The Cliffhanger Budget

Last week, the City Council approved the 2010-11 budget by a vote of 6-0 with Councilmember Weir absent because of a longstanding commitment. It’s not a budget any of us are happy with or proud of.

In order to close yet another multimillion-dollar deficit, we voted in favor of significantly reducing the number of police officers and firefighters – this will result in the “closing” of Fire Station 4, at least for now – the possible closure of the Downtown Senior Recreation Center unless we can close a deal for somebody else to take over the building, the elimination of more than 40 positions citywide, further reductions in park and streetscape maintenance, and a general thinning of the ranks for the second year in a row.

Plain and simple, this is a cliffhanger budget, designed to help us squeeze through the third fiscal year in a row where revenue has declined, and still hang on to the basic infrastructure of our city services. I hope it’s the most draconian budget I ever have to vote on.

Most of the attention in the last few weeks, of course, was focused on the question of whether we would continue to staff Fire Station No. 4, on Telephone Road near Montgomery, which City Manager Rick Cole and Fire Chief Kevin Rennie suggested was the station least likely to have a significant impact on our fire department response times if it were closed. Both the firefighters union and many of Station 4’s neighbors took us to task on that idea, saying it stretches the Fire Department too thin. The fact of the matter is that this budget stretches everything very thin. This includes not just the Fire Department but the Police Department as well, which won’t lose any beat cops but will see a reduction in all kinds of support services – detectives, the graffiti team – that help to keep our community safe.

At this point, it is not too much of a mystery to most people why we are having to make these cuts. We have lost more than $15 million in revenue in the last 2½ years. Our General Fund revenue is back down to the 2003 levels; our sales tax revenue has dipped down to the level we saw in around 1999. Property tax is stagnant and beginning to go down.

Just as there was last year, this year there was considerable interplay between our proposed budget on the one hand and our labor negotiations on the other. The reason is not surprising: When revenue is going down there are only a few ways to reduce expenses and most of them of them affect our employees. The options usually go like this:

1. “Go out of business” in some areas by simply ceasing to perform some low-priority functions, which usually means eliminating positions.

2. Reduce levels of service in at least some areas – if not all of them – another step that usually involves eliminating positions.

3. Reduce employee compensation.

And the hard truth of the matter is that there’s usually a tradeoff here. Either we reduce the number of positions – some vacant positions and some layoffs – or else everybody takes a pay cut.

Last year, we did all three things. For example, we no longer fund any public art out of the General Fund; and all of our bargaining units agreed to a 5% cut in 2009-10, much of which was taken in the form of things like less vacation. (We were one of the few cities in the state to successfully negotiate such a cut.)

This year, it has been harder to do anything of these things in a way that doesn’t really hurt. There are few low-priority activities that we have not ceased doing. Cuts in service are beginning to hurt because we have cut the back offices all we can. Most significant, it has been more difficult this year for us to reach agreement with our labor unions for pay cuts. We are asking for more than we did before – short-term and long-term – and they are pushing back.

Since we haven’t successfully negotiated any pay cuts, we didn’t put any savings from those pay cuts into the budget. We are currently in negotiations with the police union and with SEIU Local 721, which represents all of our non-public-safety workers. These contracts expire on July 1.

We also engaged in a lot of talks with the firefighers union, even though their contract doesn’t expire until December, because they were interested in keeping Station 4 open. (The real cost savings in Station 4 is not “closing” the station; it’s the $1.2 million in savings that comes from eliminating 9 of our 66 firefighter positions.)

The firefighters stuck with us, and came up with many creative ideas, and we made some progress. In the end, however, the reductions they offered were not enough to reopen Station 4; and the Council was unwilling to accept one of the conditions the firefighters asked for in return – a guaranteed number of firefighters on duty at any given time. This would be an unprecedented step for the city to take. No city union contract currently contains guaranteed staffing for any department. If we accepted this condition, we would essentially be earmarking a certain percentage of the budget for the firefighters – exactly the same kind of earmark that has made it impossible for the state to balance its budget year after year.

