Let's Saddle Up - Comments on the 2011 Draft City Budget

Our City has an unfunded liability of seven million dollars - the cost to bring the surface of the streets up to like-new condition. In fairness, we might not want to bring the streets to like-new conditions, but a bigger concern is that we have no idea what costs lie beneath the surface of the streets. This is not something we have to address by noon, but we do have to address it. Let's saddle up as part of our 2011 budget process. Here's how:

$25,000 should be budgeted for a robust study to combine the surface and subsurface street needs numbers. Then the community could discuss how to pull together a TABOR election in March 2012 to approve a property tax to fund a capital program to address maintaining the City's assets in proper condition. Let's ask Council to consider including this $25,000 in the 2011 budget. Our acting City manager has said including this item in the budget would be very helpful.

Ahead of the results of that study, the City will need to spend +/- $610,000 every year to keep the streets from getting worse while we're figuring out our capital program. That expenditure keeps our roads at a slightly worse condition that the average community in our region. If we do not properly fund, the streets will fall into a state of greater disrepair. The current draft budget includes only $300,000 for this item, a shortfall of $310,000. $300,000 is an imprudent approach to this need. The budget instead funds other initiatives. I beleive this is cross-threaded. I believe we should fund the upkeep of what we are already responsible for before we take on new initiatives. So, where could we get the $310,000 to fully fund this item? How do we pay for our streets?

a) We could pay $90,000 for City management, rather than the $180,000 suggested by the current draft budget. If we combine managerial skills with the Metro District, $90,000 is a very real number. So long as water is Job 1 in Castle Pines (North), let's not hire a City manager to supervise the Metro District. Let's instead hire a Metro District manager to also supervise functions of the City. If you add $90,000 to what the Metro District will pay for a manager, you can attract an individual to perform both tasks. This change provides $90,000 for streets.

b) We could pay only $96,000 for legal fees, rather than $192,000. If the City dissolution petition goes away, a lot of legal fees go away too at both the Metro District and the City. We might have to curtail some City initiatives if we spend less money on legal fees, but as slow as this economy is, what's the big rush? Rather than cancelling these initiatives, let's just wait to see if revenues prove higher than forecast. If and when we have the money, then we could ask the attorney to pursue those initiatives. The change provides $96,000 for streets.

c) We could pay only $37,500 for communications, rather than $75,000. We don't have any impact metrics to support an expenditure of this magnitude. Is the problem with the issues we're trying to communicate, or with how we communicate them? Until we find out, blogs are free. Facebook is free. Costs to keep fresh news flowing is about $2,000 per year. Website maintenance costs are small, as are costs to send E-mail blasts. If the Master Association stages events to support our sense of community, and if the Chamber advocates for the businesses in the community, why would we want to pay $75,000 for communications? This change provides $37,500 for streets.

d) We could pay only $36,000 for parks rather than $72,000 for parks. It's suggested the cost would remain the same for the park whether we combined forces with the Metro District or not. Rather than looking at incremental costs for one park, look to apply a single budget to all park management functions. See what you get. For example, installing more efficient rotary nozzles to irrigate the parks could reduce water costs and fund operation of the new park. The Metro District is budgeting $200,000 for the Dissolution process. What could the community derive instead from an investment of $200,000 in more efficient irrigation? This change provides $36,000.

e) We could pay only $24,360 for bookkeeping services rather than $48,720. $48,000 is a lot of money to keep our books, write checks, and help budget. Our current bookkeeper works with HOAs, and has no real expertise with other Cities. Let's offer Metro District staff an additional $24,360 to do our books too, and see if they'll say yes. This change provides $24,360 for streets. (While we could combine bookkeeping, we would need to conduct separate audits.)

f) We could pay only $21,200 for office space rather than $42,400. Let's take out a measuring tape and see how much square footage the City now leases, then measure the space in the upstairs loft of the Metro District (including the store room). Let's see if there's a fit. This change provides $21,200 for streets (and puts money in the Metro District's wallet).

If you total up the savings, that's an additional $305,060. If we need an additional $310,000 for streets, that's pretty close. Think about what we would have to give up to get our streets properly funded. It's really not very much. And if someone has a better idea on how to fund the streets, let's do that.

