2009-10 Woodland Budget Adopted — While, Several Municipal Employee Associations Help Close $6.8 Million Deficit

YOLO SUN NEWS REPORT :

 

“Conceptual tentative agreements” — involving requested employee help with bridging Woodland’s $6.8 million budget gap — have been reached between the City and its two non-public-safety unions: Woodland City Employees Association and Mid-Management Professional Association.

This “very good news developed” quite recently, exclaimed City Manager Mark Deven, at the Woodland City Council meeting of June 16, during an update on — “meet and confer” — negotiations proposing overall employee compensation reductions of $1.3 million, by means of furloughs or salary / benefit cuts — which city management has deemed essential for balancing the municipal budget without employee layoffs.

Basically, Woodland must chop its budget from $45 million down to $38 million (please see Yolo Sun News Report:  Final Adjustments for Woodland’s 2009-10 Budget — Also, City Manager and Library Director Will Slash Their Own Pay By 7.4%).

These — “conceptual tentative agreements” — will have the affect of eliminating — almost all potential layoffs — of non-public-safety personnel that are outlined in city staff’s “contingency” plan, to be implemented if such “agreements” didn’t materialize.

“Agreements” have yet to be negotiated between the city and its police and firefighter unions.

The legal process of accomplishing layoffs requires about a month, until it arrives at a concluding phase, wherein work must eventually cease. Unless such “agreements” promptly arise for police, firefighters and building inspectors, by June 19 several such personnel will receive formal notice of their impending involuntary-layoff.

Deven identified July 20 as the Potential Discharge Date for employee layoffs that remain operative.

___  Firefighter-Union Representative Appears  ___

Eric Zane, representing the Woodland Professional Firefighters Association appeared before the council to express that the Association “is working very hard to negotiate” with the City — and that it is presently “awaiting a written offer from the City.”

Zane described his perception that — “there is only a $2000 [budget] gap” — related to retention of the city’s Fire Prevention Specialist, whose function was identified as a key component within the Fire Department program.

Zane speculated that each firefighter would likely concur on an equity approach to underwriting this amount of deficit, for that purpose.

Approval of wage / benefit concessions by the Woodland City Employees Association has already erased the potential layoff of the department’s administrative clerk, removing the threat of decreased public-counter access.

In another budget move, resulting from a projected savings of $250,000 from added employee retirements under the Golden Handshake plan, overtime funds for firefighters have been increased to a traditional level, acceptable as (more) reasonable by the Fire Chief.

___  Police Officers Are Fewer, But Donate to Boxing Program  ___

Deven indicated during the course of the council meeting that, as a result of ongoing budget impacts causing several unfilled positions within the Police Department — only 5 officers are on patrol — 45% of the time.

He indicated that this level of service will surely impact some response times to priority 1 calls.

Officer Ted Ruiz of the Woodland Professional Police Association briefly spoke to the council about his and fellow officers’ good-faith, public relations effort of raising $690 ($10 from each member) to offer in support of the City’s [youth] boxing program, intended as a durable diversion from potentially less-desirable socialization.

Vice-mayor Art Pimentel wanted to throw in — his own $10 — to put an even $700 into this grass-roots gift by police — but he was short on hard cash.

So he turned to Mayor Skip Davies for a little help.

Whereupon Davies created the — largest laugh — of the council meeting, when he swiftly dove into his wallet, while exclaiming:  “With kids, . . . it never stops!”

___  Redevelopment Agency Reports Independently  ___

Budget matters led with Cynthia Shallit, Woodland’s Redevelopment & Housing Manager, emphasizing that the Redevelopment Agency would present its budget “independen[tly],” upon a separate agenda item, in order to better comply with relevant state law.

Shallit described that by its fiscal nature, derived from an increment of property tax within the Redevelopment Zone (essentially, Woodland’s downtown area), the City’s Redevelopment Fund is fairly resistant to adverse influences from the current, recessionary economic climate.

Shallit also expressed that various efficiencies in relevant project engineering processes would now be obtained, through matriculating agency projects within the city’s Capital Improvement Program (CIP).

Mention of Woodland’s CIP — which has fallen off a cliff into a sea of red ink (please see Yolo Sun News Report:  Woodland’s Capital Improvement Program — Deep in Red Ink) — seemed to pinch a nerve along the council dais, with councilmembers asking a string of detailed questions of Shallit. At one point, Deven supported with added specifics, her responses to council inquiries.

Councilmember Martie Dote was concerned about a reference in Shallit’s report involving possible — “expansion” — of the Redevelopment Zone, both east and west along Main Street, as well as south to include the existing county fairgrounds.

Shallit responded that such an “expansion” is “suggested,” and “not for sure.”

Shallit explained in response to another question, that there is about $300,000 in budget “carry-over” for the City’s commercial facade restoration program, wherein a 50% funding match is available to building owners for use in such improvements.

___  Potential State Theater Project Zeroed Out  ___

Councilmember Bill Marble inquired about the fact that a proposed project of renovating the State Theater was — zeroed out — within the agency’s future budget allocations.

Shallit briefly described a scenario of — no practical traction toward demonstrating project feasibility or business plans — on the part of the theater-owner and other interested persons.

Several project proposals for new, multiplex theaters currently exist on the eastern side of the downtown area, which if developed would likely spell eventual doom for the State Theater.

At that point, city staff and other persons have speculated, the moment will have finally arrived for either some version of viable, community-inspired (perhaps, redevelopment assisted), multi-million-dollar rescue effort — or a wrecking-ball.

$5 million of redevelopment funds is now budgeted toward securing a proper location and other assistance for a new county courthouse — within downtown Woodland — which is the highest priority project at the agency, involving retention of an extraordinarily valuable facility — as well as development of the City’s initial multi-story parking garage.

Shallit has previously indicated that the Redevelopment Agency may eventually be reimbursed for some portion of these funds (Please see upcoming Yolo Sun News Report).

___  City Manager Emphasizes Community Development Changes  ___

During the portion of his presentation which pertained to the Community Development Department, Deven emphasized that developers would now be aligned in a “Project Queue,” a time / phase line of process that would resist alteration, “so that some projects do not [unfairly] jump-ahead” of others.

Also, “High Priority Projects” would become precisely that — based on staff scrutiny, analyses and determinations regarding various elements of economic / cultural benefit(s) for the city.

Developers’ “Project Liability Accounts” (impact fees, funding for consultant studies, etc.) must now be fully funded, as well, tightening-up a more casual / flexible style of process previously in place — in recognition of presently hard-times — for developers.

As of June 30, Woodland’s budget cramp will temporarily close the public counter at the Community Development Department — except for 15 hours per week:  8 am to 11 am, Monday – Friday.

The department will engage in an outreach effort to inform the relevant public of this significant reduction in its operation, which is susceptible to some revision as warranted by specific, evolving circumstances.

___  Internal Borrowing Practices Pilloried  ___

“I’ve inherited this — and it’s really a pain in the butt” — was Deven’s emphatic reaction to Councilmember Marble’s probing for new policies with real teeth, related to seeming revelations that Woodland has — long been using a “pooled cash” (“internal borrowing”) approach to its finances — recently leading to its stable of municipal funds being anything but stable (except as moribund).

Most of Woodland’s Capital Improvement Program is spinning around relatively helplessly — within a perfect storm of red ink. Some fund deficits are projected to linger or increase for a quarter-century (please see Yolo Sun News Report:  Woodland’s Capital Improvement Program — Deep in Red Ink).

From an aggregated deficit of $20 million in 2009, negative municipal fund balances are forecast as — skyrocketing – to $32 million in 2019.

“I can’t tell you what the prognosis is [at this point],” said Deven, whose staff report indicates an upcoming effort to improve analyses and evaluations of the CIP’s financial situation.

Quizzed about one municipal account that appeared buoyant, with $37 million (over three years), city staff indicated that this particular money is related to utility surcharges, which are much less variable than development fees.

___  City Operated a Ponzi Scheme?  ___

Although noted as well by other councilmembers (for example, Vice-mayor Pimentel suggested reversing the council’s recent reduction of development fees) — Councilmember Marble spoke on several different occasions, being — “very concerned” — about this fiscal practice of: “pooled cash” — “internal borrowing,”  contending that “it’s a good way to bankrupt the city,” and eventually referring to it as similar to “a Ponzi scheme,” a famous label for fraud.

