Thursday, August 12
St. Thomas Aquinas
6306 Kenwood

The proposed budget can be found at www.dallascityhall.com.

We need to move forward on bond projects which are critical to maintaining and improving our city’s infrastructure. We’ve seen what can happen when we are derelict in our upkeep — we face more expensive fixes in the future. We can also recover substantial savings on projects we undertake right now while construction costs are down. But we must be very judicious and conscious of what our city budget will look like next year, and borrow only the amount of money we can afford. This year’s budget cut not just fat, but muscle and bone. We laid off employees, cut city programs and reduced services to our citizens. For next year’s budget, we’ll have to cut even deeper if we don’t want to raise property taxes. Given that reality, it doesn’t make sense for us to dig ourselves $6.8M deeper into the hole.

Instead, we should borrow slightly less money this year so that we won’t have to pay more in debt payments next year. We could reduce the March tranche of bonds just slightly (to eliminate the $1.3M in next year’s additional debt service) and reduce the October commercial paper sale a little more (to eliminate the $5.5M in additional debt service). When we get a better idea of our financial condition in the coming year, we can consider rescheduling any delayed project as soon as it’s financially responsible and we can afford it.

For these reasons, I voted against the city manager’s proposal, which will increase our budget expenses by $6.8M next year. (All other councilmembers supported the proposal.)

I know what you’re thinking. “Wow, Angela, you must be psychic. How else to explain your eerily accurate prediction one year ago that the impending economic recession would reduce revenue to the city, reveal the city’s budget forecast as overly optimistic, and necessitate mid-year service cuts?”

Indeed, how else to explain it other than telepathy?

I began dabbling in the clairvoyant arts last year around this time in an effort to see into our city’s financial future. I started out by reading tea leaves (and by “tea leaves” I mean “newspapers”), which foretold ominous fiscal tidings: Lehman Brothers would file for Chapter 11. AIG would go down in flames. Bank of America would take over Merrill Lynch.

And that wasn’t all. My crystal ball/television revealed more otherworldly insights: Fannie Mae and Freddie Mac would be placed in conservatorship. Congress would plunge $700 billion into Wall Street to try to stop the hemorrhaging. And Washington Mutual would become the largest bank failure in American history. Ahem.

All of these things came to pass just days before the City Council approved last year’s budget. I shared these mystical insights with my colleagues and urged them to reconsider the budget before them — a budget that relied on optimistic revenue projections.  I, along with Councilmember Rasansky (who himself often evidenced an uncanny prescience in financial matters), suggested a more conservative budget and proposed $45 million in cuts.

I warned my colleagues that if we failed to read the signs and portents and Dow Jones, if we failed to make the tough cuts now, we would be forced to make even more difficult budget cuts in six months due to lower than expected revenue. We could either plan for the crisis or let the crisis overtake us. It would mean the difference between thoughtful, targeted reductions that spared core services, versus reactionary, hacking cuts to any program or office with unspent funds.

Unfortunately, the rest of the council and the mayor scoffed at my and Mitchell’s grave prognostications and passed the unrealistic budget over our protests.

Six months later, sales tax revenue had dropped so far below budget projections that City Manager Mary Suhm instituted a hiring freeze and began cutting the budget.  That’s tough to do mid-year, especially under such exigent circumstances. And by the end of the year, it turned out that the city had overestimated revenue by about $45 million.  Too bad nobody saw it coming.

So here we are, a year later, about to approve next year’s budget, and I’ve got some new predictions.

I’ve been staring into this budget for weeks, and here’s what I see:  The city is going to get into too much debt in the coming year — borrowing $355 million.  That won’t hurt too much next year, but it could devastate us the following year when our debt repayment goes up by $24 million.  (To put that in perspective, that’s the entire budget for our streets department or our code department.)

Where will we get this money?  That’s when my powers of insight fail me.  Short of raising taxes, I can’t foresee any way to cobble together the additional millions of dollars that will be needed to repay our debt.  We’ve already cut our budget to the bone; cutting another $24 million would reduce city services to an unacceptable level and might actually threaten our infrastructure.  Since there’s no reason to believe we’ll be getting additional revenue, where is this money going to come from?

We can avert this crisis by paring down our debt as we weather this recession.  Let’s borrow $140 million next year instead of $355 million.  We’ll still be able to complete plenty of bond projects, but we won’t increase our debt repayment the following year.  We can extend our bond program by a couple of years, and make it through these tough times without saddling our citizens with crippling debt.

