State budget deficit soars

With gas and food prices on the rise and home values continuing to drop, more bad news from Sacramento: Governor Schwarzenegger is now warning that the coming year's deficit is now estimated at $20 billion, up from the $10, $14, and $16 billion numbers he floated as the economy deteriorated.

Cities used to be first in line to take a hit from bad news at the State Capitol. Twice in the past twenty years, Governors and Legislators have teamed up to grab local revenues to solve State budget deficits. We are still paying the price of those "take aways." But cities banded together to force the State to put a protection measure in front of voters, which easily passed. It isn't iron-clad, but it at least protects local property and sales tax revenue from being permanently diverted (the State can still "borrow" money from cities -- but has to pay it back.)

While our city services face cuts from local revenue declining, at least we won't have to further slash police, fire, parks and other local services to balance the State's budget.

But we will all feel the pain.

More felons will be leaving State prison and returning to local communities. More poor people will fall into the holes in the "safety net." State beaches and roads will continue to lack adequate funding. The County and the School District will face major problems balancing their budgets.

It does little good to point fingers. Both parties have pandered to voters and avoided making tough choices. But the magnitude of the problem is causing some electeds in Sacramento to reconsider the stale "don't cut spending" mantra of the Democrats and "don't raise taxes" fixation of the Republicans.

"The larger that number gets, the more unrealistic it is to think you can cut your way out of it," said Sen. Denise Ducheny, D-San Diego, chairwoman of the Senate Budget Committee. "And it's unrealistic to think you can tax your way out of it, either. It forces you to think of changing things we've been doing for years."

These are tough times. They are likely to get tougher. The press will highlight strident voices who will protest cuts and equally vitriolic voices protesting taxes and fees. We can spend the summer in grinding political gridlock and posturing.

Or we can set to work to rebalance our expectations and remember what veteran Sacramento columnist Dan Walters wrote earlier this week: “We should accept the reality that there's no free lunch and if we want something from government, we must pay for it.”

Hold on . . . rethinking the weed abatement fee

Well, if we didn't learn from the controversy over the 911 Fee, we've had another humbling experience with a $99 fee for a "weed abatement inspection fee." Mayor Christy Weir will be asking the Council to waive the fee and I will be supporting that recommendation. For more details see this announcement:

http://www.cityofventura.net/newsmanager/ templates/?a=17&z=12

Last summer, it seemed like a good idea when staff proposed it as part of our annual updating of all the fees charged by the City. Why?

That requires a little explanation. We all are annoyed by mysterious fees charged by banks and other businesses. It's a little different when it comes to cities.

California voters have been pretty consistent over the last 25 years: they generally don't like paying higher taxes. Yet a wide range of powerful forces have continued to push up spending. Local government is sometimes part of the problem, but more often, we are simply left holding the bag. We didn't create the State budget deficits or the State raids on local revenues to bail out Sacramento. We didn't dream up all the new State and Federal environmental and other mandates -- we just have to figure out how to pay for them.

One of those is a State law that requires us to enforce annual weed clearance behind homes along potential fire lines. It's a perfectly sensible law -- and it has helped save hundreds, if not thousands of homes. And the vast majority of homeowners sensibly comply.

But the cost of notifying property owners, inspecting compliance and enforcing the law is paid for by everybody in the city.

I doubt that anyone resents that. We all know that protecting lives and property is in everyone's interest. But when we face budget cuts that affect everyone in the community, is there a rationale for having those who benefit the most from the fireline weed clearance program pay a modest fee for administering something that directly benefits them?

That's a legitimate question. Unfortunately, we (City staff) failed to ask it. We simply lumped that new fee into the annual fee schedule. No one noticed, no one protested and eight months later staff simply mailed out the notices to 1200 very surprised homeowners.

That's not how we should do business. I agree with the Mayor Weir's comment: “Our goal is to do right by our residents, and we owe them better communication when City decisions affect them directly.” So Fire Chief Mike Lavery and I will be supporting her call for waiving the fee and refunding it to anyone who has already sent in their check.

Coastal balance

Last night, the City Council once again tackled the State beach sand issue and it looks like there might be some grounds for new hope.

Back in 1999, the City sought a permit to use heavy equipment to move sand back from the ends of the Pierpont Lanes -- the unique beach neighborhood that adjoins the State beach.

We were rebuffed by the Coastal Commission. In the years since, blowing sand has continued to pile up -- and now constantly spills over onto the adjoining public stairs, public streets and private yards.

As the sand has risen, so has the level of complaints from residents. They've lost patience with the City, the State and the Coastal Commission and have demanded that the City act. A handful of beachfront owners have even sued the City and the State, demanding taxpayers foot the bill for removing the sand from overtopping their back walls and fences. Since we don't own the beach, the City is obviously opposing their demand.

