Welcome!

Welcome to any new readers.  I encourage you all to learn about the most urgent issues in Lafayette, including the possible urbanization of our city, by clicking on “Action Alerts” near the top of the page.  Please feel free to look around, leave your comments and, if you would like, send me your thoughts.  Thanks for checking out the site. 

 Sincerely,

Gabriel Froymovich

Property Transfer Tax Report: November 2010 Ballot?

The City is considering trying to pass a property transfer tax in November 2010.  I would guess that we’ll see it on the ballot then.  I would also guess that we will not have seen any major attempt to create a more sustainable budget.

Property Tax Revenue on the Rise in Lafayette

Well, here’s some good news: Lafayette assessed property values have risen over 3%, according to City Manager Steve Falk.  This means another $50K or so in property taxes that I hope will be dedicated to roads.

Also, some areas of the city are being hit by thieves in residential burglaries.  MOST OF THESE BURGLARIES WERE FACILITATED BY FORGETTING TO LOCK UP THE HOUSE!  Lock your doors, windows and garages folks.  Don’t let your home be a soft target.  Also, keep your eyes and ears open for suspicious behavior.  Neighbors have been instrumental in providing leads in these cases which have led to one arrest so far.

Also, on the agenda for Monday night’s council meeting, will be a discussion about bringing a Farmer’s Market to Lafayette.  We should.  I have seen high-paid consultants pull out graphs talking about the millions of dollars Lafayette needs to spend to reduce our carbon footprint to be in line with such-and-such standard.  It’s crazy to me, but what isn’t crazy to me is to bring in a Farmer’s Market.

There are many benefits to creating a source for local food and one of them is that much less fuel is spent feeding our town.  Not only is this an environmental cause we should all get behind, but it is a great public amenity for residents and a way to bring more people into Lafayette by accentuating our status as the indisputable food Mecca west of the Caldecott.  More people means more revenue for our permanent merchants, more sales taxes for our roads and a more vibrant city, in general.

Housing Size Ordinance is Dead

The Lafayette Taxpayers’ Association is reporting that the Housing Size Ordinance is dead, at least for now.  New ways to strengthen the DRC’s ability to hinder the building of larger homes are still being considered,  however.  This is good news.  Many in the community, especially the Happy Valley Improvement Association, opposed such an ordinance, which would limit the square footage of any new home – or any older home through additions - to a certain percentage above the average of nearby homes.  The problems with the ordinance are three-fold:

1)  By discouraging larger homes and discouraging renovations, property taxes are depressed.  Larger homes generate more property tax and renovating a home brings it out of Prop 13 protection.  The city needs this money to fix all of our broken-down roads, especially when revenues are falling in today’s economic climate.

2)  The ordinance was too arbitrary.  It was based on an arbitrary formula that only took into account square footage of a home.  Worse yet, it took into account only gross square footage, not living space, so that it could even prevent someone from building a new garage or deck. 

3)  The ordinance only restricted property rights, without protecting any property rights.  That is, it was meant to protect neighbors from monster homes that could ruin their views or otherwise harm property values.  Instead, by using the arbitrary square footage formula, it only takes away the builder’s rights, without guaranteeing any protection of the neighbors’ rights.

Property Transfer Tax

The Sun reported that all three of Lamorinda’s cities are considering working up a city charter so that they can enact a property transfer tax.  Our City Manager, Steve Falk, claims that this is necessary to ensure our City’s “survival.”

Sorry, Steve, but I don’t buy it.  Lafayette generates plenty of tax revenue.  We need a more sustainable budget.  Anyone who is really worried about Lafayette’s fiscal survival would focus on the fact that our payroll has approximately sextupled since we incorporated 40 years ago, from 6 or 7 employees, to 40+ and we’re still hiring.  Even in today’s tough economic times, when city revenues have dipped and cost of living is not rising, our city staff will get an average 7% raise.  That sounds to me like a much more real threat to the city’s survival.  Let’s not talk taxes until we have a sustainable budget.