Describing specific fiscal changes, outlined in an associated staff report, Deven explained that new policy language, adopted alongside the new budget, is intended to formalize such a financial policy adjustment — establishing a suitable framework of process for resisting internal borrowing between municipal funds (individual accounts for specific purposes, like: sewer, storm-drain, police, fire, parks development, etc.).

Deven also declared that he is “happy to entertain” whatever alternatives or policies are reasonable, in order to best address this matter.

___  Revised Internal Borrowing Practices Must Continue  ___

However, his staff report indicates that these internal borrowing practices — must be indefinitely extended — because, in the words of staff from the Finance Department, during earlier testimony before the council – Woodland’s CIP is “in a deep hole — and it will take a really long time” to slowly climb out of it.

Plus, both the staff report and testimony before the council declare that the only genuine path out of this dense deficit-thicket — is by an avenue of vastly increased commercial, industrial and / or residential development — (for the most part) outside of the Spring Lake Specific Plan.

Several pertinent annexations to the city are pending or proposed — but until Woodland and Yolo County agree on a new tax-sharing compact (the existing Memorandum of Understanding is obsolete), no annexations will occur.

Councilmember Dote has expressed concern about further amending Woodland’s outdated (1996-ish) General Plan, through significant annexations, and inquired to Deven at one point in this meeting about the possibility of having developers help pay for the estimated $1.3 million expense of enacting a new Plan.

Flexibility to continue arranging resources of these municipal funds along easily anticipated contours of prioritized needs, is argued to be fundamental for servicing municipal obligations related to bond payments, for example, according to Deven’s report.

Certain key municipal projects may also become affected by any form of strict prohibition against fund transfers (“internal borrowing”).

However, this result — obtained within a surprisingly short period of time — seemed to be the goal of Marble’s comments.

At first, Deven stated that he would prepare a relevant update for presentation to the council in a year, but he later retreated to six months. Several councilmembers mentioned holding a special meeting(s) on this topic.

“Avoid[ing] internal borrowing,” as expressed by Marble, will become a work-in-progress, as clearly expected by Deven.

What’s not obvious, however, is the practical benefit of lamenting many years of financial laxities (engaged in during his own council term) — by means of Marble’s snappy analogy to fraud — while, proposing some vague constriction of reasonable flexibility for municipal operations that are imperative — as the city remains under thrall of such chronic, fiscal mismanagement.

___  More Budget Cuts Envisioned for 2010-11 Fiscal Year  ___

In remarks toward the conclusion of this council meeting, Mayor Davies announced that there is already perceived to be a $2.5 – $3 million hole in next year’s budget, “and we’ll start working on this immediately.”

Woodland’s Capital Improvement Program — Deep in Red Ink

YOLO SUN NEWS REPORT :

 

A basic component of Woodland’s overall budget is its Capital Improvement Program (CIP), which involves both: external debt service to repay bonds and internal loans between various municipal funds.

The CIP contains about 200 projects — engaging a 10 year expenditure of around $232 million.

Woodland has long been using a — “pooled cash” — approach for financing its CIP, which involves transferring (borrowing) surpluses in certain municipal funds to meet deficits in other such funds.

Also, “the City [has] implemented and expended money on various capital projects in advance of collecting the related development fees, and opted not to pursue additional bond financing[; therefore,] several development fee funds reflect negative balances[,]” describes an associated staff report.

Combining these fiscal practices — in a deteriorating economic climate — has created a very — “challenging [  ] situation” (declares city staff), inherently affecting Woodland’s evolving financial condition.

___  Development Fees Insufficiently Service Bonds  ___

As outlined in this staff report: “Pledging development impact fees as the primary source of repayment for [four separate bonds] has proved problematic because, by nature, these types of revenues can be unpredictable and sporadic.”

Comprehensive analyses by city staff, of financial processes related to the CIP, has demonstrated that: “Even with relatively moderate development activity meeting current debt service requirements will be challenging. Given the adopted reduction in development fees combined with the decreased level of development activity, the Park, Fire and Sewer Development Finds will not generate sufficient revenue from residential development to meet minimum debt service requirements.”

Woodland has four capital improvement (project) bonds to service (Community and Senior Center, Sports Park, Fire Station 1, and the Wastewater Treatment Plant), which were issued between 2002 and 2007.

Aggregate annual debt service on these four bonds totals — $5.39 million — with $4.1 million to be annually repaid through development impact fees and the remainder ($1.2 million) by either Measure E funds or the Sewer Enterprise Fund.

Woodland is also running substantial deficits in most of its municipal funds — including some deficits that are significantly widening (park and storm-drain funds).

“Pooled-cash” mingling of city funds must thus be temporarily extended as a fiscal practice, according to city staff. “[G]iven these large [  ] deficits, substantial slowdown in development, and the magnitude of reduced development fee revenues, the City is not able to fund necessary projects without some level of continued pooled cash borrowing, primarily because of external debt service commitments[.]”

___  Key Changes Coming in City’s Financial Practices  ___

City staff is recommending a key alteration of financial policy be adopted alongside the 2009-10 (operational and capital) budget, due for consideration and potential adoption by the city council on June 16.

“Section 4.8 [of] the procedure associated with financing has been modified from  Encourage pay as  you go financing of capital improvements where feasible  to  Fully evaluate the financing of capital improvements to determine the most economical means to complete the work.”

“This change is intended to require analysis of financing capital improvements, including the potential impact of escalating future development / construction costs versus annual debt service payments and interest[,]” continues the staff report.

Complementary to this policy change, “staff needs to further study this trend in growing internal debt and develop alternatives for the Council’s consideration.”

“This situation was generated by years of internal borrowing, exacerbated by the current recessionary economy and further impacted by the decision to reduce development impact fees. It will require a long-range, programmed and disciplined approach in order to be resolved[,]” concludes the staff report.

___  Details of Fund Deficits  ___

Woodland faces current deficits in its municipal funds — totaling $20 million — within “[t]he more significant borrowing balances,” as of July 1, 2009.

In round figures, this amounts to deficits of:  $10.2 million in the sewer fund, $4.2 million in the police fund, $4.3 million in the road fund and $1.1 million in the storm-drain fund.

“At the end of the ten-year plan,” states the staff report, “internal borrowing balances are anticipated to be” as follows:

Sewer Development  — $5.8 million deficit; Police Development — $2.1 million deficit; Fire Development — $1.3 million deficit; Storm Drain Development — $12.4 million deficit; Park Development — $10.6 million deficit.

Deficit within the Sewer Development Fund — “originated more than ten years ago as a result of work done on the Wastewater Treatment Plant Phase I expansion project and various wastewater improvement projects where development paid a portion of the cost,” relates the staff report.

Recent plant expansion was funded “through a combination of internal borrowing and bond financing.” Debt service will continue in this fund until 2035, with total project expenditures of “less than $200,000 until 2019, at which point the deficit will have been reduced by about $4.5 million.

The Police Development Fund deficit — “originated in 2005 as a result of construction of the new police station.” During the next 10  years, this fund’s deficit will drop by half ($2.1 million). However, because of the condition of this fund, relevant projects in the future are being carefully prioritized.

The Fire Development Fund — “develops a deficit as a result of annual debt service requirements related to the construction of Fire Station 1. This fund has only one capital project over [the next 10 years]; however, annual revenues of approximately $500,000 and annual debt service of nearly $300,000 [will] lead to a slow recovery.”

___  Serious Structural Deficits Projected – Big New Development Needed  ___

Deficit within the Storm Drain Development Fund — “increases dramatically through the course of the [10-year] CIP. Residential development in Spring Lake does not pay a citywide Strorm Drain impact fee; because nearly all the residential development in the CIP is related to Spring Lake, expected revenues in this fund are minimal.

“[A]dditional commercial, industrial or non-Spring Lake residential development, or removal of flooding and drainage related projects, are necessary to reduce the deficit[,]” indicates the staff report.