So in the end, we were unable to reach a deal with the firefighters and we adopted the budget without any wage concessions. On July 1, both our police force and our fire department will be reduced. Fire Station 4 will go unstaffed most of the time for now. We will further reduce park and landscape maintenance and we will shrink in many other ways as well.

I said at the beginning that this is not a budget to be proud of, and that’s certainly true considering service cuts it contains. But one thing I think we should be proud of here in Ventura is that, unlike so many other public agencies, we are facing the issues head-on and we’re not papering them over.

We’re balancing our budget, just as our City Charter requires, and we’re doing it honestly, even if honesty comes with pain.

We’re not using reserves or other “one-time money” to keep things going.

We’re not pretending we’re going to get more revenue than we are.

We’re not – as some cities are doing – reaching agreement with our labor unions by promising them raises in three or four years, when we have no idea what the future will bring.

But that doesn’t mean we will stop trying to figure out ways to restore the services we have lost. I view the “closure” of Station 4 as temporary – though I can’t tell you whether temporary means six months or five years.

Nor will we stop looking at ways to restrain future spending. We are going to have to restrain spending to accomplish three goals: (1) ensure our long-term solvency; (2) maintain our ability to provide services to our constituents; and (3) maintain our ability to meet our financial commitments to our loyal and hard-working employees. We will continue to negotiate with our labor unions for short-term pay cuts, which could help restore some service cuts in the short-term. We will also continue to work collaboratively with our unions on long-term pension reform.
But all this is not enough. We cannot achieve all these goals unless we also reinvent the way we deliver public services.

What do I mean by reinvention? Mostly what I mean is questioning how we do things. All too often in government, we desperately scramble to try to keep doing things the same way as we have always done them – without thinking about whether the current system is cost-effective, or even effective at all. Instead of trying to figure out how to maintain the current infrastructure as it exists, let’s focus instead on what the goal is.

So, for example, all through the debate about the Fire Department budget, the focus has been on how to keep Fire Station No. 4 open – a perspective that has been driven largely by the vocal involvement of the firefighters union and the people who live near Station 4. To me, however, the question is not how to keep Station 4 open, but how to make sure that our firefighter/paramedics can be at your home or your business, with the right equipment, when you need them. Once you make that shift, it liberates you to think differently about what the city does and how we do it.

In fact, we already stretch our resources in public safety by moving people and equipment around on an hour-by-hour basis. We think that if Station No. 4 is open, three firefighters are located there 24/7 waiting for your call. In fact, the Battalion Chief on duty is always redeploying our fire engines geographically depending on the circumstances.

So, if you're having a heart attack and call 911, Engine No. 4 may actually be sitting in Station No. 4. But, depending on what's going on, Engine No. 4 could be at a structure fire up in the hills, or at the training facility at Seaward and Allessandro, or sitting on Station 1 on the Avenue, backing up because Engine No. 1 is engaged somewhere. (It is typical practice in the Fire Department to move equipment around so that Stations 1 (Avenue), 2 (Seaward), and 3 (Buena) are always backed up, because these areas have the highest volume of calls.) In any of these circumstances, your call would be responded to by a different engine, including possibly the county engine in Saticoy. I cannot tell you how frequently this occurs now, but it's an everyday occurrence.

Similarly, after July 1, we will not have a crew permanently located at Fire Station 4, but that does not mean it will always be empty. In all probability, sometimes a crew (city or county) will be present there on occasion, again depending on how our Battalion Chief chooses to deploy resources.

So, already, the way we deploy are resources are very dynamic, even though we think they are static. But we have to move beyond the question of deployment to deeper questions of efficiency and effectiveness. If the job of most firefighters these days is to be paramedics, does every firefighter have to be attached to a fire station in a stationary location – or even to a fire engine that contains all kind of equipment not needed to rescue you while you’re having a heart attack? Reinventing things like fire and paramedic service takes time, effort, and commitment. And it’s an uphill battle against the natural inclination of practically everybody – constituents, politicians, and employees alike – to protect the status quo.

But let’s face it: We’ve spent the last three years cutting wages, cutting jobs, and cutting services. Now we’re at the bottom. It’s time to stop cutting and start reinventing