Budget Process

[StanN]

My reaction to the budget process:

a.. long on detail - short on substance.

b.. far too liberal use of high priority category - especially for P&R

c.. lack of rational system for determining priorities, e.g. needed for health and safety, needed to improve QOL, needed to facilitate future high quality growth growth; lack of cost/benefit estimates (even H,M,L would help). The only exceptions are notations the project is legally comitted.

d.. Lack of strategy; e.g. maintain Cary as the #1 town for roads in the triangle to promote ED and QOL. or promote development in NWA to recoup high investment there;

e.. Lack of business plans e.g. Increase tax base in downtown area consistent with zero cash flow over ten years

f.. Line items should be grouped by hierarchy of strategies and priorities.

g.. Without overarching strategies and lack of rational basis for priorities - total system of priorities is merely someone's opinion and the basis for disagreements and wasted $'s.

Here is an example:

Bartley Park is listed as a high priority. Why?

1. It is in Jack Smith's district who is running for re-eelction and whose re-election is supported by EM.

2. The area is the most under-served in Cary?

I3. t is in the P&R Long Range Plan?

4. Mary Brady thinks the priority is high?

5. Based on standards and benchmarks established by staff and approved by the CTC the surrounding area is the most under-served in Cary?

5a. A recent survey of the public indicated a preference for more parks over more roads?

6. The CTC has agreed to a long range strategy that places P&R ahead of roads as a priority in the CBP and CIP? This was arrived at by an analysis that shows that parks rather than roads leads to increased high-quality tax base increases?

7. A survey of the businesses targeted for growth in Cary indicates a great dissatisfaction with the parks system and places parks ahead of roads as the reason for prefering Cary as a place to live and work?
------------------------------------------------------------------------

We have no explanation other than staff proposes Bartly Park as essential for the TC and high priority.

IMHO only 5,5a, 6, or seven are acceptable reasons - #5 and 5a are marginally so.

And thats just one small example.

Comments?

stan

[Brent]

Stan, these are excellent points.

Regarding priorities, I generally agree, but I am told that the priority applies only within the department -- that is, PRCR says Bartley Park is high priority as far as PRCR budget line items go, but that doesn't relate it to non-PRCR line items (hence, it isn't the case that Bartley Park is necessarily rated higher than roads/transportation items). I'm also told that there is a methodology used by Staff to establish the priority of a line item (I do not know the details; it could very well be something along the lines of what you have outlined here! :wink: ).

I am not defending Bartley Park being ranked high, mind you, just noting that that's PRCR's priority according to other PRCR items only.

Regardless, I agree with many of your general observations. The overarching "strategy", if there is one, appears to be "whatever we can get away with this year, with no tax increase this year".

I will also note that, in the town manager's proposed budget, if you believe the numbers therein, staffing levels and operational costs would grow faster than Cary's population.

[kellyc]

I thought Bartley Park was a Marla thing, not a Jack thing. Seems as if when we went thru the budget thing last year it was Marla pushing to keep the funds...not Jack.

[StanN]

Brent,

If there is a methodology, it is not clear and transparent to all - including the public.There is only a mysterious triangle that says "trust me".

I also understand, as you do, that priorities only apply within departments. What is the methodology/philosophy for making prioritizing decisions between departments? I suspect there is none. They delegate the task upwards. I would have been demoted for doing that. A smart leader will not accept upward delegation before the person reporting to him has made their recommendation. Then they will decide.

And how do I know that the roads/parks nominated are a complete rather than a selective list.

The process is neither transparnt or rational.

One possible conclusion - staff is trying to exert control, with possibly the consent of some on the council.

WO IS IN CHARGE??????????????????

stan

[StanN]

I will also note that, in the town manager's proposed budget, if you believe the numbers therein, staffing levels and operational costs would grow faster than Cary's population.

Why isn't there a committment, common in wisely run businesses, to annual increases in productivity by staff. What ever the town's growth rate is, that should not be a reason to increase staff.

