Musings

by Mike Ceremello

Feb 16, 2005

 NEVER A DULL MOMENT

Living in Dixon for most of you may be a little on the boring side. After all, you work outside of the city and when you come home from a hard day’s work, you just want to relax. If you do go out and around the town, it is probably to shop at Safeway or Wal-mart or, perhaps, to get a meal and rent a video.

You don’t know or care about the details of your city government as long as there is no perceptible impact on your life. You pay your taxes and hope that all forms of government won’t want more. (Fat chance)

You might read an editorial to keep up on the malcontent’s view but you don’t believe any of this impacts you or your children, if you have any. You might be right as long as you don’t care how the money you pay in taxes is spent or if you always go along with whatever a government official tells you to do.

With that in mind, I am going to give you some insight into my perspective on some boring items: the city’s finances and management compensation. The reason for this is the continued cheerleading from other media outlets and city hall’s finance officers about how well our city is doing.

I wouldn’t mind this if it wasn’t for the fact that it could be so much better. When your leaders take the attitude “if it ain’t broke, don’t fix it”, why would they ever question the optimality of the operation.

I was taught at the university that information isn’t useful to managers unless they could make sense of it. You need to be able to follow a “flow” of numbers to see from where the numbers are coming and to where they are going in reports. Also there has to be consistency within documents such that a balance in one statement reflects the same amount in others.

At the last council meeting, the “Comprehensive Annual Financial Report” for the fiscal year which ended on June 30, 2004 was presented to the Council and to you, the citizens of Dixon. A fiscal year is just a calendar year with the starting and ending dates changed to what the reporting body finds as more appropriate dates based on whatever activities the body is involved. For cities, tax revenue is important and with two payment dates, the final one being in April, it makes more sense to have a year that ends on June 30.

The following item, which was presented by Finance Director Peggy LeFebvre, was the year end General Fund Budget review. Actually, it was a review of actual amounts referenced to budgeted amounts. This same information was within the first item, the financial report. You would think that the figures would mesh seamlessly, right?

According to LeFebvre’s report the beginning balance of the general fund and equipment replacement fund totaled $4.05 million and the ending balance was $4.459 million. She claims that both the general fund and equipment replacement fund grew individually and in total by $499,000.

The claim was also made that the city once again took in more revenues and spent less than expected, (actually budgeted because they always “expect” this to happen) yielding the growth in these funds. The implication was that the result of deficit budgeting was not an operating deficit as I and others have claimed in the past.

I turned to the page in the financial report which had the details on the General Fund budget and actual amounts stated. This report, I assume it is to be trusted as being accurate, states that the beginning balance was $4,399,937 and the ending balance was $4,709,257 for a total increase of $310,000. Once again, the city spent more than it took it and ran an actual deficit of $218,300.

It was only after transferring funds of $512,000 into the general fund that it grew. From where these funds came were not readily apparent to me as my search through the financial report did not turn up any information.

When I approached the podium to ask why there was conflicting information, I received no answer and sat down. Of course at that point with no way to return, the city manager suggested I speak to LeFebvre at some later date for an explanation. This was done during the item, while LeFebvre was sitting in the audience.

Now excuse me if I don’t get this, but why should I or any other citizen have to wait and take the issue out of the public eye to get an answer. LeFebvre is a professional and should have been brought back up to resolve the point during this meeting. Do they think that we are all simpletons who can’t understand how or why they manipulate these documents? This isn’t brain surgery.

Lest you get involved with this incongruity as a major point, it is better to sit back and understand the implication on the bigger picture of solvency and the benefit to you as citizens. The fact is that there is some $4.5 million sitting in our general fund, most as reserves for an economic downturn or equipment replacement, both of which totals somewhat over $3 million. So solvency at this point is not really an issue unless the “governator” were to appropriate a large sum from our city’s revenue stream or the city were to recognize a certain large unfunded liability they have.

The real point that needs to be driven home once again, is what the benefit to the average citizen has been from the rising revenue stream? Why hasn’t the general fund balance become much larger than it already is? If the city truly has no use for these extraneous funds, why isn’t it refunding a portion of them to property owners?

One answer: the city staff views the general fund as their piggy bank for additional wage enhancement. According to the financial report, general government expenditures have risen by 65% and 85% for general government and public safety respectively over the last 5 years and have more than doubled since Warren Salmons took over as city manager.

Some of this is due to increased staffing and general inflationary pressure on salaries. However, public safety has seen an increase in only 5 officers since Rick Fuller was the chief of police and, I believe, only one additional crew was added at the fire department. The analysis of this subject can’t be covered even superficially in this column. The contention does bring up the question of whether we, as citizens, are getting any bang for our additional tax bucks.

I was rather impressed by new councilman Steve Alexander’s bulldog approach to addressing this aspect of spending. While I would still advise him to be a little more succinct, Alexander was dead on target in asserting the need to review the “senior management compensation” package and “fox guarding the hen house” stratagem for negotiating pay increases.

Coupling or indexing salaries of high management employees to individuals not under their direct supervision was not the intent of specifying a 15% salary differential to avoid wage compaction between supervisor and supervised. The pyramiding of the increases reaching a pinnacle of pay for the city manager while the city manager negotiates raises for those far under him, needs to be re-examined in its entirety.

If the only reason employees work for the city of Dixon is money and a fat retirement check, then we have indeed been paying too much. If the hired help is here because they are looking to preserve and enhance our quality of life, I have no problem paying them “merit” bonuses for a job well done.

I do have a problem with a council who refuses to discuss or state what individuals have accomplished of substance to earn their bonuses. I understand the principle that some things are personnel matters. To hide the fact that little has been accomplished and much remains to be done by hiding evaluations under this legal guise does no one any good.

Besides, the Brown Act specifies that you “may” hold closed sessions on personnel issues, not that you must. All you have to do is get the employee to agree to have the issue discussed in public and it can be done.

If you have nothing to hide, why are you hiding....