Unfortunately, I don’t see that in the cards. Instead, I have a vision of our mayor and City Council making a grave mistake in passing a budget we can’t afford, and Dallas taxpayers suffering the consequences.

On a totally unrelated note, this came to me in a dream last night:

The harbinger of mutual destruction will wear a spotted cloak
and plunge a great city into dark indenture.
Caution will be rewarded as treachery.
Vassals shall wither under false levies.

No idea what it means.

Below is a 45-minute video of my budget presentation to District 14 residents last week.  Like last year, I created my own Powerpoint to explain the city’s budget in what I hope is a comprehensible way.  If you’d like to see just the slideshow, you can view it here.

If that’s still not enough for you, you can peruse my handy Excel spreadsheets that I created to analyze the budget.

I hope you find this helpful.  As always, I welcome your feedback.

Take next year’s proposed city budget.  I’ve been through this thing line by line, with a fine-toothed comb, ever since we got the “final draft” in early August.  It’s a lot to digest.  Lots of numbers and all.  But some numbers are more important than others, and right now I want to focus on debt and its effect on our bottom line.

The city borrows money to make major infrastructure improvements, like constructing new libraries and police stations, building new roads, putting in new playgrounds in our parks.  These are bond projects approved by voters.  When we borrow money for these projects, we’re essentially putting them on the city’s credit card.

As with any credit card, the city has to make regular payments.  Next year, our credit card bill will be about 22% of our entire operating budget.  It’s the largest expense after police.  Take a look:

Next year, the city manager proposes to charge an additional $314 million to our credit card.  The critical question is: How will that affect our credit card payment? Well, it won’t make much of a difference next year.  It’s the following year we have to worry about.

See, if we decide to borrow $314 million next year, then the following budget year we’re going to be up a creek without a paddle.  Our credit card payment will jump by $24 million.  TWENTY-FOUR MILLION DOLLARS.

Why am I shouting?  Because I’m worried about this.  Really worried.  Because if we have to spend $24 million more on debt repayment, that means $24 million less that we’ll have for all our other city services:  police, streets, parks, libraries, code, the arts, etc.

It’s just like your household budget:  The more stuff you buy with your credit card, the higher your monthly credit card payment.  In this economy, you probably aren’t going to be getting a raise. So assuming your income stays the same, a higher credit card payment means less money you can spend on groceries, gasoline, the light bill, etc.

The same is true for the city. The more debt we incur, the higher our debt payment and the less we have to spend on the basics (assuming we’re not rolling in more money in two years, which I doubt).

So my question is pretty simple:  Where is this additional $24 million supposed to come from?  Property and sales tax revenue is likely to remain down, so more money won’t be flowing into the city coffers.  And we’re already cutting muscle and bone in the upcoming budget — laying off 840 city employees, cutting back library and rec center hours, combining city departments, dipping into the city’s rainy day fund.  Seriously, where are we supposed to get $24 million in 2010-11?  Look at the pie chart again.  Where are we going to get $24 million?

There’s a simple solution.  If we just cut our credit card purchases down to a “modest” $125 million next year, our credit card payment the following year will stay level.  Makes sense, right?  Don’t increase your credit card bill when money’s tight.

I brought this up at last week’s council meeting when we were discussing the budget:  We’re about to dig ourselves into a bigger hole, I said.  A $24 million hole at a time when we’re looking for pennies in the couch.  Bad idea.  Only Councilmember Ann Margolin shared my concern.

I went over to the mayor, thinking, “He’s a business guy.  Surely, he gets this.”  Instead, he did that thing he does when he wants to dismiss any opposition.  You know the thing I’m talking about.  It goes something like this:

“We must do [X] to make Dallas a great city.  If you oppose [X], you don’t want Dallas to be a great city.”

It’s a hell of a syllogism, and it’s worked for him through the Trinity Toll Road and Convention Center Hotel campaigns, so why not go back to the same well?

So when I told him my concerns, he just shook his head.  “We can’t just throw up our hands and not invest in our city.”   (As if I were proposing to eliminate bond projects altogether and let Dallas devolve into a third-world country.)  I asked him where he thought he was going to get $24 million.  “We’ll find it.”  Are you planning on raising taxes?  “Absolutely not.”