An increase in staff should be a conscious strategic decision. The CTC should choose 1 or 2 top strategies to focus on. Those strategic imperatives should get the added manpower.

stan

[StanN]

Kelly,

I never said it was Jack...or Marla. Nor meant to imply same. I'm just listing options and the lack of a transparent or rational process by staff.
Staff has the most info. They should INITIATE or propose priorities. The CTC should then make the final cut.

stan

[kellyc]

Kelly,

I never said it was Jack...or Marla. Nor meant to imply same. I'm just listing options and the lack of a transparent or rational process by staff.
Staff has the most info. They should INITIATE or propose priorities. The CTC should then make the final cut.

stan

No you just implied it. It couldnt be any more obvious that you have personal axes to grind with Jack and Ernie, and therefore whether your arguements have merit or not you simply are a bitter old man. Everytime you make a statement I cant help but wonder if you are looking out for the town, or simply trying to figure another way to stick it to the CTC, town staff or chamber.

Now you are going to take a process that some very intrested citizens are using to do what they feel is best for the city and turn it into another way to grind your ax against the CTC, the town staff, and the Chamber. Thanks Stan for ruining a process that had a lot of potential and putting your ego ahead of the succes of the group. Are you related to Bill Fletcher?

[Don]

Now you are going to take a process that some very intrested citizens are using to do what they feel is best for the city and turn it into another way to grind your ax against the CTC, the town staff, and the Chamber. Thanks Stan for ruining a process that had a lot of potential and putting your ego ahead of the succes of the group. Are you related to Bill Fletcher?

Hear! Hear!

GREAT POST KELLY!

[Brent]

If there is a methodology, it is not clear and transparent to all - including the public.There is only a mysterious triangle that says "trust me".

Staff's priority setting criteria are explained Exhibit A of the CIB Budget Work Session meeting minutes at http://www.townofcary.org/agenda/councilmin05/ws042605.htm (that exhibit is a presentation that one would need to request from the town clerk, I believe).

[Don]

Oh, and BTW stan, will you be attending the next Budget Review Meeting and actually take part in the process, or just continue to insult everything from afar?

[Cathy]

I repeat:

Stan may have "asked for" the level of suspicion as to his intent,
but I think he is raising some very good points that shouldn't be dismissed so easily.

Cathy

[Don]

I repeat:

Stan may have "asked for" the level of suspicion as to his intent,
but I think he is raising some very good points that shouldn't be dismissed so easily.

Cathy

....and I say "IF" stan wants to participate in THIS debate (budget forums for PARTICIPANTS of the citizens budget review committee), then the personal agenda and attacks on council stops and stops NOW.

I was VERY concerned about this website being used as the forum for this groups debate....and I still am.

If he wants to participate in a constructive manner, he is free to do so. But if the insults and/or negative attitude continue he will ruin whatever good this group may accomplish - and probably run 1/2 of the participants off. (I have already heard from 2 who are concerned)

An attack on Jack is NOT a good way to start. (whether he deserves it or not) You think Jack will want to hear anything this group has to say after reading insults directed towards him on this board? Maybe stan should take an anger management class instead of participating in this committee instead.

I agree he makes great points and is a very intelligent man - but let's try it in a non-confrontational / non-insulting kinda way and save the bashing for the other sections of this site ok?

[StanN]

Many towns across the US have permanent citizen finance committees who work with both staff and political leaders to establish budget priorities and act as a watchdog. Such committees are established by state law in Mass. I have a friend who works on Brewster's. It is a time consuming, year round effort.

I will bring some print outs of such committees with me - but take a look at virtually any Ma town - Braintree, e.g.

We need to consider the full magnitude of the effort.

Stan

[Don]

While a good idea stan, (year round volunteer committee), I have NO desire for Cary to be anything like Massachusettes......or Seatle, Tempe, or Raleigh either. We can however learn from others mistakes.

I wish our town would quit looking at what everyone else is doing and instead just do what's right for Cary. We didn't get to be one of the best places to live by copying everyone else so why start now?

Maybe other muni's should be emulating us a bit?

[StanN]

DonF,

Are you saying that you are highly pleased with Cary's budget process and you see little room for improvemnt?

If the latter what would you like to see improved by the process? What are its greatest strengths and deficiencies?

stan

[Don]

DonF,

Are you saying that you are highly pleased with Cary's budget process and you see little room for improvemnt?

If the latter what would you like to see improved by the process? What are its greatest strengths and deficiencies?

stan

You know me better than that stan - no, I can't say that I am highly pleased at all.

