discussed whether or not to approve putting RichmondBUILD in the general fund. The program trains people in construction and renewable energy. Most of its graduates are minorities, and many of them have history in the justice system. In addition to some funding from the city, RichmondBUILD relies heavily on grants and private donations. Because of sequestration, program director Sal Vaca said, much of the grant money has dried up, meaning at the moment the program is running on private donations alone. It has enough money to make it through December of this year, he said.
Putting the program in the general fund would make sure the program doesn’t disappear if its funds dry up—a worthy cause, said Booze. He asked three teachers with the program to stand up and tell their stories. “I never thought I’d be part of something like this,” said DeMarco Wooten, a carpentry instructor, “making my mom proud.”
“I’m proud of you,” Booze told each of them.
“It’s always great coming to the graduations,” McLaughlin said, beaming.
“I don’t always agree with the Vice-Mayor on everything,” Myrick said, “But I think we can all agree this is a slam dunk right here.”
Then Councilmember Nat Bates doused the good cheer. He just had a talk with someone from the city about the upcoming budget, he said—things aren’t good. “At this point I don’t think we should be putting money anywhere until we take a look at the budget,” he said. “RichmondBUILD, I assure you you’ll be a very high priority.”
The program has been running on $1 million a year, Vaca said, although it could keep going on just $650,000 per year. Since 2007 it’s trained more than 700 people, he said, placing almost three-quarters of them in jobs.
Ultimately, a substitute motion passed; if the program does run out of money, then the city manager will come back to the council for approval to spend the money to prop up the program. Booze voted no, saying the decision should be left to the city manager.