The Park Development Fund — “develops a substantial deficit through the course of the CIP related almost entirely to debt service. The annual debt service requirement of [this fund] is about $2.2 million.”

“Non-residential development does not pay a Park impact fee, and based on the current residential development impact fee for Spring Lake, the City would need to issue 670 permits each year just to break even; this level of development is not achieved at any point in the CIP, which creates a structural deficit that grows every year.”

“Debt service requirements will continue through 2035; [and this fund’s] recovery from [  ] deficit will likely be slow and prolonged without a fee increase or completion of other large residential development projects[,]” relates the staff report.

Final Adjustments for Woodland’s 2009-10 Budget — Also, City Manager and Library Director Will Slash Their Own Pay By 7.4%

YOLO SUN NEWS REPORT :

 

Fine-tuning of Woodland’s proposed 2009-2010 budget has been accomplished by City staff, led by City Manager Mark Deven, in advance of City Council consideration and potential adoption at its regular meeting of June 16.

In round numbers, the council must remove $6.8 million from an initial $45 million budget.

However, the key issue of possible compensation reductions for city employees appears to remain — at least formally — unresolved.

$1.3 million in budget reductions by means of: furloughs, salary modifications or revised benefit-sharing, has been requested by city management, which has presented a contingency plan for council use in the event negotiations with city workers are not successful.

Interestingly, in recent correspondence to the Woodland Library Board of Trustees, Library Services Director Sandra Briggs reports that: “In a dramatic act of leadership, City Manager Mark Deven has instructed the Department of Finance to reduce his overall compensation by 7.4% beginning July 1, 2009 through a combination of 5% wage reduction and 2.4% in other compensation (benefits). I propose the comparable reduction for me in my position [  ] to achieve an overall monthly compensation reduction of 7.4%.”

Library trustees have recently approved this request by Briggs, contingent upon Deven successfully engaging with other upper-managerial employees, the prospect of their participation in an equivalent pay cut.

Trustees don’t want to have Briggs — whom several consider already under-compensated – to be the only top staff (besides Deven) to make such an effort to demonstrate equity with other city workers.

It is yet unknown whether additional city managerial staff will participate in such voluntary compensation reduction.

___  Modifications From Latest Council Budget Workshop  ___

Subsequent to the May 26 City Council meeting on budget matters, several “modifications” have been accomplished in response to citizen and council concerns.

A second round of the Golden Handshake retirement-incentive program has produced — “at least ten” — employees for enrollment, according to staff projections. Only three or four such retirements were anticipated, increasing budget savings by $250,000. These funds will be spent to increase the overtime-reserve fund of the Fire Department, from $115,000 to $365,000.

In a recent interview on local National Public Radio affiliate, Capital Public Radio (Please see Yolo Sun Report: Woodland City Manager Interviewed by Capital Public Radio on Budget Impacts to Public Safety), City Manager Mark Deven described that Woodland may well need to substantially increase overtime for understaffed municipal firefighters, in order to cope with emergency exigencies (such as large or multiple fires, or long-duration events, such as some hazardous-material spills).

Two priority allocations of “one-year expense[s]” are made within the Parks and Recreation Department — for preserving the Ballet Folklorico and Boxing programs ($17,000) — as well as — $63,000 “to facilitate the transition of the Senior Center programs and operation of the Community and Senior Center to the remaining staff as part of” –  a restructuring of this Department  — according to the staff report.

Two retiring managerial employees in this department are being retained on a temporary, part-time basis, in order to best support this “transition [and] restructuring.”

However, Hiddelson Pool — which was requested to be open during the upcoming summer — will soon discontinue operation. City staff have determined that it is — “impossible” — to provide pool employees, because of the elevated nature of employee specialization required for this public facility is presently infeasible.

___  Developers Lose City Flexibility on Fee Payments  ___

The Community Development Department will undergo serious budget impacts — including half-day (8 am – 11 am) public-counter hours, “prioritization of development projects and maintenance of project liability accounts[.]”

Several capable clerks who have traditionally been assigned to the community development counter, will be relocated (to Public Works Dept., for example), leaving the building inspectors to accomplish public-counter service in the mornings and inspect buildings in the field during afternoons.

Flexibility for developers — on their impact-fee payment schedules — has suddenly evaporated, with the department now instructed to begin to ensure that developers’ impact-fee payments are — fully up to date — before the city expends its funds for delivery of related services.

Also, developers will face the fresh hurdle of having city planning staff working their projects — on a newly established “priority” basis — using elevated scrutiny and analyses to ensure that projects deemed more beneficial to economic circumstances of the city have a distinct advantage.

Obviously, this new municipal policy resembles turning lemons into lemonade.

It is already in place within the city’s affordable housing program (Please see Yolo Sun Report: City Of Woodland Launches New Affordable Housing Development Process).

___  Leake Room Remains Closed For Non-Library Uses  ___

“Community organizations that have used the Leake Room at no cost[,] have expressed a desire for the space to remain available for reserved use at some level,” describes the staff report.

The Library Board of Trustees recently closed this space to all activities except those within the library’s “core mission.”

The library recently conducted a patron survey, indicating that general public access to the Leake Room was ranked — “near the bottom” — by its patrons, whose relevant use is most often associated with regular library-sponsored programs and activities in this space.

While it’s “a nice amenity,” general public access to the Leake Room is –“incidental to the core mission” — of the library, notes the staff report, concurring with the judgment of the board of trustees.

Cost of such access is the basic problem: $25,000 is required to annually operate this space for general public access ($14,000 for staff, $6000 for utilities and $5000 for janitorial services).

Usage fees would have to be charged ($20 per hour); while, there are — “other alternatives with reasonable fees attached” — explains the staff report. “Many other options [exist], including the Community and Senior Center, where a fee schedule is already in place, because such use is part of that program’s core mission.”

___  Contingency Plan  ___

The contingency plan, activated upon the specific degree of failure related employee negotiations, could result in — “up to 13” — employee-layoffs.

It would result in layoffs of: police (one sergeant, one officer and a records specialist), the fire-prevention specialist and a clerk in the Fire Department, code-enforcement and building-inspection personnel, plus a clerk and an analyst in the Community Development Department.

These employee layoffs would affect existing police services in a minimal manner (5% budget cut), relative to already understaffed circumstances.

Police Strategic Operations (SWAT, K-9 and crisis negotiation) and the Graffiti-Abatement program would also be eliminated under the budget contingency plan.

Layoffs of code-enforcement personnel would result in only high-priority enforcement — with police handling immediate threats to public safety.

Loss of the Fire Department’s clerk and fire-prevention specialist would translate into substantially reduced public-counter service and obstacles to fire inspections.

In addition, Woodland’s Economic Development Office would close, ending all business retention, recruitment and collaboration, plus discontinuing most municipal interface with the Chamber of Commerce and other local and regional business associations.

Library staff would lose three Library Technician positions, leaving only four full-time employees, resulting in a severe slashing of library hours — to only 20 per week.

Library hours are currently 54 per week, but will be reduced to 40 per week on July 1, under the proposed new budget (assuming municipal employees’ compensation reductions).

Investigations by Yolo Sun indicate reasonable optimism around city hall, that negotiations with city employees will eventually be successful in obtaining their cooperation in closing the remaining $1.3 million gap.

City Manager Deven has declared that if such agreement is attained, no employee layoffs will occur for this fiscal year.

Woodland City Manager Interviewed by Capital Public Radio on Budget Impacts to Public Safety

YOLO SUN NEWS REPORT :

 

Woodland City Manager, Mark Deven, was featured via telephone on the June 9 edition of (local National Public Radio affiliate) Capital Public Radio’s morning public-affairs show (Insight with Jeffrey Callison), to describe impacts of the economic recession and fiscal crisis upon the City’s public safety programs.

Deven outlined affects of recent budget cuts, including a loss of seven firefighter positions (at over $1 million, a 12% reduction in the fire department budget) — requiring the city’s four fire engine companies to operate with three firefighters per engine company.

This level of service, explained Deven in response to a question, drops Woodland below service [staffing] standards established by the National Fire Protection Association. This lower staffing level within our fire-protection program, he said, “is all that we’re able to afford.”

