COMMUNITY NEWS
Grand Jury Wants City Budgets We Can Understand
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By Jondi Gumz
ities are involved in risky business — and I don’t mean Tom Cruise dancing in his skivvies on the sofa. The problem, according to the Santa Cruz County Grand Jury, is that Capitola, Santa Cruz, Scotts Valley and Watsonville have not done enough to evaluate risks that could cause a budget shock. All the cities evaluate potential hazards such as earthquakes, floods and fire and mitigations but the Grand Jury contends the cities should analyze operational and financial risks and potential interactions, explore options to control the risk, identify where investing resources would have the most impact and then do more to communicate this risk to the public. In a 60-page report, which the Grand Jury details a scenario, “Pandemic Causes Budget Crisis,” showing how a pandemic leads to emergency spending, lower revenue from service fees and lower tax revenue, none of which are under city control. Lower revenue leads to an emergency hike in service fees and reserve funds being depleted, leading to a significant budget
deficit. At this point, the city could tap a nonrecurring revenue source, reduce funding for services or reduce funding for infrastructure projects. An emergency donor network to cover specific expenses could mitigate this situation. If the choice is made to reduce funding for services, either services will be cut or maintenance will be deferred. Challenges for the analyst include confirmation bias and overconfidence bias. The Grand Jury says its analysis applies to Santa Cruz County as well. As for providing information that educates the public about public business, the Grand Jury says – despite strategic plans, budgets and comprehensive annual financial reports – these documents “fall well below the bar of transparency.” Employee pensions and their share of a city’s annual budget are a major concern for the Grand Jury. Searching for key data points such as employer contribution rate and funded ratio (assets vs. accrued pension liability)
to evaluate each city’s pension risk was difficult. For example, the Scotts Valley Comprehensive Annual Financial Report was not searchable. The state pension agency, CalPERS, assumes a 7 percent return on investment to generate funds to pay benefits but if the actual return is 5 percent, the city would have to make up the difference. A CalPERS report projected that employers would have to increase their contribution by 66 percent for public safety employees and 33 percent for other employees. Grand Jury interviews found this would result in “significant loss of staff and services.” The Grand Jury recommends that each city include a section in the annual financial report and in the budget devoted to pension risk. “Future taxpayers (in 20 to 30 years) will have to pay for services rendered today through reduction in available funding for their service needs due to unfunded liability debt payments,” the Grand Jury wrote, calling for effective transparency for residents. “Perhaps if they could view understandable data and information showing what they and their
children will have to give up for overly generous pension benefits, then political action would be possible.” The next election is coming up Nov. 3 for anyone who wants to make financial transparency an issue. n
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“It’s very rewarding,” said founder Jackie Tucker, who has 100 employees, some “with us 20 years.” Pay is $16-$17 an hour with paid vacation and sick time provided. Jobs: Care coordinator, care providers, HR manager To apply: Jackie@carefromtheheart. net or call 831-476-8316, or see www.carefromtheheart.net/jobs Big Data Federation: in Santa Clara, founded in 2015. “We predict the future, said Peter Walther, vice president of operations Jobs: Senior data scientist with PhD or masters in engineering math or statistics with 2 years experience in artificial science or machine learning. To apply: Peter@bigdatafed.com Two more opportunities are available for small businesses: GetVirtual.org, a new initiative led by Toby Corey and Nada Miljković in which college students get college credit for upgrading websites to add appointments, payment and delivery options, and Monterey Bay Interns, which allows small business owners to post internships at no charge at mbinterns.org.
UCSC Winners eetup attendees also heard presentations by the winners of the UC Santa Cruz IDEA Pitch. They are: First place and $3,000: ARbot, an automated recycling arm to sort out contaminated trash on the conveyor belt at a recycling center. Logan Fansler, on the ARbot team, said the device could save the city of Santa Cruz $22,750 a year. Details: ARbot.inquiry@gmail.com Second place and $2,000: ViBrace, a wearable device to alert the profoundly deaf to smoke and fire. Third place and $1,000: Slug Charge, a solar-powered vandalismresistant password-protected device to be installed in areas for people who are homeless to charge their cell phones. Team member Jordan Tam said it charges six phones at a time. Slug Charge also was voted by attendees as “the people’s choice” award. n ••• For more information visit SantaCruzWorks.org
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