Newest articles on The Sacramento Press tagged as "leyne milstein"

City Finance Division audit finds lost revenue potential

2011-08-18T01:39:21Z

Is the city of Sacramento losing out on an opportunity to bring in more revenue? According to the most recent city audit, the answer is yes.

In a report to the City Council Tuesday, City Auditor Jorge Oseguera outlined four areas for needed improvement in the Revenue Collections department of the city’s Finance Division, along with 12 recommendations for remedying the problem areas.

The audit, which was started in late November 2010, found that the city could improve its cash handling procedures, that the performance measures for Revenue Division management lack efficiency and the process for collecting transfer tax revenue is inefficient.

“(The Finance Department) does have good practices in place as far as safeguarding the city’s assets,” Oseguera said Tuesday. “We’d like to see better-documented procedures so we can be more in line with the city’s expectations.”

The fourth area that city auditing staff focused on was the Transient Occupancy Tax process, and this is where a large potential for increased city revenue was found.

Transient occupancy tax (TOT) is charged by hotel operators on hotel guests who stay for less than 30 days in a room. The tax is charged at a rate of 12 percent of the room charge, according to the audit report.

Hotel guests generally pay the tax directly to the hotel operator when paying the room charge. The operator then remits the full amount of the TOT collected each month to the city.

According to the audit, nearly $17 million in TOT revenue was collected in fiscal year 2009-10, representing 6.5 percent of city tax revenue and 2.1 percent of total city revenue.

Despite TOT being such a large source of city revenue with clearly outlined penalties for nonpayment or fraud, the audit reports, this revenue has not been audited since fiscal year 1996-97.

Instead, the city relies solely on hotels’ calculations of the TOT due.

With hotel operators self-reporting the TOT they charge to hotel guests and sending the amount collected to the city, it is possible that a hotel may be operating and not remit TOT collected to the city, or that a hotel could charge unsuspecting guests the TOT and retain the additional revenue, the audit states.

The audit findings recommend auditing the TOT process to better identify potential revenue increases from applying city code as it’s written – including penalties for late payments and interest on underpayments.

The city’s last audit of the TOT process was 15 years ago, Oseguera said, and in the year following that audit, the city saw an increase in overall tax collected of more than 20 percent.

According to projections in the revenue collections audit, a TOT audit would cost approximately $83,000 – but it could mean as much as a $2.4 million increase in annual city revenues if the results are similar to those following the last audit in 1997.

According to the report, an audit of TOT revenue was attempted in 2003, but the auditing firm raised concerns about confusion between the TOT policy and city code and the audit was stopped. Since then, the TOT policy has been updated.

Councilman Steve Cohn, chairman of the city Auditing Committee, said Tuesday that the recommendations in the recent audit report are items the city should definitely follow up on – especially the collection of hotel taxes.

“(That one) could be a big-money item,” Cohn said, “so we really need to follow up quickly.”

In a response letter to the city auditor, Leyne Milstein, finance director of the city Finance Division, said she agreed with the findings of the revenue collections audit report.

Milstein wrote that she was “very pleased” with the “professional efforts” of the city auditor and his staff.

Milstein said the work on a TOT audit is scheduled to start this summer and that, although there are mechanisms in place to adequately enforce the uniform TOT per city code, the division will take steps to document the process and keep it up to date for further review by the audit department.

Oseguera said the Revenue Division has already requested the firm Muni Services to do the TOT audit. Muni Services currently has a contract with the city to provide other analyses, Oseguera said, so this audit would fall under that contract.

Although there is not yet an established timeframe for completing a review and audit of the TOT process, Oseguera said he will include it as part of the followup process that he has for all of the city’s audits.

Oseguera said he follows up every six months with audited departments to evaluate how staff went about applying any recommendations.

“We do (the followup) to ensure that none of (the recommendations) get shelved,” Oseguera said. “We continue to report back on (them) until the risks that we identified and the remedies we recommended have been fully implemented.”

The city auditor is tasked with completing three to four audits per year, and the revenue collections audit was the third and final one in the 2010-11 fiscal year.

City audits are scheduled every year during the budget process, Cohn said, and the next audits scheduled include reviews of fire inspection fees, city-wide supplemental pay, city sidewalk repair process and a 3-1-1 call center audit.

Additionally, Cohn said Oseguera and his staff are working with an outside firm to review the city’s golf course maintenance.

Cohn said council members hope to have that audit completed by the end of 2011 so a decision could be made on contracting out golf course maintenance by the middle of 2012.

Mayor Kevin Johnson said at his weekly press conference Tuesday that he has been supportive of the audit process since he came into office, and he’s pleased to see the work Oseguera and his staff are doing.

“I felt there was waste and fraud and abuse and inefficiencies and things we could do to consolidate,” Johnson said. “We are finally at that point where we’re auditing different (city) departments and every month bringing one forward.”

Johnson said the next step for the council after reviewing the audit is to act on the recommendations as soon as possible.

“For us, you gotta find ways to do more with less, especially in a down economy,” Johnson said. “There’s certain things we can do to consolidate our effort that make us smarter and more efficient and cost-effective.”

Cohn agreed, saying he thinks the audits offer good insight into the efficiency of city government and how it handles practices and procedures.

“Generally, the audits point out things that really need to be done,” Cohn agreed. “We see how we can get additional revenues or reduce costs in the (auditor’s) suggestions. It’s good housekeeping.”

Cohn added that the Audit Department is “very professional” and the fact that it is doing these audits will “make staff a little more on their toes.”

Read the Revenue Collection Audit here.

Melissa Corker is a Staff Reporter for The Sacramento Press. Follw her on Twitter @MelissaCorker.

State budget brings good news and bad news for Sacramento

2011-07-14T01:39:44Z

The new California state budget reduced spending by $15 billion and potentially includes an additional $2.5 billion in cuts – but it’s not all bad news for Sacramento.

