Seattle Neighborhood Coalition

One of the more interesting and informative community groups I've discovered here is the Seattle Neighborhood Coalition, which meets for breakfast on the second Saturday of every month. Each month there's a guest speaker (or panel) to shed light on important but often underreported aspects of city government. The best part is the knowledgeable and skeptical attendees and their tough questioning of the guests. I attend as often as I can.

This is the announcement of this Saturday's meeting:

This coming Saturday, November 13, The Seattle Neighborhood Coalition invites you to a discussion focused on the new contract between the city and Comcast the cable provider, nd programming at Seattle Channel. Tony Perez director of cable services and Gary Gibson director of Seattle Channel will be guests.

You should ask why would you want to give up a Saturday morning to hear about something that might be dull and only interest lawyers.

The answer is this contract has a great deal to do with how you get information about city affairs. In very simplistic terms here's why!

Seattle owns most of the poles on which Comcast sends it's signals around town. In exchange for the use of these poles the city is given access to cable channels space. One is SCAN the public access channel where individual citizens can create and broadcast their own TV programs. The other is SEATTLE CHANNEL the city government channel that brings you direct broadcasts of government at work. We wouldn't have either without a good contract.

In addition the director of Seattle Channel will be at our meeting and able to address questions about programming and content. Maybe you can ask why the mayor is featured so many times in one day.

We meet at 9:00AM, Saturday morning Nov. 13 at the Greenhouse Cafe 2205 7th. Av. See you there and bring a friend.

I've written about the Seattle Channel on this blog recently [here and here] (and even filed an official ethics complaint for lack of balance in its programming). I'll plan to be there this Saturday.

Kudos to SNC organizer Kent Kammerer, who also sends out summaries of each months' discussion. His write-up of last month's meeting, on the Seattle City Budget follows in the continued entry.

By popular request: A Summary of some of the October 9 meeting of the Seattle Neighborhood Coalition on Seattle's proposed 2005 budget. Please note, this summary mixes background with comment and should not be considered a verbatim record of all the expressed ideas.

SETTING THE STAGE

As the flush economy of the 90's waned the City of Seattle's revenues vanished along with the Dot-Com's and hundreds of other jobs. Riding the crest of the affluence, Seattle had hired new employees and government expanded, in part, because they could. Fiscal conservatives asserted mayors Rice and Shell, along with a willing city council, spent like teenagers with their first credit card. New city programs popped up everywhere and Seattle became known nationwide as the place to receive quality social services. Along with the general expense of government, the city also initiated many new capital projects; many financed on councilmanic bonds or borrowed money supported by levies. A library, a new City Hall, new parks projects, opera house etc. During recessions the city normally would have raised taxes to replenish it's general fund to make up for the shortfall, but I-747 ended that. The unthinkable had occurred, government would have to cut back.

It took awhile for the economic shock to be recognized by the city. The Washington Research Council was commissioned by a group of small businesses to prepare a study that would look at the next decade of the city's finances. It was a report the city didn't want to hear. In fact, some denied the indicators. The report was gloomy, suggesting that unless spending underwent major cuts, bankruptcy of the city was conceivable. (see presentation [large PPT])

Enter newly elected Mayor Greg Nickels. It was rumored his honor wasn’t enamored with some of the City Council's past sophomoric behavior. The new mayor would be "KING" with his own agenda. He immediately began seizing power from the council by taking them and the public out of the loop. He would not allow his department heads to go directly to the city council without his blessing. The mayor had his own agenda and to advance it he needed control the city's finances in order to wrestle money out of a budget hit hard with declining revenues. The mayor has proposed a budget for next year that some say show little cuts in upper management. He would ask already strapped citizens to pay extra fees for city services. Anger has risen because the mayor proposed parking fees at public parks. With a fee -for- services concept established, it would be a foot in the door to extend fees on countless other items. It becomes possible to imagine a future with pay turnstiles to enter a public park.

THE DISCUSSION:

Early discussion centered on both individual city programs that might be cut, to the broader concept of how the city, as an entity, perceives their role of providing city services and the relationship to spending money to support those services.

