Berkeley’s deteriorating finances were the subject of the council’s work session last Tuesday. The proceedings should make citizens sad and mad. Sad, because the people who will be hit the hardest by the $12.5 million deficit forecast for Fiscal Year 2012 are among those in our community who are most in need of support—the aged, the mentally ill and the poor. Mad, because City officials blamed the looming debacle wholly on “outside forces,” when in fact the budget crisis results in good part from their own fiscal imprudence.
First, a few more numbers. According to the staff report, the $12.5 million shortfall has two parts: a $3 million deficit in the general fund and a $9.5 million deficit in so-called special programs—specifically public and mental health, refuse, clean storm water, the permit service center and federally funded programs. In addition, the housing department currently faces non-structural funding losses of $.9 – 1.5 million. And this is just for 2012; in 2013 revenue sources are likely to shrink further.
The upshot is that for the first time, real layoffs may occur. In the last two years, 130 positions have been cut, but those were vacant. In Fiscal Years 2012 and 2013, the City is expecting to eliminate 96 more positions, including 51 that are currently filled. The largest cuts are planned for health services and public works, which stand to lose 24 positions each. Even the police department will lose 19 positions, though almost all of those losses will be accommodated by not filling the department’s current 20 vacancies.
The loss of personnel will inevitably diminish city services, though exactly how was largely impossible to tell from the job numbers in the written staff report. The only specifics offered there dealt with the housing department: the West Berkeley Senior Center will be converted to a supportive services hub; the weatherization program will end in January 2010; and community agency contracts will be affected in ways to be detailed in April.
Some of the blanks were filled in by the department heads. Police Chief Meehan, for example, said that the police department would lose its crime analyst FTE, but that an officer would be moved into that indispensable job. Health Services director Beth Meyerson said that everyone who comes in for mental health assistance will be seen, but not everyone will be treated. After pointed questioning from Councilmember Arreguin about what kinds of positions were being eliminated, Meyerson explained that most of the mental health staff being laid off lacked a clinical license and could only work under a licensed supervisor, and that hence the department would be filling 4 vacant supervisorial positions. That explanation didn’t satisfy Arreguin, who asked if it was appropriate to fund four supervisorial slots. City Manager Kamlarz intervened, saying that the current supervisor-to-staff ratio of 20 to 1 is too high. Arreguin demurred.
The news is grim, everyone agreed. But just as troubling as the news was the council and mayor’s apparent inability to grapple with the details of the city’s budget. In his insistent queries about the meaning of the mental health services numbers, Arreguin was the only councilmember who really probed the staff report. His fellow officials on and off the dais mostly indulged in grandstanding—emphasizing, above all, that they were not responsible for the budget mess. “I don’t think anyone in this room contributed to this meltdown,” said Councilmember Maio, “and yet we’re holding the bag….We are not the cause of this. This has been done to us.”
Yes and no. Certainly Berkeley City Hall is not responsible for the Great Recession and the consequent bleeding of federal and state balance sheets—all of which affect the municipal budget. As the staff report indicated, the Obama administration’s proposed cuts in the federal Community Development Block Grant, Community Services Block Grant, Low Income Home Energy Assistance and HOME Investment Partnership programs will all impair Berkeley’s ability to assist the lowest income members of our community. To a lesser but still real extent, economic development in our city will be adversely affected by the elimination of redevelopment agencies and enterprise zone tax incentives that have been proposed by Governor Brown. These proposals have yet to be resolved, contributing to the uncertainty that is making budget planning even more difficult. And then there are the wildly escalating CalPERS rates and health care costs. To cite the staff report: “The rising CalPERS rates alones will increase the City’s costs by almost $7 million over the next two-year period.” “Total health care costs increased over 70% in six years, going from $9.5 million in FY 2005 to a projected $16.3 million in 2011.” Again, nobody in City Hall is responsible for these daunting figures.
But let’s talk about the daunting figures for which our elected and appointed officials are reponsible—for example, the City’s 15-year, annual subsidy of UC Berkeley’s use of City services (police, fire and sewers) to the tune of about $13.8 million. That subsidy was established when the council majority secretly approved the agreement that settled the City’s 2005 lawsuit of the school over UCB’s Long Range Development Plan.
How about the $15 million dollar surplus in the City’s Sanitary Sewer Fund (flagged by Barbara Gilbert in another piece in the current Planet), carried from year to year, while our sewers—to borrrow an adverb from the staff report—“desperately” need repair?
Or, to turn to the core problem, how about the excessively generous union contracts that the city manager has repeatedly negotiated and the council has repeatedly approved? Contra Costa Times columnist Daniel Borenstein recently noted some of the most flagrant excesses: “a pension plan that allows some workers to collect more in retirement than on the job; overly generous promises of health care coverage for police in retirement; and a ridiculous vacation and sick leave accrual policy that costs the city millions and enables employees to spike their pensions.” These and similarly ill-considered policies have led to the City’s $310 million worth of unfunded liabilities documented by City Auditor Ann-Marie Hogan.
At the Tuesday work session, Councilmember Wozniak indirectly cited Borenstein, referring to the “bad local press” that the City had recently received. The councilmember then raised the possibility of a hiring freeze or a salary freeze; called for ending termination cash payouts; and marked Berkeley’s “very generous” health policies for City staff, “with no deductibles and no premiums.” It was tough talk, but as longtime observers know, Wozniak never walks such talk; he voted for all of those raises and benefits, as well as for the secret agreement that capped UC’s annual payments to the City at $1.2 million.
Nobody else on the dais even talked tough about the core issue of staff compensation. Instead, councilmembers expressed solicitude for the City workers and their families. Councilmember Worthington asked that in the future, union representatives join management at the front table where City staff sit facing the council. That suggestion garnered loud applause from the many City workers in the chamber. Bringing union reps to the table, said Worthington, “won’t solve the problems, but it would be a statement of respect.” Yes, it would, and it’s a good idea.
But what about respect for the citizenry, a.k.a. the taxpayers? Why didn’t anyone invite our representatives to sit at the table? Is this government for the people, or government for the staff? Why doesn’t the council resurrect the Citzens Budget Review Commission, which it eliminated in 2005, and this time give it the staff support that it needs to do its work?
Ain’t gonna happen. The last thing Mayor Bates, his council majority and City Manager Kamlarz want is serious scrutiny from the public, especially about the City’s finances. Berkeley citizens are going to have to dig into the budget themselves. Happily, some hardy volunteers are doing just that; their website will be up in a month or so. In the meantime, you can email them firstname.lastname@example.org.