This ran in the San Mateo Daily Journal on Monday, April 2, 2018.
What would you do with $38,000,000?
It’s a question we’d probably all like to face. I can’t offer that princely sum to you as an individual…but it’s a very relevant question for every resident of San Carlos. Because that’s roughly how much the City has in financial reserves. Yet few San Carlans have any idea there’s that much money in their bank account.
That’s not surprising. Up through 2009, our costs were growing faster than revenues. That culminated in a major restructuring, outsourcing our police department to the County Sheriff’s office, our fire department, ultimately, to Redwood City, and several other functions to private contractors. The restructuring worked, big time. City finances began improving dramatically immediately afterwards, even though we were still mired in the Great Recession.
While the size of our reserves is public information, it’s generally presented in a way that’s hard for a layperson to understand. For one thing, it’s broken down into a bunch of categories, labeled “committed” or “assigned”, which leads people to conclude it’s outside the Council’s control. In reality, 98.99% of the money is available, today, for whatever purpose a majority of the Council considers appropriate.
What might it be used for? Being community money, earned by accepting development, arguably it should be invested in improving our quality of life. New or upgraded parks? Community gardens? A rollback of recent sewer rate increases? A local bus/shuttle service to help people get to and from downtown without using a car? New parking structures serving downtown? A community recreation center or pool? More workforce housing, so our teachers, firefighters and police can live in the community they serve? These are just some of the ideas I’ve heard over my years on the Council. I’m sure there are lots more, too (write me at email@example.com to share yours).
It’s unclear we’ll be going after the best ideas first, though. The Council recently earmarked $10 million to rebuild the Holly/101 interchange and add a pedestrian/bicycle bridge over the freeway.
Many residents tell me they love the idea of a bicycle bridge. But I’ve yet to hear from a single person who thinks rebuilding the interchange is a top priority. Indeed, its reconstruction mostly seems targeted at enabling more commercial development on the east side.
We do need continued development to pay our bills. But our main goal should always be creating the financial resources we need to improve our quality of life, so that we more than offset the negatives of development. Otherwise, why not just curtail all but the minimum development needed to keep us solvent? Which, given that $38 million sitting in the bank, could clearly be much less than what we’ve been allowing.
Spending our money to foster development so we can, say, get a new park or a shuttle service, is one thing. Spending money to earn funds which we plow back into projects that primarily enable yet more development is something else. In fact, I don’t believe the latter is what most San Carlans want. But that seems to be the direction we’re heading.
Another idea involves irrevocably committing $7.5 million to pre-fund employee retirement benefits. The city’s annual pension contributions have been increasing for some years (employee contributions have, too). Investing additional money today, beyond what we are required to pay into the state pension system, would reduce our future annual payments (although they’d still increase).
But, for years, our revenue growth – derived from San Carlos being an attractive place in which to invest, work, and shop — has kept pace with the increases in our required contributions. I’d much prefer we stay with that successful formula and invest the $7.5 million in improving our residents’ quality of life today. That way, our community will continue to attract a healthy level of investment and spending in the future, out of which we can fund our future pension obligations. Plus, we’ll have the improved quality of life that $7.5 million can buy.
Why is all this timely? Because the Council will shortly be starting its biannual budget process, making it a great time for San Carlans to weigh in on how they think their money should be spent. Two all day meetings on the new budget will be held, the first on Friday, April 27th, and the second one week later, on Friday, May 4th. Both are open to the public and will start in the City Hall Council Chambers at 8 AM.
How do you want to see our quality of life improved?
I look forward to hearing from you.