Looking for a solution to this increasingly contentious situation, the City consulted with Coastal Commission and State Beach staff to commission a "sand management plan" to deal with the problem. But instead of the groomed recreational beach that Pierpont residents have been clamoring for, the new plan called for the protection and encouragement of fenced off dunes with carefully reintroduced native plants. Guess who would pay for this eco-experiment on the State Beach? The adjoining property owners.

That made the plan dead on arrival. Not only were we asking the residents to accept a solution they opposed, we were asking them to finance it.

No wonder we had some heated meetings. But just about everyone has calmed down now, due to the thoughtful leadership of members of the City Council, leaders of the Pierpoint Community Council and some hard-working and patient City staff people who've all been willing to turn down the volume and look for win-wins.

No one is celebrating yet. But the Council was widely applauded for their actions last night. The Council reaffirmed our cooperative agreement with the State for lifeguards. The Council agreed to seek a permit for short-term relief to allow both the City and the adjoining property owners to move some of the sand back. The Council also agreed to partner with the Pierpont Community Council to work with the Coastal Commission and State Beach on a realistic beach management approach, recognizing that the costs will need to be shared instead of falling solely on either the government or private property owners. One additional source of funding was embraced by the Council -- enforcing our hotel tax on temporary house rentals in the Pierpoint area. Finally, the Council agreed on a stepped up level of sand removal covering the beach access stairs -- although it made clear that was subject to the tough upcoming budget process that may not make that feasible in the near future. Councilmember Neal Andrews dissented reluctantly on the last point, fearing that the contingent commitment was not fiscally responsible knowing what we know about the upcoming budget. His point -- and the response from his colleagues -- helped clarify that the level of maintenance we all want is not necessarily what the City can afford.

All in all, a big step forward. There is still a big gulf between the stance of the Coastal Commission, which is primarily focused on protecting sensitive dune habitat -- and the local neighbors who want a clean, safe and attractive playground for the multitude of visitors drawn to Ventura's coast. The City finds itself trying to find a realistic middle ground. As hard as that challenge will be, we've already come a long way. Continued dialogue and collaboration can help us all find the right balance.

Peak oil

There is one indisputable fact about the supply of oil: there is a finite amount of it.

For the past century and a half, we've had ample supplies. Legend has it that oil was so plentiful here in Ventura that the pipe that filled U.S. Navy ships off the coast in World War II didn't even have a cap -- it just flowed into the ocean when it wasn't fueling the fleet.

Now with gas prices at all-time record highs, Americans are having to pay attention to something we've long taken for granted for everything from the fuel we put in our cars to the bristles in our toothbrushes and the fertilizer we put on our lawns.

Is the world facing "peak oil" -- the upper limit of worldwide production?

Petroleum Geologist Jeffrey Brown has studied the issue closely. "The lifeblood of the world industrial economy is draining away in front of our eyes," he warns. "The only question is how fast the patient is bleeding to death."

Brown brings his charts and graphs to UC Santa Barbara's Bren School of Environmental Science and Management next week in a public lecture on Tuesday, April 10 at 7 PM:

http://www.sa.ucsb.edu/sustainability/

He's not alone. In an eye-catching front page story last fall, the Wall Street Journal declared:

"A growing number of oil-industry chieftains are endorsing an idea long deemed fringe: The world is approaching a practical limit to the number of barrels of crude oil that can be pumped every day."

Of course, there have been prophets of doom before. But there are two deeply troubling and inconvenient truths this time: first, the world is now retracing the same arc of declining production following declining discovery of new reserves that has steadily diminished American oil production and forced us to import 65% of the oil we use -- and second, worldwide demand for oil is accelerating. This is a collision course that puts in jeopardy our way of life.

If it was our sand, we'd have the luxury of burying our head in it. But the largest reserves of oil are underneath places where we are not particularly beloved: Russia, Iran, Venezuela etc.

Last year, a team from Cal Poly Pomona's 606 Studio approached the City to study the impacts on Ventura's future. They produced a thick and colorful report called: "Transforming Urban Environments for a Post-Peak Oil Future." It's available on the City's website at:

http://www.cityofventura.net/peakoil

We've only begun to think about the long-term implications of the end of cheap oil -- and the impact on our planet of burning carbon at an accelerating rate. But we can't afford not to, according to a new study by the Urban Land Institute. Called "Growing Cooler," it makes a case for the kind of smart growth policies embraced by our community in the 2005 General Plan. Only by curbing sprawl and creating a more compact, mixed-use future can we not only live in balance with nature, but also pursue a prosperous future. For more on the study, see:

http://www.uli.org/AM/Template.cfm? Section=Home&CONTENTID=118999& TEMPLATE=/CM/ContentDisplay.cfm

It all can be overwhelming. But it doesn't have to be. We are not victims. In our home towns, in our consumer choices and because of our democratic freedoms, we can tackle a future without cheap oil. As Robert Kennedy said many years ago:

"Our future may lie beyond our vision, but it is not completely beyond our control. It is the shaping impulse of America that neither fate nor nature nor the irresistible tides of history, but the work of our own hands, matched to reason and principle, that will determine our destiny. There is pride in that, even arrogance, but there is also experience and truth. In any event, it is the only way we can live."

