City Hall and the Tea Party - 2011

This is my first post cross-posted to sdrostra.com. Dave Maass asked me earlier about what I thought the Tea Party would be watching locally in 2011. As the unofficial chief ideologist, I thought the question deserved an answer. (By the way, no one selected me, in a decentralized organization, people just do the job that needs to get done. Shared vision is the glue that keeps the Tea Party together, not a party organization.) Here is what we will be watching:

City Hall. Will the politicians at City Hall vote themselves new digs, without a vote of the people? Will they have the audacity to put it on the ballot, where I predict flaming defeat? This will be a litmus test for the new and more evenly balanced council. Rumors that this boondoggle might move ahead are in print.

Pensions. Despite a small bit of good news from this morning's paper, the pension problem is the main fiscal problem facing the City of San Diego. Regardless of the faux-fabulous headline: BUDGET GAP SHRINKS, the actual fact is that the city has 67.1% of the funding needed to close a $2.14 billion gap (technically, the unfunded actuarial liability), up from 66.5%, hardly cause for rejoicing, or even a headline for that matter. My headline would have been: Tiny Progress on Pension Funding. During the November campaign, Howard Wayne performed a public service by explaining that the employees are not contributing to their own pensions to the extent allowed by law and that increasing these required contributions would be an ethical and legal way to close the gap. Even though I endorsed Lorie Zapf, I want to give credit when Democrats positively contribute to the dialog. Carl DeMaio has been doing a good job of pointing out other ways that the city can deal with this funding crisis, with ideas like freezing pay increases and not calculating certain benefits as part of base salary. Perhaps this sounds a bit arcane, but this is the hard work that needs to be done to legally and ethically meet the city's pension obligations without increasing taxes. But the other key component is the number of employees. This brings us to another key issue.

Managed Competition. The issue of managed competition makes my blood boil, because it is a proven way to reduce the costs of city services, but it has been obstructed by left leaning council members since 2006. Often times, even when the city department wins the competition, the taxpayers still end up winners because to win the competition, that department streamlines its own operations. Today's U-T offers a glimmer of hope in this area, with Mayor Sanders announcing details of competing street sweeping and public utilities. The article only identified 134 full time employees impacted. Certainly a start, but much more needs to be done. We will be watching.

Lorie Zapf. Someone we will be watching is new council member, Lorie Zapf. (Disclosure: I live in District 6.) Lorie campaigned on reigning in non-essential spending, including dealing with the pension problem, to focus on public safety. She has largely disappeared from the radar following her election, although she did do a phone interview with LaDona Harvey on KOGO. The rumor around her possible support for a new City Hall is driving me nuts because it is so plainly contrary to her stated campaign positions. I have yet to receive a satisfactory answer, even though staffer Brian Pepin left me a voice message. This, from an initial inquiry before Christmas. My honest concern is that Lorie is beholden to business interests who helped get her elected. Nothing wrong with business, per se, but here in San Diego, they tend to team up with government in sweetheart deals not in the public interest. Speaking of potential deals,

Charger Stadium. I am a Charger fan, but I don't want the city subsidizing their stadium, nor the Padres, for that matter. Professional sports are businesses that should make a profit, period. It is not up to us, as taxpayers, to make them profitable. We will be watching the city council's actions. The shenanigans of our Republican mayor don't leave me confident that we can just trust the government on this one. So who will be the new mayor after the 2012 elections?

Carl DeMaio is a council member whom we will be watching. I have really loved much of what he has done over the last year, see the link. However, I have heard some private grumblings among Tea Party activists about him, so I will be digging deeper.

That's it, there are certainly other things to keep an eye on, but B-Daddy's Book of Management, Rule #2 is "The commodity in shortest supply is management attention." It behooves us to keep our eyes on the most important issues.

More Reasons to Vote Against Proposition D

City strikes deal with unions to allow outside bids

. . . or so states the newspaper headline. At first, it sounds like the city council is working to keep its promises to get Proposition D, but read the fine print, as pointed out by Carl DeMaio. Although the outside bidders do not have to provide health care benefits, as previously demanded by the city's unions, two other factors make a mockery of this process:

City Councilman Carl DeMaio, who opposes Proposition D, said the managed competition guide is a watered-down version of what Sanders proposed last year and creates several opportunities for the council to avoid outsourcing city jobs, such as not requiring the city to accept the lowest bid. He also noted that, in addition to their 10 percent advantage, city workers don’t include annual pension costs in their bids — one of the most significant expenses in each department’s budget.

