Nat Bates: June 24, 2014 City Council Meeting

blogimage.jpgAfter two presentations and during open forum, three consecutive recesses were called regarding comments and responses by the audience toward two councilmember. A few in the audience challenged vice mayor Beckles regarding her allowing supporters of the RPA, the mayor and herself to be recognized and crash the acknowledgement of those who participated in the planning and organizing of the Juneteenth parade and celebration scheduled for this Saturday, June 28th  at Nichol Park.  For whatever reason the mayor and vice mayor chose to recognize two individuals and allowed them to speak although neither attended any planning meetings for the event and without confirmation from the Juneteenth Committee. 

A recess was called by the mayor when Councilman Booze challenged the vice mayor when she began giving out the groups’ web site and praising them for their work in the community although it had nothing to do with the Juneteenth celebration. Returning from the recess, Beckles proceeded to deny using the F___Y__ word to Councilman Booze several months ago, she defended herself by stating the comments were a private conversation between two adults and not heard by others. This prompted several members in the audience who also heard the word to immediately protest as did Councilman Booze and the second recess was called. During the open forum, I was challenged by Millie Cleveland,  representing SEIU 1021 regarding my denial of the 35 million short-fall several years ago. I responded the original amount had been reduced significantly and the 35 million was not an accurate figure. I also pointed out the same is occurring tonight where the original amount of shortfall was approximately 24 plus millions but as of today the amount had been trimmed to approximately 5.356 million dollars. As I concluded my remarks, I stated it was also a fact as I was sitting near Beckles when she uttered the F___Y__ word to Booze where upon the mayor immediately called her third recess even though I had finished my statement.  Be mindful that this is an election year and all sorts of politics will rear their ugly head. On a side note, Councilman Butt and I made a friendly wager as to whether Mark Wasberg would be thrown out of the council chambers again and I won as Mark was on his best behavior while speaking  in defense of his 1st amendment rights.

The balance of the evening was consumed with discussing the budget. As indicated, the original short fall was approximately $24.1 million dollars and questions were raised as to how did we allow such a large shortfall to occur without notification to the council?  The city manager stated there was a decline in property tax, (Chevron’s and all city residents property taxes were reduced after the fire because on what the assessor determined to be a loss in value of these properties.) and sales tax and utility tax have for the most part remained flat.  However the major cause of the shortfall has been expenses have outpaced revenue. In other word, city operation cost was $140.9 million and revenue was $133.3 million with a deficit of $7.6 million. Why the council was never notified continues to be a question. My assessment is the responsibility of keeping the council informed regarding the budget has always been the responsibility  of the city manager, our full time mayor and finance chair and her committee. Their primary responsibility is the oversight of the financial well being of the city and when revenues fall short of expenditures, they are to report to the council. In fact past finance chairpersons have had midyear budget reviews to keep the council up to date and informed. During this crisis, I along with Councilman Booze have frequently  visited the finance director, Mr. Goins to better understand the financial problems of the city. I inquired from him a few days ago as to how often he been contacted and sat down to speak with the mayor and vice mayor as chairperson of the finance committee regarding the finance of the city? His response was on a few occasions the mayor has spoken with him but vice mayor Beckles, as finance chair has never been in his office to discuss and go over the financial conditions of the city. That in and of itself speaks as to how we fail as a council in our oversight of the most important aspect of governing. Without revenue to pay for the expenses, no city can survive and provide the necessary and basic services the community deserve. This also perhaps explain why Councilmember Tom Butt, a business man who has more knowledge about finances than most on the council refuse to serve as a member of the finance committee that comprise of Beckles and Rogers only.

The council with the recommendations from the city manager and finance director took several actions in order to reduce the shortfall. First, we did a SWAP financial arrangement where we will refinance the civic center with a lower interest rate from 5.48%  to around 4% that was anticipated to provide about $9.5 million but somehow came back around $8.9 million dollars. It is questionable if the eminent domain or the deficit had a factor in our losing some $600,000 dollars.  We also receive from the Port a check for $500.00 from Mr. Wu who has an exclusive right to develop terminal one that will eventually provide an additional revenue of the sale for $9.5 million to the port who will repay the city and hopefully construct a $350 million dollar project that will include housing, restaurant and retail. The net increase and deduction represents an ending balance of $10,263.861 in reserve although the city council is committed to 7% reserve balance required ($9.108 million). This represents a $1.155 million excessive in the reserve.

The city manager has proposed personnel reductions (Lay-Offs) in the amount of $4.9 million dollars with $2,8 million coming from general fund departments, full time and part time employees and $2.1 million from non-general funds, full-time and part-time employees. Almost every department will be affected with reduction in service and the job of the city manager is to find a way to reduce the $5.356 million dollars deficit with more cuts and lay-offs or employees willing to give concessions that may include delayed pay raises, paying additional cost for medical benefits, giving up other employee benefits, not being able to sell back sick leave and etc that has to go through the meet and confer process with each employee bargaining unit.

In conclusion, the financial picture is not good and I refuse to kick the can down the road. It is Important this council correct the problem we collectively created today and not expect new councilmember’s in November to do the job in which we created.  I realize this is an election year and already individual council members are caving in and promising everyone there will be no layoffs or reduction in services in exchange for their votes in November.  However, realistically, there is no way the council can balance this budget without laying off personnel or at the expense of digging deeper into the $10 plus million dollars reserves, which I will not vote to support. The city manager is the CEO of the departments and while I support the Public Safety, Public Works, Arts, Recreation, Library, Code Enforcement and other important programs in the city, my recommendation to the city manager is to be fair with each department as he return with a balance budget. All departments must share in the deficit because we are all in this together and I refuse to pit one department against another or management staff vs. line staff. I trust the city manager will do the right thing in being equitable.

Nat Bates

Senior member of the City Council

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