In a disappointing show of increasing dysfunctionality, the Richmond City Council failed to pass the balanced budget presented by City Manager Bill Lindsay last night. City Council members are increasingly consumed by their own ideology to the detriment of the city as a whole. Essentially, they are holding the budget hostage for the ransom of their individual and selfish political obsessions.
· Nat Bates wouldn’t vote for the budget unless the City Council agreed to an “outside audit.” The City is, in fact, audited by an independent auditor every year. See http://www.ci.richmond.ca.us/2973/Single-Audits. The kind of additional audit Bates wants would cost several hundred thousand dollars, which is not in the balanced budget. Bates’ real beef is with the city manager, whom he unsuccessfully tried to get rid of by voting not to renew his contract earlier this year. Bates has no confidence in the city manager’s ability to run the city, and he wants some independent consultant to second guess Lindsay’s management decisions. I suggested that Bates bring the audit up as a separate agenda item at a later date, but he was not dissuaded.
· Nat Bates and Eduardo Martinez wouldn’t vote for the budget unless it included a provision to appoint standing Finance and Public Safety Committees. These committees were terminated by a majority vote of the City Council last year, and presumably there is not a majority vote to reinstate them. I suggested that Bates or Martinez agendize the issue for another discussion at a later date, but they were not interested. The standing committees were no longer supported by the City Council because they were redundant, wasted staff and City Council time, wasted money and were ineffective. They often failed to convene a quorum so they could even conduct any business. Bates also stated this strange opinion that a finance committee would “oversee city staff,” which is, of course, not how a council-manager city government works and would be contrary to the City Charter.
· The RPA Three (McLaughlin, Beckles and Martinez) wouldn’t vote for the budget unless it included their irrational and delusional plan for graduated voluntary compensation cuts by City employees. They just can’t let this go and move on, although there is no evidence that it would ever happen. Following their previous request, city staff and our negotiating team already broached this, and it was met with a distinctive lack of enthusiasm.
Council members continue to try to micromanage organizations and staffing as a part of the budget process. Last week it was a long discussion about the fire marshal position. This week it was an equipment superintendent.
So where does that leave us? We have one more chance next week to pass a budget. What happens if we fail? Well, there is no explicit requirement in state law for a California city to adopt a budget. But many other laws and practical requirements make budget procedures and documents essential for any city.
· A public agency may not spend public funds without the legal authorization to do so. Among other things, a budget appropriates public funds, thereby providing the legal authorization from the governing body to expend these funds. Appropriation authority can also be conferred by an ordinance or resolution.
· Like other California public agencies, each city must annually establish its appropriations limit pertaining to the proceeds from taxes in compliance with Article XIIIB of the California Constitution and Cal. Government Code Sec 7910. The appropriations limit is often established as a part of an annual budget and must be reviewed as a part of an annual financial audit.
· It is nearly impossible for even the smallest government agency to operate without incurring any debts or liabilities, even short-term, i.e. pay upfront cash for all employees, services, and supplies. The California Constitution (Section 18 of Article XVI) states that no city or county may incur any debt or liability in any year that exceeds the income and revenue anticipated for that year without two-thirds voter approval. In order to verify compliance with this, an agency must determine its anticipated income and revenue. A budget does this.
· Cal. Government Code Sec 53901 requires each local agency to file its budget with the county auditor within 60 days after the beginning of its fiscal year. If an agency does not have a “formal budget” it must “file a listing of its anticipated revenues, together with its expenditures and expenses for the fiscal year in progress” which amounts to much the same thing as a budget.
· In order to qualify to receive federal funds, a local agency must comply with the federal Single Audit Act and must retain a Certified Public Accountant to prepare an annual audit of its financial records. Such an audit will require the agency to comply with Generally Accepted Accounting Principles and government accounting and audit standards. That compliance will be very difficult without an adopted budget.
Passing a budget is critical for Richmond. I hope voters will let our City Council know that they need to abandon the political theater and take care of business.