So, here’s how things will play out: the City will spend thousands to tens of thousands of taxpayer dollars on the committee to explore this option.  Then they’ll spend tens of thousands to hundreds of thousands of taxpayer dollars to put the new tax on the ballot and campaign for it.  Meanwhile, the Lafayette Taxpayers’ Association and others will have to spend their own time and money to push back against the pro-tax campaign that they were forced to pay for.   And - just like all the attempts by the City to pass new taxes in the past several years - all the sound and fury, effort and money, will be for nothing, and the proposed tax will rest beneath yet another unmarked tax increase gravestone in a cemetary that gets bigger every year.

With the Council scaring residents with a plan to urbanize Lafayette, I would suggest they lay off plans to increase taxes.  The next election cycle, which could well feature a citizen-sponsored referendum, looks like it will be contentious enough already.

Yet Another Money Grab by the State of California

State's broken road to bankruptcy?  Or just another Lafayette neighborhood road?

State's broken road to bankruptcy? Or just another Lafayette neighborhood road?

In a party-line vote, Assembly Democrats have decided to take away cash for road repairs that voters have allocated for localities.  That means that Lafayette is out nearly one million dollars of roads spending over the next two years.  This follows another recent grab of about half a million dollars right out of our general fund.

The State is grabbing at anywhere it can to come up with cash, but I think the last thing they need to do is to take cash away from those who have managed it infinitely better than they have.  The State Assembly won’t ever come up with a healthy budget, until the fiscal armageddon really hits; taking city funds down with them won’t fix the problem, it will only make it worse.  Please friends, complain.  Write letters to the editor and write to the thieves you voted for (or against).  Lafayette may be affluent, but we’re in a pinch and our infrastructure is in desperate need of help.

DSP Brush-Off

Many of this city’s interested citizens feel that the City Council is giving their views about the Downtown Strategic Plan the brush-off.  There have been complaints that Councilmember Mike Anderson did not make room for public comment and adopted procedures that would block height limit advocates from being an important part of the debate.  Councilmember Anduri, regrettably, was absent.  Vice-Mayor Brandt Andersson and Councilmember Federighi went along with Mike, but Mayor Tatzin did advocate for a more open process.

A subcommittee will be formed to look at height and the conditions upon which certain heights will be allowed, like setbacks.  The subcommittee will not be taking public input prior to presenting their “findings” in July.  They will meet in private and may only include those who are pro-height, though I am hoping that Mike Anderson will surprise us.  The initial draft will be written by the city staff’s ultimate pro-height ringer, Ann Meredith, who has tirelessly advocated for a DSP that will trample underfoot the wishes of Lafayette’s residents.  The public can submit their views to staff in writing and in July, in front of the Design Review Commission, the Planning Commission and the City Council. 

Anderson, Andersson and Federighi are in favor of reducing public input in this way, in order to expedite the process.  Multiple sources have reported to me that only Mayor Tatzin seemed to have taken into account public comment.  Eliot Hudson and George Burtt challenged the Council to drop the most contentious plans, the nearly identical staff and consultant plans, which would ABSOLUTELY RUIN LAFAYETTE.  The two plans would turn Lafayette into a town of tall buildings, poor views of the hillside, high population density, intolerable traffic congestion, strained infrastructure, lower property values, less sales tax revenue per capita and, quite likely, would also increase crime.

THOSE PLANS HAVE NO COMMUNITY SUPPORT!  In fact, the city’s residents are rabidly opposed to them.  The Council could expedite the process and save money by dropping those plans.  The only logical reason to keep them would be to adopt them, after city staff manufacture some way to justify them.  Not dropping them seems inflammatory to me.  I expect, based upon the current level of grassroots foment, that we will see civic involvement become more adversarial in Lafayette.

Multiple groups of citizens are clamoring for a petition and there has been talk about a ballot measure to stop the DSP or some of its elements.  Such a ballot measure could coincide with Council elections, making them more contentious than in the past.  I do not plan to run for City Council again, for personal reasons.  If, however, the Council continues to ignore the community’s opposition to the DSP; continues to incur unsustainable administrative costs; and continues to convert Lafayette into a ‘commuter node’ and an ‘affordable housing community;’ I would expect someone else to step up and to win.  I myself may well advocate for ballot measures, if the Council cannot learn to be responsive to the needs of Lafayette’s residents.

