Dollars and Sense

By Ed Rast

Did you know that the San Jose budget is one of the most perplexing documents in the world?

Administrations of different cities use significantly different but easily understood language, performance metrics, and comparisons in documents presented to their Council as the basis for final budget decisions. The idea being that the average citizen shouldn’t have too much trouble following the flow of money from revenue to expenditure in their city’s budget documents.

Budget documents prepared by San Jose city staff omit important revenue, staffing, and expenditure details. Performance information is not compared to other cities with regard to population or geography. This makes it hard for both the City Council and residents to understand the difficult decisions faced by the nation’s 10th largest city in its 8th consecutive year of deficits. What this all means is that San Jose’s budget is exceedingly difficult to understand, even for CPA’s and MBA’s.

Let’s take a look at the budgets for three California cities so you can get a better idea...

Los Angeles is California’s largest city with a population of 3.8 million and the second-largest police force in the United States. It’s budget contains detailed information on revenue, staffing, expenditures, and performance:

• Go to the City of Los Angeles Proposed Budget 2009-2010 and flip through the pages concerned with police funding: p. 37, 41, 143-146.

• While you’re on page 41, have a look at the simple math: police operations ($1.2 billion) + pensions & benefits = $ 1,98 billion. Now go to pages 143-146 and read through the Police Department budget, complete with sources of funds, expenditures, and cost programs.

• Still with me? Okay. Open up the Los Angeles Blue Book 2008-09. This budget addendum is a detail of departmental programs. Flip to the page 507 to read about the Police Department’s indicators of workload. Here, you’ll find hard numbers of crimes, cases, violations, and investigations taken on by the LAPD since 2002-03.

• You can complete your tour with the Blue Book 2009-10. Simple charts and graphs on pages 525-528 (pdf pages 55-58) compare the 2009-10 proposed police budget to the actual 2008-09 budget as well as valuable metrics for technological and operational support. Pages 525-555 (pdf pages 55-85) detail the entire police budget all the way down to cabinet makers (p. 548).

Sunnyvale is the second-largest city in Santa Clara County with a population of 137,538 and is internationally recognized for its comprehensive approach to managing performance budgeting outcomes.

The U.S. Office of Management and Budget said Sunnyvale is “the single best example of a comprehensive approach to performance measurement in the United States... allocating funding for tasks rather than for personnel, equipment, and supplies, with quantified objectives that are expected to be achieved with the funding." For examples, see the following documents:

• Operating Budget Guide: A glossary of terms, which comes in rather handy.

• Sunnyvale 2009-10 Recommended Budget and Resource Allocation Plan

• General Fund Revenues by Source: See pages 11-13 for police and fire sources.

• Law Enforcement Goals, Policies and Action Statements: See pdf pages 1-6.

I wish things were that clear in our neck of the woods...

San Jose is California’s 4th largest city with a population of right around 1 million (or 939,890, according to census data from 2007). We have just risen to the status of 2nd Safest Large City in the U.S. (pop 500,000+) with lowest police officer per resident ratio (1.48) of 23 cities with populations from 500K-1M.

Yet here are the documents our leaders use to determine the city budget:

• San Jose Proposed Operating Budget 2009-10

• Public Safety Budget and Performance Metrics: See pdf pages 3, 4, 10-16 and 53-76.

With a mess like this to sort through, is it any wonder the City Council has such a difficult time balancing the budget?