Some of the impacts of the state budget on Sacramento were outlined at the City Council meeting Tuesday, most notably problems stemming from changes to redevelopment, realignment and motor vehicle license fees.

“The best thing I can say is that it was an on-time budget,” said David Jones, lobbyist for the city of Sacramento.

The budget was balanced using $4 billion in projected revenue increases, Jones said, and about 40 percent of that is “just hopeful thinking and subject to litigation or challenges.”

That’s good news for the city, Jones said, because some increases in the budget would result in significant revenue loss for the city if they remain in place.

One aspect of the state budget that will have a deep impact on the city is the restructuring of redevelopment agencies.

According to Jones and Leyne Milstein, city finance director, redevelopment funds from tax increment funding through the state bring approximately $3.5 million to the city and county each year.

Under the state’s new Voluntary Alternative Redevelopment Program, the Sacramento Housing and Redevelopment Agency (SHRA) will have to come up with an initial $22 million “continuation payment” to continue its operations, or it will be dissolved.

If that happens, said La Shelle Dozier, executive director of SHRA, numerous Sacramento redevelopment projects in the works will be stalled unless alternate financing is identified, and some projects would never come to fruition.

Jones said the California Redevelopment Association is filing a lawsuit to stop the new redevelopment agency legislation but, until that litigation is resolved, redevelopment agency activities in Sacramento are on “uncertain ground.”

Another item in the state budget that will impact the city comes from the realignment of public safety programs from the state to local governments.

Senate Bill 89 (SB89) diverts 100 percent of motor vehicle license fee revenues from cities to counties, using it to fund public safety activities that have been realigned from the state to the counties.

Until last year, Sacramento received approximately $1.7 million from vehicle license fee revenues annually.

“Realignment is one of the major features of the governor’s budget,” Jones said. “There will definitely be an impact (to local government) down the line.”

The governor’s realignment strategy involves shifting low-level offenders from state institutions to county institutions and local government programs.

“We’re going to see offenders crowded out of from our county jail and possibly onto the streets,” Jones said.

Other realigned programs, according to the governor’s budget summary, include local public safety programs, mental health, substance abuse, foster care, child welfare services and adult protective services.

“The measure passed in the very last hours of budget talks,” Milstein said. “If this legislation stays on the books, it will be a real hit to the city.”

The state budget isn’t all bad news, though, said Jones.

The Community Oriented Policing Services public safety grant has been approved, Jones said, and that means $763,000 in funding to the city.

Assembly Bill 678 (AB678), which provides reimbursement to local fire departments for emergency medical transport, is progressing through the Legislature and may be out of committee and onto the governor’s desk by the end of August, Jones said.

Additionally, transit agency funding has reached a higher funding level this year – the second-highest in its history.

“We’ve seen better-than-anticipated sales tax from the first quarter,” Milstein said, “So we’re keeping an eye on it, and it looks like a positive trend. Then we can adjust for it later in the year.”

Read the governor’s budget summary here.
Read the text of SB89 here.
Read the text of AB678 here.

Melissa Corker is a Staff Reporter for The Sacramento Press. Follow her on Twitter @MelissaCorker.

City fee increases cause concern for local businesses

2011-06-16T03:49:09Z

The Sacramento City Council approved changes to a variety of fees for city services and permits for the upcoming fiscal year Tuesday night, including an increase in the cost of entertainment permits for businesses that provide music and dancing.

All totaled, the council approved 18 different fees, including increases to 12 existing fees and the addition of six new ones.

City Finance Director Leyne Milstein outlined the proposal in a public hearing presentation to a full council and about 50 people in the chamber audience before the council unanimously voted to approve it.

Citing cost recovery as the basis for the adjustments, Milstein noted that 18 fee changes is a relatively small number compared to the 237 approved fee adjustments in fiscal year 2009-10 and the 59 fee changes that were approved for the current fiscal year.

“Cost recovery offsets general fund costs,” Milstein said. “For certain fees, we believe that it’s reasonable for people to pay the full freight for the benefit that they’re getting.”

Included in the new fee changes were some adjustments intended to make fees more predictable.

The hourly rate for building plan review previously varied depending on whichever individual staffer was doing the review. Now, the rate will be a consistent $140/hour.

Review of building permit applications for flood zone regulation, however, previously had no associated fee but now will also be charged at a rate of $140/hour.

Other fees were increased to keep up with changes over time in actual costs to the city. Utility customers who need a water supply test will find that the fee has been increased $200 from $753 to $953.

Although the majority of the changes proposed for fiscal year 2011-12 reflect less than a 100 percent cost recovery for the city, some of the fee changes were met with criticism from the business community.

The entertainment permit fee increase, in particular, came under fire from representatives of businesses where amplified music and dancing are cornerstones of the operation.

“We can’t exactly say that we’re excited about the fee increases,” said Rob Kerth, executive director of the Midtown Business Association (MBA).

Kerth said the Midtown Business Association (MBA) works to make Midtown a place where artists, businesses, entertainment venues and residents prosper together.

“We’re business people and we understand things cost what they cost,” Kerth said. “We just want to make sure it’s fair and businesses aren’t frustrated by the process or the enforcement.”

Prior to the council’s approval of the fee changes, a new two-year entertainment permit from the city cost applicants $1,428. Now, the fee is $1,722 and renewals of the permit have nearly doubled, going from $743 to $1,331.

According to a Finance Department report from May 31, however, the fee charged for the permit doesn’t cover the city’s actual cost of providing it.

A 2009 city-wide fee study determined the actual cost recovery for the application review process on a new two-year entertainment permit is $3,445. For a renewal, the actual cost recovery is $2,662.

The newly increased permit fees only recover about 50 percent of the department’s actual cost.

Shortly after reviewing that 2009 fee study, the Council approved an incremental increase over several years until the department reaches 100 percent cost recovery to avoid “sticker shock” increases.

The last time the entertainment permit fee was increased was in 2009.