Four less police officers are another result of municipal budget woes (at $860,000, a 5% reduction in the police department budget).

___  Public Education Outreach Gone — Graffiti Abatement Stays  ___

Woodland’s various  fire education and crime prevention programs have been eliminated for the 2009-10 budget year.

“Public education outreach,” along these lines, has regrettably become infeasible, said Deven.

Fire-prevention education activities will soon be curtailed.

Neighborhood-Watch programs citywide are being excised (no police staffing participation), as well as the Drug Abuse Resistance Education (DARE) program, which uses a regular (sworn) officer to target fourth-graders for relevant consciousness raising.

Weed abatement activities by the city will soon be attaching monetary fines for such efforts to be billed against violators, according to Deven.

The city’s graffiti abatement program, though — will remain solidly in place.

When asked why, Deven explained that: “graffiti devalues property and the appearance of a community,” and if neglected, “it can significantly multiply.” Also, connections between graffiti and (criminal) gang activity argue for constant, priority action, he believes.

“It’s a quality of life issue,” Deven declared, a problem that if allowed to get out of control can have a variously negative influence on communities.

___  Why Prioritize Police Over Fire Services?  ___

Asked about reasons for the fire department being reduced more than police services, Deven related that the predominance of fire-department calls involve requests for — “emergency medical aid” — rather than fires.

A large-structure fire or similarly serious, emergency situation — “will stretch our resources” — said Deven, and Woodland would have to depend upon overtime-scenarios for its firefighters and contextually proportionate help from neighboring jurisdictions, such as Davis, to provide an elevated emergency response.

“We need multiple police officers to respond at any one time,” stated Deven, to incidents involving potential felony arrests — which is the reason for maintaining police staffing levels above those of the fire department. “We need to decide which (kind of) balance is the right way to go, he said.

Economic conditions “force us to review everything we do,” Deven described, deciding “what are our most important services.”

___  Projection of More Budget Cuts  ___

Queried about the future fiscal outlook and potential for more city budget problems, Deven exclaimed: “absolutely;” in order to properly arrange the city’s new, 10-year fiscal-planning program, additional cuts are coming.

“Yolo County’s 12.3% unemployment rate,” is an ongoing and significant indication of economic circumstances affecting municipal revenue and programs, according to Deven.

For fiscal year 2010-11, Deven is currently projecting a reduction to the city budget of $2.25 million.

Planning Commission Delays Consideration of a New Commercial Development Proposal to the East of Gateway Center

YOLO SUN NEWS REPORT :

 

Paul Petrovich, developer of the Gateway I commercial center at Woodland’s eastern edge (Costco, Target, etc.), suddenly has a new developer as his neighbor.

New Woodland Partnership (NWP), an investor group which owns the 22 acre parcel directly east of Gateway I, on March 6, 2009, requested “a General Plan Amendment in order to pursue annexation of [this] property and, ultimately, entitlement and development of a highway commercial center,” according to an associated letter from Mintier-Harnish, planning consultants for NWP.

On a contextual diagram appended to this letter, NWP’s conceptual proposal includes a large, retail (‘big-box’) building — similar in size and adjacent to Costco — plus a smaller retail building on the southern portion of this 22 acre parcel.

“Our goal is to work with the City to develop a project that is mutually beneficial,” continues this letter from Mintier-Harnish. “Our initial concern that we would like to discuss with the Planning Commission is site access. We understand that decisions were made in the past that have limited our ability to ensure adequate access for highway-serving commercial uses. We would like to work with the City to formulate a solution to site access that creates a logical circulation network[.]”

Lack of a quorum at its meeting of June 4 prevented the Woodland Planning Commission from considering this matter.

Paul Petrovich was present with various associates, presumably in anticipation of opposing — on a yet unknown basis — this request by NWP.

City staff confirmed that some form of contention or opposition was expected to arise from Petrovich, although no details were known.

Petrovich owns — all — of the relevant land surrounding the 22 acres involved with NWP’s commercial development proposal, essentially locking-up access to this parcel alongside the I-5 freeway.

Only a 24-foot wide: “Right-of-Way, Sewage, Water, and Utility Easement” currently exists along the southern edge of this NWP parcel, which is entirely insufficient access for its development within a rezoned (from Urban Reserve) Highway Commercial designation.

___  NWP’s “Preferred Access Solution”  ___

Bronze Star Drive, the road along the southern edge of the Gateway I commercial center, should be extended easterly and then northerly, along the southern and eastern boundary of NWP’s parcel, is the view of Mintier-Harnish.

Mintier-Harnish believes this road extension is now clearly justified under existing law, because development of a city-owned (flood-water) detention basin along a portion of the eastern boundary of NWP’s parcel — accomplished in connection with municipal support for development of Petrovich’s Gateway I commercial center — “triggered” a pertinent clause within a formal, legal access easement — recorded in 1968.

Its March 6 letter accompanying NWP’s request for a General Plan Amendment quotes this formal document as providing that: “this easement shall be expanded to 60 feet upon the rezone or development of any [relevant] property [ ] to either industrial, commercial, or residential.”

“We feel strongly that since the City-owned detention basin located directly to the east of the NWP Parcel has been developed to support an urban use (i.e., Woodland Gateway I), the condition to expand this easement to 60 feet has now been triggered,” describes Mintier-Harnish in its letter to the City of Woodland.

“To further support this argument, the NWP parcel is now surrounded on three sides by entitled urban uses (Woodland Gateway I development, City-owned infrastructure easement to the south, and City-owned detention basin to the east). We would like the City to confirm our understanding concerning this easement,” relates the letter, which outlines an “integrated commercial area, with logical access points between the properties. Our goal is to blend our project seamlessly with the neighboring commercial uses.”

Secondary access is described as an easterly extension of Maxwell road, through the northern portion of Petrovich’s more recently proposed Gateway II commercial center.

___  Petrovich’s Gateway II Commercial Center Proposal  ___

Petrovich has his own pending request for a General Plan Amendment, annexation and rezoning of 150 acres (adjacent to the south of his Gateway I development), being referred to as the Gateway II project (for auto/commercial uses).

City documents indicate that. “[Petrovich] has submitted additional funds and requests that work continue on an [environmental impact report], coordinating [various] technical studies,” related to his General Plan Amendment / annexation petition.

Already, an environmental (technical) study has been conducted on the subject of — odor — emanating from Woodland’s waste-water treatment plant, located nearby, in connection with Petrovich’s request to bring a Gateway II project inside the city limits.

The potential exists for the City of Woodland to require Petrovich to provide suitable access to NWP’s 22 acre parcel — as a condition of eventual approval for his proposed Gateway II development.

___  Lack of Quorum Leads to Discussions  ___

The Woodland Planning Commission meeting was adjourned after waiting for 15 minutes to potentially achieve a quorum. Its chairperson and City staff indicated that this matter will be on the agenda for its regular meeting of June 18.

One member of the contingent of persons associated with NWP suggested in passing that — in absence of a planning commission quorum to proceed with this item — at least some form of preliminary discussions was ensuing between themselves and Petrovich.

Awaiting a quorum, conversations initiated between NWP representatives and Petrovich and his associates, who were seated nearby.

Subsequent to the meeting, Petrovich and his associates were observed in discussion with a representative(s) of NWP — on the bench in front of Woodland City Hall.

___  Political Prospects for General Plan Amendments  ___

Woodland City Manager, Mark Deven, during the June 2 City Council meeting, remarked that the City is essentially operating on a General Plan that was created in 1996.

About $1.3 million is projected to be expended for accomplishment of a comprehensive update of the General Plan, announced Deven.

Feasibility for this goal is absent within a City budget that remains in crisis mode, facing still-declining revenues and a relatively uncertain economic climate.

In response to Deven’s comments at this council meeting, Councilmember Martie Dote expressed concern about prospects of various, accumulating, potential annexations occurring simply by amendment, without a new General Plan.

___   Another Political Hurdle  ___

Another considerable political hurdle for municipal annexations exists in the form of present prospects for a specific — tax-sharing agreement — between Woodland and Yolo County, a prerequisite for future annexations to proceed.

