When the Berkeley City Council voted not to ask for voter approval for a parcel tax increase in next March’s election, the critical factor may have been a failure to communicate. City officials failed to successfully communicate a message that no one—not the voters, not the employees, neither unions nor management—wanted to hear: that, without a tax increase, significant reductions in police, fire, and youth services are in the immediate future.
It’s understandable that Council did not want to commit resources to placing a measure on the ballot when it seemed unlikely to garner the needed two-thirds vote. However, it’s unfortunate that the city will have to decide on program priorities without an objective measure of what choices the voters would like them to make.
Over the years, as decisions made at the state and federal levels have slowly and inexorably squeezed local jurisdictions’ ability to control taxing and spending, a variety of special taxes and special funds have been put in place for specific programs in Berkeley. Among them are the Library Fund, Sewer Fund, Landscape/Parks, and Paramedics Fund.
Because of this, in the short term, the revenue reductions in the city’s General Fund must be addressed by program reductions in the General Fund. This means that the police and fire departments will bear the lion’s share of the cuts.
The current year General Fund budget includes over $76 million in police and fire costs, and about $23 million in costs for other operating programs and departments. In order to keep public safety at the current budgeted level, assuming cuts are made only to program areas (rather than support services), other General Fund front line services would have to be reduced by 65 percent, since money from “special” funds are restricted and can’t be used for public safety expenditures.
Other General Fund Services
Transportation, Animal Care Services, and Economic Development are each budgeted in a range of $400,000 to $1.4 million annually; Public Works and Planning have annual General Fund budgets of less than $1 million each (since most of the work of both departments is funded by “special” funds); the Housing Department and Health and Human Services are budgeted at about $4.7 million and $9 million each in General Funds. In both departments, General Fund dollars are used to leverage substantial additional grant revenues. The Parks, Recreation, and Waterfront departments also incurs General Fund costs of over $4.7 million, to pay for services that can’t be funded by the Parks Tax or the Marina Fund, such as youth services.
General Fund Support and Oversight Costs
Other General Fund expenditures are in the “nondepartmental” category, which is made up of mandated costs such as debt service, and in the support and oversight departments. The support department with the largest General Fund budget, Finance (at about $5 million) also provides revenue collection and management services.
Other support and oversight services (Auditor, Police Review Commission, City Manager, Information Technology, City Attorney, City Clerk, Human Resources, and Mayor and Council) have budgets ranging from less than $400,000 to about $3,000,000 annually. In the short term, it does not appear that cutting programs in operating departments will cause significant workload reductions or cost savings in support services, which limits their ability to contribute to expenditure reductions.
In the long run, focusing support department resources on solving some of the operational and structural problems that foster inefficiencies and waste of resources could pay off in a more smoothly functioning (and smaller) organization. Reducing workers’ compensation costs, improving oversight over city contractors, and improving the city’s budgeting and cost accounting systems are three of the most obvious areas for action.
Short Term Decisions
Over the next few months, city staff will recommend to Council a budget that picks and chooses between various levels of service for all of the programs funded by the General Fund. Over the next few years, the level of service that is practical for the “special fund” services (the Library, Parks, and most of Public Works) will also need to be addressed. If the city goes forward on the assumption that the current level of local property taxes should not be increased, then the larger question of which services need increases in funding, and which services should be reduced, will have to include an examination of all of our local spending, including the school district and other local special districts.
Questions? Comments? Ideas for the Audit Plan? Contact the city auditor Ann-Marie Hogan at firstname.lastname@example.org or 2180 Milvia St., 3rd floor, 94704. Audit reports available on line at ci.berkeley.ca.us/Auditor.