LONG RANGE VIEW
There was, for example, the assertion that the city never really adopts a long range view of its taxing vs. service role and instead, struggles each year determining priorities of individual programs. Program managers go to the Mayor and City Council with hat in hand pleading the case for funding. What the public considers basic services provided by their taxes may be viewed quite differently by a mayor with trolleys on his mind. It was suggested there was much to learn from New York City's past struggle with bankruptcy where there were plans to boost taxes on hot dogs from street vendors while many of the fortune 500 companies that had head offices in New York City moved to New Jersey where taxes were more favorable.

THE LEVY APPROACH TO TAXATION

Taxes pay for public services. Licata has speculated whether a special levy might be appropriate for supporting a police force. Should that occur some speculated that removing police, fire, and 911, from support from the general fund, in effect holds citizens hostage to special levies. “Inherent is the implied threat, VOTE YES or lose their services. Passing the levy would then give the mayor more money to allocate to special projects like planning for the in South Lake Union trolley

Should the special levy concept be taken seriously, what’s next? It was asked if the size of city government in FTE’s (number of employees) had a direct relationship to the population. In 1960 the population was 600,000, now the population is approximately 575,000. Should the number of city employees be correlated with the population? Are more non-essential jobs created?

PUBLIC NON-PROFITS AND PPP’S
There was an observation that the increase in the use of public non-profits and public/private partnerships really had no one looking analytically at a cost benefit analysis of these partnerships. Mayor Shell had earlier appointed a PPP (public private partnership) board to look at proposed partnerships to evaluate, if in fact, they would deliver the benefits promised. Not only is the PPP board not engaged, but also there are few standards of when they must be engaged and what criteria they must use in they’re analysis of what makes a “good” PPP investment. City council must address this issue now because the trend is for more PPP’s and public non-profits to take over even more of the city’s traditional services.

It was observed that financial oversight is never really taken to the level of comparing need vs. want. Instead, the city departments put out puff pieces with the required number of photos of the mayor to support their desire to either create a new service or retain the staff they already have. The problem is akin to the City Council, the Mayor and all departments having a joint checking account where no one is really responsible how it’s spent after the budget is created.

WHO CARRIES THE TAX LOAD?
It was pointed out that smaller businesses provide the tax money for 56% of the City budget but that the City takes their tax contribution for granted. Small businesses see the City’s contribution to South Lake Union and feel it is they who are financing the growth in that area. They assert that the City could ask for impact fees but do not. It was stated that about two years ago the city had engaged a study of impact fees and that the study revealed that they do no drive away business. Bellevue seems a reasonable example. Was the study suppressed because it did not coincide with Nickels policy in SLU?

THE SEATTLE PROCESS
Discussion developed over the issue of whether the so called “Seattle Process” was, in reality, a hindrance to new business development or merely a slogan voiced by developers who didn’t get their way. It was pointed out that very few impediments to development occur when the developer builds what is allowed within the existing zoning and development codes. Resistance occurs only when the developer attempts to manipulate the system and develop beyond what is allowed. Asking the development community to stick by the rules should not be attributed to excessive “process.” Critics of “Seattle Process” may mistake diligence in observing zoning and development codes with obstructionism. It was noted that most developers seek, above all else, predictability. They wish a level playing field and the clarity of law to protect their investment in property and planning without the city micromanaging their efforts. Citizens also expect predictability to protect their housing investment and have every right to object when the city changes the rules to favor development that goes beyond what was in place when property was purchased. Changing the rules wipes out many small businesses. Eliminating parking along Aurora is a death sentence to many.

Not only do small businesses supply a major portion of the tax burden, but the city also extracts from them multiple fees and permits. Considered of lesser value than a large employer, they also suffer a major impact from (up zoning) to increase density. The cumulative effect drives up taxes and forces the less competitive small businesses out of the city. Increased costs may not be as much an issue to large retailers or investors with deeper pockets.