So I guess the mayor is saying, “Spend, baby, spend!  Who cares if we don’t have the money!  We’ll tell everyone that we have to do it, or else Dallas won’t be a world-class city!”  I guess he thinks there are buckets of money we can dip into.  But that would be silly.

City Manager Mary Suhm had the same response.  “We’ll find it.”  Where?  “It’s not that hard to find $24 million.”  Really?  Can you find me $24 million in the upcoming budget so we don’t have to cut our parks, libraries, streets, health services, police, and everything else?  And if we’re so flush with money, why are we planning to take $11 million out of the city’s rainy day fund?

Now, keep in mind, this time last year when we were debating the budget, Mitchell Rasansky and I were the only two people on the council saying the city’s revenue projections were overly optimistic.  We suggested cutting the budget by $40-$50 million or risk making severe cuts mid-year.  But the mayor and the rest of the council ignored us and passed a bloated budget.  Guess what happened mid-year?  The city had to cut services because it had over-estimated revenue by a cool $44 million.

So I’m raising the alarm again.  At a time when we’re cutting deep into city services and scrounging for every penny, it’s irresponsible to dig ourselves into a deeper hole.

With the severe cuts needed to balance our city budget, every department will have to make sacrifices. That includes the budget for the Mayor and City Council offices.  In order to reduce our impact on the budget, we propose the following cuts, which will save nearly half a million dollars in the 2009-10 budget:

BUDGET ITEM	TOTAL SAVINGS
Eliminate paper agendas	$148,000
Reduce Councilmembers’ office budgets by 25%	$57,880
Reduce meals by 30%	$9,600
Eliminate hand-delivery of packets	$6,024
Eliminate hard-copies of interoffice memos (email only)	$5,850
Reduce Councilmembers’ travel budgets by 15%	$8,600
Eliminate two secretarial positions for Council offices	$103,200
Postpone hiring of one Council office assistant for 3 mos.	$17,500
Reduce Mayor’s office budget	$70,000
TOTAL SAVINGS:	$426,654

The memo was signed by myself, and Councilmembers Jerry Allen, Ann Margolin, Linda Koop, Ron Natinsky, Delia Jasso, Carolyn Davis, Steve Salazar, Tennell Atkins, Pauline Medrano, and Dwaine Caraway.

The current economy has left no one unscathed, including our city.  Next year, we anticipate that the money the city collects from property taxes, sales taxes, and city fees will be down significantly.  As a result, the city will have to tighten its belt.

Last week, the City Manager presented her proposed budget to the City Council.  The council will now review and revise this budget.  I have been analyzing the City Manager’s proposal very carefully, and here are some of the highlights:

• No property tax rate increase
• Hire 191 police officers (91 w/federal grants, 100 w/city funds)
• Invest $106M bond funds in major street improvements; continue basic street repairs, but eliminate slurry seal
• Reduce median and park mowing from 2 weeks to 3 weeks
• Reduce tree trimming and litter programs
• Add $500k to Code Compliance for more code officers
• Cut library hours (40 hrs/wk for branches; 44 hrs/wk for central)
• Cut rec center hours (45 hrs/wk for large; 30 hrs/wk for small)
• Close 14 out of 21 pools
• Consolidate city depts. from 31 to 22 (combining Development Services w/Building Inspection, and Library w/Cultural Affairs)
• Go to citywide once-a-week trash and recycling pick-up
• Reduce employee pay by 2% via five unpaid vacation days
• Reduce 311 call-taking from 24/7/365 to 7am-7pm Mon.-Fri.
• Contract with non-profit to manage zoo (most top zoos in country are managed this way, as are many city-owned facilities)
• Lay off 840 employees (including 165 non-uniformed police employees)

I have some concerns about this budget, and will continue to review it and analyze it over the coming weeks.  My goal is to realize as many efficiencies as possible, limit the long-term damage of these deep cuts, and develop a good “exit strategy” as we come out of this downturn.

We will have to weather this economic storm together, make some tough choices, and sacrifice some city services in the short-term.  I deeply value your input, so please review the proposed budget at www.dallascityhall.com.  I’ll also post my analysis in upcoming blogs.

Right before council recess, the Mayor charged Councilmember Jerry Allen with developing proposed cuts to our council budget. Councilmember Allen has been working hard to gather a consensus among the council, but it’s been difficult to do so during the council recess.

