City Council to get first look at long-term path to economic stability

Since Benicia first began feeling the effects of economic downturn, city staff and the City Council have sought an approach to fiscal matters that would lead to stability.

At its next meeting Tuesday night, City Manager Brad Kilger and Assistant City Manager Anne Cardwell will outline a long-term approach they said should result in financial resiliency.

In recent years, the city has attempted to keep its budget balanced, but it’s been hit by a series of surprises, such as one year’s unanticipated downturn in utilities revenues and last year’s drop in property taxes. This year, the drought may cost the city as much as $900,000 in water purchases.

In the future, city officials know they’ll be dealing with rising costs of retirement and pensions — no surprise, but no pleasant prospect.

At the same time, city staff has been telling the Council and other advisory panels that cutbacks in employee numbers can’t be sustained if the city is to keep providing the same level of services to residents.

Kilger and Cardwell will ask the Council on Tuesday to approve two service contracts that will help them continue to develop the Sustainable Community Services Strategy (SCSS).

They’ll also ask the Council to direct which steps to take next in determining community priorities and assessing residents’ satisfaction with the city’s operation.

In their report written Wednesday, the pair told the Council that employees “are well under way with the first phase” of the sustainable services plan that’s designed to help Benicia “effectively weather an economic downturn.”

That first phase involves generating a number of financial studies, development of a 10-year forecast and an evaluation of the city’s organization.

Those are designed to provide a basis for finding the most effective ways “to provide valued services to the community,” they wrote.

To complete the 10-year forecast and other studies, conduct community conversations and prepare a long-term city services plan, they’re recommending the Council agree to a $59,900 contract with consultant Management Partners.

They’re also asking the Council to spend up to $35,000 with the Lew Edwards Group for help with the proposed community survey.

The 2013-15 budget earmarked $63,000 toward that end, and $35,600 of that money has been spent toward developing the 10-year economic forecast, Kilger and Cardwell wrote.

The balance of their request would be underwritten with savings in the current budget derived from vacancies, they wrote.

As the city responded to lower revenues that began in Fiscal Year 2009-10, the city cut employee compensation by about 10 percent and froze or eliminated positions, they wrote. “Departmental reductions to date have been opportunistic in nature,” they added, and fewer employees are available to work on projects. In addition, the city has experienced turnover in key positions, they noted.

Finance Director Karan Reid left for Concord before completing even a year in Benicia. Public Works Director Melissa Morton accepted a position in Vallejo late last year. The city eliminated Community Development Director Charlie Knox’s position nearly a year ago.

It’s time, Kilger and Cardwell wrote, for the city to take the time and spend the money “to better plan and budget for the organization for the long term and create a sustainable organization.”

They defined a “sustainable organization” as one that has the resources to provide a level of services its community wants on an ongoing basis while being able to withstand economic uncertainties.

The Council authorized the work plan to prepare the SCSS, described as a long-term city services plan. It was discussed further during the development of the Fiscal Year 2013-15 budget, Kilger and Cardwell wrote.

The plan has three phases, the first of which should be done by July. That would be to complete the financial studies and 10-year forecasts, the analysis of city organization and a survey of residents.

Of those, the city has completed studies of the Pension Obligation Bonds Fund, which showed that the city’s calculations adopted in the current budget are accurate; one on workers compensation and another on liability insurance, the results of which will be shown to the Finance Committee later this month; and one on property tax appeals, to determine if Solano County expects to impound money for anticipated significant appeals.

In the latter case, the pair wrote, the county did impound money, “and the status of appeals is being monitored over time.”

The Council and the Finance Committee will meet in a joint study session some time this month to discuss the 10-year forecast.

The analysis of the city’s organization, which the pair called an organizational scan, is expected to identify critical unmet needs, Kilger and Cardwell wrote.

It will list the programs residents already receive, determine if there are better ways to deliver those services and list other methods of making city operations more efficient.

During the first phase, city employees will be asked to comment on its various segments, the two promised. Residents will be surveyed as well, they wrote.

Two other studies — one about funding employee leaves and another on capital replacement — are on hold until other studies are finished, they wrote.

Beginning in September and wrapping up in October, the second phase would involve giving residents opportunities to add their comments. Specifically, they’ll hear about the 10-year forecast and areas where the city budget is vulnerable, as well as the services the city provides and what it costs to provide those services.

Participants will be asked to take a hypothetical list of resources and choose how they would be allocated, and will be asked to talk about how tax dollars are spent and what community priorities are.

Phase three, slated for November and December, would be the preparation of a long-term city services plan.

Kilger and Cardwell wrote that in flusher times, the Council used budget sessions to hear residents’ comments about community needs and priorities, particularly during updates of the city’s Strategic Plan.

That changed with the recession, they wrote.

“Because the city was focused primarily on addressing significant revenues reductions, the last two strategic planning efforts focused on making only minor updates,” they wrote.

In other matters, the Council will review its priority project list, a quarterly assignment.

Based on earlier Council comments, Kilger wrote, the list has been assembled into two categories: Council Priority and Fundamental Projects, to make clear what is normally expected of a city department and what may be outside the norm but is a Council priority.

On the priority list established Feb. 11, 2012, business development continues to be a top item, whether it’s trying to make the Benicia Industrial Park competitive — particularly through improved Internet technology — or listing empty city-owned buildings.

The financial sustainability project is another priority, as are support of the city’s two state parks, cleaning waters off West C Street, obtaining master plans for the coastal area at the foot of First Street as well as for Benicia’s trees, and city code amendments to expand project notification requirements and to regulate food trucks.

Less-urgent priorities involve public arts, replacing fire equipment and making the Valero Air Monitoring Station operational, getting grants to underwrite a transitional shelter and adoption of a Lower Arsenal Specific Plan.

The City Council will meet at 7 p.m. Tuesday in the Council chamber of City Hall, 250 East L St.