“(The city) thinks they’re doing us a favor by not recovering 100 percent of their cost from businesses,” Kerth said. “But really, it’s a disincentive to the business owners who pay the fees because they are levied unfairly.”

Kerth explained that, although the initial permit fee may be the same for all applicants, conditions placed on receiving the permit are “very subjective, depending on the (permitting) officer of the day,” and that enforcement of permit conditions and violations is inconsistent.

“There may be two businesses across the street from one another, and the terms of their permit will be completely different. Each one thinks the other got a sweet deal, and there’s resentment and animosity created,” Kerth said.

To some business owners, the fee increase is an unnecessary burden that only makes it harder for them to afford to do business in the city.

“Five years ago, I was paying $50 a year for a permit to have dancing in my clubs,” said Terry Sidie, owner of three Midtown dance club locations: Faces, Headhunters and Club 21.

“Once the economy started to go bad, the city came up with the ‘e-permit’ and started charging us a huge fee,” Sidie said. “They don’t understand all that (business owners) have to pay every year. It’s crazy.”

Sidie listed fees ranging from royalty fee requirements for the music he plays to a county health permit, an annual fire inspection fee and more – fees totaling almost $16,000 per year, for each of his business locations.

Not all of those fees are paid to the city, but Sidie said the city’s increased entertainment permit fee is “just one more thing added on.”

“The council members say the city is business-friendly, but it doesn’t feel that way,” Sidie said.

Kerth said the MBA is eager to sit down with city staff and talk about ways to streamline the permit process to make it more cost-effective, and to discuss a more consistent code enforcement policy that will level the playing field for all businesses who use entertainment permits.

Read the full Finance Department staff report on the new fee increases here.

Get more information about all city fees and charges here.

City cuts not limited to police, fire, parks

2011-05-27T01:59:26Z

While proposed budget cuts to public safety departments have attracted a lot of public attention, the Sacramento City Council also discussed millions of dollars in proposed budget cuts to many other offices and departments earlier this week.

At a Tuesday afternoon meeting, council members examined cuts to departments and offices that include the mayor and City Council, Economic Development, Finance, Human Resources and Transportation. The city is in the throes of a budget crisis with a $39 million budget gap for the 2011/2012 fiscal year.

The City Council members decided on Tuesday to give a large chunk of its budget to the city’s general fund.

Council members’ budgets include revenues from cell phone towers and billboards. They moved $417,567 of $665,067 of these revenues to the general fund.

Councilwoman Bonnie Pannell was visibly frustrated by the council’s choice to move that money to the general fund, even though she voted to do so at the end of a discussion.

She said she utilizes her funds from cell phone and billboards on programs that help children in South Sacramento.

“What’s going to happen to the kids?” she asked.

Councilwoman Angelique Ashby said the council members receive hundreds of funding requests from community groups each week. She said that community groups that support the arts, sports and festivals will need to understand that the council members will no longer be able to help fund them.

“We simply won’t have the money,” she said. “We won’t be able to do that.”

While they took $417,567 out of their collective budgets, each council member will still have a pot of $55,000 in discretionary account funds in the next fiscal year. The $247,500 remaining from the pot of $665,067 in cell phone and billboard revenues will be moved into the discretionary accounts to help each council member reach the $55,000 figure, according to Dawn Holm, a city staffer in the budget, policy and strategic planning division.

The $55,000 for each council member is not a new amount, Holm explained. Council members had that amount of discretionary funding in their budgets in the 2010/2011 fiscal year, Holm wrote in an email.

The discretionary accounts are available for the City Council to help fund community projects.

The council also listened to Finance Director Leyne Milstein explain proposed cuts to various departments. Interim City Manager Bill Edgar and Interim Deputy City Manager Betty Masuoka are proposing a $707,406 cut to the Economic Development department, including four full-time employee positions.

The Human Resources Department could lose two full-time employee positions as part of a proposed $240,000 cut.

A recommendation to chop $480,884 from Transportation’s budget is also included in the city manager’s proposed budget.

Breaking the trend of cuts, the proposed budget recommends two new hires to the Finance Department. The new employees would be hired as revenue collectors, Milstein said.

It’s unclear at this point how many people will actually be laid off as a result of the proposed cuts to positions.

Also on Tuesday, Councilman Darrell Fong said he wants to explore the idea of making more cuts to Finance, Human Resources and Information Technology. He did not explain at the meeting why he wanted to make those cuts. The council did not act on Fong’s idea Tuesday.

Read a report on proposed cuts to many city departments here.

Kathleen Haley is a staff reporter for The Sacramento Press.

New union courts nearly 700 city workers

2011-02-18T02:21:49Z

The leader of a new effort to unionize city employees took issue with Interim City Manager Gus Vina’s recent decision to raise three managers’ salaries and lower the salary of a fourth manager.

Dee Contreras, the former labor relations director for the city, is spearheading a campaign to unionize 677 city workers, including top managers and administrative staff. She retired in December but is once again involved in local labor issues – this time on the other side.

Contreras said in an interview with The Sacramento Press on Wednesday that she will serve as the staffer for the emerging group, which is known as the Sacramento City Exempt Employees Association.

“I will be working for them and representing them in their struggle,” Contreras said. “I don’t know whether the city will fight this or not.”

Contreras, who used to work for city management, criticized Vina’s decisions during the public comment section of Tuesday night’s City Council meeting.

City spokesman Maurice Chaney confirmed in a Thursday e-mail to The Sacramento Press that Vina recently made salary changes for four top managers – three raises and one decrease in pay.

Contreras claimed at the council meeting that Vina’s salary changes “raise the spectre of an unfair labor practice charge.”

She said that changes to employees’ salaries should not be made while a union organizing effort is in process.

“In general, an employee cannot give or take away from the employees while you’re in an organizing mode,” she said Wednesday.

But Vina disagrees. In response to Contreras’ claims about unfairness with the salary changes, Chaney, speaking on behalf of Vina, wrote, “Those comments are unfounded.”