Oh, and for those of you who have been involved in Lafayette’s politics/civics in the past, the Council suddenly decided to – sans public input – include some changes to the vision statement that are a thinly-veiled push to re-define Lafayette as a ‘smart growth’ community.

Why do I seem so steamed and so ready for action?

  • The most critical part of the DSP discussion was put off to the last minute so that it could be subjected to a completely different, more opaque process in a cynical sleight-of-hand ploy.
  • No public discussion was allowed on the specific subject of height limits.
  • The limits will be decided in secret.
  • The secret committee will be handpicked by one councilmember and their decisions will be drafted by Ann Meredith, who seems to see height limits as about as useful to the town as a lemon zester.
  • There may be no representation from anyone opposed to urbanizing Lafayette.
  • The same councilmember, Mike Anderson, who will pick the subcommittee members will also chair the subcommittee; a recipe for bias.

I am not the only member of the community who is upset that speaking logically and calmly and trying to work with the Council seems to be a waste of breath.

Lafayette’s Budget Deficit

The City Could Use a Few Stacks of These

The City Could Use a Few Stacks of These

So, Lafayette’s expenditures in the City Manager’s proposed budget are up 3% this year and revenue is down 2%, due to the economic climate.  Oh, yeah, and while the County has decided to start forcing cities to pay for things they previously didn’t, the State is planning on taking a “loan” from Lafayette worth about half a million dollars.  It’s supposed to be paid back, with interest, in 3 years, but we (and all the other cities in California will see.)  Please find the phone numbers of your public officials in an earlier post to protest this action.

Also, the Council will be deferring $380K in roads funding until next year.  Mostly, this is because this year actually saw a  windfall of roads funds and, supposedly, the City Engineer can’t handle more, though that is news to me.  Let’s keep an eye on that cash, though.

The deficit will eat up 11% of city reserves, if the City Manager’s proposed budget were to pass.  It won’t, as it is always submitted to be modified by the Council.  Still, if this goes on, we can expect that, at some point, police services and our already underfunded road repair program will be cut.  Police are a huge and growing portion of our costs, but we can, if we are optimistic, expect this to be partially alleviated by having someone other than the Sheriff’s department contract for police.  In fact, part of the deficit is from a one-time outlay to be able to fund a police transition.

So, what can be done to close this gap?  Well, the Council, with Mayor Tatzin and Councilmember Mike Anderson in the lead, did push off some  less urgent expenditures to later years and did some trimming around the edges to reduce the deficit by a good bit.  Also, Parks and Recs unexpectedly reported that they have not seen revenue drop as expected.  Tatzin and Anderson would have cut more, but couldn’t get the rest of the Council on board.  Anduri was very hesitant to make many cuts, Andersson seemed contemplative, but generally uncommitted to many of the possible cuts and Federighi served as a kind of swing vote.  All five, though, did go at this problem in a thinking manner, with open minds.  I was impressed to see Anduri, at one point, withdraw a reservation after debate with other Councilmembers.  Overall, they did a good job of trying to work on this problem, except for one thing…

There wasn’t much discussion about the elephant in the room, though: the City Payroll.  In fact, a document detailing budget-cutting measures suggested for consideration by the Lafayette Finance Review Committee was conspicuously missing a suggestion to reduce payroll costs.   I think that much of the debate on this was precluded by the presence of a labor contract, but more on that later.

Since incorporation four decades ago, the size of the payroll has increased by 6 or 7 times, while population has grown by less than one-sixth.  Meanwhile, we have seen recent increases in compensation average about 6.5%.  The 401(k) package the city uses demands, essentially, that the city kicks in an amount equal to about 15% of salary.

So, in today’s economic times, what size raise are we looking at? Well, how does 7% sound?!  I have dealt with many city employees, as a business owner, as a private citizen, on behalf of the Lafayette Taxpayers Association, as a city commissioner and as a City Council candidate.  By and large, we have a high level of customer service and great city staff.  Still, 7% is a lot at any time, but especially during lean years.  The methodology used for determining raises is unfair to our citizens, unsustainable and operates in a vacuum.