I am however pleased that I am offered an opportunity to participate in the process (to a degree anyways) and that there are council members who appear eager to hear what we have to say.

I am a believer that priorities such as roads, water, sewer, police and fire come first. If we cannot adequately fund those to "Cary Standards", then ammenities such as aquatics centers, doggie parks, and tennis centers have to wait.

My biggest beef with "the process" is that citizen input takes place WAY to late in the game. I would, like you, like to see a year round citizen's budget review committee so that citizen input may be reviewed and implimented at the beginning, not 2 months till doomsday when it is too late.

Cary is loaded with intelligent people who, if brought together at the same table, could come up with some really wonderful ideas on how to budget our town's finances. This citizens committee is just the start of that process. We need not look to other muni's to see what we should do - but rather we should be looking at them for what NOT to do. The day we start acting like Massachusettes, Seatle, Tempe, or Portland is the day I pack up the U-Haul and move.

[Brent]

I agree that I don't really want to emulate Massachusetts, and that there is both opportunity and peril in looking at other communities.

I would very much like to see a formal, year-round citizens budget advisory committee.

Indeed, last year's budget committee's recommendations included:

We recommend an “official” citizen budget committee of some type
– e.g., Town board/commission
–To provide ongoing advisory input throughout annual budget cycles
–To leverage knowledge that citizens gain during budget “learning curve”

[StanN]

As a warm-up exercise lets focus on roads for a while.

1.How do we know all the options are on the table? (I doubt they are)

2. Lets assume there not enough money to do all the roads we would like, One possibility is that you would start with the most congested roads/intersections first and go down the line until you had run out of money. Do we know what the most congested roads are?

Do you really understand how staff has arrived at their priorities? I don't.

A second possibility is that you would favor certain road projects because of the overall importance to the town of the project. For example: a bias toward the NWA because the town has spent tens of millions in water and sewer there already and we need more construction there to get a return on our investment; or TCAP roads - because the CTC wants to stimulate construction there. (Forget about my bas - somebody loves that idea)

How do youu choose among those options? Just opinions? Yours versus whomever supports those other options? A compromise between those holding different positions?

Take sewers as another example, HW thinks we are build too far in advance of demand - too big a wastewater plant. Would you cut back on sewers to build roads? Suppose you were told that if you cut sewers the cost per unit of capacity would be much higher.

At the same time the roaads champion is arguing that delaying roads to build sewers is foolhardy becuse of the rapid cost inflation for roads and they were vital in attracting new jobs. How would you choose?

I know this is all theoretical at this point. But the point I'm making is that the decisions involved are likely to be more complex than initally thought.

How do you make decisions with such complexity? Thats why I am focused on process. Think about it.

stan

[Don]

I would want to know when the computerized/fiber optic signalization takes place, and an estimate of how much traffic will be alleviated as a result of this going online before I were to discuss this stan.

My gut say we start with the most conjested areas, but I also believe the syncronization of signals "might" be a more cost effective solution in some areas. Anybody know when this will be completed and how much it will help?

[Don]

I know this is all theoretical at this point. But the point I'm making is that the decisions involved are likely to be more complex than initally thought.

How do you make decisions with such complexity? Thats why I am focused on process. Think about it.

Decisions regarding the TOC's budget are complex, and unfortunately if we are going to accomplish anything of merit we don't have time on our side either. However, I am confident that with this many dedicated, involved, and intelligent folks, we got a shot at it.

I am a bit disheartened however not to hear from some of those participating in the group who are not "regulars" here though. Ya'll out there?

[Brent]

I would want to know when the computerized/fiber optic signalization takes place, and an estimate of how much traffic will be alleviated as a result of this going online before I were to discuss this stan.

I would also like to know this information. I'll add it to the "Questions" forum and ask Mr. Joyce to ask this one.

I am especially interested in this answer, because I was quite surprised to hear the town's engineering director state, at this year's council retreat, that the fiber-optic signalization would improve travel time and pollution but would not increase capacity, and that intersections at service level 'F' would stay at service level 'F' even with the computerized signals. This seems contrary to other data I have read.