WHAT IS A BASIC CITY SERVICE?
Another comment suggested that the city had lost sight of what constitutes basic city services. Does it constitute malfeasance for the city to not fund basic services yet invest large sums in new projects by reinterpreting what those basic services are each budget cycle? It was stated that city budgets should be built from the bottom up with starting basic services guaranteed.

WASTE IN GOVERNMENT
The discussion heard frequent complaints about excessive use of departmental publications with the required number of photos of the mayor promoting their new programs. The practice was described as nothing more than very expensive propaganda, especially when there are suggestions to charge citizens to use our parks.

OVERSIGHT
There were frequent suggestions that there were insufficient methods to oversee city spending. A watchdog mechanism is needed. It was noted that ironically we had such a mechanism built into our city charter in the form of an elected comptroller and elected city auditor independent of the mayor’s office and the city council. Those who wrote the original city charter understood the need for oversight in spending and budgeting. Norm Rice managed to convince the public that these elected positions weren’t essential and the public voted away their own protection. Some degree of financial oversight was also provided by the City Council when they were allowed to work directly with city departments and perform the time consuming and difficult task of evaluating the city budget. When the city council is out of the loop they have limited means to evaluate the effectiveness of programs. Now they are given a budget -- asked to approve it with far less involvement and time. It was mentioned that the CNC (City Neighborhood Council) had been sanctioned by ordinance to oversee the neighborhood-matching fund. While the matching fund ordinance did not grant this citizen body the authority to make budget recommendations on the general budget, it is an independent body whose opinion matters. It was commented that the children and education levy might not receive the cost benefit analysis it should. While levies are promoted by inferring that all “good citizens” should vote “yes” for these measures two problems can result. The first is that the use of the special levy creates an environment where the original funding body has less incentive for doing their job within the budget if they know a special levy will take care of the problem. In other words what should be part of basic service has been transferred to a special levy category. The second problem is that there is no mechanism to evaluate if the monies granted to these uses actually perform as expected. There is no systematic evaluation built in, no performance test, and no method to determine if the money was well spent. Some may produce excellent results others might be little more than job opportunities for project managers.

ORGANIZATIONS & NON PROFITS HAVE AN EDGE
A point was made that organizations with a full time staff have disproportionate influence during budget considerations. Whether they are private corporations, public/private partnerships, non-profits, or large single-issue organizations, they have the money to hire full time lobbyists, analysts, and executive directors to advance and promote their funding issues. The private citizen, neighborhoods or small interest groups don’t have the resources to meet with Mayors representatives or City Council members. Their issues often go unheeded while it’s the job of the full time lobbyists to see that their group’s interests are advanced.

BUDGET COMPLEXITY AND THE FINE PRINT
Everyone expressed the understanding that the city budget is not only big but also complex. On paper the budget is nearly 600 pages offering detail most citizens, including council members, don’t always understand. There are few independent citizens groups with the resources to analyze critically a city budget. Sometimes though individual items are ferreted out that arouse great interest. Take the cost to the city of creating “Allentown,” as South Lake Union and the Cascade neighborhood are now becoming known.

Water mains, $155,000, two sewer projects $830,000, and $260,000, 1.6 million for Mercer St. traffic study, and $30,000 for a parking management study, $3.4 million for a new substation to be paid from our light bills, a 5.2 million balloon payment on the Roy St. site. 2 million more for water main work necessary for the proposed trolley, funds to come from your water bills. The mayor proposes the city will pay only 1.6 to 2.0 million on actual construction costs for the trolley and possibly only 3 million a year to operate it. Will the public investment pay off when the cities own studies show that the trolley will attract only 30 riders per hour?

Overall Paul Allen and Vulcan will receive at least a 45 million benefit to stimulate their investment in the area. Three economic consultants who spoke at an earlier Coalition meeting believed that jobs will be produced, especially in the bio medical field but will they be in numbers that support the investment. Adding to this uncertainty is that many existing trade oriented businesses appear to be leaving.