Budgets of both local governments are in an ongoing crisis, perhaps a pivotal dynamic within their eventual tax-sharing negotiations.

On May 19, the Woodland City Council approved: “Collaborative Planning Principles for Yolo County and the City of Woodland,” which are “intended to commit both local governments to formal discussion of issues that will facilitate economic development and address potential areas of concern associated with annexations, including fiscal impact, environmental mitigation and governance in advance of a project or annexation application,” according to the related staff report.

“Most specifically,” continues this staff report, “the Principles would facilitate development of a Memorandum of Agreement that would establish the process for implementation of development proposals within annexation lands and a renegotiated Master Tax Sharing Agreement.”

Within the most recent joint meeting between Woodland and Yolo County, Woodland City Manager, Mark Deven, advocated for progress related to this matter, expressing the City’s hope that the County (supervisors) would soon place this item on its regular agenda for consideration and eventual adoption.

Apparently, Supervisor (and former Assemblymember) Helen Thomson, who represents the Davis side of Yolo County, is somewhat upset about fiscal consequences to the County, related to Woodland’s recent annexations.

Thomson’s concern, among other dynamics of county consideration of this item, was the topic of brief discussion at this (joint) meeting.

Woodland (area) Supervisor, Matt Rexroad, said that he would attempt to make some progress with Supervisor Thomson’s reception of this matter, and pursue placement of these “Planning Principles,” already adopted by Woodland, on an upcoming county supervisors’ agenda.

City Hosts Developer Conference for New Affordable Housing Development Process

YOLO SUN NEWS REPORT :

 

“Design Is King,” was the key message from City of Woodland’s Associate Housing Analyst, Jamie McLeod, to about a dozen housing developers who attended an orientation conference on June 3, in advance of their potential submittal of affordable-housing project proposals on June 19.

A detailed process of consideration by the city will result in awarding, on June 30, one development project with a commitment of priority effort by city staff, toward its eventual approval and construction, with remaining projects ranked in order of municipal preference for future attention.

Woodland City Council recently approved issuance of a pertinent Request For Proposals (RFP) — launching what City staff refer to as a “proactive” posture to better attract and more advantageously process proposals for affordable housing development, leading to enhanced value for the community (Please see previous Yolo Sun News Report:  City Of Woodland Launches New Affordable Housing Development Process).

Developers came from as far away as San Francisco and Fresno to attend this orientation conference, although the majority of developers were of local origin.

___  Mayor and City Staff Outline Salient Details of Process  ___

Woodland Mayor, Skip Davies, was on hand to offer a statement following the staff presentation and help answer questions — which impressed several attending developers. “Thanks for being here, and being interested in us,” said Davies, who also described several relevant facets of City consideration of these housing proposals.

Both Davies and McLeod emphasized that one basic aspect of consideration will be project options involving acquisition and rehabilitation of existing development, rather than potential new construction.

A seven percent (7%) grading advantage for rehabilitation projects is part of the detailed consideration process, although McLeod stressed that new construction projects will certainly be seriously considered. It would seem that a primary component of consideration: “Design is King” would better apply to new construction projects.

Municipal funds accumulated for new construction of affordable housing, related to the ongoing Spring Lake Specific Plan Area, now total about $1 million, for potential use on 74 dwelling units. This factor of incentive, combined with the emphasis on “design,” serves to more or less balance the grading scale for new construction proposals, with inherently higher ranked acquisition – rehabilitation projects.

McLeod mentioned that tenant relocation costs and a “physical needs assessment” (for specific, project funding purposes) should be included, in the case of rehabilitation projects.

“We’re not shy about going after funding,” declared McLeod, referring to the city’s capacity to cooperate with affordable housing developers and facilitate their obtaining of necessary capital to accomplish municipally desired projects.

“Plus, we’re fun to work with,” declared McLeod.

Possibilities exist to obtain various financial bonds and tax credits to support such development, as well as to secure “Infill Incentive Grants” from the federal Department of Housing and Urban Development.

Energy efficiency subsidies, historical preservation grants and density bonuses represent other possible avenues of resource.

___  Police-Magnets Targeted for Rehabilitation Proposals  ___

Davies briefly discussed the fact that several — “five of six” — existing housing developments in the city are disproportionately large consumers of public safety services, namely police.

Rehabilitation and improved management of such housing developments, he said, would substantially benefit the community.

McLeod also noted elevated council and community interest regarding potential developer acquisition and rehabilitation of several housing complexes

Investigations by Yolo Sun have revealed that the most powerful — police-magnet — in Woodland is the apartment complex located at 555 Matmor Road, which has long been referred to as — “the Triple Nickel” — by both city staff and local crack/meth-addicts.

City staff indicate, however, their understanding is that the owner(s) of “the Triple Nickel” isn’t interested in selling this apartment complex for rehabilitation.

___  Housing Challenges and Opportunities  ___

Another affordable housing challenge noted by Davies during the orientation conference, is that Cache Creek Casino supplies about 1000 relatively low-income residents to Woodland, from its total workforce of around 2800 employees.

Woodland also houses a considerable number of employees and students of the University of California, Davis.

Davies mentioned that, “there are three or four [suitable] parcels with nothing on them,” throughout the city, which would likely be available for new-construction infill projects, implying that the city would assist interested developers in discovering such opportunities.

Davies also noted opportunities for development on parcels with existing structures.

McLeod noted that Woodland has a greater than 90% occupancy rate in its affordable housing developments, with waiting lists for some apartment complexes.

According to governmental policies, 20% of dwelling units in an “affordable housing” project must be reasonably available to persons earning less that 50% of local median income, while 80% of units must be targeted to persons earning less than 80% of median income — with certain financial incentives arranged to promote those 80% of units being available to persons earning less than 60% of local median income.

___  Key Advantages of Affordable Housing Developments  ___

Important advantages exist, according to McLeod, in terms of legal requirements applying to affordable housing development — with regard to management operations.

When public funds are used to support such development, law demands that a responsible and accountable system of tenant management is implemented. In other words, governmentally supported “affordable housing” is prevented from becoming a siphon of public services and a public-safety concern, such as “the Triple Nickel.”

Maintenance of high-quality management practices, as a legal requirement, is a very durable value for the community, inherent in “affordable housing” developments, emphasizes McLeod in remarks made to Yolo Sun outside the conference.

___  Developer Reaction  ___

Responses of attending developers was perceptibly positive, especially from Larry Del Carlo, President and CEO of Mission Housing Development Corporation of San Francisco, a non-profit housing developer — with 38 years of experience.

Del Carlo stated during the orientation conference that the style and approach of the City’s Request for Proposals (RFP) indicates that Woodland has — “the political will” — to accomplish its goal of best developing affordable housing.

“That makes it interesting for us [to pursue],” continued Del Carlo.

Interviewed subsequent to the conference, Del Carlo repeated that it requires civic leadership to successfully create such housing development. When asked to elaborate on his perceptions, he said that a “cooperative” attitude “was evident,” that city staff has “experience with this process,” and displays a “willingness to work” to achieve its goal.

That the city “has identified local funding sources,” like the $1 million pooled for affordable housing from the Spring Lake Specific Plan, as well as providing a wide variety of development incentives, demonstrates both municipal leadership and resolve, said Del Carlo.

City Employee Associations Wield Key Piece of Woodland’s Budget Puzzle

YOLO SUN NEWS REPORT :

 

Municipal employees are wielding pivotal influence within the final phase of bridging Woodland’s widening budget chasm.

One measure of such influence will be political leverage in ongoing (“meet and confer”) budget negotiations with the city, for its genuine analysis and consideration of several issues of municipal finance that are of concern to employee associations, framed in the posture of — “alternatives” – to employee compensation reductions.

The expenditure-reduction target for attaining a balanced budget has recently been raised to $6.8 million (up $.5 million) – to be slashed from the $45 million budget for fiscal year 2009-10.

A updated budgetary — “contingency plan” — is substantially outlined in the city manager’s latest (May 26) budget-status report, with the pertinent — “contingency” — being the level of municipal cost reduction achievable from the city’s unionized workforce.