The city is facing an estimated $35 million - $40 million budget gap for the 2011-2012 fiscal year. Chaney commented on Vina’s raises for Finance Director Leyne Milstein, Human Resources Director Geri Hamby, Community Development Director Max Fernandez and a salary decrease for Utilities Director Marty Hanneman.

Hamby’s salary was raised from $151,402 to $162,000. Fernandez’ salary jumped from $164,445 to $172,667.

“Two of the three salary changes (Community Development director and the HR director) were envisioned as the next planned step of last fiscal year's consolidation process, which occurred last July and resulted in a cost savings of more than $4 million,” Chaney wrote. “Salary adjustments specific to these positions were considered because of the associated increases in departmental duties that resulted with these mergers.”

Chaney also provided Vina’s rationale for raising Milstein’s salary from $131,270 to $150,304.

“The finance director has played a crucial role during the last four years in assisting with a budget deficit that has affected all city employees,” Chaney said. “As we enter another year in dealing with yet another deficit, Leyne Milstein's expertise, institutional knowledge of our city budget and fiscal experience was critical to retain as we navigate through this budget process. Therefore, a pay adjustment was made.”

Chaney further commented on Vina’s reasoning for lowering Hanneman’s salary from $186,101 to $167,491.

“The Utilities director, who transitioned from an assistant city manager to a department head, retained his previous position salary,” Chaney said. “After an across-the-board examination of city director’s compensation, a salary adjustment was made to parity salaries of other department heads.”

But Contreras, who aims to represent a group that includes managers, disputes Vina’s view of Hanneman’s salary decrease. Vina is reducing Hanneman’s salary to a rate that is below the salaries of other department heads, Contreras claimed.

Contreras sent a Feb. 4 letter to Vina about her organizing a campaign, which can be read here.

The number of people Contreras is attempting to organize represents a large slice of the city’s 5,001 employees, according to statistics provided by Chaney.

If the organizing effort runs quickly, the union may be formed in three or four months, Contreras said.

“The city has not taken care of its unrepresented (non-union) employees,” Contreras said.

Contreras retired from a special projects position with the city’s Labor Relations division in December. The Labor Relations Department became a division of the Human Resources Department when the city consolidated departments last year to save money. Before the consolidation, Contreras was the director of the Labor Relations Department.

While she represented the city as Labor Relations director, Contreras noted that she has worked for unions in the past, including the Service Employees International Union.

The people Contreras wants to organize include high-profile managers, such as assistant city managers and the city attorney. Other job descriptions for people being recruited include the titles of investigator, administrative analyst and staff aide. Read a list of the jobs that Contreras wants to include in the union here.

Contreras said she is now working to organize the campaign because city employees approached her to help them unionize.

“After numerous discussions and approaches, I agreed to assist them,” Contreras said.

City Councilwoman Sandy Sheedy commented on Contreras’ new role as a city labor organizer. “Dee is very effective,” Sheedy said. “She no longer works for the city, but she understands the city.”

Kathleen Haley is a staff reporter for The Sacramento Press.

City budget discussed in Pocket

2011-02-04T06:40:45Z

About 65 Pocket and Greenhaven residents gathered Thursday night to learn about current city issues. City staffers briefed the citizens on the city budget, green waste pick-up services and other topics during the community meeting, which was organized by City Councilman Darrell Fong.

Attendees were fully engaged throughout the meeting, asking plenty of questions. It began at 6:30 p.m. and by 8:30 p.m. few had left John F. Kennedy High School on Gloria Drive.

City Finance Director Leyne Milstein presented information to the group about the city’s $35-$40 million budget gap for the 2011/2012 fiscal year.

She noted that the $35-$40 million represents about 20 percent of the net general fund, which means the city expects to cut its budget by that percentage.

Resident Bob Pecora asked Milstein about ways the city could bolster the economy.

“We need to take the initiative ourselves and try to put measures into place that will help us to grow the value of our economy locally,” Milstein responded.

The issue of trash pick-up was brought up later in the evening. Resident Roger Fong asked Utilities Department spokeswoman Jessica Hess about problems with his loose-in-the-street green waste pick-up.

The city uses two green waste pick-up systems – green waste is picked up in the street or in containers. The Utilities Department is in favor of the container system, which it says is more affordable.

Roger Fong said that he pays more for his loose-in-the-street pick-up. But his neighbors, who have containers, still put their green waste in the street, he said.

“My neighbors don’t seem to understand ... I always pay my fee and they don’t.”

Hess said the department is going to soon take action on that issue.

The meeting covered the work of various city departments. But the city’s budget crisis was a central theme of the meeting.

Darrell Fong told his constituents that he wanted them to help him with budget decisions on city services.

“I’m going to get you involved to decide what services are important to you,” Fong told the group.

Kathleen Haley is a staff reporter for The Sacramento Press.

City Council talks priorities, budget

2011-01-07T03:03:11Z

As part of a Thursday workshop led by Mayor Kevin Johnson, the Sacramento City Council discussed its current priorities as well as ideas for the upcoming “State of the City” address.

Johnson described the workshop as a “mini-retreat” for the City Council. The city leaders kept the budget in mind when discussing their priorities, but exact budget numbers were not discussed.

City Finance Director Leyne Milstein said after the meeting that she was still working on the budget figures and would present concrete budget information at a Jan. 25 public meeting.

Johnson will speak at the State of the City event, which will be held Jan. 20 at the Sacramento Convention Center. His City Council colleagues gave him advice on points to include in the speech.

Councilman Rob Fong suggested that Johnson mention some of the positive developments in the city, such as the city’s work on streetscape improvements.

“I think there are lots of little things that are happening that we don’t necessarily focus on that make a big difference to a lot of people.”

Councilman Jay Schenirer said that gangs and public safety should be addressed in the speech.

The council members also discussed their priorities. Councilman Kevin McCarty said he wanted the council to consider city services. “How do we maintain a full-service city?” he asked.