The 10 percent advantage is a provision that the winning bidder must be 10% less expensive than the city. Unfortunately, I don't care if they are slightly more expensive, if we could offload pension and health care obligations for city workers.

The deal isn't done either, city union members have to approve the negotiated process for outsourcing. Hard to predict how that vote will go. Taking the pensions out of the calculation gives them a significant advantage, but who knows, their salary structure still might be too high to withstand competition.

Until we see actual outsourcing, we should not be voting for tax increases.

No On Prop D in San Diego

Do you think they'll figure out we should just start the reforms before we ask for the money?

The U-T got this one right on the editorial page, with the following headline:

Prop D: Does mayor really have a hammer?

The editorial board argues in essence, that Proposition D doesn't give the mayor the hammer to reform spending that Sanders and Frye argue for in the front of the Dialog section. Because this is getting adequate publicity and the No campaign seems to be adequately funded, for now, I may not spend much time on this issue, core as it is to the Tea Party philosophy. A few points from the editorial:

Given that five City Council members were ready to place the sales tax proposal on the ballot without linking it to reforms and that the council has stalled outsourcing of some city services despite a 2006 voter mandate to do so, Sanders’ comments are highly reassuring. They suggest reform savings would be on the high end of the $700,000 to $85 million-plus range of annual savings cited in ballot language.

But does the mayor really have the hammer he says? City Attorney Jan Goldsmith doesn’t think so.

This goes to my basic argument about Proposition D. Structural budget reform, pension reforms and aggressive outsourcing of city services can be performed right now, without the need for a half cent sales tax increase. If the ruling class was serious about reducing spending they would show good faith by taking those actions now, in advance of any vote. That they want the people to pony up first is prima facie evidence that they cannot be trusted. Kevin Faulconer and Carl DiMaio echo my sentiments:

Opponents, such as Councilmen Kevin Faulconer and Carl DeMaio, rightfully pointed out that many of the reforms listed in the ballot measure are those the council has been working on already for years with no success. Further, they argue, no one knows how much money the city might save by implementing all the reforms. They expressed doubt that the package alone could fix the city's mounting obligations forever. It was another example, they said, of city politicians kicking the can down the road on the backs of taxpayers.

It is analogous to the border situation. We all know that aggressively securing the border is not a sufficient condition to solve our immigration woes; but it is a necessary first step. Every day that the Congress and the President fail to perform this basic function, is another day that deepens our distrust of any "comprehensive plan" that any of them may propose. The only way to win back trust is to secure the border. The only way for our city council to win back trust is to deal with out of control spending on employees salaries and pensions. Do a good job and we might not even need to talk about a tax increase; but if it still looks required, we might be willing to listen. Until you get serious, NO DEAL!

Never Let a Tragedy Go To Waste - Local Version UPDATE

The tragic choking death of a two year old, purportedly because of slow paramedic response due to rolling brownouts of firefighting station "brownouts" is being used to push a half cent sales tax increase on the city. You can judge for yourself if the brownout was significant by viewing the linked time line. That local politicians would choose to do so is both highly cynical and sadly typical. I did not use a picture of the deceased for illustration, because this issue is really about the two illustrations pictured, a new library and new city hall. At a time when the city council is making plans for a new city hall and a new central library, claiming that the tax increase is necessary for firefighting and paramedic services is demonstrably false.

First, by refusing to make any progress on managed competition, or outsourcing, the council has failed to reap available savings. As I posted earlier, it was no coincidence that the proposal for the half cent sales tax increase surfaced on the same day as the proposed initiative to force more outsourcing failed to make the ballot.

Second, the manner in which the firefighters are paid needs to be examined. Carl DeMaio, a personal hero of mine, lays out the excessive pay and overtime in the fire department itself in the following article.

The salary list also demonstrates excessive compensation across the city's Fire Department, which is represented by what is arguably the city's most powerful union. In fact, firefighters comprise nearly half the membership in the “$100,000 Club” at City Hall. When comp overtime is factored into total compensation, the number of firefighters receiving net compensation value of more than $100,000 a year jumps to 371 – that's 40 percent of the active city firefighters earning six figures or more.

