Whitewater’s lengthy budget process draws to a close. I offer proposed changes as a longstanding objection to current policy; I don’t expect that any of these changes will be implemented this year. In time, though, Whitewater will have to make drastic reductions, and the longer they’re put off, the worse they’ll be.
There are four points to consider: our current economic situation, our current fiscal (municipal budgetary) policy, changes to make, and the advantage of those changes.
Whitewater’s economy.
We’re a struggling town, with child poverty above of average of other towns — that’s the truth that town squires refuse to discuss. Our current policies have left thousands, in a small city, with no advantage or opportunity. Whitewater’s municipal manager has his Potemkin Village, useful to no one. Each year this persist, Whitewater draws closer to a permanent, but ignored, underclass.
A few striving bureaucratic men, eager to justify their paltry accomplishments as greatness, trumpet empty schemes over lasting prosperity. No proud project, no vainglorious vision, has improved the condition of those now distressed. On the contrary, there are likely more residents living in poverty in Whitewater today than in decades.
Municipal Finances.
Our city manager presides over a city more impoverished than when he first took office, and a municipal government whose future fiscal
prospects are precarious. The City of Whitewater’s own financial analysis paints a stark, bleak landscape. See, Whitewater’s Fiscal Trend Analysis. Whitewater’s prospects are troubled, as I have written then:
Municipal government’s revenues per capita.
Page 5 tells the tale on revenues per capita, from 1988 to 2009. Beginning in 2001, revenues per capita begin a precipitous plunge, as the city gets less each year in revenue. The city’s analysis, following the graph, is telling:
The warning trend is that there is a decrease in net operating revenues per capita occurring in Whitewater. Over the studied 21 year period, adjusting for inflation, revenues per capita has varied from $275.2 (1989) to $355.66 (2001). For 2009, the Revenue Per Capita equals $278.97. Since 2001, revenues per capita has been steadily declining. This reclects [sic] lack of growth in the City’s major revenue source, – state shared revenues.
It’s true, of course, that the ground on which so much relies has been the shifting (simply eroding, really) sand of shared revenues. In this critical respect, we are considerably different from most of Wisconsin communities of similar size. I’ve written on this topic before.
Municipal government’s net direct debt service.
Page 35 shows how the city’s net direct debt service has been rising markedly from 2005 through 2009. Here’s the city’s analysis:
According to credit industry standards, debt service on net direct debt exceeding 20 percent of operating revenues is considered a potential problem. Ten percent is considered acceptable.
In analyzing this trend, the City in 2006 had a percentage of 24.35% which is considerably above the credit industry standard.
However, because the City has issued $ 3,618,622 in new debt for TID#4 in 2005, $500,000 in 2006, and $5,600,000 in 2008, this percentage will be increasing. The general fund has only a small portion of the total debt service outstanding for the City. 85% of the net direct debt service is due to borrowings for TID #4. The balance of 15% is supported by the shared revenue utility payment from the power plant.
Policy statements should be developed by the City that would indicate desirable levels of debt service as well as procedures for analyzing future debt service. Suggested policies are that 1) total debt service for general obligation debt will not exceed 10 percent of annual operating revenues and 2) before bonded long-term debt is issued, the impact of debt service on total annual fixed costs will be analyzed.
Our municipal administration relies on a drying stream of state shared revenues. We rely on this more than most cities of similar size. See, The City Manager’s Selective and Deceptive Use of Data. Even as the city’s reliance on Madison proves imprudent, city manager Brunner has committed this small, struggling town to a tech park project that “relies on millions in public grants, millions in subsidized public bonds, will use a third of its space for a publicly-funded tenant, has no clear private purpose, violated commonsense competitive principles in awarding contracts, was once shut down for federal violations of obvious competitive rules, takes place in a town that has high poverty that the project has no hope of alleviating, and that’s nearly certain to fail as other projects of its kind typically do.” See, Whitewater’s Innovation Center: Good for Producing Innovative, ‘International’ Fairy tales.
