Council spends day working on budget

The Chico City Council was told during its all-day budget meeting this week that the city is fiscally sound, unless the state or national economy takes a dive, that the Police Department needs to hire 18 more sworn police officers, and that the city is having trouble hiring department heads because it can’t recruit quality applicants based on the salaries the city offers.

City Manager Tom Lando said he didn’t know how “exciting or pessimistic” his assessment of the future was “because of what’s on the horizon.” He was talking about the energy bind the state is in. Last year, he said, the city spent $1.4 million for energy. This year, he said, PG&E warns that without serious conservation efforts that bill could reach $2.2 million.

And while the city seems to be doing well, sales tax accounts for 47 percent of the budget revenue, meaning its fiscal health is tied to consumer spending; should consumers cut back, the city budget will suffer.

But the city also uses redevelopment (RDA) projects as a source of revenue. In a complex end run around the arrested property taxes created by 1978’s Prop. 13, RDA funds allow a city to build big projects that in the long run raise money through increased property values. It’s a money-making scheme too good to ignore.

And with no one offering public input to slow things down, in less than 20 minutes the council approved the issuance of 2001 tax allocation revenue bonds that would raise $18 million to pay off redevelopment agency debts from 1996 and add $11 million to fund new RDA projects. This with nary a squeak or peep from the normally fiscally conservative members of the council.

One of those conservatives, Councilmember Rick Keene, explained that the bonds were insured, giving the city some protection as it digs itself further into debt as a means of covering existing debt. The more liberal Councilmember Dan Nguyen-Tan compared it to refinancing one’s home with a lower interest rate to reduce debts and garner some cash to boot. Federal interest rates are low right now and may not go much lower. Plus, the state is expected to be swamped with bond issue requests as summer rolls on, so the council wanted to act now.

(Later, Councilmember Coleen Jarvis, who seconded the motion to approve the bond issuance, rescinded her vote, saying she did not care for the RDA project priorities.)

Chief of Police Mike Efford said the department needs to hire 18 sworn officers and 14 non-sworn personnel. Dispatch is in good shape, Efford said, but now there is a demand on patrol and investigative services. But realizing that hiring additional officers is not in the books, Efford said he will look to cut back in other areas, like responding to minor auto accidents.

Community Development Director Tony Baptiste told the council he was having trouble hiring a qualified senior plan checker for the amount of money the city was offering: $53,800 per year. Lando agreed that was an ongoing problem, noting that top officials in the San Diego County town of Carlsbad were making $130,000 per year.

The council also allocated its annual community organization funding that comes from three sources: the general fund and block grant money; transient occupancy taxes (TOT) for economic development and tourism; and TOT for arts funding. The big winner, as usual, was the Chico Chamber of Commerce, which asked for and received $120,000 for its dual role as visitor center (promoting the town) and business center (a couple of computer terminals in the chamber offices).

Also getting full funding was the Chico Nature Center, though its request and grant of $60,000 sparked debate over the best way to fund that entity. The Chico Economic Planning Corporation, a nonprofit economic development agency, asked for and received $42,000, though not without some criticism. Council gadfly John Gillander charged that CEPCO’s nonprofit structure did not permit it to engage in political matters as it has done in recent elections, including Measure A.

And Mike Smith questioned CEPCO’s getting taxpayer money when it does basically what “a good industrial real estate organization should be doing.”

Smith also questioned funding the chamber, noting how heavily involved it had become in local politics, forming a political action committee to promote or lobby against candidates for the very City Council it was now requesting money from.

(The chamber also lobbied heavily for the passage of Measure A, which Smith fought against.)

Of course, none of what the council did on this day is a done deal until it meets again July 10 to adopt a final budget.