Tuesday, August 31, 2010

City of Tucson Budget Crisis

Mind Set and the Economic Crisis

Another tax hike will cut commercial spending, which is an undesirable outcome even though the city would then have more money to spend. Take from the many to give to the few. I think it is time for new ideas.

An analysis of city spending needs to be made. I will begin with SunTran.

How often do the routes run?

What is % ridership? If it is 25%, then four too many buses are being run.

How much is this transit management team being paid? They are producing nothing.

How much federal funding does Tucson get for transit?

How many actual runs would serve the needs of the riders?

At forty cents a ride, maybe a little inconvenience is worth it. If SunTran cannot afford to run so many buses due to low ridership, then it would save money to cut the number of buses. Preserve the routes but not the frequent pickup times. People who ride the bus will plan ahead to continue using the service. If these excess runs are being demanded by the union in order to create jobs, this point must be negotiated. The money is just not there for them to spend. The taxpayers are subsidizing their jobs with no increase in productivity.

The ticket subsidy should remain the same if SunTran cuts the bus runs. This is the sacrifice asked of the people who ride the bus to the budget crisis. They cannot afford to pay more. The 'executive staff' giving up their free cars and cell phones might be a nice gesture. How about they get a free bus pass?

This plan will cut personnel costs and might result in layoffs, unless the drivers want to get together and share the actual available work. This plan would cut personnel insurance costs. Fewer buses would be running, so the bus fleet would last longer. Running huge empty buses is a waste of machine hours, fuel, insurance, street surfaces and productivity. This is like a teacher giving sixth graders scads of third grade work to keep them quiet. It works but there's no productivity. Those handicapped transit vans could run when full by appointment, with a driver on call, not just to pick up one person. You know, like the shuttles to Nogales from South Sixth.

This is a right to work state. The unions have no right to demand that the city fund excess bus runs in order to maintain their membership dues payments.

An analysis of the mindset that asks Don't you think that this worker is worth $100,000 or $50,000 or whatever? The question they should be asking is: What is the amount we actually have to pay workers? Figure that out and then cut payments and city funded benefits to workers to what the city can actually afford to pay. If these workers feel slighted, then they can move on. In this job climate, applicants at a lower pay will be legion.

This brings me to somebody's saying that each department will be cut X%. This screams assumption that each department is equally important, not top-heavy, overstaffed or even competent. An analysis needs to be made on each department. Some departments could be eliminated entirely, others remain more intact. Maybe some departments can be merged into others. I know it's easier to leave it all intact, but I question the efficiency of spending in some instances.

How about the city visit one of those agencies that do debt consolidation and renegotiation? I know this has already been done, but perhaps something could be gained. Has the city considered 'clawbacks' of money paid out with little received in return? It happens on Wall Street why not here? I am awaiting the Rio Nuevo Audit. Possibly charges can be filed? Excess indebtedness has eroded the value of the tax dollar to $.60 with $.40 going into the pockets of the moneylenders for years and years to come. What about default? What are the options?

According to a verbal report, the Fed wants to keep 3-4% inflation rate, which helps pay off the exorbitant Federal debts run up in the last 10 years. If that happens, that means we pay higher costs for everything, while unemployment continues and the people have less to spend. Higher taxes on top of that will simply put more of the money supply in the hands of government for distribution to that select group of workers. This is onerous when reorganization has not be achieved. Reorganization of city departments should result in lower taxes, not higher. Excess indebtedness has eroded the value of the tax dollar to $.60 with $.40 going into the pockets of the moneylenders for years and years to come. What about default? What are the options?

Wednesday, August 18, 2010

Tucson Budget Crisis

 If the city is requesting a tax hike, there must be more information given to the voters.

So let's do some math! What is the amount of federal money received by transit today? How long is this requirement from the '70s in effect? Are these higher costs associated with hiring a management company, the union demands, the benefit levels and coping with strikes worth what the feds are contributing now? Too much money is tied up in this. If the answer is that certain people who make money off federal grants control the process and they're not going to let go of it, then this financial crisis cannot be solved. If this management company hiring is in perpetuity, then a court challenge needs to be made. How much does the management company for transit cost the taxpayers? This appears to be an unnecessary restriction in a right to work state.
I want to know what percent of this proposed tax increase will go to what department and will be used for what. How about a nice pie chart showing the raw data? Then break down each core department into how it spends the money: personnel, pensions, benefits, equipment, maintenance, buildings, consultants, debt service... Another general pie chart showing personnel numbers per department, others to show executive, administrative, clerical, field personnel, contractors and consultants as a percent of total expenditures in each department.