First, we saw a total of $17K added to the budget this year as a “salary range” increase.  This is based upon an average of our 8 or so peer cities, which sets a basic salary range.  First of all, this data is, by necessity, a bit outdated.  If it were based on current salaries, I would guess that the number would be lower.  Furthermore, it does not take into account that many other municipalities are laying people off.  I doubt cities are retaining everyone and giving 7% raises.  Structurally, this is an improper method of determining salaries.  This is how you decide what to offer to a new hire.  Raises are best based on cost-of-living and merit increases.

The big increase, however, is the $135K in merit increases.  This is unfair, as, while revenue decreases, it drives costs up unsustainably, putting roads and police funding in danger.  When expenditures are up and revenue is down, and the future of our revenue and expenditures could be even worse, this is a dangerous move.  It puts endangers the budget and increases the chances that drastic pay or benefits cuts or layoffs would be required of our staff. 

It also fails to take into account market forces.  For one, the labor market is currently a buyer’s market, not a seller’s market and this raise is completely out-of-line with basic principles of market economics and budget management.  Furthermore, our economy is experiencing deflation – a decrease in the cost of living – which warrants smaller raises. 

Lafayette’s businesses are cutting staff in line with revenue decreases.  The City of Lafayette is not just failing to do this, but moving dangerously in the opposite direction.  I work in health care.  We’re doing absolutely gangbusters.  Our revenue is very much so in line with the city and our financial position, based on revenue, profit margins and growth is, well… amazing.  Still, my raise this year was 2.89%.  Seems cheap, huh?  No, it’s just realistic.  There is some economic uncertainty for the future, so we can’t be too sanguine with raises.  2.89%  also goes pretty far when prices are dropping and, well, quite frankly, I’m happy to have a secure job.

So, how could this happen?  For one, our Council has allowed this to happen.  Two, we would have to open up contract negotiations to change this.  This is the last year of a 3-year contract.  I understand the obligation to honor the contract, but we need to be ready to change the methodology by which we determine pay increases.  Let me outline 3 methodologies.  The first is the current one, the next is more in line with the private sector and the third is a unique way to do a public sector contract that would protect its residents.

CURRENT METHODOLOGY:  Basically, City Manager Falk rates all of city staff on a scale of 0 to 3.  Each point is worth a 2.5% salary increase.  I don’t think anyone has gotten below a 2 recently and the great majority get 3 points, equal to a 7.5% increase in pay.

REVENUE-BASED:  We could establish a range for payroll.  Take what we currently have and modify it by between 0% and 6% each year.  The amount of the raise would be equal to the change in revenue, but never outside of the 0% to 6% raise.  The City Manager would determine how to distribute that.  He could terminate employees to make that budget work, he could give some employees much higher raises, like 12%, in order to retain talent, so long as the overall payroll increase stays within range.  The City Council would be authorized to institute pay cuts or lay off employees only if doing so would be necessary to maintain city services and a reserve equal to 50% of the budget (the current standard, which Lafayette comfortably exceeds.)

A NEW PARADIGM:  Lafayette was established with the understanding that it’s mission was to take care of the 3 Ps: Public Work, Planning and Public Safety.  We are under-policed and 15% of our residents live on failed roads.  One way to determine raises that is fair to Lafayette’s residents is to tie them to these two expenditures.  That is, set a starting level of General Funds contributions to roads and police, say $1.25M and $5M respectively.  That’s quite a bit higher than right now, but I’m being optimistic; this would work with lower initial funding levels, say $1M and $4.5M.  The increase to payroll may never exceed the lower of the increase to either of these two costs.  Any decrease in the level of funding to either of them would have to be accompanied to a payroll decrease.  The City Manager would still choose how to distribute pay raises however he feels fit.  The biggest weaknesses are that it could, in the future, restrict the Council’s ability to retain talented staff.  Also, it would create a disincentive to staff to keep costs down.  Still, an attentive Council could make it work, especially since the contracts have traditionally been only 3 years in length.

Well, that’s my two cents on the matter.  If you want to do something, e-mail the Council at cityhall@lovelafayette.org and don’t forget to call your public officials to complain about the State’s money grab.