Council members Steve Cohn and Bonnie Pannell mentioned the importance of jobs. “To me, everything has to be focused right now on jobs, jobs, jobs and our budget,” Cohn said.

The soundness of the city’s budget should be a priority, said Councilman Rob Fong. “I think we have to start focusing on sustainable budgets.”

Mayor Kevin Johnson responded to Rob Fong’s comment. “I couldn’t agree with you more,” he said.

Councilman Darrell Fong mentioned water rights and flooding as key issues. Meanwhile, both Johnson and Schenirer talked about focusing on youth. Johnson also said education is a priority.

Councilwoman Sandy Sheedy noted that the city’s budget should be presented in a transparent way “so that people out there understand it.”

Councilwoman Angelique Ashby urged the council members to tour each other’s districts to learn about the districts’ various issues.

Interim City Manager Gus Vina said after the meeting that he would revisit the council’s ideas during a discussion of economic recovery in the city. “My goal is to tie this conversation with the Jan. 25 date, where we’re going to do a workshop on our recovery plan,” he said.

File photo of a Sacramento City Council meeting held last July. Photo by Brandon Darnell.

Kathleen Haley is a staff reporter for The Sacramento Press.

Schenirer, Fong explain district goals

2010-11-30T02:05:29Z

Incoming Sacramento City Councilmen Jay Schenirer and Darrell Fong both said in interviews on Monday that they want to address concerns in the specific neighborhoods they will represent. They also said they are mindful of the city’s expected budget shortfall.

Fong and Schenirer will be officially sworn into their new posts on Tuesday night.

Schenirer pointed out that he will represent 19 neighborhoods as the councilman for District 5, including Oak Park, West Tahoe Park and Curtis Park.

“I think the neighborhoods in my district have a significant amount of need,” Schenirer said.

To respond to the neighborhoods’ needs, he said he wants to spend the next three to six months working with each of them to set goals.

Schenirer also said he wants to work on the issues he campaigned on, such as the city’s role in job creation and as a provider of youth services. As a city councilman, he said he wants to ensure “our young people have safe places to be when they’re not in school.”

Meanwhile, Fong said he will will examine the issue of flood insurance costs in the Valley Hi neighborhood. Residents there are claiming that their insurance costs are too high, he said.

In addition to Valley Hi, Fong also represents the Pocket/Greenhaven area.

Another district-specific matter Fong wants to tackle is a vacant Nugget Market grocery store at the Riverside Plaza Shopping Center in the Pocket neighborhood. He said he wants to meet with the owners of the shopping center and discuss the vacancy.

Both Fong and Schenirer also said they were focused on the city’s financial woes.

“The budget is a priority for me,” Fong said. Delivery of city services will be an issue because of the city’s budget situation, he added.

“Obviously, the city’s budget is going to be a big issue,” Schenirer said.

City Finance Director Leyne Milstein said there would be a shortfall in the 2011/2012 budget. She declined to provide a ballpark figure, saying that city staff is still working on the budget numbers.

The Sacramento Press plans to interview new District 1 City Councilwoman Angelique Ashby and recently re-elected City Councilman Steve Cohn later this week about their plans for the Central City.

Kathleen Haley is a staff reporter for The Sacramento Press.

Robbie Waters gives library $150,000

2010-11-24T05:59:47Z

Outgoing Sacramento City Councilman Robbie Waters is giving the Sacramento Public Library Authority up to $150,000.

Waters specified at Tuesday night’s City Council meeting that he wants his donation to go toward materials at the Robbie Waters Pocket-Greenhaven Library.

He announced at the council meeting that he scrapped his earlier terms for the donation. Last week, Waters had planned to give the money to the Library Authority only if the City Council retains the name of the Robbie Waters Pocket-Greenhaven Library.

If the City Council changed the name of the library, Waters had planned to give the money to the Sacramento Society for the Prevention of Cruelty to Animals.

Waters said that he talked to City Attorney Eileen Teichert’s office about his original plan and then decided against it. “I’m withdrawing that proposed resolution agreement that was published last week because there was a conflict of interest involved with that,” he said.

The $150,000 comes from City Council discretionary funds. Each council member is allotted $55,000 annually for his or her discretionary account, said city spokeswoman Amy Williams.

Leyne Milstein, the city’s finance director, explained that Waters’ $150,000 consists of a combination of discretionary account funds and funds that go to council members from cell phone tower agreements.

The city allows council members to carry over unspent money from previous years in their discretionary account, Milstein said.

“It’s an accumulation of unspent money,” Milstein said, referring to the $150,000.

City attorney Eileen Teichert explained that the city enters into agreements with cell phone companies that want to place towers on city property. A portion of the city’s revenues from these agreements are credited to council members’ discretionary funds when the towers are located in their districts, she said.

Photo by Kathleen Haley.

Kathleen Haley is a staff reporter for The Sacramento Press.

City auditor digs into four new projects

2010-07-24T01:50:37Z

In an abandoned corner of City Hall that formerly housed the planning department, four auditors are digging for information about the city’s rules and finances.

Jorge Oseguera, the new city auditor, has narrowed down the top four areas of municipal government he will investigate first: the city’s health benefits, citywide policies, revenue collections and the vehicle fleet.

In addition to those audits, he has four more in the hopper. The next set of audits will cover the city’s 311 information center, purchase cards, fire inspection fees and the city’s sidewalk repair process.

The City Council gave Oseguera permission to move ahead with the audits in June.

Oseguera said his goal is to complete the eight audits by June 30, 2011, the end of the fiscal year.

“If we don’t finish all eight, at the very least, we’ll initiate all eight,” he said in an interview Thursday.

In the revenue collections audit, Oseguera said he wants to learn if cuts to staff have affected the way the city collects cash. He will examine the Finance Department, among other departments.

Leyne Milstein, city finance director and head of the Finance Department, spoke positively about the revenue collections audit. “They’ll provide a second set of eyes,” she said.