Core services as defined by charter? how detailed is it? Are all these subsidiary to the core services also untouchable? Can some portions of 'core services' be transferred to other departments, away from core services? let's redefine 'core services' to more austere levels.
I know what kind of core services this city had in the early days and what they are defining as core services now is nothing like that.

Here is an explanation for the creation of a management company for transit, politely supplied by George Caria:

Here are the answers to your questions. The first and third questions are reated, so I answered them together.

1. When did the city give this management team the right to negotiate with Sun Tram, giving them the right to strike when others can not? and 3. She said it was federally mandated. Why would this be?

When the Transit system went from private to public in the 1970's, the Federal Government had agreements in place with the Department of Labor. If transit systems, throughout the United States, not just Tucson, were going to received federal money they were required to have a right to strike clause in their labor agreement. Since most cities do not have a right to strike clause, they were required to hire a management company, so those employees were not employed by the City, but a separate management company. Additionally, it is required that issues related to labor details in the agreements, only be negotiated by the management company, and not the City.

This model was used throughout the country in cities such as Minneapolis, Mephis, Richmond, just to mention a few.

2. Who in the city set this up?

As I previously mentioned, this was set-up back in the 1970's. As private transit companies were folding, the Federal government offered financial assistance, and this was one of the strings attached to receiving Federal dollars. If Federal monies were not used to acquire transit systems cities were faced with the dilemma of using the Federal dollars or not having a transit system in the community.

Friday, August 13, 2010



I have been holding my consul lately concerning the fiscal problems of the City of Tucson government, while hoping to learn more about the situation. A few discussions, presentations and websites later I think I know enough about what is going on in order to logically comment upon it.

The presentation at El Rio by City Council members Romero, Fimbres and Ulich was illuminating in that four 'core services' are identified as being Police, Fire, Parks and Transportation. The Police and Fire and Parks departments were well represented by the respective department heads who took responsibility for informing the people concerning the tax increase to be voted upon in November. Nowhere did I see the head of Transportation, nor did I hear a word concerning their proposed share of this proposed tax increase. They should have been there to explain their part. I feel slighted by this omission.

I don't trust this proposal without estimates, percentages per department, prioritizing cuts and layoffs. Isn't there more to this proposition? We need expositions for the rest of this proposal. What about the reorganization of city hall? What about the proposed salary raises for council members? What else is tied up with this vote? Using scare tactics to get through a tax increase that would also include raises for council members? These items should have been four separate votes, not one huge vote with unrelated items in it.

Reorganizing city hall should be tied to a tax decrease, not an increase. Giving raises at a time when unemployment levels are high is unwarranted. Guaranteeing that one segment of the city is immune to layoffs and hikes in benefit costs is not fair to the rest of the city employees or the taxpayers since this tax hike would benefit Transportation employees in just that way. I heard that the city charter details transportation as a 'core service' but I suggest that parts of the transportation department would be better organized under different departments, thus reducing transportation to the actual core services, which would not be so difficult to fund. How about public safety and road repair administered under the police department? Are the SunTran employees under a management company so they can be exempt from the city worker agreement not to strike? Who set that up?

As for the scheduled cuts to be made in the event this tax increase does not pass, these are not the only configurations of cuts to be decided upon. I mean, there are other things besides police and fire to cut. I've seen the budget. One presenter at another meeting suggested retiring the 'double dippers', cutting high level salaries and benefits and reorganizing and cancelling departments. Absolutely, the level of public debt is too high! No more borrowing for anything.

Analyze this streetcar thing. How much money was borrowed to finance this? How much grant money was obtained? How much debt service will be paid on all borrowed funds? Does the interest cost of borrowing use up the grant money? Are we really making money on this thing, or are we just employing people in Oregon to build streetcars? What will the maintenance on this system cost? Are fares expected to pay for this deal? How realistic is this scheme? A few will be employed, but how long will it take for the rest of us to pay for this system? How many of us will use this system? I think deals like this and Rio Nuevo are impoverishing the community with debt service, reducing the value of our tax contribution.

Maybe this is off the topic of the proposed .5% tax increase, but voters are wary of giving more money into the hands of the city because of the recent track record. More tax to give to the moneylenders for debt service is simply unacceptable. If there were no debt, there would be no money crunch and projects could still continue to be built out of incoming receipts. A new way of thinking is needed.

The size and cost of government spending and projects must be reduced to fit the budget! You cannot depend on tax hikes, borrowing and selling real estate assets during a downturn.