In closed session prior to the regular City Council meeting of May 19, Woodland City Manager Mark Deven “informed the group [of five professional, employee associations] that the City needs total compensation reductions of approximately $1.3 million in order to balance the budget for [fiscal year 2009-10] and avoid layoffs and deeper reductions in programs and services.”

“[M]anagement staff is [ ] seeking compensation reductions from the City’s [professional association] bargaining units through the meet and confer process,” relates Deven’s report. “Concessions from the City’s bargaining units in compensation or sharing of benefits will [ ] facilitate significant reductions that could eliminate the involuntary discharge of employees through layoffs and mitigate deeper cuts in programs and services.”

$1.3 million represents about a 7% compensation reduction for city employees, whether accomplished by furloughs, salary decreases and/or lessening of benefits.

“[I]f the City does not receive a commitment from the [union] bargaining units that will achieve savings of approximately $1.3 million then a contingency plan must be implemented. The contingency plan will require the involuntary discharge through layoffs of approximately 13 positions by July 31 and deeper reductions in programs and services in order to achieve the necessary savings.”

___  Beneficial Consequences of Union Concessions  ___

This budgetary — “contingency plan” — within Deven’s report produces considerable negative impacts upon city programs and services.

The Community Development Department would lose four employee positions, including: a building inspector, code enforcement officer and two administrative staff persons, which would “seriously impact the timely processing of development applications, timely inspection of buildings in response to permits and tracking of liability accounts, business license and other development related revenue.”

Loss of the code enforcement officer would totally remove that program, leaving code enforcement efforts to the Police Department. which would prioritize complaints of violations according to degree of “immediate threat to life and safety.”

Both the Planning and Historical Preservation Commissions would suffer an indeterminate removal of staff support.

The Police Department would be required to eliminate its Strategic Operations component (Special Weapons and Tactics, Crisis Negotiation Team, Honor Guard and K-9 Unit) and Graffiti Abatement Program.

Additionally, the Police Department would layoff one regular officer, a sergeant and a police records specialist, which would “seriously impact operations,” including: “response times and tactics for responding to Priority One calls,” as well as, “provid[ing] timely information on warrants associated with suspects [to] regional law enforcement agencies.”

The Fire Department would lose and administrative clerk and its fire-prevention specialist, which “would have a significant impact, [ ] requir[ing] periodic closure of the Fire Administration office” and slashing fire-prevention inspections.

The Library would be required to excise three employees — forcing it to remain open for only 20 hours per week — with huge consequences for its various programs and services.

Economic development efforts would be substantially eliminated, which would “impact all business retention, recruitment and collaboration. Organized recruitment would be curtailed and coordination of development applications, facilitation of programs such as Tax Credits and infrastructure financing to help businesses meet development impact fee obligations would be severely restricted.”

The existing position of economic development manager would be erased, transferring that [senior] staff-person to the “Redevelopment and Housing [program], which would force [the] involuntary layoff” — of the manager of Woodland’s Redevelopment Agency.

Such action would likely side-track valuable, anticipated expansion and progress of Woodland’s redevelopment program — as well as impair its overall economic development efforts – with quite adverse economic and cultural consequences for the City.

___  Unions to Propose Alternatives to Compensation Reductions  ___

Discussions with a variety of reliable sources of pertinent information around city hall have revealed that Woodland’s professional associations will propose an unspecified nature of — “alternatives” — to requested compensation cuts.

These “alternatives” involve some municipal-employee perceptions of prior / current “fiscal mismanagement,” especially related to the city’s community development program, describes one reliable source.

Several reliable sources of relevant information indicate that — factoring in the city’s diligent consideration / analysis / action regarding these suggested “alternatives” — municipal employees are likely to approve a carefully negotiated program to help attain the city’s proposed (perhaps revised) target for compensation reduction, and best resolve the current budget crisis.

The next “meet and confer” occasion, between the city and representatives of professional association employees, is scheduled for June 3, the day after the next regular city council meeting. A closed-session conference of these parties will occur, as well, prior to this council meeting.

___  More Budget Problems Surface  ___

Interestingly, Deven’s report also notes that there is already perceived to be a — $2.7 million budget gap — approaching for the 2010-11 fiscal year.

Plus, revised projections of property tax revenue show another $500,000 deficit for the current budget ($6.3 to $6.8 million), which Deven explains will be covered by means of a “combination of additional operational savings and some one-time revenue identified since March 31.”

On top of that — the state may soon raid municipal coffers for a three-year loan (with interest, but no transactional costs) of up to $1.3 million, in order to knit together a state budget.

Deven has placed on the agenda for the city council’s regular meeting of June 2, information about a recently created campaign by the League of California Cities, proposing that cities formally adopt resolutions of severe financial distress, in hopes of staving-off such raids.

The city council has already directed Deven to prepare in a separate (reserve) fund, $1.1 million of the city’s $5 million in reserves, in anticipation of this threat or another exigency.

City Of Woodland Launches New Affordable Housing Development Process

YOLO SUN NEWS REPORT :

 

Woodland has launched a fundamentally new policy and process for creation of affordable rental housing, with action at its regular meeting of May 19, 2009.

A Report To Mayor and City Council prepared by relevant City staff describes that “in the past, the City has taken a very ‘reactive’ approach to its affordable housing rental program.”

“Development of a new affordable housing project could have a significant positive impact on the City,” suggests this report.

In addition, “the recently completed Housing Element update [  ] found that there is a very low vacancy rate for units in affordable properties.”

“Staff would like to take a ‘proactive’ approach by soliciting developers for potential projects in preparation of a possible 2009 HOME funding round,” alluding to federal money for support of affordable housing. Applications for this federal support must be submitted by August 15, 2009.

“The City is looking for innovative (affordable housing projects) and experienced developers that can bring a project to completion on time and on budget,” announces outreach material, which also catalogues a “myriad” of both project criteria and development incentives.

“[T]he City of Woodland has successfully used many funding sources to produce affordable housing,” according to this outreach material. “[T]he City would be interested in using new programs, [and] is willing to apply for,” whatever programs of funding may be required for successful completion of approved projects.

___  Local Housing Development — Past & Future  ___

Previously, diverse actions of housing developers were the basic, driving force behind the creation of affordable housing, with the city responsively attempting to guide these actions in a relatively uncoordinated fashion.

“[T]his process has been driven by irregular, sporadic and chance requests. Though the projects require substantial amounts of staff time and sometimes City financial assistance, the projects are not necessarily the best project or the highest priority for the City,” explains this staff report.

“Staff has felt that many of these projects could have been improved if there were competition for the limited amount of local, state and federal funds.”

Now, a formal planning process will exist to simultaneously receive, evaluate and rank a variety of development proposals. According to city staff, this — “proactive” municipal posture — is advantageous for several key reasons, promoting values of both comprehensive planning coordination and developer competition.

“[Over the last 12 months, staff has had a noticeable increase in calls from developers soliciting City assistance for projects. This new affordable housing development “process will allow the City to fairly assess these potential projects and prioritize them in a manner that provides the greatest impact and benefit,” declares the staff report.

___  Public Sector Incentives Appreciate In Value  ___

City staff describes that recently increasing developer interest results from the ongoing recessionary climate -- within which private lending is quite scarce.

This generally adverse economic environment for housing development dramatically raises the value of already valuable public housing funds, use of which demands performance / compliance on rental affordability.

Thus, the city -- as conveyor of those funds, plus various other incentives -- is essentially confronting a sort of -- ‘buyers-market’ -- with housing developers, leveraged toward achieving affordability.

This new city policy and process attempts to transform the huge, continuing -- problem -- of insufficient, general housing-development activity -- into an opportunity -- to stimulate, channel, correlate and prioritize affordable-housing development proposals, accomplishing vastly enhanced community progress and value.

City staff indicates that there are currently over a dozen inquiries from housing developers about participation within this process -- several from Southern California -- with the deadline for applications still several weeks away, on June 19.

A five-member selection committee comprised of one councilmember and various staff will review, rank and prioritize submitted housing development proposals -- in advance of itemizing project selection for council action.

___  “Request For Proposals”  ___

Conventional in community planning processes, such as redevelopment administration, this new approach is called: “request for proposals” (RFP).

