Once the celebrating ends and the last bit of purple confetti is swept away, reality begins.
A few weeks after the council approved a non binding $258 million term sheet. City Manager John Shirey told the City Council that the city is facing its own “fiscal cliff” in six years, when an increase in the sales tax rate expires and the city’s required contributions to the state pension fund are expected to spike by as much as $17 million. What’s more, Shirey said the city faces an unfunded liability in retiree medical costs of $440 million, a number that is increasing by the day. The city has already addressed cumulative deficits of more than $240 million over the past seven years, said Leyne Milstein, city finance director. Those deficits are projected to continue, as the city grapples with increasing employee costs and modest increases in key revenue streams such as property and sales tax. “For the first time in many years, we’re actually showing revenue growth,” Shirey said. “The bad news is that our growth is a lot slower and a lot less than our neighbors’.”
Crime continue to rise in this city.The Police department has lost more than 300 sworn officers and civilian staff members and more than 30 percent of its budget since 2008. In 2011 the police department eliminated the vice, narcotics, financial crimes and undercover gang squads, sending many detectives back to patrol; and thinned the auto theft, forensics and canine units. Police officers no longer responded to burglaries, misdemeanors or minor traffic accidents.
Firemen were cut last year. Other essential services were closed completely or cut back in this city of nearly a half million people.
Sacramento and Stockton California
Ten years ago Stockton City Leaders told citizens an entertainment complex would revitalize downtown section of the city. Retail had long abandoned the city’s core and many of the buildings stand vacant.
Eight years ago the Stockton Arena, Ballpark, Hotel and Arena opened with much fanfare. Today those same store fronts remained vacant. The arena is underutilized and has lost money for the city since its inception.
A blistering grand jury report issued Thursday, skewers former Mayor Gary Podesto and then-City Manager Mark Lewis for setting Stockton on a crash course toward bankruptcy In the grand jury’s investigation, Podesto said, also failed to factor in a $125 million pension obligation bond the city issued after his term and millions the city spent to repair streets and build community centers.
The report titled “Recovering from Stockton’s Financial Sinkhole – Don’t Fall Back In,” doesn’t identify those onetime city leaders by name, but it targets two driving figures by job title behind building the downtown waterfront sports complex.
A witness testified before the grand jury that a former city manager and mayor ordered the city auditor not to delve into general budget issues, the report says.
“A former mayor would marginalize any council member questioning or opposing the mayor’s desired programs, and sought to limit public discussion of important financial matter,” the report says.
March 26, 2013 Mayor Kevin Johnson and six members of the City Council approved a complex $258 (non binding) million dollar term sheet. The Mayor and council had less than 72 hours to view the document before voting on it. The term sheet was approved before citizens could comment.
The Mayor and leaders believe, the new Arena will revitalize downtown.
Critics of the term sheet says the plans to protect to general fund are overly optimistic, other’s believe the calculations are incorrect.
At a public forum in March, City Manager John Shirey was asked about Stockton. He quickly dismissed Stockton,nearly suggesting Sacramento’s financial problems were under control.
There are several Cities with Professional Sports teams whose budgets are underwater due to decisions made for them with revenues diverted from essential service to make up for the shortfall.
Stockton is in the news daily, the cities police force has been slashed due to the city’s financial condition. In 2012, Stockton was the second most dangerous city after Oakland (Oakland has also cut its police force) The quality of life for it’s citizens have reached an all time low. In 1999 and 2004 Stockton received an All America City award from the National Civic League. In 2009 and 2011 Forbes magazine said Stockton was the most miserable city in the Nation.
Sacramento economy has many things in common with Stockton. The downturn of real estate dramatically affected budgets of both cities. Both cities have reduced city services, reduced police and fire personnel and both cities have underfunded pensions.
Should any element of the city’s arena predictions fail, the shortfall will come from the general fund. Resulting in a further reductions of city services and staff.
The citizens of Stockton did not vote on the Entertainment Center. Its very possible they may have approved it, however their future was decided for them. In Sacramento, the citizens should a say in determining theirs.