Some days the City budget process reminds me of a Motely Crue mosh pit that I visited in 1991.  Other times it seems like we're going to mosh and everyone walks away, thinking better of it.  That second is pretty much what happened last night.  The Council was presented by the City Manager with 3 possible scenarios.  All had various line items and numbers that ranged from the existing tax rate to much, much higher rates.  Some had a line item for "Jail Fund" and others had one for "Community reinvestment" (or something close to that).  As always, several different variables that help the Council arrive at a rate.

Recall that the pain point here has been the creation of a "Jail Levy" by the City Manager.  That essentially removes revenue from the General Fund that is shared with the schools.  I was very encouraged by the discussion I heard last night.  Mr. Way was as analytical as ever – glad to see that – and I thought Mr. Elston had some interesting observations.  The Mayor offered what I thought was a strong and thoughtful commitment at the end to working with the schools and inside of our existing agreements.  He also encouraged the Council to do the same.  I was glad to see the Mayor do that.  His commitment to our community is undiminished and he's really good at that stuff.  Although I hate to lose him, I would reiterate my endorsement of his candidacy for Senate.

The Manager did offer that he thought the Council had the authority to set aside revenue from the sharing agreement as they see fit.  I agree that the Council has that authority but it's an authority that should never be exercised unilaterally.  If revenue is going to be "carved out" it should only ever be done in consultation with the schools.  It takes a lot more work to build trust between institutions than it does to tear it down.  In this particular instance, creating a "jail levy" seems wrongheaded to me.  In contrast to standing up an entire Fire department from scratch and funding a long-term capital plan, the Jail has been around since I was in short pants.  This seems like an operational cost that the city just doesn't want to pay.  Yes, it's expensive but the revenue sharing agreement is based on the expectation that as the City's costs go up, so do the schools.  This is, in fact, the case. 

It might be that this is just too big a nut to crack in a single year – we may need a hybrid solution where the city creates a levy that sunsets in a couple of years as the levy is merged into the operating budget.  I don't know, maybe that's too silly a construct but it's a thought.  In any event, the Council voted to advertise the Managers recommendation of $1.39.  What this means is that this is the highest rate that can be enacted by the Council.  I view this as a good thing.  I don't know whether or not the Council will elect to set the rate at $1.39 but it gives them room to maneuver and, given their comments last night, they are inclined to work with the schools to get where we all need to go.

I'm encouraged, but we'll have to keep watching to make sure our elected bodies work together!  This sort of uncertainty certainly highlights the need for longer-term planning.

Soooo….let me get you two pieces of info before I get started:  One – the schools and the City have this thing called the "Revenue sharing agreement".  It says that 58.5% of general fund revenues are to be shared with the schools (whether you love or hate it really doesn't matter right now).  The "General Fund" is comprised of property taxes, business taxes and a few other taxes.  When the City setup the fire levy, we met with the schools in advance and increased the percentage of the general fund they received to compensate for the removal of the fire budget from the General Fund.  Ok, hold on to this for a minute.

Two – The cost of operating the jail has continued to climb.  We have been locking up more people and, because we're short at least one judge, people are staying in jail longer when they aren't released before trial.  Some of that operating cost was built into the budget but over the years as the costs climbed, the Managers of years past "fixed" the situation by using savings accumulated over the course of the year to pay the balance due to the county.  Those savings are collectively called "Year-End funds."  As long as the budget variance wasn't much it wasn't a big deal but it has become an operating expense and not a one-off.   ok, also hold on to this.

Now comes the rest: the proposed budget was never really presented to the public.  The Manager gave a short speech and that was it.  I was disappointed that there was no presentation.  Really, the first time the public will see a budget presentation will be right before the public hearing!!  That's not very transparent.  In looking at the budget forecast an odd thing turns up.  It's easier to show than describe so here:

This is a list (out of the forecast) of all of the tax revenues that the city is to share with the schools.  Real Estate, Personal property, etc, etc all makes sense but wait, what's that last?  The jail is revenue to share?  I didn't know we made money on the jail?….hmmmm…Oh, no…oh my.  It's in parens so it's a "negative revenue" to share.  That's interesting.  My take on that is the proposed budget takes about $1.2 million right off the top before revenue is shared with the schools!  I've checked with other folks and the consensus is that this is exactly what's happening.  Put differently, the City's base budget doesn't include enough revenue to fund our obligation to the jail so we are taking money from our kids education and putting it towards the jail.  Krooks before Kids?  Doesn't sound like a great strategy to me and this proposal should be DOA.

I don't see how, given the revenue sharing agreement, the proposal can just strip a million bucks right off the top.  The City has never done that before that I can recall.  I've read the revenue agreement and I can't see where this is something allowed.  Yes, running a jail is expensive.  No, I don't want to pay more taxes but, unless we're going to go all "Sheriff Joe" and put up a tent over by the airport, we have to have an operating jail and the revenue sharing agreement (again, liking it isn't germane) foresees that as the city's operating expenses go up, the schools will follow a similar trend.  Look, until about 60 days ago it was me on the other side of the dias so I'm sensitive to the fact that the revenue sharing agreement makes things more expensive for the city but enrollment has continued to climb and operational costs, including salaries, don't get cheaper.  Just like the City, the Schools have seen their expenses go up.  

I'd like to see the Council cowboy up and take this on.  We don't have endless resources and I don't want another tax increase but the elected bodies have to sort something out here.