Each councilmember represents 90,000 residents. We each have two staff members: a secretary and an assistant. Each office gets hundreds of phone calls, emails, and letters requesting assistance with city issues. Our secretaries and assistants help us respond to those requests.

With a goal of reducing our budget by nearly $500,000, Councilmember Allen has proposed cutting half our secretaries. However, with the significant cuts in many city services, the council is going to see an increase in constituent phone calls and service requests, and the proposal to eliminate half the secretaries will, in my opinion, reduce our ability to respond to residents.

We can obtain nearly the same savings, without eliminating secretaries, by making the following cuts:

Reduce individual council office budgets by at least 30%
Savings: $188,160

Eliminate photocopying agenda materials (use online agenda)
Savings: $148,000

Eliminate Meals for Mayor and Council
Savings: $32,334

Eliminate Mayor and Council travel budget
Savings: $60,000

Eliminate fleet fuel and lube (unclear what this is for)
Savings: $10,262

Eliminate 1 of 3 photocopiers
Savings: $6,744

Eliminate hand-delivery of council packets to Mayor and Council homes
Savings: $6,024

Eliminate hard copies of interoffice memoranda to Mayor and Council (email memos)
Savings: $5,850

TOTAL SAVINGS: $457,374

I want your input on next year’s budget, and would like you to get involved in the process as soon as possible.

Because of the dire state of next year’s budget, the city is holding early meetings to give a budget overview:

Tuesday, June 9
6:30 – 8:00 p.m.
Goodwill Industries
3020 N. Westmoreland Rd.
Dallas, TX 75212

Monday, June 22
6:30 – 8:00 p.m.
Jewish Community Center
7900 Northaven Rd
Dallas, TX 75230

Thursday, June 25
6:30 – 8:00 p.m.
Winfrey Point at White Rock Lake
950 E. Lawther Dr.
Dallas, TX 75218

Take a look at the city’s budget presentation and the draft budget.

If there is a service that’s being cut that you would like to keep in the budget, please tell me how you propose to fund the service (is there something else you propose to cut?). I hope you will attend one of these meetings and let me know your thoughts.

Neighborhood leaders, please pass on this info to your neighborhood residents.

While I have conscientiously reviewed the proposed city budget in years past, this year I scoured the budget, looking in every crack and crevice. Overall, there were many positive aspects to this budget that I have pushed for and am very pleased to see: 200 more police officers, 30 more code inspectors, etc. But when I saw how little (less than 1%) of our budget that we’re spending on code enforcement, it really made me think our budget is not aligned with the priorities I’m hearing from you. In talking with my constituents, code is the second most important issue next to police.

I’ve never voted against a budget before, and this year I struggled. But I ended up voting against the budget for several reasons: One, I think we need to realign our priorities. That will mean cutting some things (which I tried to do in my budget amendments) to focus on the most important issues. We need to fundamentally rethink our budget. I’m going to ask for your help on this, but we’ll discuss this more in December.

Second, the process was flawed. Long story short, several councilmembers (including me) put together very specific amendments, cutting programs and adding to others. The mayor decided not to go through these item by item, but just vote the entire amendments up or down. I think that gives short shrift to a $2.7 billion budget. We discussed amendments for less than two hours, which is totally inadequate. The amendments are the only time councilmembers directly change the budget; otherwise, it’s wholly staff-created. (Some councilmembers argued that we’d had dozens of budget meetings, so we’d aired out all budget issues. That misses the fact that the council only had ONE meeting to discuss amendments, a meeting which lasted less than two hours. I think that’s insulting to our residents.)

Lastly, I think our budget is too optimistic in this financial climate. It’s not an overstatement to say our country is in a financial crisis. We need to cut back as much as possible and prepare for lower than predicted property and sales tax revenue. I hope the optimistic predictions turn out to be right, but I’d rather plan for the worst. Under the adopted budget, I predict we will not see as much money flowing into the city coffers as hoped, and that mid-year the city will have to cut services to make up for the shortfall.

That’s the crux of my reasoning for voting against the budget. I moved to amend the budget to include the amendments offered by Councilmember Rasansky and me (reduce the budget and supplement code, streets, public safety, and provide a pay increase for sanitation workers now making minimum wage). Only Mr. Rasansky and I voted for the amendment, and the council passed a budget that included additions premised on additional sales tax revenue and city fees. I think that’s a grave mistake in this financial climate.