Friday, February 15, 2008

"Something's Happening Here, What It Is Ain't Exactly Clear"

Based on the official minutes of the January 28, 2008 City Council meeting, the City Council and City Manager Bob Cumley (and most likely other high ranking city staff) knew of the decline in sales tax revenue BEFORE the Council voted to approve the 2008-2013 CIP, which included the expenditure of $350,000 for a city tricycle park.

Frequent bus riders will know this whole business about the sales tax revenue shortfall and the budget crisis bothers me. Surely this knowledge just didn't magically appear by itself on Wednesday evening. Surely staff or City Council had some inkling it was out there on the horizon, just waiting to drop in on us. Surely it wasn't, as the newspaper reports, "unexpected".

The Springfield News-Leader is reporting tonight in the online edition that "Springfield city government has been placed under an immediate hiring freeze, and city departments are being asked to cut their budgets by 7 percent because of an unexpected drop in sales tax revenue."

It wasn't. The Bus drove back to past City Council meetings and found it. And I didn't have to drive very far. We all saw it, but didn't connect the dots, we didn't know what questions to ask and it appears staff certainly wasn't about to answer unasked questions.

The minutes for the January 28, 2008 Council meeting report Councilman Dan Chiles asked City Manager Cumley "for clarification regarding sales tax revenue for the final quarter of 2007. Mr. Cumley responded sales tax revenue is down approximately 1% from last year’s revenue." That is from the official record.

We have to go to a local blogger's liveblogging record to flesh out that exchange. Life of Jason liveblogged the January 28, 2008 City Council Meeting. From Jason's liveblog: "Councilman Chiles asked about sales tax in the final quarter. Cumley said sales tax is down one percent when it was projected to be up three percent so the city is facing a four percent deficit versus projections." I need to note that Jason's liveblog is NOT an official record.

Chile's question was asked during a discussion of the shortfall in the police and fireman's pension fund. The SN-L has an account of the meeting here. Wes Johnson of the SN-L reports Cumley "noted that sales tax receipts are down 1 percent since the city's fiscal year began in July, even though city planners projected a 3 percent increase. Collectively, that means the city is facing a 4 percent shortfall in the current budget. Cumley said city staff are looking at some programs and services — which weren't specified Monday — that might be reduced or even eliminated to generate savings to bolster the pension shortfall." This account is NOT an official record either.

Chiles, one of the newest City Council members, like the rest of us sitting out in the cheap seats, had the answer but we didn't know it and staff didn't appear to have any inclination to clue us in on what that meant until they got what they wanted. Doug Burlison was on track to pick up on the clue but he got sidetracked by his own budget shortfall.

Looking at all of these accounts of the January 28, 2008 City Council meeting, staff's attitude appears to be rather blase about the whole affair. (Remember Cumley saying staff was looking at some options to generate savings, but he was directing his response to the pension fund shortfall. Either he was cagey enough not to mention the general revenue fund shortfall that would result from the sales tax downturn and the necessity of paring down the CIP or he wasn't aware of the severity of the 4% spread. The reports don't indicate any sense of urgency on his or any of staff's part. It don't look good for the home team.)

It was at this meeting that the Springfield City Council unanimously endorsed a plan to build the city's first children's tricycle park near Sunset and King. The $350,000project was included in the city's six-year Capital Improvements Program. And yes, I know the money for this park was left to the city by an elderly lady specifically for this purpose. It just don't look good.

This is where I get confused.

This is where I don't know what questions to ask.

But I am going to try.

Where does the Capital Improvement Program get its funding?

I know it pays for park improvements, the trike park, the downtown car parks, the steetscape at the College Street Station, the million dollar equestrian place out by Valley Water Mill, the Crime Lab (that voters voted down twice) and stuff of this nature. I know that some of the money in the Program is earmarked and can't be spent on other stuff (like the Trike Park mentioned earlier).

The signs we see up at intersections, saying this project was completed with the 1/4 cent sales tax, that's capital improvement, that's part of the program, right?
I think this is correct. If I am wrong, and I have been wrong before, someone email me and tell me please, or leave commentary on this post. I took off comment moderation.

Now, the sales tax goes into the general fund. If the sales tax revenue is down and the Capital Improvements Program is also partially funded by a sales tax, wouldn't that be down also?

If some of the items in the Capital Improvement Program require city matching funds, where do the matching funds come from?

Would it be prudent to think that if the source of the matching funds for the Capital Improvement Program is the general revenue fund and that fund is facing a shortfall, that we don't vote to spend money for the Capital Improvement Program that aren't absolutely necessary until we get the budget shortfall and the police and firemen pension deficit fixed?

If dirt is turned for a project, does that mean that project is "absolutely necessary"? Is this why staff was in such a hurry to start on the square? Because they knew the city was facing a serious budget shortfall that could possibly result in layoffs of city employees and reduction of services? Remember Ralph Manley saying "Time is of essence," here?

When the City Council approved the 5 year CIP at the January 28, 2008 City Council meeting, does that mean they approved each individual project in the CIP? Does the Council have any discretion is saying, “we can’t afford the match money for this particular project, so we are not going to do it.” Or are they, because this particular project is in the approved CIP, are they locked into doing the project?

Dang, this is confusing.

If this downturn in revenue from sales tax is a crisis on February 15, 2008, why wasn't it a crisis on January 28, 2008? Why wasn't it a crisis on February 11, 2008 when council voted to approve renovation of the square?

I think staff is setting us up for a tax increase. I think we will hear how the pension fund is breaking the city, how sales tax is not a constant source of income, it flexuates too much, that a city wide income tax or earnings tax or property tax increase is necessary to keep up with what we have started. And they will say, "Look at downtown. Look at the wonderful things happening down there. We are just beginning, we can't stop now!"

I think staff pushed through the CIP to get that money earmarked and they will try to convince City Council and the voters that "in for an ounce, in for a pound."

Remember what Life Of Jason reported at 8:49 PM:

Councilman Manley said that the people in these departments are experts in their fields and that the Council needs to rely on these people. He said that they’ve had this to review for a week or so and that it’s ready to pass because the experts said it’s important. He said he wants to vote on it tonight and passing this tonight. He said that this is what the people want and that it should be passed.

Councilman Manley was almost right. He said this is what the people want and that it should be passed. Only replace "people" and put in "staff" or maybe even "developers".

I know, if it were an option on the ballot, that I would vote to transfer some of the funding for Capital Improvement Programs to General Revenue Fund to avoid cutting staff or services. And if is not an option on the ballot, I would be lobbying Lampe, Champion, Dixon, Norr, Marsh, and Denison to get us that option to put it on the ballot.

I am against any plan to raise taxes because I don't see where the City has been a good steward of my money.

Some may call me an "aginner", but I know what I like and I know what I don't like. And I don't like what is happening here.


Józef Jan Hughes said...

This post cuts right to the heart of the problem, Jim. You and Jacke M. and Jason are getting me seriously riled up about local mismanagement.

Gregory Holman said...

Nice blog! I just discovered it while reading the News-Leader website. I've thought about doing the City Academy myself, but I don't have a lot of extra time for that sort of thing. Will you be blogging about it?

Busplunge said...

Commentators above: Thanks for riding the bus!