For it all, what kind of budget does our city manager produce for 2011? Nothing but a status quo, kick-the-can-down-the-road effort. Here’s how, with America, Wisconsin, and Whitewater facing hard times, city manager Brunner describes his budget:
This slight increase in the tax rates won’t really put much of an impact on residents….
We try to sail a lean ship by producing a high level of services at the lowest tax rate possible.
Madison’s significant but dwindling shared revenues to Whitewater are responsible for this; the city manager’s budget is balanced through others’ earnings, not his own.
If our situation is troubled — and it is — Brunner can’t seem to grasp that whatever our relationship to other cities now, we need to improve our position. That means lower taxes and less spending. Brunner’s budget is about trudging along, preserving as much of government as possible, and hoping like mad that his administration can rely on grants and shared revenue for as long as possible, to keep going and generate publicity for showy projects.
Seeing how many plates a man can keep spinning at once isn’t prudent policy or good government; it’s a circus act.
Changes in Spending from the Proposed Budget.
I believe in a much smaller budget, with a minimum burden on taxpayers, and with preservation of services that recognize the community in which we actually live. Significantly, though, I am opposed to spending cuts that affect services disproportionately benefitting the disadvantaged. I also strongly oppose the city’s grand projects that, in the end, will either prove ineffectual, or a kind of corporate welfare (itself a mistake and disincentive to efficiency).
Here’s a copy of the 2011 proposed budget, with recommended spending reductions and a memo in reply from Whitewater’s police chief, Jim Coan, that I have attached at the end.
2011 Municipal Budget Proposal with Amendments. (pdf opens in new window)
One quick note: For all the millions involved, only two council members took the time to propose additional savings. Only two. That no others on our Common Council could find suggestions of their own to add to this list, is astonishing. Those two who have offered suggestions should be commended. They did the good work others have ignored.
Spending changes (either more or less):
1. Support all the proposed reductions in spending that council members Singer and Butler have, separately, proposed, with the change to police force reductions as note below. (Reductions over present.)
2. Establish a permanent position overseeing our food pantry and services for the needy. (Increase over present.) Principal task is to develop a modern and professional method of food distribution for the poor of Whitewater. Significant emphasis on finding a better location and contemporary standards for food distribution. This should be a three-year position, at a minimum. City to provide effective assistance to overcome objections. Rome was not built in a day.
3. Restore library hours. (Restoration over present proposed reduction.) These cuts disproportionately affect the disadvantaged. Those who have more should feel cuts first.
4. Keep parks and recreation fees where they are. (Restoration over proposed fee increase.) This idea is a diffident man’s cut, asking other people to pay more while unnecessary bureaucrats keep their jobs. A city manager who advocates cuts like this is more concerned about preserving an institutional status quo than making true reforms. (That’s a joke, of course — there’s not a reformist element anywhere in this municipal administration. It’s all status quo now, status quo tomorrow, status quo forever.)
5. Eliminate two administrative posts, effective March 31, from among the following four: assistant to the city manager, director of finance, director of neighborhood services, director of public works. One subordinate from these groups would become a team leader (if there are subordinates). (Reductions over present.) Which leader occupies these post is a concern of others; that we have too much administration is clear.
6. Return to the city any and all compensation the city manager receives for work on the Community Development Authority. (Reductions over present.) The best course would be to remove the city manager from this role, as it creates conflicts and allows only the speedier propagation and adoption of bad ideas.
7. Eliminate one FTE in the police department, as proposed, but for the administrative lieutenant’s position within the department. (Reductions over present.) These duties would become those of the police chief. We’re a small town – we don’t need that much administration. Which leader occupies the post is a concern of others; that we have too much administration is clear.
8. Reduce consulting expenses 25% over proposed budget. (Reductions over present.) Those leaders working in the administration should be expected to know and manage planning within their areas of responsibility. Those leaders who require significant assistance from outside consultants should not be retained.
Result: More services for the needy, while returning all remaining amounts to the taxpayers who, through their own efforts, earned them. We would have both a leaner and more humane municipal government. The arrogance of big projects in a small town has come only at the expense of ordinary residents.
For these changes, Whitewater would save hundreds of thousands dollars, offer more to residents, and bring this administration away from public relations and closer to worthy governance.