Press Release: Berkeley Fiscal Accountability Initiative Headed for November Ballot

From Barbara Gilbert and Jacquelyn McCormick
Wednesday May 16, 2012 - 05:05:00 PM

The Committee for FACTS turned in almost 4,000 signatures to the Berkeley City Clerk, more than enough to qualify its fiscal accountability initiative for the November ballot. 

The Berkeley FACTS Ordinance of 2012 will require the City of Berkeley to prepare and publish, by March 1, 2013, a Certified Financial Report specifying the City’s financial obligations for a twenty-year period for employee-related expenses and prudent capital improvements. Additionally, it would require a substantiated determination of the present value of these long-term obligations and of the annual monetary resources necessary to pay them down. The Ordinance, which requires bi-annual updating, would also restrict the City’s ability to incur new debt or impose new taxes, assessments or property-related fees, or raise certain existing taxes, assessments or fees during any period that the Report is not properly prepared and certified. 

The City’s unfunded obligation for employee-related costs and capital improvements is estimated at about $1.2 billion. Even annual operating revenues are not keeping up with annual expenses. Funding and taxing decisions are being made in a fiscal vacuum.  

According to FACTS spokesperson Jacquelyn McCormick: 

“The City has set aside no monies for its long-term obligations and, each year, allocates to them, as well as to local community social agencies, a decreasing share of annual revenues. Instead, an ever-increasing share of revenue is allocated to employee compensation. Fiscal accountability is an absolutely non-partisan issue. Our future is literally at stake. The City is now so desperate for revenues that it has willy-nilly implemented draconian parking enforcement that hurts local businesses, imposed excessive permit regulations and fees, suggested a potpourri of new taxes on residents suffering their own financial reverses, and it is even trying to upzone established residential/artisan neighborhoods in West Berkeley to garner development-related fees and taxes.” 

Research conducted by attorney David Wilson, a principal of the Committee for FACTS and of Berkeley Budget SOS indicates that over the last twenty years, while inflation has been about 166%, the City’s budget has increased by about 226% and employee costs have increased by 279%. These employee costs have risen from about 64% of the budget to 80%. Meanwhile, basic funding for capital improvements declined from 10% to 4%, and little or no monies were reserved for long-term employee costs, capital improvements, and emergencies. 

Hundreds of Berkeley residents and many community organizations assisted with the FACTS signature drive and are ready to work for the November passage of the measure. The Berkeley City Council, after more than two years of refusing to address the unfunded liability issue, is belatedly considering a superficially-similar but deeply-flawed alternative to the FACTS ordinance.