Wednesday, May 7, 2008

Cut the Budget and Hold the Fees

This has not been an easy time to be a member of the City Council.

Over the past few months, we have been constantly skewered – by the Ventura County Star and many of our own constituents – on the question of fees, first the 911 fee and more recently the weed abatement fee.

At the same time, we’ve spent almost every Monday night for the last two months debating how to cut the budget – not just next year’s budget, but this year’s budget too.

Well, last Monday night (May 5th) we made some tough decisions on the budget – and we began to address the question of fees as well. And next Monday night (May 12th), we’ll continue our discussion of fees. I’ll get to the fees in a minute, but first let me talk about the budget cuts.

Budget Cuts

As I pointed in my last post (below), we at the City of Ventura – like most other cities in the county and the state – were a bit surprised by the quick drop in both the real estate market and retail sales. Property tax revenues are now growing slowly and may soon drop. Sales tax revenues have leveled off and are beginning to decline too.

All this means we have to start spending less money, not more. Twice in the last two months, the City Council has cut $1 million out of the current year budget, mostly by postponing certain capital projects and making similar changes. On Monday night, we made about $4 million in cuts. We did this by accepting the vast majority of cuts proposed by City Manager Rick Cole and his staff as the result of a months-long debate at the staff level about what we can live without.

We punted on a few things that individual council members wanted to discuss further – reducing downtown police foot patrols and closing police storefronts, cutting arts grants, cutting our subsidy of the Visitor and Convention Bureau, and a couple of other things. But we bit the bullet on a lot of other things.

Make no mistake: These cuts are going to hurt. They are going to anger some of our constituents, who will complain that we have cut the wrong things. For example:

-- We have completely eliminated the neighborhood speed bump program. If your neighborhood wants to ask for speed bumps, unfortunately the City is not going to be able to put them in any more.

-- We are punting on renovations to many of our parks.

-- We’re also cutting back on parking lot cleaning in many of our parks, and also we’ll be maintaining fewer trees in parks and mowing the grass less frequently.

-- We will be cutting curb and gutter repairs by half, so some curbs and gutters that are in bad shape simply won’t be fixed.

-- We’ve also agreed to cut sand cleaning by 50% in the Pierpoint, though we may well put that back in next year’s budget when it actually comes before us.

I’m particularly concerned about some of the cuts in the police department. I fear that we may wind up using fewer civilian folks, forcing our sworn officers to do routine desk tasks. And much as I love the arts, I’m not sure I can support maintaining arts grants at the current level when people can’t even get speed bumps anymore. But as most of us have said, everybody’s ox is going to get gored before we’re done; and we have to bear as fair as possible in doing to the goring.

And I don’t see any way to avoid even more cuts next year. This is going to get worse before it gets better.

Rethinking Fees

We got creamed in the press and by constituents all winter and spring over passage of the 911 fee. More recently, we’ve gotten hammered by hillside property owners for the weed abatement fee of $99, which is meant to cover the city’s cost of ensuring that hillside property owners are complying with the State Fire Code.

Most recently, an appellate court in the Bay Area struck down a city’s 911 fee up there; and our City Attorney cautioned us to re-examine the weed fee. Our 911 fee is still in place – the so-called “opt-out” period ended yesterday – but on Monday night we did waive the weed abatement fee for this year while we take a step back. (By the way, only about 10% of people opted out of the 911 fee; and we have still reserved the 911 funds to hire more police officers – we are not using the funds to plug the budget gaps described above.)

Next Monday we will talk about fees some more because the annual “cost of living” fee increases will come to us for approval. But that’s clearly just the beginning of the conversation.

As far as I can tell, overall Ventura’s “fee burden” isn’t all that high. The proposed 2008-09 budget estimates fees at a little over $11 million, or about 12% of our general fund. By contrast, property and sales tax together make up close to $50 million, or more than half our general fund.

I’d say people don’t complain much about fees when they understand what service they’re paying for. If you’re doing a room addition, for example, and we charge a fee to cover the city’s cost of processing the permit, people understand that. If we raise the fee a lot they may gripe, but at least they understand that they are paying for something they are getting.

In the case of both the 911 fee and the weed abatement fee, it’s not as clear to people what they are buying their fee. They’re not paying a fee based on something they are applying for – a room addition, a business license, whatever – but rather based on the fact that they fall into a particular category of resident. For example, everyone who buys telephone service pays the 911 fee (unless you opt-out, in which case you pay by the call); and that, of course, is just about everyone, which is why some people think it’s a tax. The money is earmarked to maintain the state-mandated 911 call center. Similarly, everybody who owns hillside property received a bill for the weed fee, whether or not they maintain their property on their own, simply because they live in a high-fire-hazard area. That money is earmarked to pay for the city’s cost on ensuring compliance with the State Fire Code.

So when people gripe, it’s because they’re being asked to pay a fee when they aren’t applying for or seeking anything in particular. This is a fair point and we’ll debate it over the coming weeks and months. But if we do back off fees like this, then we will have to make much deeper cuts in our city services, at least in the short run. We’ll probably just be trading constituent complaints about high fees for constituent complaints about poor service.

In the case of the weed fee, the action we took on Monday night was stimulated partly by the backlash – but also partly by City Attorney Ariel Calonne’s concern about how we passed the fee in the first place.

What happened was that last year we approved our usual “fee list” (like the one we will consider next Monday night), and it included a variety of new fees and charged from the Fire Department. These were put into place because we had encouraged all the departments – including Fire – to look for new sources of revenue. Last year we approved a $99-per-hour charge for fire inspections. This got translated at the staff level into the $99 weed abatement fee. Thus, Ariel is not sure that we really adopted this fee as we should have. Maybe the Fire Department was too zealous in interpreting the $99-per-hour fee schedule that we approved – but they were definitely operating with our encouragement to increase revenue however possible.

Who Pays?

I know this isn’t a popular statement, but my personal view is that the City has been too reluctant to charge fees in the past, because the good folks who work for the City hate to make our residents pay for things. That’s why our overall fee burden is fairly low.

But I’m more than willing to admit that it’s time to step back and examine where we should “draw the line” between (1) charges for specific services that specific people request and (2) charges for services that we must provide to specific groups of people (often because of state law) whether they ask for those services or not.

So the question becomes, who pays for what?

The tricky part is how we handle a situation where the City is obligated by law to do something that benefits a particular group of people, but charging those people to cover the cost requires either voter approval, if it’s a tax, or public acceptance for the notion that it’s a fee.

The hillside weed thing is a good example. When a wildlife breaks out in the hillsides – as happens frequently in Ventura – hillside residents expect the government to spend enormous amounts of money to fight the fire and protect their neighborhood. (I know this because I used to live in Ondulando, which has been saved several times by a multimillion-dollar firefighting efforts.) So there’s a state law that says the hillside owners have to abate their fire hazards and that the City has to enforce those requirements.

You can probably argue the question of who should pay either way. On the one hand, spending a little tax money to monitor weed abatement in the hillsides might save huge amounts of tax money later – so shouldn’t we all pay? On the other hand, the primary beneficiaries of fire suppression efforts are the hillside homeowners – so shouldn’t they pay? We often face the same kinds of “who pays?” questions down at the beach.

In any event, I think all the public debate over the last few months – including all the criticism of the City Council – has done us a favor. It’s forced a long-overdue conversation about who pays and who benefits and what our priorities should be. So I’m looking forward to talking to all of you about this more and reaching a better community consensus about it.

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