When Modesto Mayor Ted Brandvold took office earlier this year, he appointed a committee to review the City of Modesto’s budget. In 100 days, the committee was tasked with finding money to fund the police department and provide ideas for improving funding of various city departments.

This week, a nine page booklet, “not paid for at taxpayer expense,” was distributed to select individuals throughout the community. The booklet summarizes recommendations for delivering better government without raising taxes.

The booklet lists committee members as Mayor Brandvold, City Council members Kristi Ah You and Mani Grewal, and ten other prominent citizens. Citizens include: Chairperson Charles Bryant, CEO of a local company; Michael Zagaris, a local real estate developer; Dave Thomas, head of the Stanislaus Taxpayer’s Association; and Patricia Gillum, a Certified Public Accountant. The remaining committee members are current or former CEOs or executives in the private sector.

Even the casual reader may notice some glaring omissions in the report.

Urban development fees have not been properly updated in over ten years. Therefore, no one knows how large a subsidy the city is providing to the development industry. As one of the stated goals of the committee report is to eliminate subsidies, why is the biggest question mark facing the community overlooked?

In looking at the efficiencies and finances of all the departments within city government, no one looked at police and fire operations beyond the 911 system. For example, the fire department is notorious for allowing employees to work overtime. Many police officers also work overtime. Yet, the committee did not look at either department for cost savings, even though 75% of the city’s general fund goes to funding public safety.

The committee recommended merging a number of city administrative services with Stanislaus County, such as vehicle maintenance. Reaching agreements between the city and country regarding cost sharing could be problematic.

The committee could have suggested merging police and fire with the parallel county departments but did not. Administrative functions could be combined without loss of local control. Another option to save administrative costs for police and fire would be to merge them into one department of public safety, comparable to what the City of Sunnyvale did decades ago.

Pointing Out the Obvious

Included in the recommendations are ideas that have been around for years, such as finding someone to take over the management of Centre Plaza Convention Center, the golf courses and the airport, so that subsidies to these enterprises are eventually eliminated. Selling off any enterprise not breaking even was also mentioned.

The role of government is to provide services and amenities that the private sector is unwilling or unable to do. The city could sell off all of the amenities; we could live without golf courses, the convention center, the airport, or 14 parks. But would we be a better community after the sales?

Shuffling Cash

The biggest problem one may have with committee recommendations is that members have no institutional memory about why money is handled the way it is within city government.

One of the more prominent committee suggestions is to take all of the “surplus” cash out of the various departments and drop the money into the general fund. The downside would leave departments unable to deal with immediate short term emergencies. Response to emergencies would be delayed until the city council could meet, discuss, and appropriate funds. The collateral damage accrued during the waiting period could be substantial.

Department heads would have no ability to shuffle resources to meet citizens’ shifting demands for services. The fact that money has been saved in various accounts demonstrates that department managers have been behaving responsibly by not spending all the money allocated.

If reserve funds are drained, the incentive for department managers to save funds would be eliminated and could precipitate greater waste than what may now occur. Since departments currently tend to be understaffed anyway, having no cash reserve could be very detrimental to public service.

Committee Recommendation: Reduce Credit Card Use

When the city credit card system was established, the purpose was to make the tracking and auditing of expenses easier, to eliminate all cash transactions, and to reduce the cost of accounting. While the committee recommends reducing credit card use, it did not provide a cost-effective alternative. If misuse of credit cards is suspected, then enhancement of the auditing process may be a more cost effective alternative.

Creating More Work to Save Money

Many of the committee recommendations will require city staff to do more work in order to save money. The cost of the additional work will offset cost savings. There’s a need to discuss those recommendations—but that’s for another article.