Kathy Meeh - Budget Transparancy

I'm posting this for Kathy, and it is a wonderful indictment of our cheery and misleading City Council about our financial issues:

Letter-to-the-editor. Kathy Meeh, 1276 Alicante Drive, Pacifica, 650-359-9270. 6/20/08

Budget transparency

In their congenial deliberations, City Council claims to maintain a high standard of “transparency in government”, as a citizen who has observed all the budget meetings and done some research I don’t think that is entirely true.

City budget sessions were held by Council 4/16, 4/19, 5/12 and 5/21, with approval 6/9 for the 2008-09 fiscal year beginning 7/1. The process seemed more efficient and professional this year, thanks to Steve Rhodes, General Manager and City staff. Contrary to comments by Mayor Pro Tem Lancelle (6/18 Tribune), there were transparency problems in Council deliberations and communications with the public. There were also delays in website budget postings prior to 6/9, and gaps in detailed information.

Council discussion (5/21) over refunding bond debt from variable-rate to fixed-rate went something like this: “a steady stream of payments…I like that better… cities can borrow money at much lower rate than citizens”. Missing was the discussion about the additional $2 million dollars debt, and the plan to repay the loan.

Mayor Vreeland talked about the sewer tax rate increase in similar funding terms (5/12). Twice he repeated the improvement of the new fixed loan being a “steady stream of payment”. Missing was the connection to the actual 18.777% tax increase ($2 million) paid by homeowner and business parcel owners, and an adequate explanation why the increase occurred from the planned 9%.

This year the cost to run the Waste Water Treatment Plant is expected to be about $11.4 million, with $3 million (26%) of that total paying annual debt service only.

Mayor Vreeland (6/9) solicited the short-answer response from Ann Ritzma, Finance Director, that City loans “are mostly for capital projects”. The longer answer is that these loans are mostly for debt refunding of old capital projects, additional capital extracted, and debt is not paid down. Funding of the Police Station and the Waste Water Treatment Plant debt are two examples of this debt restructuring.

While the budget expenditure detail no longer includes a page describing “debt to project”, the audited Comprehensive Annual Financial Report to the State of CA, fiscal year ending 6/31/07, provides broad debt disclosure on page 112: $39,029,240 business-type government (sewer bonds and notes payable) and $56,629,618 primary government. Total City debt as of 6/31/07 was $95,658,858.

The completed 6/31/08 budget has yet to be audited, but Staff reporting indicates that current City debt must be about $100,000,000 or more. For those who have problems with zeros, that is more than $100 million dollars, continuing to grow.

When Mayor Vreeland was elected to City Council office in 1998 the City debt was $11,077,000, and the population was 40,381. Last year the audited debt was $95,658,858, and the population was 39,251. In the nine fiscal years from 1998 through 2007, the City debt “red ink” has increased $84,581,858, representing 8.64 times, or 3,641.55%. At the same time the population declined by 1,130 people.

Did you know the economic plan of this City Council is “recreation”, we live in “park city”, and an important part of the Mayor’s economic plan is “trails”? These communications and related “vision” were certainly not made clear to ordinary citizens, nor did we vote to defeat a viable, balanced economic plan for this City.

“Our environment is our economy” really, what does that mean? Infrastructure = loans or grants; City supplemental debt = parcel owners; City productive raw land = “open space”. Spin to citizens of this City = priceless. Isn’t it time for this City Council to step-down?

Kathy Meeh

Sun Valley

Proud Member of Pacificans for Progress, and Pacifica Business for Responsible Government

Deja Vu - City Attorney's Budget

published as a Letter to the Editor in the Pacifica Tribune, 6/18/08

I recall writing an article last year detailing our city attorney's budget, and how it was a significantly higher portion of our general fund than all of our surrounding cities. I also recall critics praising our city attorney for "defending" the city from developers, and we were told that our excessive city attorney budget was due to one case (Fish and Bowl) for which we would prevail. The city did prevail, and there was much back-slapping and self-congratulation.

Except city council has once again approved a city attorney budget close to $1 million. Their justification was "anticipated litigation."

When I pressed them at the most recent city council meeting to explain what litigation they were anticipating, there was no response.

In fact, the Pacifica City Council had discussed "pending litigation" during a closed session before this meeting, and the city attorney claimed they had nothing to report from that closed session. Exactly how does city council approve such a large budget with "nothing to report"?

As Yogi Berra said, "it's like deja vu all over again." First of all, who exactly prevailed in the Fish and Bowl lawsuit? The land was not developed and the developer will likely declare bankruptcy.

The city will see no financial benefits from development. The city recouped some of its legal fees from a contentious lawsuit with ABAG which, in my opinion, effectively destroyed any good will and our reputation with that respectable organization. In the end, the city spent over $5 million in legal fees, effectively crippling every other functional aspect of city government for 4 years, and the city still lost over $1 million even after the ABAG settlement.

Instead of negotiating in good faith, the city attorney got her rolodex of rich lawyer buddies even richer, while the citizens of Pacifica were deprived substantial tax dollars for basic city services. We, the citizens also paid for our failure to negotiate with decent city employees like Dave Carmany, Mike Angel, and Maureen Lennon as well as local citizens (Arno Rohloff) and businesses (Coastside Scavenger). The only people who have really prevailed are the law firms of Hanson Bridget LLP, Lombardi Loeper & Conant LLP, McDonough Holland & Allen, and others.

Not that I have anything against lawyers, and I don't begrudge them for earning a living. But I do begrudge our city leadership when they subsidize law firms from their refusal to negotiate in good faith, and proceed with what I view as fiscally irresponsible and politically reckless legal decisions.