On the issue of health benefits, Oseguera noted in a Jan. 22 report to the City Council that $34 million of the city’s funds go toward medical insurance for employees and retirees. The city may be able to find other ways to pay for health benefits, he wrote.

Meanwhile, the city’s fleet of vehicles should be audited with a focus on its management, he wrote in the report.

He pointed out in the report that the city’s fleet, which is overseen by the General Services Department, had a proposed 2011 fiscal year budget of $34 million.

“It’s a lot of money that we’re spending on fleet,” he said.

The auditors will delve into why the fleet division’s budget for this fiscal year was about $7 million less than its budget in 2007/08, according to the report.

Hiring outside the city for some areas of fleet work is another idea they will study. San Jose saved money and enhanced its operations as a result of an audit on its vehicle fleet, Oseguera noted in his report.

In a fourth audit, Oseguera and staff will look at rules used throughout the city government, he said.

The city “seems to lack several important formal policies,” Oseguera said in his report. He’s also looking into whether city procedures contradict each other, or if they haven’t been updated.

The scope of each audit is not limited to one city department, Oseguera said, noting that the audits on the city’s polices, revenue collections and vehicle fleet will involve numerous departments.

Oseguera and his staff will focus on the Finance Department in the revenue collections audit. But they will examine several other city departments because many of them collect money, he said.

The General Services Department, which oversees the vehicle fleet, will be scrutinized in the fleet audit. But again, Oseguera pointed out that numerous departments will be involved. Many departments use vehicles, he said.

The same principle applies to the citywide policies audit. While the city manager’s office will play a key role in the audit, citywide policies affect multiple departments, he noted.

The results of the audit will produce a report that includes recommendations. The City Council is in charge of making any decisions in response to the audit.

Oseguera said his audit reports will be made public.

He explained that the audit process includes data gathering, risk assessment, interviews and analysis. The risk assessment process plays an important role in the audit. For that step, the auditors investigate possible areas where the city might be vulnerable, he said.

“Through the risk assessment, what we do is we try to brainstorm about all the things that could possibly go wrong, all the threats that are involved,” he said.

Oseguera said the public can participate in the audit process. “(I’m) willing to talk to whoever is interested in talking to me about potential concerns that they may have regarding the city, regarding operations,” he said.

Read more information about all eight planned audits here.

Kathleen Haley is a staff reporter for The Sacramento Press.

A deeper look at city's decision to hire 30 new cops

2010-06-30T05:07:09Z

When the Sacramento City Council resolved a $43 million budget gap last week, it also decided to hire 30 police officers during the following three fiscal years.

The decision to create 30 new police officer positions was non-controversial among council members, even though the city is experiencing harsh cuts in its departments.

“I think we felt that this was an appropriate measure to keep our police department at a level that can maintain public safety,” Councilman Steve Cohn said in an interview Monday.

The city has figured out how to pay $3.6 million for the police officers during fiscal years 2010/2011, 2011/2012 and some of 2012/2013. Sheraton Hotel parking funds will cover $1 million of that amount. The remaining $2.6 million will be paid out of funds owed to the city from Thomas Enterprises, the company developing the Railyards, according a June 22 report from city Finance Director Leyne Milstein.

However, the city will eventually need another $2.4 million to keep the positions intact for the entire fiscal year of 2012/2013, Milstein’s report said.

A filled Sacramento police officer position costs about $100,000 total per year, department spokesman Sgt. Norm Leong said. The $100,000 includes the police officer's salary and benefit package, which includes medical and retirement benefits, he said.

Even though the positions will be available, officers won’t begin patrolling right away. “While the posting for these officers can begin immediately, there is a substantial amount of lead time that is needed to complete the background/training/hiring process,” Milstein wrote.

“It takes approximately six months from the date of posting to complete the background process for each applicant. It will take an additional six months to complete academy training, and another year before the officer can function independently in the field.”

Cohn said the 30 positions are vital for the city's safety. “We don’t want to lose momentum and not have a police academy.”

While the City Council approved hiring 30 police officers, the department still faced cuts to officer positions.

In the 2010/2011 budget, the City Council cut 85 police officer positions that were vacant, according to Leong. Those positions were vacant, so there were no police officer layoffs. However, it means the department cannot hire for those positions.

The city has about 1.5 officers for every 1,000 residents, Leong said. Other capital cities such as Austin and Denver have a higher ratio of officers to residents, he said. Austin has 2.04 officers for 1,000 people, while Denver’s staffing levels are 2.61 officers to every 1,000 residents, Leong noted.

At his Tuesday press conference, Mayor Kevin Johnson pointed to the figure of 1.5 officers per 1,000 residents to make the point that the department does not have enough officers.

Johnson addressed the issue of the $2.4 million the City Council will need to find to keep the new officers in fiscal 2012/2013.

“We’ve started the process now, even in this budget cycle, to work to that end,” Johnson said. The city will need to monitor sales and property taxes, and look at how it can spur economic development to be on a path to pay for the $2.4 million, he said.

The 2010/2011 fiscal year starts July 1.

Photo of council members by Anthony Bento.

Kathleen Haley is a staff reporter for The Sacramento Press.

Mark your calendars: May, June city budget meetings

2010-05-08T05:17:40Z

The Sacramento City Council will grapple with a $43 million budget gap at several meetings this month and next. Budget meetings are open to the public. Here’s a list of key dates for the city’s budget process:

Tuesday, May 11: Interim City Manager Gus Vina is expected to make a presentation to the City Council on the draft budget for fiscal year 2010/11.

Tuesday, May 18: Budget ideas from consulting group Management Partners and fees and charges are expected to be discussed at the City Council meeting.

Tuesday, May 25: Budget hearing

Tuesday, June 1: Budget hearing

Thursday, June 10: Budget hearing

Tuesday, June 15: Budget hearing

Tuesday, June 22: Budget adoption

The meetings start at 6 p.m. at City Hall, 915 I St.

The City Council may approve the 2010/2011 budget on June 24 if it does not pass it on June 22. A budget hearing may also be held June 17.