[StanN]

The cost of living in Cary is going up…be it taxes or fees. The reaction of many is to CUT COSTS. But the reason taxes and fees are going up is lack of OPERATING MARGIN. OPERATING MARGIN = REVENUES MINUS COSTS.

CUTTING COSTS is a tricky business. It inevitably entails a cut in the level of services. The law of unintended effects works in two directions. A cut in the level of services can have serious consequences. For example, Cary’s cost of building inspections is high. But what is the hidden long term cost of shoddy construction on our homes and neighborhoods?

Why do we focus on CUTTING COSTS rather than RAISING REVENUES? CUTTING COSTS is direct and immediate…and thus satisfying. “A dollar saved is a dollar earned”. RAISING REVENUES is indirect, less certain and usually entails an initial increase in costs. But look at the successful businesses you know. Have they achieved success by CUTTING COSTS or RAISING REVENUES – or both?

In municipal government, RAISING REVENUES involves raising the tax base – quality increases that raise OPERATING MARGIN. (Impact fees simply transfer costs – the may RAISE REVENUES short term but decrease it long term if excessive.) Raising Cary’s tax base is aka ECONOMIC DEVELOPMENT. Increasing the number of quality jobs IN Cary raises the tax base and operating margin.

Take SAS for example. If half its 4,200 employees buy a median priced home that’s $500M-$600M in tax base. Plus SAS’s tax base is $220 million. Annual property tax REVENUES (Cary alone) approach $3M...plus another $0.4M in sales tax REVENUES distributed from the county. And I haven’t counted a penny of income to local merchants and how that impacts either property tax or sales tax revenues to Cary – offsetting the costs and taxes of all citizens. Isn’t that a model for what we want more of? And those revenues contribute heavily to OPERATING MARGIN.

And yet some on the CTC, including those who wish to REDUCE COSTS, are cool or conflicted when it comes to INCREASING OPERATING REVENUES through ECONOMIC DEVELOPMENT. Why? The Budget Committee is owed an explanation.

A second conclusion. It is dangerous to simply focus on CUTTING COSTS. Rather we should be focused on RAISING EFFICIENCY OR PRODUCTIVITY, i.e. preserving or even increasing service levels while reducing costs.

Fourthly, is staff and the budget process focused on INCREASING OPERATING MARGIN? The Budget Committee should consider this, and if not, suggest how that process should be changed.

Lastly, lets avoid the flag waving about avoiding increased debt. Debt is a method of financing. It has become a political football. Debt may be good or bad depending on how the underlying capital expenditure impacts OPERATING MARGIN. Either we need an intensive understanding of how increasing debt impacts OPERATING MARGIN, (i.e. bond ratings) or we ought to leave the topic to the experts, i.e. the finance director.

Comments?

stan

[kellyc]

In municipal government, RAISING REVENUES involves raising the tax base – quality increases that raise OPERATING MARGIN. (Impact fees simply transfer costs – the may RAISE REVENUES short term but decrease it long term if excessive.) Raising Cary’s tax base is aka ECONOMIC DEVELOPMENT. Increasing the number of quality jobs IN Cary raises the tax base and operating margin.
stan

Okay I'll bite...but I think this conversation would be more appropriate in the local issues forum instead of the budget forum.

What would Stan do to attract quality jobs to Cary. And how would you accomplish this in one year before the start of the next budget season. Keep in mind that SAS is not necessarily a good comparison as they dont answer to stock holders.

[HW]

at this year's council retreat, that the fiber-optic signalization would improve travel time and pollution but would not increase capacity, and that intersections at service level 'F' would stay at service level 'F' even with the computerized signals. This seems contrary to other data I have read.

The fiber optic signalization will increase throughput 20% or more. That is it will eleviate some of the red light process of slowing down, stoping, and starting up. Thus getting from point A to point B will be faster. The quicker cars get from their origination point to their destination point the less capacity on the resource traveled. This is basic queueing theory.

Levels of service measure how long a car sits at a red light. If I remember correctly 60 seconds or more will be an F. So in a scenario where there is an F for two hours at an intersection during rush hour a computerized signal system might improve that to an F for an hour and a half. So technically the statement by staff could be true in some cases.

But it is still an improvement. AND the improvement is cheaper than adding a lane or two of asphault.

HW