Today is Budget Day: Unanswered Questions and Public Concerns

Today is a significant day for our city as the budget deliberations come to a head. Over the past months, citizens have followed the budget process diligently, yet there remains a sense of uncertainty about the council’s overarching goals and priorities. As we dive into the discussions, several pressing questions need clear answers from our city leaders.

What are the Council’s Goals?

1. Reserve Goal: Last year, the council aimed for the GFOA minimum of 17% unrestricted reserves. This year, the goal has been reduced to 10%. With the state median for unrestricted general fund reserves over 60%, can the council explain why the goal has been lowered and how this aligns with our long-term financial stability?

2. Pension Liability Goal: The city’s unfunded actuarial liability (UAL) pension liability rose from $57.8 million to $85 million last year, with annual payments nearing $10 million. With CalPERS earning 5.8% instead of the 6.8% goal in FY 2023, our pension liability is likely to increase. Furthermore, a potential reduction in the CalPERS discount rate could add millions in new debt. What is the council’s strategy to manage this growing liability?

3. Credit Rating Goal: Our city currently holds a BBB credit rating, a downgrade from AA- a decade ago and A- in January 2019. With the aspiration once being an AAA rating, what is the current credit rating goal? How does this align with our reserve and pension liability goals?

Budget Transparency and Mid-Year Expenses

There is a recurring issue of significant expenses not being included in the budget, only to resurface unexpectedly mid-year. For instance, several one-off construction expenses in FY 2024 were not initially budgeted. Additionally, public relations campaigns for Measure R and the new library were not explicitly discussed in the budget context. How does the council plan to improve transparency and accountability in budget planning to avoid such surprises?

Measure R and Library Campaigns

The dual narratives of the Measure R renewal campaign and the library funding approval raise questions about consistency and honesty in public relations. The Measure R campaign seems to focus on fear, suggesting the necessity of the tax renewal to avoid fiscal disaster. Meanwhile, the library campaign paints an optimistic picture, implying we can afford substantial new debt. How does the council reconcile these seemingly contradictory messages?

Specific Inquiries

• What is the story with charging for parking, and where does it appear in the five-year budget?

• Can the council unify the optimistic library campaign to present a cohesive and transparent financial strategy to the public?

A Call for Clear Goals

Citizens need clarity on the council’s goals, particularly regarding the reduction in reserve goals, the approach to managing pension liabilities, and the realistic credit rating objectives. It’s essential for the council to provide a clear and honest explanation of these goals and how they plan to achieve them amidst the current financial challenges.

Tonight, let’s hope the council addresses these questions with the transparency and accountability that the citizens of our city deserve.