Can't we do better than the State?

Cities in California have long played the role of victim.

We complain about how our dysfunctional State government has pushed its financial problems on us, forcing us to cut vital services and do stupid things (like subsidize auto malls and big box retailers to generate sales tax.)

It's true, but almost no one is listening.

Part of the problem is us. We talk about "funding for cities." The more successful "schools lobby" doesn't talk about "funding for school districts."

They talk about "kids" and "education" and "investing in our future."

Part of the problem is the voters. They generally pay as little attention as possible to anything long-term or complicated.

Part of the problem is partisan gridlock in Sacramento. One party panders to the voters desire to protect "kids" and "parks" and "education" and "fight crime" etc., all of which cost money. The other party panders to the voters desire to keep down taxes. Of course, each panders to the constituencies that favor one over the other, but they both pander to the voters in the middle who like both.

I don't have any practical solution for our State's problems, but I do believe at the local government level we have the opportunity and the responsibility to do better.

It begins when we stop playing victim.

Yes, we've "lost" millions in local revenues diverted by the State. Yes, we've had to add millions in spending to cover State mandates and problems they've dumped on us.

But as my wife would say, it is what it is.

Our challenge is to balance our budget anyway.

In Ventura, we are moving in that direction. Four years ago, recovering from the last recession and the State's confiscation of our revenues to help balance their budget, we adopted a Three Year Budget Plan. It aimed to reduce the growth of costs and increase the growth of revenue to erase a deficit and create a surplus.

We succeeded. We directed the surplus to four priorities identified at the beginning. We added 7 police officers and 6 firefighters -- the first increase in over 15 years. We invested in fixing our streets and other vital infrastructure. We added three parks -- with the funding to maintain them. After several years of salary freezes for most of our staff, we began to bring them closer to average compensation in response to record levels of vacancies that were going unfilled.

Now, the housing market slide has triggered an accelerating erosion of revenues. Sales tax is down 10% below projections. Building permits more than 15%. We expect the bad news to get worse as California enters a recession.

So we are again acting. The City Council unanimously approved defering or cutting $1.253 million in projects, added to $1.1 million cut in February. After approving $1.9 million in operating expense reductions in January, last night they began consideration of early implementation of $4 million of reductions originally slated for next year's budget.

It's called fiscal sustainability -- or not spending money you don't have. Here are the principles the Council unanimously approved last night to guide them through the tough decisions ahead:

1. In spite of adverse economic conditions, the Council remains focused and committed to the achievement of the long-term General Plan Strategic Visions embodied in the 2005 General Plan and will continue its commitment to the community to become a national model;

2. To ensure increasingly limited resources are allocated to what matters most in achieving the General Plan Strategic Vision, the Council recognizes that tough choices will need to be made and that its emphasis will be placed on eliminating, reducing or restructuring lower-priority programs and expenses rather than compromising the success of high-priority efforts by inadequate funding;

3. Building on the first two principles, programs and initiatives that produce income or save future expenses should generally be given higher priority than those that simply consume revenue; and

4. Because we will be asking more in the these difficult times from our workforce, the Council remains committed to the goal of competitive compensation to continue to retain and attract able and loyal staff.

Will Ventura voters support this approach? The Council also approved an ambitious public outreach effort to involve our citizens in the long-term and complicated challenge we face. Mayor Weir began that effort with an outline of our budget realities in the Star that is now posted on the City's website:

http://www.cityofventura.net/mayorsmessage

Mark Baldassare, President of the California Public Policy Institute, makes the case that voters across California recognize the problem and want common sense answers -- including a mix of cuts and revenue increases to ensure we live within our means without sacrificing vital services:

http://www.signonsandiego.com/uniontrib/20080330/news_mz1e30baldas.html

He asks: "Will the elected officials squander the moment and use it for political grandstanding and partisan one-upmanship? The state's leaders have little to risk and much to gain in showing the electorate a way out of the current budget crisis and a fiscal plan for the future."

The elected officials in Ventura have accepted that challenge at the local level. Let's hope it works as a model for our State.