Mayor answers money questions

Government budgets are complex and, in the current economic climate, hard to balance. The Bee posed some questions to Modesto Mayor Jim Ridenour:

Q: What questions are you asked most frequently about the city budget? What issue is misunderstood the most?

A: I think many people don't understand that the council just can't spend money on whatever they choose. The city's general fund is the city's discretionary spending fund. Those funds are used to pay for parks, public safety, forestry programs and the like. On the other hand, much of the city's revenue has limits on it.

For example, it would be illegal for the council to spend money from the city's water fund to hire more firefighters or police officers, even though public safety is a high priority for the council. Likewise, you can't take federal or state grant money that was awarded for a park project and spend it on road improvements.

Q: The council cut some firefighting and police positions to keep $10 million in reserve. Why does the city need so much in reserve?

A: It's never prudent, whether you're dealing with your own personal finances or the city's finances, to spend every dime you take in. The current economic situation with all the home foreclosures and the impact that's having on businesses throughout our community is an excellent example of why a financially responsible city maintains a healthy reserve. The city's general fund reserve (8 percent of the city's general fund operating expenses) is really a rainy day fund -- set aside to pay for unanticipated costs or to take advantage of opportunities that may arise.

Additionally, maintaining a healthy reserve demonstrates responsible financial management -- something that benefits the city when we go out to the bond market for big projects like the second phase of the surface water project.

Q: Some of the council's most persistent critics claim the city has piles of money sitting around that it isn't using for things such as road maintenance. Is that true? Why isn't the money being used?

A: I've heard that as well and can tell you that it's probably one of the biggest misconceptions out there. The city's last pavement management report indicated that over $15 million was needed every year just to keep our streets at the level they are now. The council used that information to increase the budget for our street maintenance crews from about $1 million annually to nearly $3 million annually, but of course, that's not enough.

The city has fully committed its portion of federal gas tax revenues and uses as much of the state's local transportation funds as we can, after making sure that our commitments to transit services are met. The council has also tried to steer as much money as possible toward larger road projects and, in just the past budget cycle, the council committed an additional $1.6 million to street maintenance activities.

The reality is that California cities have historically depended on the state and federal governments for funding of road maintenance and road improvements. But as those resources dry up or are withheld when the state's budget is tight, we are going to need to do more for ourselves. The areas of our state that seem to be in the best shape are those that have committed local resources. We only have to look north to see what San Joaquin County has been able to do with a dedicated half-cent transportation sales tax.

Right now, we're doing a road maintenance survey of all public roads within the city of Modesto to determine their condition. This information, along with information we're getting from our new pavement management software program, will assist public works staff in determining how to best utilize the funds we do have and plan for the future.

Q: Since becoming mayor, you've pushed for more after-school programs and other activities for youth. How much is the city spending on that now? Isn't that a luxury, given that the city couldn't fill police and firefighter positions?

A: After-school programs, recreation leagues and other youth activities are as much a part of our public safety strategy as is the hiring of police officers. Kids who have someplace safe to go, who have activities to occupy their time, and who have adults interested in them are less likely to turn to gangs, paint graffiti on our businesses, and become involved in other criminal behaviors.

This past year, the city spent about $1.2 million on these types of programs, and we expect to spend about that same amount in the upcoming year. Another thing to keep in mind is that some of these programs are self-supporting, so there's about $300,000 coming in from program fees that help reduce the city's costs.

Q: Last summer, the council approved pay raises for employees and within a couple of months there was a hiring freeze in place. That seems inconsistent. Shouldn't the city have forgone the pay raises in favor of filling vacant positions?

A: Pay issues during tough times are always a difficult balancing act. However, there is always going to be a need for the city to pay decent salaries in order to attract and keep quality staff. At the end of the day, we may have a smaller number of staff but our employees will be well-qualified, enthusiastic about their jobs, and ready to do the work of making Modesto a wonderful place to live, work and play.

Q: Ceres residents approved a sales tax increase to pay for improved public safety. Turlock is considering putting such a proposal before voters there. Will Modesto also be proposing a sales tax increase for police and fire? If so, when?

A: A public safety sales tax has been talked about in the past, but right now our focus is on the proposed half-cent sales tax measure for transportation. We're pleased that the proposed measure includes funding for both regional projects that will help improve traffic conditions throughout the county as well as local traffic improvements and road maintenance. Voters will have the opportunity to voice their opinion about the transportation sales tax measure in November and we look forward to hearing from them.

Q: Measure M, the accountability package, includes an item that would give the mayor more power in creating the annual city budget. Why is that important? Will it assure that the money is spent more wisely?

A: On a day-to-day basis, the council and I are very involved with the annual budget process. Through the council's Finance Committee, the council has the opportunity to provide input and direction all along the way. I also get involved throughout the process, whether it's working through the latest revenue numbers or deciding the best way for dealing with budget reductions. We've been able to build this kind of professional relationship because both the elected officials and appointed city staff want to be partners in the process. So, while I don't expect that Measure M will change much about the way we currently do business, it will help future councils by ensuring that the collaborative partnership is there regardless of the individuals involved.