Source: Sacramento Finance Director Leyne Milstein’s report for the May 11 City Council meeting.

Kathleen Haley is a staff reporter for The Sacramento Press.

City officials back measure to fight state

2010-01-13T05:38:46Z

City officials are supporting a proposed ballot initiative that aims to ban the state from taking or borrowing local government monies. Mayor Kevin Johnson stood with three city councilmembers and local public safety officials outside City Hall to publicize the initiative in a press conference Tuesday morning.

California is in the process of borrowing $12 million of the city’s tax funds as part of last year’s state budget crisis, according to city finance director Leyne Milstein. By the end of the month, the city will have given that total amount to the state, she said.

Don Cavier, finance director for the Sacramento Housing and Redevelopment Agency, said that the state plans to take $19.6 million from the agency in May and another $4 million next year. SHRA did not give funds to the state last year, Cavier said.

“We’re here basically to say very resoundingly to the state, enough is enough,” Johnson said.

Councilmembers Lauren Hammond, Bonnie Pannell and Steve Cohn appeared with Johnson at the press conference.

Cohn expressed concern that the state might take gas tax funds from the city. State politicians have been saying they may use local gas taxes for non-transportation uses, Cohn said.

“It’s just plain common sense that the gas taxes we pay at the pump should be used to improve road safety by fixing potholes and crumbling roads to relieve traffic congestion and to fund mass transit, such as buses and commuter rail," he said.

Brent Meyer, president of the Sacramento Police Officers Association, urged residents to sign the petition to place the proposal on the November ballot.

“It’s critical for the services that you see every day,” he said. 

Brandon Castillo, a campaign consultant for the group Californians to Protect Local Taxpayers and Vital Services, noted that the proposed initiative would be an amendment to the California Constitution. A constitutional amendment is “the strongest protection” voters can make, he said.

Aaron McLear, a spokesman for Gov. Arnold Schwarzenegger, did not respond to a message seeking comment on the proposed initiative by press time.

Kathleen Haley is a staff reporter for The Sacramento Press.

Plan to combine some city/county services advances

2009-12-09T05:41:38Z

The Sacramento City Council is open to the idea of consolidating some of the services offered by the city and county governments.

Councilmembers unanimously decided Tuesday that city staff should analyze the issue over the next 90 days, and then bring their findings to the City Council. The discussion about consolidating services is moving forward as both the city and county struggle with severe budget problems.

Councilman Rob Fong strongly supported the idea. If the city and county can have “virtually identical” regulatory processes for businesses, then organizations like the Sacramento Area Commerce & Trade Organization and the city and county’s economic development departments could market Sacramento as a “dynamic region,” he said.

Uniform processes at the city and county governments could also lead to better land-use planning decisions, Fong said. He acknowledged that his ideas may be too expansive for the 90-day period, but said he hoped staff’s analysis would move beyond everyday issues such as “who picks up the leaves.”

“We would do ourselves a disservice if we didn’t start to have those kinds of conversations,” Fong said.

Staffers will now select services that could potentially be combined, according to Assistant City Manager Gus Vina’s report to councilmembers.

Vina said Monday that combining services could save money in the long term for local governments. In addition, joining services could eliminate redundancies, Vina said. The city and county provide several similar services, he said, such as animal control and code enforcement.

City Finance Director Leyne Milstein said her office is not ready yet to provide an estimate for the city’s budget situation next year. Staffers still need to analyze third quarter sales tax information, she said. However, she estimated in May that the city would face a $30-million deficit in the 2010/11 fiscal year.

She acknowledged Monday that the city’s budget for next year could be troubling, saying that “nothing has changed” since her May estimate of a $30-million deficit.

The county’s budget crisis is severe: Its $180-million gap last spring was followed by a $76-million shortfall in the summer.

Kathleen Haley is a staff reporter for The Sacramento Press.

City, County to consider consolidating some services

2009-12-08T05:34:22Z

Sacramento’s city and county governments are considering consolidating some of their services to save money as they wrestle with tough budgets. The City Council and Board of Supervisors will discuss the idea at their public meetings Tuesday.

Combining services could help local governments save money in the long term, said Gus Vina, assistant city manager. It also could cut redundancies, Vina said, noting that the city and county offer several similar services. For example, the county and city both provide animal control and code enforcement services, he said.

The city and county have not yet selected which services to combine. At this point, city and county officials are asking elected representatives if there is a “thumbs-up” for staff to pursue the idea, Vina said.

If the City Council supports it, city staff would choose services that could be combined, according to a report Vina is presenting to the City Council on Tuesday. Staffers would analyze the issue over the next 90 days, and then bring their findings to the City Council, the report notes.

“We’ll evaluate services on both sides: what’s the benefit, what’s the downside,” Vina said. “We’re looking for things that are not that difficult to do.”

City Finance Director Leyne Milstein said that city staffers are not ready to provide numbers for next year’s financial picture. They still need to analyze third-quarter sales tax information. Milstein estimated in May that the city would face a $30 million deficit in the 2010/2011 fiscal year.

While she did not release specific figures Monday, she acknowledged that the picture could continue to be grim.

“Nothing has changed for the better since that estimate was out there,” Milstein said.

The county has faced a wrenching budget crisis over the past several months. Its $180 million gap last spring was followed by a $76 million shortfall in the summer.

Kathleen Haley is a staff reporter for The Sacramento Press.

SacPress interviews city finance director

2009-07-11T03:26:03Z

Now that Sacramento’s 2009 / 2010 budget has been approved, what does the city’s financial picture look like for next year?

The Sacramento Press sat down with Leyne Milstein, the city’s finance director, to ask that question. Milstein outlined next year’s projected $30 million deficit and commented on the city’s “structural deficit.”

While Milstein grapples with severe city budget gaps that are tens of millions of dollars, she has a self-described “lighter side” that is evident in her choice of office decorations. An interview with Milstein would be incomplete without mention of her Magic 8 Ball collection.

