Modesto Amgen: Seed Money or Wasted Money?

On February 3^rd, a slim majority of the Modesto City Council, led by outgoing Mayor Garrad Marsh, voted to donate $75,000 to the Amgen bicycle tour to pay for an overnight stay of bicycle riders. Was the expenditure a sound investment or a waste of money? We don’t know.

Citizens are having a lot of trouble understanding the decision, especially since they were previously told of the need for a sales tax increase due to severe budget distress. Many argue that the $75,000 could have been spent on more important services such as public safety or even street sweeping.

Mayor-elect Ted Branvold’s first act after Garrad Marsh conceded probably should have been to appear at the council meeting to oppose the appropriation, as the funds will be disbursed while he is in office. Now, absent his overt opposition, critics will hold him accountable if the donation does not benefit the community.

Seed Money

In local politics, the justification for spending money in a dubious manner has often been explained by the need for “seed money.” The theory is that if a little bit of money is strategically “planted,” the seed will grow into something significant and good for the community.

The justification for gifting $75,000 for the Amgen tour is that the city might get future business from the bicycle race because of the goodwill generated from the donation.  Any payoff would be at least a year from now (or maybe never).  Politically, one might say the expenditure was a boneheaded decision that would never be made before an election, which is why it happened a day after the runoff.

The Convention Center Seed

The Modesto Convention Center was a very large seed that was planted in the early 1980’s. The city council at the time thought that spending a large sum for the project would reap exponential benefits in return.

The council thought it was planting a fertile lawn, but discovered after the fact that it had unwittingly planted large bamboo, sucking up taxpayer money with annual losses from the year of inception to the present, with no end in sight.

Today, the decision appears to have been boneheaded. Maybe it could have been a great project if someone within city government had insisted on sound business practices. For example, if rental rates had been based on supply and demand rather than fixed too high, the facility probably could have been busier than it has been over the years. In time, the annual losses might have been reduced or eliminated.

Political Payback?

During the campaign for Mayor of Modesto, Mayor-Elect Brandvold opposed Garrad Marsh’s efforts to pass a sales tax increase. Mr. Brandvold stated that the city has enough tax revenue and does not need any additional income; he made the statement without even looking at the latest budget!

Now that Mr. Branvold has assumed office, the outgoing mayor has left the new mayor a $75,000 expense that has infuriated taxpayers. Taxpayers are less trusting of their elected leaders now than they were on the day of the election. Should he decide he needs one, the new mayor most likely won’t get any agreement from taxpayers for a future sales tax increase.

A Promise to Look at the Budget

Shortly after Mr. Marsh conceded the runoff election, incoming Mayor Brandvold promised to closely scrutinize the budget and find savings. The city manager and  Modesto’s Finance Director normally prepare the budget.  If Mayor Brandvold follows through with his promise, then he will either validate the work of the city employees or discredit them.

During the campaign, Mr. Brandvold charged that there is much waste in the city budget. As the term “waste” is subjective, citizens should expect changes in priorities and expenditures. The eliminated priorities will be called “waste.”

Political Advantages of “Bankrupt” Government

If the Modesto has no money, it can’t give city employees pay raises. It also has an excuse for cutting services. The lack of money also prevents the city council from making bonehead expenditures, at least theoretically. Such expenditures might include money for new initiatives, or for subsidizing special interest groups without cutting services that may cost votes at the next election—whether such expenditures are wasteful depends on the observer or beneficiary of the expenditure.

Rest assured that no matter what they are, the incoming administration will have the funds to pay for the Mayor’s priorities. If he deems the services you receive as “waste,” too bad for you when they are eliminated.