Less understood by the public is that the city will receive little tax benefit from the new development. Many of the educational and medical research facilities proposed for the area are property tax exempt. So also are some of the proposed housing developments eligible for tax deferments. If tax increment financing should be employed most of the remaining tax money in the area would also be used to pay for the development. That means the schools are deprived as well as the city’s cost in supplying fire, police, water, sewer, and power costs.

HOW CAN THE PUBLIC BETTER PARTICIPATE IN THE BUDGET PROCESS?

It was suggested that the city could present sets of alternatives that are available for public scrutiny and comment. It’s a system every citizen understands. The paycheck / revenue determines what can be spent. The citizen often chooses between fixing the roof or building a new deck. When the cost of each is know they make a decision. If the city were to lay out the actual costs of planning for a new trolley against the cost of acquiring public open space, the public could make a choice. When the mayor suppresses competing ideas and closes the system to the public and the city council it leads to distrust.

A CONSENSUS OVERVIEW

There seemed consensus on two distinct concepts.

The first is that public subsidy for economic development in specific geographic areas is highly questionable. The state provides the mechanism for impact fees to pay for concurrency in infrastructure. Seattle makes no attempt to collect it! The immediate implication is that South Lake Union should not siphon funds that would otherwise go to maintaining other city basic services like parks, and public safety. There was consensus that there should be solid proof that if public funds are used for economic development or any non-profit or public non-profit or public/private partnership, that there must be a measurable cost benefit to the public interest.

There was also consensus on a second concept. The City can, and should, engage the whole community in a discussion that determines what is a basic set of city services that must always receive the highest priority. The City Council has announced, prior to their budget talks, a prioritization of how they will deal with budget items; but that list has always changed and also proved to be very flexible. The most influential or best-organized lobbies have always seemed to rank receive funding.

OPINION:

The City of Seattle must cut approximately 9 to 10 million dollars to achieve a balance with expected revenues. Along with this the City also must deal with over 500 million of deferred maintenance, not to mention costs to the public, of replacing the viaduct. The public is expected to pay for all this as well as make payments on all the bonds that have been sold for other public projects and the costs associated with the RTA and proposed monorail. The mayors proposed budget deals with none of that. How the budget is made deserves, public attention, education and comment.

The following recommendations for the budget process must be considered:

A substantial reserve fund must be set aside and maintained.

We must adopt a solid consistent policy that insures we maintain existing public facilities from the general fund before we contemplate funding new projects.

There is undeniable evidence that many of the City divisions/departments/offices have consistently retained highly paid administrative positions but have sacrificed lower paying jobs that often provide the direct services to citizens. There is also direct evidence that departments have deliberately chosen to make their more severe cuts in the most visible programs available to the public.

Cutting lower paid employees and keeping all the high paying jobs ranks as the top symptom of government mismanagement. The “lets make the cuts hurt” philosophy must also cease.

The city must engage in a dialogue with its citizens of just what are basic city services and define a list of priorities that must be consistently honored during the budget process.

The spending of huge amounts of money for economic development at the expense of providing other basic services is, at best, inappropriate when tax revenues are at a two-decade low. Other jurisdictions use impact fees to support new development as provided by the growth management act. While there will be some measure of job creation, or a least a shift in job types, there is in the South Lake Union project very little likelihood the return in revenue to the City will justify the cost to taxpayers. One can make a convincing argument that South Park or Georgetown or Columbia City need civic support far more than South Lake Union, but all the city’s resources are focused on SLU to support a project that most believe will occur with or without the City’s financial support.

While the private sector seems to be offering less pay than 5 years ago, we must face the reality that Seattle City Employees are very well paid. Private industry has offered some of their employees the choice of lower pay or the highway. Mayor Nickels has cultivated and exceptionally close relationship with all of Seattle employee unions. A relationship that might need revision with the need to cut close to 10 million from the budget.

The notion that the public should be charged a fee to use the parks or deprive shut-ins bookmobile services in order to help finance a trolley in South Lake Union is a decision repugnant to Seattleites. Seattle already has a fee for services – they are called taxes.

Posted by Stefan Sharkansky at November 08, 2004 11:10 AM | Email This