Together, let's figure how to keep Lincoln alive

By: Carol Feineman, Editor
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The city of Lincoln must drastically change the way finances are handled. That message at the April 5th special City Council budget meeting, though, was missed by many audience members. It was thrown out during a very difficult meeting. Firefighters, library staff and police personnel in the audience heard councilmen and city department heads say they were making budget cuts, including in effect reducing salaries through eliminating public-safety overtime. The message was delivered by Ingrid Sheipline, a certified public accountant with auditor Richardson and Company. She led a 20-minute presentation on the city’s audited financial statements for the 2010 fiscal year. “We concluded that the city could continue to operate for the next 12 months. We need to revisit that during the next audit,” said Sheipline on April 5. With the city’s funds being thrown out in rapid succession amidst warnings that the city must come up with a plan to pay back $34 million in interfund loans, that sentence was lost in the audit presentation. But if nothing positive changes immediately in Lincoln’s financial picture, then the city could make national headlines a year from now as it struggles to meet operating expenses. Next year’s headlines could add Lincoln to the list of about 500 cities, including Vallejo, that have declared insolvency. In May 2008, Vallejo declared bankruptcy. With a population of 120,000, Vallejo was the second city in this state to take this action. We don’t want Lincoln to find itself in the same situation a year from now. Lincoln city representatives and residents have to work together in the next few months to find ways to keep the city adequately funded. The life of the city depends on finding immediate solutions. Vallejo declared bankruptcy after a major downturn in real estate and the local economy. That seems almost like deja vu to me. Since the two years I’ve lived here, the Lincoln city manager and incumbent City Councilmen have said our city’s economic woes are a result of less property tax (and development) and less businesses operating here. Also similar is that the Vallejo’s police chief in 2008 said he was running out of ideas on how to keep a police presence on the streets. Plus three fire stations closed. Contrast that to Lincoln losing 13 police positions since budget cuts began two years ago and Lincoln city staff saying that “virtually all crime and gang prevention programs” have been eliminated here. Plus there’s the sign at the formerly operating McBean Park Fire Station in Lincoln that says the station closed, due to budget cuts. With that said, the Lincoln community has to avoid becoming another Vallejo. “Vallejo is very fragile today,” said interim finance director Dave Millican. “The city’s hope is that our final plan of adjustment will be approved in June by the bankruptcy court. Not being in bankruptcy doesn’t mean you’re flush with money. But being out of bankruptcy lets you act like a normal city.” Millican was aware that Lincoln is having budget difficulties. “Cities all over the state are under stress,” he said. “Some got in trouble by not facing up to financial issues and thinking they could solve them by just borrowing until the good times come again.” Next month will mark three years since Vallejo declared it could no longer pay General Fund employee salaries and the city is still suffering. In 2008, the Bay Area city faced a $16 million shortfall. The city’s No. 1 employer, Mare Island Naval Shipyard, was closed and, as Millican explained, “the recession in 2007 was starting to bite in Vallejo.” “Seventy-five percent of the ($80 million) General Fund was used to pay public safety and the other 25 percent was planning and development services, and public works street maintenance,” Millican said. In Vallejo, the county runs the library. Parks and recreation are in a special district. What Vallejo “could not guess” at the time of bankruptcy, Millican said, was that the General Fund revenues would drop from $80 million to today’s $65 million.  The Bay Area city’s police department has been reduced 47 percent, its fire department has been reduced by 42 percent and other departments have made similar 40 percent cuts, according to Millican. “There are increased crime levels, ‘victimless’ crimes can’t be addressed, prostitution and burglary rates have gone up,” Millican said. “Response times for fire and emergency medical calls are longer. Police patrols have doubled up. Doubling in police calls means that they have fewer units to respond to calls, priority calls get attention first and other calls have to wait or cannot be addressed.” And streets are in poor condition these days due to potholes, cracking and water damage, according to Millican. “The city gets concerns expressed by its citizens regarding their personal safety, condition of the streets and the difficulty in finding people in City Hall to talk to,” Millican said. “We’re down from 490 to 310 General Fund employees; the redevelopment agency is down to two employees, including economic development.” And the city’s tax base has considerably shrunk. “During the three-year period, housing prices have dropped 70 percent. The median price has gone from $470,000 to $137,000. Even nicer neighborhoods saw a 50 percent drop,” Millican said. “The city service level, according to the city manager and City Council, is inadequate to serve residents through public safety, maintenance of infrastructure, quality of life, which is almost not talked about because priorities have shifted. Vallejo is a hard place to be in for city employees and some residents but it still has great beauty and cohesive neighborhoods.” Millican has worked in city administration since 1970. His last position, before becoming a consultant for Vallejo and then the interim finance director, was as Fremont’s deputy city manager/chief financial officer. Millican is “hopeful” for Vallejo’s future, thanks to the city’s work the last three years negotiating with unions to reduce retirement medical benefits, current employee medical benefits, positions and salaries; and also working with neighboring cities and the county to provide some services together. “Vallejo residents would say, ‘If you can avoid bankruptcy, avoid it.’ You need to have trusting honest relationships among your staff, management, council and community,” Millican said. “If everyone is fighting that information presented about possible insolvency is not true, that takes precious time that could be used to change agreements and make plans. What you don’t want to do is come down to being 45 days away from an empty bank account.” Carol Feineman can be reached at