“The RFP process allows the City to solicit for projects based on set criteria that is developed internally,” relates the staff report. “It also allows the City to do an in-depth assessment on these potential projects and pick the project that will provide the City with the greatest impact.”

“This proactive approach also allows the City to have greater input on the type of housing, location, affordability levels, and whether or not it will be new construction or acquisition / rehabilitation project, and materials and design,” indicates the staff report.

Several other important advantages of this new policy exist, outlines this report. “Developers tend to be more creative in projects and financing structures when they are being compared with others,” leading to “a higher caliber of proposals.”

Staff emphasizes the key values of this competitive dynamic in best achieving municipal interests during all phases of this new development process.

“The RFP could also lay out a ‘road map’ of potential projects to assist over the next few years. Staff can analyze the responses, and rank them on [comprehensive] established criteria (e.g., acquisition / rehabilitation versus new construction), and then work on the list of preferable projects as funding comes available.”

“In addition, the RFP will allow the City to target sites and/or types of projects,” upon which it desires to focus.

“[A] list of potential sites that could be identified in the RFP” has recently been compiled through discussions with council, city management and various departments.

Another useful aspect of instant adoption of this policy is establishment of a productive time-line for — “position[ing] a project” — in anticipation of a specific (recession-related) regulatory change in the allocation format pertaining to one particular source of federal housing funds (HOME), which are administered through the state.

— “Open Canvas” For Affordable Housing Proposals  ___

“Essentially, the City is providing the developers an ‘open canvas’ in which to create housing. Seeing the majority of the City has been built out, we are looking for innovative projects that maximize density as well as integrate nicely into our existing neighborhoods.”

One portion of the ranking criteria automatically grades acquisition / rehabilitation projects higher than new construction projects (10 points to 3 points) within the overall selection system.

Another project selection factor for developers to consider is: “Benefit to the City,” through property taxes and successful accommodation with the goals of existing City housing policies and programs.

The city council is slated to award the winning proposal priority assistance for its development on June 30, 2009, based on its gaining the highest score on a criteria scale of merit points up to one hundred. This grading scale is weighted toward scrutinizing specific projects (60 possible points, with developer characteristics having 40 possible points).

Results of this RFP and subsequent evaluation will also form a relatively prioritized list of potential projects for future city consideration, assistance and action.

‘Golden-Handshake’ Retires A Dozen Employees – Reduces City Budget Deficit

YOLO SUN NEWS REPORT :

 

Facing — “up to 20 layoffs” of municipal employees — in order to balance the budget for fiscal year 2009-10 — “and provide various levels of General Fund Reserves” — as outlined in a related staff report, Woodland’s City Council proceeded at its May 19 meeting to establish an early-retirement incentive program (referred to as a Golden Handshake) made available under the California Public Employees Retirement Law (Gov. Code, 20903).

Eligible city employees receive two extra years of service credit toward their retirement formula if they retire within a designated period, in this case from June through August, 2009.

Several other eligibility criteria must be met. The city council must find that “because an impending curtailment of, or change in the manner of performing service, the best interests of the City would be served,” by using such a program.

Also, employees must work in relevant departments / classifications, be at least 50 years of age with 5 years or more of service credit in the Public Employees Retirement System (PERS), and a permanently unfilled vacancy must occur in the relevant department / classification, resulting in a minimum of 1% “reduction in the overall workforce.”

Areas of program relevance were: “Community Development Dept., Parks & Recreation Dept., Library, Administrative Clerk II & III, Youth Services Counselor and Crime Prevention Specialist.”

Outreach to city employees was conducted in several ways and a dozen municipal employees are participating, from all of these areas of program relevance — except for the library.

Once eligibility and participation is determined, the law (Gov. Code, 7505) requires that the city council be presented with a report of the total cost of implementing this program — two weeks in advance of adopting a resolution to formally activate it.

Total cost of Woodland’s Golden Handshake early-retirement program in this circumstance is $469,770 — amortized over twenty years.

Described as “very manageable” by the city manager, this cost amounts to an increase in the “employer contribution rate [under PERS], beginning in September 2011 — from 14.718% to 15.04%.

The staff report accompanying this council agenda item explains that this cost would have represented only $43,431 of expense to the current (‘08-’09) budget, $20,122 of which would be from the General Fund.

“Annual structural savings,” on the other hand, totaling $1,155,537 ($1,035, 295 – General Fund) would be accomplished through this program.

However, because of varying retirement dates and other matters, fiscal year 2009-10 savings will be $848,355 ($752,271 – General Fund).

This three-quarter of a million dollars represents significant progress on reaching the General Fund budget-deficit goal of $6.3 million.

City Of Woodland To Adopt New Fiscal Policy During Budget Crisis

 YOLO SUN NEWS REPORT :

Political turbulence arising from the roiling city budget crisis “is making the development of the [current] budget more difficult and could potentially place the City in a vulnerable financial position,” announced City Manager, Mark Deven, in his staff report for a key agenda item at the Woodland City Council’s May 5, 2009, regular meeting.

Deven is thus immediately bringing before the council a draft statement of: Budget and Fiscal Policy — “to facilitate discussion of this very important document [  ] in order to receive guidance to finalize the document for adoption as part of the FY 2009-10 budget actions on June 16.”

This new Budget and Fiscal Policy, indicates Deven, contains various elements of material “introduced to the City Council in December 2007 and [  ] referenced and reaffirmed on several occasions whenever major budget / fiscal issues are presented. Staff believes that [its] adoption will address a deficiency in the City’s current financial practices and facilitate financial stability.”

Deven expresses the motivation for advancing immediate adoption of this document by the City Council, as: “comments received [,] community meetings and discussions [with] City Council,” related to his “belief that current level of General Fund reserves should not be further diminished.”

Essentially, the city projects expenditures of about $45 million — while revenues are expected to be about $38.7 million — leaving a $6.3 million deficit that must be erased for the upcoming fiscal year.

He notes that, “based on a $38.7 million operating budget, maintaining the reserves at the present level of $5 million will provide the City with a 13% fund balance which is equal to approximately seven weeks of operating costs.”

As detailed below, the council voiced support, with Vice-Mayor Art Pimentel dissenting, for adopting (on June 16) a — modified version — of Deven’s fiscal policy proposal.

___  FISCAL RESERVE POLICY JUSTIFIED BY STRUCTURAL DEFICIT?  ___

Since Deven’s arrival as city manager in mid-2007, a “structural deficit” has been discovered to exist within municipal accounting behavior, meaning that the city has habitually been spending more money than it actually has, independent of other budget problems caused by currently adverse economic conditions.

Deven views this structural budget-imbalance as unsustainable and contrary to municipal interests. He hopes to largely eliminate it within the process of determining the upcoming budget — indicating to the council that progress along these lines is reflected in his current budget proposal.

“The City Council [in October 2008] expressed the need to develop long term strategies to address the structural imbalance and bring General Fund expenditures in line with actual revenues,” Deven recognizes in this staff report.

This fiscal predicament was recently relieved in part through use of a limited series of “one-time sources of revenue” (such as spending the city’s liability insurance reserve fund, revenue from sale of city property, etc.) — as repeatedly emphasized by Deven within his oral presentation to the council.

Deven directly associated this unsustainable budget dynamic with the need to maintain adequate reserves; although, use of budget reserves is clearly contemplated to cover much more that a temporary “structural deficit” which is expected to be largely eliminated for FY 2009-10.

The crucial budgetary distinction related to this situation appears to be that of properly recognizing the precise contours of this “structural deficit” — in the midst of general fiscal consequences of the expanding economic recession.

___  LABOR UNION PROGRESS ON CLOSING BUDGET GAP?  ___

Prefacing Deven’s written discussion of this Budget and Fiscal Policy, is a brief budget-status update concerning two key prospects for bridging Woodland’s current budget gap.

As of April 27, twelve eligible city staff members have enrolled in the state’s (Cal PERS) Retirement Incentive Program, “often referred to as the Golden Handshake,” which provides “two years of service credit,” at a (future) cost to the City that is “very manageable,” according to Deven.

