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Friday, March 23, 2007

Councilmember Souza running for reelection; Pledges to Balance the City Budget

The Davis Enterprise reported on Thursday that Davis City Councilmember Stephen Souza announced his bid for re-election to the City Council.

What I find interesting aside from again the sheer earliness of a reelection bid are goals if reelected.
“I would like to see an urban transition zone. I would like to move toward reducing our global footprint, provide police and fire with the tools they need to keep us safe, and balance our budget completely.”
Leaving aside the inconsistency between reducing our global footprint and big box development such as Target, the idea of balancing our budget completely should draw question and scrutiny given the record of Mr. Souza and his council majority cohorts in this regard.

One might rightly ask, and it is probably true that at an announcement is perhaps not the time to do so, what Mr. Souza has done to balance the budget in his first three years on the council?

If anything, as we discussed last week, Mr. Souza has contributed to the spiraling structural fiscal problems of the city of Davis by failing to act on the runaway pension problem.

As we reported last week, the city has been extremely generous with retirement benefits and after just five years of city service, a city employee is entitled to lifelong retirement benefits. If allowed to continue this will simply suck up all of the resources of the city. Moreover, the city is becoming increasingly hamstrung by upper management salaries. The combination is likely to mean fewer services and higher taxes down the line.

And yet, as recently as Mid-March, Souza continued to approve such measures that extend those benefits.

Furthermore as the Davis Enterprise reported on March 14, 2007: City leaders, led by you guessed it, Stephen Souza, have proposed "building, equipping and staffing a fourth fire station, something that would cost $5.2 million to get off the ground and $1.7 million per year to operate."

This feeds right into Mr. Souza's goal of providing fire with more tools to keep us safe, but again, is something that the city does not have money for.

On March 13, 2007, the city had serious talks about their financial future. Finance Director Paul Navazio painted a bleak picture:
"At current funding levels, projections show streets will continue to deteriorate over time," said Finance Director Paul Navazio.

The city budget is a delicate thing, depending on just a few revenue streams. The bulk of the revenue comes from property tax and sales tax, and half of that sales tax comes from car sales, Navazio said.

The City Council has made efforts to diversify the city's sales tax base by approving retail developments such as Target and Interland, but those projects have yet to be built and yet to start producing revenue.

But even that revenue could be diminished if a half-cent sales tax that voters approved in 2004 isn't reinstated in 2010, leaving the budget with a $3.2 million hole.

A parks tax, renewed by voters last year, will expire in 2012, taking $1.3 million in revenue with it if it is not renewed again.
The answer to the funding problem: you guessed it, new and more taxes.
"The answer could be a new and different tax with clear information about what it funds. Both the sales tax and the parks tax go into the general fund and can be used for any number of things."
What the discussion did not talk about is that a lot of the revenue problems and short-falls are being driven in part by structural spending problems created by locked in salaries and benefits that have been set at too high a level with little or no flexibility.

It is nice to talk about balancing the budget, but we need an honest discussion about how we got to where we are now and what it will take to balance the budget. That will require an explanation of why increasingly large amounts of city spending is going towards the payment of high ranking city officials and those who will have to pay the brunt of it will be the taxpayers and the heaviest burden will fall on new home owners and others who can least afford to pay that burden.

It is nice that Mr. Souza is now talking about a balanced budget because he has contributed as much as anyone to the runaway structural fiscal problems that this city has faced.

In fact, perhaps the most responsible councilmember in this regard has been Mayor Sue Greenwald who has voted against numerous pay increases, pension increases, and who has been warning us for years now of an impending crisis as the city council continues to lock up more and more future revenue into these expensive contracts that go heavily and increasingly toward wealthy, top-end personnel. As Mayor Greenwald said at a recent meeting, if the contract was merely going to rank-and-file, she would have no problem with it, but going to upper management, she could not in good conscience support it.

At some point we need to have an honest discussion of the city's fiscal situation, unfortunately many of us have little faith that the current news media in this city would understand the problems enough to hold the public official's feet to the fire.

In the meantime, Souza is running for re-election along with colleague Don Saylor. The question now is who will run against them. We will be watching closely as this develops.

---Doug Paul Davis reporting