Of the firefighters who made the “$100,000 Club,” many ended up taking in between $35,000 and $45,000 in overtime during one year. One fire engineer alone was awarded $74,028 in overtime.

Michael Stetz in the Union-Tribune also looks into this issue.

In 2006, our newspaper reported how four San Diego fire officials did this nifty trick: They moved up to higher-paying top management positions for a year or two, then went back to their old jobs. That boosted their pensions by as much as $30,000 a year. For one, it kicked up his pension to $133,000 a year.

In 2008, the third- and fourth-highest paid city employees were fire battalion chiefs who earned $228,000 and $209,000, respectively — more than the police chief.

In 2009, our newspaper reported how 1,560 city employees made more than $100,000 annually during the previous year. Nearly one-third of those happened to be fire department employees.

Maybe the answer to the city's firefighting budget woes would be to pay far less overtime, and use the savings to hire entry level firefighters, reducing the number of engines that must be idled. The monumental waste evident in the fire department, as evidenced above, is a clear indicator that almost any reasonable management review could wring savings that would boost protection for the citizens who pay their salaries.

Local governments have a long history of reducing vital services when faced with tax revolts. Now that we have an active tea party movement, we won't let them get away with this.

UPDATE

Temple of Mut has her own take on the situation and calls into question the timing of tieing a toddler's death to the brownouts. She provides convenient email addresses to contact your local council member.

San Diego Tax and Spend Alert

Not coincidentally, the same day that Carl DeMaio's outsourcing initiative failed to make the November ballot, comes news that Mayor Jerry Sanders is considering putting a half-cent sales tax increase on the same November ballot (H/T Temple of Mut.) The city council and the mayor have failed to outsource a single service to save money, even though the voters approved managed competition two years ago. The lack of coincidence is that the only reasonable way to cut the cost of government is to reduce labor costs by outsourcing. That way, the big overhang of future obligations from city pensions can start to be reduced. Carl DeMaio had this to say about the situation:

Voters overwhelmingly passed proposition C in 2006 to require the city to use regular competitive bidding on city services with the exception of police and fire. And so four years have passed, not one city service, not one function not even one taxpayer dollar in the city budget has been subjected to managed competition under proposition C.

Richard Rider discusses the idea of a ballot measure in the article about the tax increase:

Taxpayer advocate Richard Rider said any proposed tax increase from Sanders would be shot down by voters because they believe they’re already paying enough.

“If he likes to get his teeth kicked in, I guess he can go ahead,” Rider said.

Rider also said the proposed ballot measure would stop financial reforms already under way.

“Nobody is going to do anything else in terms of reform,” he said. “They’re going to hope that they can get bailed out with taxes.”

Exaclty. If there is an issue that conservatives, libertarians, Tea Partyers and taxpayers can get together on, this is it. If Sanders proposes this initiative, I will never vote for him again.

Not convinced of the efficacy of outsourcing? See Adam Summers article for the Reason Foundation. Just one example:

The City of Phoenix implemented a managed competition program in the late 1970s to address a looming fiscal crisis. One of its successful competitions was for trash and recycling collection. The city was divided into six geographic regions and collection services in each sector were put up for bid on a rotating basis. Some bids were won by the city, and others were won by private providers. As a result of the competition, the city has saved about $25 million over the past 30 years. Add in savings for competitions for solid waste transfer hauling and landfill operations and the city has saved a total of almost $40 million.

I would like to hear Howard Wayne and Lori Zapf provide their views on the proposed tax increase. I have my suspicions, but maybe we can find out.

Carl DeMaio - Local Hero

Carl DeMaio took on the unions today and delivered 138,000 signatures to put a managed competition measure on the ballot today. He did so after taking a bus ride highlighting the city services that have been cut back due to the ongoing budget issues, precipitated by the pensions imbroglio. He was, of course, opposed by the city's unions along the way. As I have said before, reducing the city payroll is only way out of our budget mess in the long run. Of course, what would a little Tea Party style activity be without some union thuggery, mild though it might be in this case:

There was a brief scuffle as a man dressed as Pinocchio thrust his long nose in DeMaio's face. Police had to break up the crowd.

I note that Carl DeMaio endorsed Lorie Zapf, despite the mortgage issues.