“The impact of the enrollment of these employees is certainly favorable from a fiscal standpoint and may allow the desired level of reductions to be achieved without layoffs or with minimal layoffs,” describes Deven. Also, “compensation reductions from the City’s [labor union] bargaining units through the meet and confer process,” may help “minimize layoffs and deeper cuts in programs and services.”

“[C]ompensation reductions” amount to employee furloughs (proposed to save $215,000) and a wage freeze (proposed to save $324,000).

Employee salary reductions, proposed at 1.5 – 3% would generate $310,000 / $620,000 in budget savings.

Closed-session conferences with these union representatives directly preceded this regular council meeting — wherein several councilmembers seemed slightly buoyant / optimistic, perhaps indicating some level of progress toward reaching a broadly beneficial consensus on employee concessions.

Councilmember Jeff Monroe confidently, even light-heartedly exclaimed — without elaborating — at one point in the discussion, that: these budget matters will turn out well in the end.

Although appearing more sober-minded during the council meeting, Councilmember Bill Marble made relatively hopeful, positive remarks while leaving City Hall, about the potential for successfully “avoiding layoffs and finding a few more hours for the library,” despite his desire to implement this reserve-fund policy

Mayor Skip Davies made during the meeting an identical remark about finding “a few more hours for the library,” despite the huge budget reductions being proposed by Deven, as well as his own expressed caution regarding reliance on the existing [$5 million] reserve for resolving this budget crisis.

Adverse results related to critical, just-conducted discussions over potentially key compensation concessions from union representation of Woodland’s employees — would seem to have produced a more genuinely grave and depressive effect on overall council mood — than was apparent during its subsequent, regular meeting.

It seems likely that some significant nature of relevant progress on municipal employee relations and cooperation was achieved during this prior, closed-session.

___  NEW RESERVE FUND POLICY  ___

A relevant component of this proposed Budget and Fiscal Policy is the practice of maintaining a certain level of reserves within each municipal fund (General, Enterprise, Redevelopment, Internal Service).

Formal designations and processes being proposed for these various funds will bring Woodland into conformity with fiscal practices of the Government Accounting Standards Board (GASB), “charged with regulation of public finance,” relates Deven.

“Approval of this policy would require the City Council, City Manager and all appointed officials and employees to apply each element,” indicates Deven’s report. “While certain elements such as the formalization of reserve levels and designations for all City Funds are new, other elements should be familiar to the City Council as they are part of the Guiding Principles that have been discussed in association with significant fiscal actions.”

These (seven) elements — Budget and Fiscal Policy “procedures” — are: Reserve Funds, 10-Year Financial Planning, Performance Based Budgeting, Capital Improvement Program, Internal Service Funds, Enterprise Funds, and Review and Adopt a Performance-Based Budget.

___  RESERVE FUND INFLUENCE ON FISCAL STABILITY  ___

Deven focuses his instant report on the “procedure” of Reserve Funds, “since the community and Council discussion in this area has been significant and has the most potentially serious impact on the City’s fiscal stability.”

This budget “procedure” maintains (annually replenishes any deficits of) specifically prescribed balances as a tiered, reserve fund within each municipal, fiscal account.

Three levels of reserve balance exist within the GASB accounting program, committed, assigned and non-assigned.

The Committed Fund Balance refers to the level of reserves that are set-aside for — truly unanticipated and catastrophic occasions (and to demonstrate fiscal stability / prowess) — since the Assigned Fund Balance is explicitly intended to repair fiscal damages resulting from all possible causes, including natural and man-made disasters and any conceivable form of economic calamity.

Non-assigned balance simply refers to whatever monetary surplus happens to arise within either committed or assigned balances. Deven states that these are “essentially surplus funds that can be used as working capital to offset the year to year fluctuations within each fund.”

“In consideration of the fund balance designations described in this report and within the proposed policy, it is important for the City Council to note that staff reviewed reference material, evaluated other local government policies and discussed this matter with municipal finance consultants,” states Deven.

“We didn’t just make it up,” Deven exclaimed to the council during his oral presentation.

Financial  consultants, etc., recommend that municipalities generally keep from 10% to 15% of annual operating expenses within the committed category of reserve fund, with an additional 5% to 15% in the assigned fund tier — thus retaining up to 30% of annual budget expenditures within these separate reserve funds.

“Staff believes the proposed Budget and Fiscal Policy will establish a comprehensive approach to facilitating long term financial stability. It is important to note that the proposed policy will not be easy to implement. Developing ten-year forecasts, maintaining designated reserve funds and evaluating capital projects to make sure that sufficient operating funds are available when the improvement is completed requires additional work, financial discipline and the willingness to reprioritize expenditures if necessary,” states Deven’s report.

___  COUNCIL AND PUBLIC RECEPTION  ___

Three members of the public spoke in specific opposition to immediate adoption of such a program of reserve funds (although not against other elements of this proposed policy). No one from the public spoke in support of this reserve-fund program or the overall policy item.

Public criticism amounted to concern that this program was elevating bureaucratic form over community substance — too “ideal” to serve the city’s interests under currently dire fiscal circumstances — and as purporting to eliminate essential, overall flexibility from Woodland’s address to this ongoing budget crisis.

All three speakers from the public were also deeply concerned with the fate of Woodland Public Library, related to the current staff proposal for a –38% cut — of its tiny — 3% — slice of the municipal budget.

Library Board Chairperson, Bud Godding, focused his remarks on emphasizing Councilmember Jeff Monroe’s comment within a recent council budget workshop that: “The sky has fallen” — by way of arguing for whatever flexibility is required to serve community interests related to the library in this budget crisis, despite any technical reserve-fund stipulations within new budget policy.

Councilmember Monroe expressed his support for adoption of this policy, nevertheless, while several times noting that: “it isn’t a law” — simply a guideline — which can swiftly be voided upon any majority vote of the council.

Councilmember Bill Marble indicated his personal involvement with development of this policy proposal and his concerns regarding evolving economic conditions of the city. He argued that prudence compels adoption of such policy measures, alongside the upcoming budget.

Councilmember Martie Dotie also stated support for staff preparation of a final version of this policy document, for adoption with the new budget.

Mayor Skip Davies spoke at length of his concerns about the following (2010-11) fiscal year potentially being even worse than this one, expressing his perception that local governments will recover from the economic more slowly than the general population, because of a natural lag-time condition within such contexts.

___  COUNCIL MODIFIES PROPOSED RESERVE FUND POLICY  ___

This four-member council majority, at the specific mention of Davies and Dote, agreed to modify Deven’s initial policy proposal — for which he had prudently provided such a back-up option.

Rather than placing the entire amount of existing General Fund reserves — $5 million — within the committed category of (retained) balance, the council directed Deven to prepare this new policy document based on his back-up option: keeping about $3.9 million in that fund balance and transferring about $1.1 million into the category of assigned reserve fund.

Although Deven has previously proposed the budgetary option of lowering what will soon be referred to as the Committed Fund (Reserve) Balance in the General Fund –  to 11%, from its present 13% — the council went even further — by electing to place 3% of total current reserves in the Assigned Fund (Reserve) Balance category.

This arrangement results in 10% of annual municipal operating expenses being sequestered under this new budget policy (subject to council action), while projecting 3% toward meeting easily anticipated, short-term fiscal demands.

This result reflected Deven’s prepared, back-up option, based on belief — expressed in his staff report — that: “the absolute bare minimum level of General Fund reserves is 10%.”

In reality, therefore — the council majority clearly took a firm and measured step toward retaining practical “flexibility” for best meeting the City of Woodland’s current economic challenges.

While — any contemplated loss of Woodland’s immediate fiscal “flexibility” strongly motivated Vice-Mayor Art Pimentel to dissent from proposed adoption of such a Budget and Fiscal Policy, “at this time.”

The council majority — by setting $1.1 million (3%) aside — meaningfully reflects the basic spirit and justification of Pimentel’s dissent, through supporting Deven’s modified, “absolute bare minimum” option for attempting to immediately implement this new budget policy.

Plus, as Councilmember Monroe explicitly emphasized — this new reserve fund policy may be at least temporarily swept aside by a council majority, if the city budget crisis continues to worsen.