Sacramento Press: What is the city’s financial outlook for the next year?

Leyne Milstein: For the fiscal year that started on July 1, we adopted a balanced budget in June. And one of the things we really need to be mindful of is this continuing impact of this economic crisis that has gripped the nation. (We need) to continually be mindful of how that’s going to impact our major tax revenues in the general fund -- and specifically property taxes and sales taxes. One of the things we’re now looking at: As the state continues to add furlough days, how is that going to affect...sales taxes?

SP: At a City Council meeting recently you mentioned a projection of a $30 million deficit for 2010/2011. Can you explain that a little bit?

LM: We still think (the $30 million projection) is fairly consistent with our estimate in June. We have some obligations that we need to be mindful of relative to our Sacramento City Employee Retirement System. So we know that costs for that will go up about $8 million.

We know that we are rolling over $8 million in one-time costs (from the 2009/2010 fiscal year). We believe that we’re going to still continue to see a decline in our property taxes.

We have some costs for some of our new facilities coming on-line...Some of our newer labor contracts -- even though we got concessions for 2010 -- include midyear raises. Small, but still 1 to 2 percent, of salary (increase) is...a cost.

SP: How can the public get involved in addressing the city’s financial obstacles?

LM: Folks can contact us, write us, e-mail, call their council members. They can call the budget office. We held community meetings all through March and April. Anybody is always welcome...We were talking about this in October, very publicly.

What we’ve really strived for, and what we tried to do when we did go out to community meetings, is to make sure that people understand the complexity of the budget. And the fact that there’s only discretion on how to spend certain portions of the budget. And that we have to respect, for legal reasons, that some dollars...can’t just be spent on anything, at any time, for any purpose.

SP: Mayor Kevin Johnson often refers to the city’s structural deficit. What is that, and how can it be addressed?

LM: Because of this ongoing decline in revenues -- and they’re continuing to decline -- we are structurally imbalanced between revenues and expenses.

When we built our 08/09 budget, we estimated a $58 million (deficit). We closed everything but $23 million. That was one-time money. So, there was a structural deficit that rolled into 09/10 of $23 million. Now, our 09/10 budget, we closed all but $8.3 million of that. So now we have, structurally, $8.3 (million) moving into 2010/2011, plus the other impacts of continued revenue decline and continued growth in expenses. So, that’s the structural problem between revenues and expenses.

SP: Looking around the office, it appears that you have a sense of fun -- even though the city is facing all of these hardships financially. I see a Gumby (doll), there’s art on the wall, some shiny fake flowers. Can you talk about how you’re balancing that sense of fun with the hard realities of working on the budget?

LM: I think life is a balance of your personal and professional. This is a really difficult job. And I do take my job very seriously. We are stewards for the residents of the city of Sacramento. But on a personal level, if I just took all the serious, and never had that lighter side, it wouldn’t be good and healthy for me.

And so, I have three Magic 8 Balls on my desk. And, you know, sometimes we play “best two-out-of-three.” Just to lighten the load. And that’s what it’s all about -- to have that balance. Honestly, I think I’m a better professional by achieving that balance. And laughing helps receive some of the stress. And so, we try and do that. And the flowers on my desk are actually things that my kids have made me over time that have become collections -- (they) are just to remind me of that other side about why I do my work.

City budget crisis: The weekly roundup

2009-05-25T02:23:36Z

The past week saw several major developments in Sacramento’s budget crisis, from the city’s forecasts of major deficits in 2010 to a campaign by residents against proposed budget cuts to local parks.

Here’s a roundup of the past week’s budget news:

Huge deficit predicted for 2010
The Sacramento City Council is studying a slew of proposed cuts to resolve its $50 million deficit. But once the city deals with the current $50 million deficit, it will face a projected $30 million deficit for the 2010/2011 fiscal year, according to Leyne Milstein, the city’s finance director.

“Gap will grow to $30 million as revenues continue to decline and expenses increase in FY 2010/2011,” Milstein wrote in her recent report to the city council.

Read Milstein’s budget forecast here. Her presentation begins on page 59 of the document.

State may take local funds
On May 19,Californians voted down propositions that aimed to lessen the state’s budget crisis. Gov. Arnold Schwarzenegger’s office said that the failure of the propositions – five of the six died at the polls – means that the state’s budget gap of $15 billion has risen to $21 billion.

Schwarzenegger recently proposed to borrow $2 billion in local funds from local governments if the propositions fail. Local governments, including Sacramento, are afraid the state will take their funds. Schwarzenegger's office told The Sacramento Press May 20 that Schwarzenegger’s proposal to borrow from local governments is still on the table.

The Sacramento City Council declared the city was in a “fiscal crisis” with the aim of telling the state to stay away from Sacramento’s revenues.

Residents create group to oppose planned cuts to parks
A group of residents is challenging the city’s planned cuts to the Department of Parks and Recreation. The group, which is called Rescue Sacramento Parks, is pitching alternative actions the city could take instead of slashing parks services.

Kathleen Haley is a staff reporter for The Sacramento Press. Send your tips about local politics to kathleen@sacramentopress.com.

City: Layoffs to occur even with union concessions

2009-05-08T00:51:04Z

City management will still need to lay off staff even if all of its unions make concessions, according to the city’s finance director.

Sacramento Finance Director Leyne Milstein said she could not say how many layoffs would be needed if all the unions make concessions. That’s because the City Council will make the final decisions on cuts to services and programs, Milstein said.

Concessions from the unions will not create enough savings to avoid layoffs, Milstein said.

The city’s proposed budget aims to resolve a $50 million deficit.

If the unions do not make concessions, city management plans to lay off 189 city employees.

At its May 19 meeting, the City Council will address the proposed budget.

The city is in negotiations with its unions, which include the firefighters’ union, Sacramento Area Firefighters Local 522, and the Stationary Engineers Local 39. Sacramento government has eight labor unions.

The Sacramento Police Officers Association is the lone union at this time that has made concessions.