By H.R. Autz

FIRST OF ALL, I WOULD LIKE TO WISH EVERYONE A HAPPY NEW YEAR. Let’s make 2013 a year with more peace on this fragile Earth.

Late last year, we were all shocked at the sudden death of City Treasurer Bob Langston. He had won the election to become treasurer in November a year earlier, and reports indicated he was doing a very good job. I think he showed anyone who doubted that the city of Benicia does need a treasurer. Many know that this has been a question in past years.

Since I was the second candidate in the election, after Bob’s death I was the natural person to be considered as a replacement. But the City Council and the mayor thought it best to allow anyone who was interested to apply. Ken Paulk and I appeared before the Council on Oct. 16 and we explained why we wanted the position, and what some of our plans were. The Council then appointed me since I had the edge in having campaigned for the position, and because many Benicians had voted for me in the past election. I was then sworn in for a three-year term as Benicia city treasurer.

The treasurer has two defined responsibilities. One is to attend and participate in all Finance Committee meetings. And the second is to review and advise staff on the major investments of the city. I see the position as having other important duties, namely communicating to the residents of Benicia and working on special projects as assigned by the finance director or city manager.

I have now been on the job for nearly three months, and the three questions I receive most are:

1. Why did the water rates get raised so high?

2. What is happening with the solar panel project?

3. Is the city in real financial trouble?

The answers to these questions are different today than they might have been in 2011 as I was campaigning for the treasurer position — and I think the financial outlook is 180 degrees different.

In 2011 we had a new city manager, an unknown leadership status. We had a retiring finance director. During the year we had a temporary finance director as an extensive search found no replacement. Our salaries were pointed out as being too high for a city of our size. The retirement package was way out of line, we discovered, just as many cities found as they projected to years ahead. And then there was the revenue problem. Revenues were not meeting expectations — and to make matters worse the city was in the process of committing to a 25-year loan for solar panels and a $1 million loan payment each of those years.

Did we need a treasurer or something?!

That was about a year ago. Now we have had Brad Kilger as city manager for well over a year. He has extensive experience and has taken positive action to control budget variances. Most employees have taken cuts in pay, retirement packages have been redone for future hires, and presently there is a freeze in filling open positions. Mr. Kilger hired, and the Council approved, an experienced finance director with a background in the neighboring communities of Napa and Berkeley.

Karan Reid has impressed me by knowing, after her first three months on the job, as much about our numbers and their history as anyone in the area. She relates well with her staff and the Finance Committee. Her department is in the process of training and implementing a new computer system that was purchased but not put in to use by previous finance teams — a system she believes will eliminate duplicate manual posting of figures and improve productivity. And, like Mr. Kilger, she is committed to a balanced budget.

The Finance Committee is a real asset to our city. It is a five-member committee, and each member has more than 20 years’ experience. These are residents of Benicia, volunteers who meet monthly to review all financial bills that have been paid in the previous month. They also work with the finance director to update signature limits, report to the Council their views on water rates and improve reporting formats. Because Brad Kilger and two Council members, Tom Campbell and Christina Strawbridge, also attend Finance Committee meetings, Benicia is singular for having regularly scheduled committee meetings with so much decision-making power.

Now to answer those questions:

Are the water rates too high? If you look five years into the future, you will see a 40-percent increase. That has been quoted in this newspaper as 15 percent higher than Vallejo’s rates (comparing Vallejo’s 2012 rates to Benicia’s 2017 rates). Now let’s look at what is hidden in this comparison. If our rates go up 40 percent and are only 15 percent higher than Vallejo’s, then Benicia has been 25 percent lower for years. We were lower because we did little to keep the water plant up to date. We have water quality that ranks higher than many nearby communities. We still will have rates that are lower than the majority of cities south and west of Benicia. But we were underfunding the water we drink, and it is time to pay what is needed to cover our expenses. There is no extra funding here.

Is the city going bankrupt? Benicia has taken major steps to adjust to the slowing of its revenue stream. The real estate tax has taken a hit the last few years, and just this month we learned of another $800,000 hit. Why is this happening when at the same time we hear of housing price increases in October 2012?

Because the Solano County assessor has the control. His figures are one or two years after the fact. Real estate went down in 2009 and 2010. Those taxes are not lowered on existing houses until sales are made in a particular neighborhood. In Benicia, many of the residents stayed put, so the crash did not appear until a couple of years went by and finally enough homes sold to represent a lower market level. And then there is further delay because John Q. Citizen sells his house for a low price and you say, “Let’s apply for a tax reduction by way of an appraisal.” You get the lower tax in 2011 and your neighbor hears about this at a soccer game. He applies for an appraisal and gets it in 2012. So the city receives the reduced income from taxes three years after the housing market crashes.

The good news is that in the near future, the tax bills are going to slowly go back up following the rising prices on today’s houses. Presently, management of the city is following the direction of the Council and come up with a budget that has equal revenue and expenses. The road is challenging, but the city is meeting the challenge.

So what about the solar panels? This is a big project. A presentation on the solar panels will be made to the Finance Committee in April. That will be the one-year mark when all the panels will be up and an actual energy collection total will be available. Right now we are getting estimates of rebates, and these will be adjusted in a few months.

I know many are concerned about the possibility of a negative cash flow. Now that the project is up, we have to have actuals and we need to project cash flow along with the fact that public utility rates are going to go up.

In other news, the 2012-13 budget progress report was presented to the Council recently, covering the 12 months from July 1, 2012 to June 30, 2013. It shows our largest income as real-estate taxes, which are 41 percent of our $29.8 million in total revenue. Industrial property taxes are 34 percent. Then we have the utility users tax at 16.5 percent, and everything else is less than 10 percent.

Our biggest expense is salaries and wages: 48.1 percent. Next is another people cost, benefits: 22.3 percent. Services and supplies are 20.3 percent of the expense budget, and capital outlay and non-recurring expenses take up less than 10 percent of the total.

As a city we need some new revenue ideas. Mario Giuliani heads up the Economic Development Division, which received applause for the strong presentation he made at a recent Council meeting. I am pleased the city is supporting his revenue-building ideas with staff and dollars.

Which reminds me. The lights on First Street were not funded through the city’s General Fund. They were paid for by downtown merchants who taxed themselves. I think the lights are fantastic. Watch for future projects this Benicia Business Improvement District will produce.

Another article in this newspaper said Benicia is a great place to live. I have lived here for more than 25 years. From what I have observed, it’s true. A key reason is we have competent staff, great committee volunteers, and a dedicated group of elected officials.

Maybe you agree with me. Maybe you do not see my reasoning. I welcome your input. Feel free to contact me at 707-745-4374 or hr.autz@ci.benicia.ca.us.

H.R. Autz is city treasurer of Benicia.