A fair question is, "How firm is this +/- $610,000 number?". Earlier in the year a study of the streets was scoped, and a vendor hired. The vendor drove all the streets, measuring the needs of the pavement surfaces. The results of the draft report were worked for a period of months to make sure they reflected reality. The draft was brought to final report. Still, this is a planning number. Actual costs could be $550,000. Actual costs could be $750,000. We cannot know for sure. However, it is prudent to take action to fund our best estimate. If we do not pursue adequate effort, the downside is steep. The $7 million figure will go much higher if the proper work is not performed. If costs are not in fact as high as suggested, funding can then be reprogrammed to other initiatives. If costs are higher, we may have to tighten our belts in other areas to provide for the needs of our streets. Let's act in good faith on this effort, and fund our best estimate at $610,000.

Don Bobeda made a pitch for Council to grant $10,000 to the Chamber of Commerce, and $5,000 for the Economic Development Council. I suggest the City provide that grant funding in 2011, one-half that amount in 2012, and tell the organizations now that they need to find their own funding from 2013 onward. This approach empowers the organizations to stand on their own feet, while giving them a chance to get started. Funding to support our community organizations is included in the draft budget. Let's not micromanage the efforts of these organizations, nor spend hours debating $5,000. Let's grant the money, with the proviso that it's going away, and so make hay while the sun shines. Empower the organizations to create successful futures for themselves. If in time their membership does not see value in their efforts, they should fail and try something else that can work.

Lastly, a good first step to a brighter future for the citizens of the community is to put the City's Dissolution Petition in our rearview mirror. It's time to saddle up and move on along. Let's offer sincere congratulations to the Metro District for their efforts on the interconnect pipeline with Centennial Water and Sanitation District. The news that this pipeline is completed will be the best news the citizens of this community have ever had! This interconnect is Job 1 for the citizens of the community. Let's support it, and not make it more difficult to achieve.

Is That What Cities Do?

I attended the City Council meeting on November 8th. While the meeting lasted over 3 ½ hours, there was not a great deal of substantive discussion.

The 2011 budget was presented to the public, with the hearing continued to the next meeting. Next year's budget will likely be adopted at the December 14th meeting.

The cost to maintain our streets, at the current average pavement condition index rating of 69, has been determined by a pavement study to be $610,000 per year. (The cost to make all repairs identified in the study is $7 million. The City doesn’t have anywhere near that much money. The City currently has no plan to provide for that capital need.) The current budgeted amount to go towards this need in 2011 is $300,000. How can we find the other $300,000 in the budget to properly fund this obligation? Or, would you like to see the streets fall into further disrepair?

$180,000 is aimed at a City manager. (Do we need $180,000 worth of city management? In a separate discussion it was asked why we have a Court. The answer was, “That’s what cities do”. Other cities pay managers $180,000, so we should too?) When the Dissolution Petition that the City has filed goes away, the Metro District can hire a new manager. Could the District pay their manager a few extra bucks to manage City operations too?

Legal fees increase to $192,000 for 2011. Regular attorney fees increase to $144,000, plus special counsel is budgeted at an additional $48,000. At $175 per hour, that’s 1,100 hours worth of lawyering. Is that what cities do? Would it be wise to back off on being so aggressive about ramping up every function a city does?

We're contemplating $372,000 for legal fees and a manager. Are we spending more on this than on keeping our streets in good shape? Is that what cities do?

$75,000 is targeted towards communications. If the Chamber of Commerce is going to represent the merchants in the area, and if the Master Association is going to stage community events, what exactly does the City need to spend $75,000 to communicate?

Parks maintenance is $72,000. I thought the Metro District maintained the parks, and did a pretty good job of it. Why do we need to add another layer of government to maintain our parks?

The cost of financial services is $48,720. Maybe we could pay the Metro District half that much to have their staff do our books too. What we do is not terribly complex, and their staff is good at minding the books. (If we hired such services from the District, we would have to have a different auditor from the District.)

The City Hall, yes the “City Hall” lease is $32,400. Could we lease the upstairs of the Metro District building for half that? Would the dividers in City Hall fit nicely in the Metro District loft?

If we halved these costs we would find the $300,000 that’s needed for the streets. That money would then go to pay for what cities really are supposed to do. From there all we have to do pull together a capital plan to fund the big expenses, present the need to the citizens, and ask for the taxes needed to pay the bill.