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  “A Tale of Two Cities”
December 9, 2003

As the specter of City of Richmond employee layoffs and resulting service cuts continues to fester, I want to thank the members of IAFF (International Association of Fire Fighters) Local 188 for bringing to my attention the “TALE OF TWO CITIES.”


According to Local 188, Richmond should emulate the City of Vallejo, which “… manages to provide quality, professional public services while minimizing administrative funding. The result is an award winning budgeting process, excellent labor/management relations, fully staffed, well equipped police and fire departments and a quality public works department.”


Furthermore, according to Local 188, “The City of Richmond ranked 69th out of 70 cities in financial management and record keeping by an independent auditor. The City of Richmond, as recommended by the City Manager, budgeted almost $17,900,000 for administrative funding, more than twice that of Vallejo.  The result is a $9.6 million dollar budget shortage. The Richmond City Council, on the recommendation of the City Manager, has decided attack public services and public safety.”


Local 188 concludes with the following: “It seems that the fat in Richmond’s budget lies in the Administrative Funds in Richmond. How does Vallejo provide more service to the public for fewer dollars, while providing higher pay as well the best retirement benefits for employees? Obviously, the Vallejo City Manager and Vallejo City Council rightly have the best interests of their citizens in mind when using tax dollars to provide service.”


I have to admit, this got my attention, so I visited the City of Vallejo website to learn more. Right away, I was impressed by the information on the website. I wanted to learn more about Vallejo’s budget, so I was able to quickly access the entire document at the Finance Department page http://www.ci.vallejo.ca.us/uploads/48/714.pdf. Richmond’s website doesn’t even have a Finance Department page, much less an on-line budget. Luckily, I have my own personal copy of the Richmond budget.


I also checked Vallejo’s online GIS system, Vallejo’s e-government email forms and many other handy and informative features that made me so envious I had to pull myself away. Richmond could certainly learn something from Vallejo’s website.


But back to the budget, I was able to determine that, in fact, Vallejo is mostly a “full-service” city with a slightly larger population (16% more) than Richmond and similar demographics but with a substantially smaller general fund budget ($73 million for Vallejo versus $94 million for Richmond). One statistic that caught my eye is the comparative crime rate – Vallejo’s crime rate is substantially below Richmond’s, even though both cities are significantly above the national average fro crime. Vallejo does not operate parks and recreation department (provided by a separate district) or a library system (provided by Solano County). However, after factoring in the $12 million that Richmond spends on these two services, Vallejo’s general fund budget is still nearly $10 million less than Richmond’s.


Individual differences are apparent in core city administrative services. For example, Richmond’s legislative budget is more than twice that of Vallejo, as is finance and law (city attorney). Richmond spends millions more for human resources, public works, development services and police. However, Vallejo spends about one-third more than Richmond on fire services, a fact that Local 188 did not miss. There are two attachments to this E-FORUM that tabulate these differences. One was prepared by Local 188, and one was prepared by me.


If there is a lesson here, it may be that Richmond could save a lot of money by increasing efficiency and decreasing the cost of various administrative services. And we don’t. have to look far for a model – just 15 miles north. I believe this is the conclusion that Local 188 wanted to convey.


The efficiency lesson may be a good one, but there is another one perhaps equally important. I contacted the City of Vallejo Human Resources Department to find out how Vallejo compares with Richmond with respect to pension plan costs. I found out that Vallejo’s pension plans are identical to Richmond’s for police (3% at 50) and general employees (2.7% at 55). Vallejo has 3% at 50 for fire while Richmond is 3% at 55. The BIG difference, however, is that Vallejo employees pay 9% PERS (Public Employees Retirement System) while Richmond employees pay nothing – the City picks up the entire cost.


Incidentally, Richmond’s police and fire department employees have been operating under an MOU (memorandum of understanding) that guarantees them the second highest compensation among 12 comparable cities. One of those is Vallejo, whose employees are paid less than Richmond’s.


Another thing I noticed on the Vallejo website is that the workday for Vallejo employees at City Hall is 8:30 AM to 5:15 PM. At Richmond City Hall, you would be hard pressed to find more than a few warm bodies before 9:00 AM or after 5:00 PM.


Yes, I want to thank Local 188 for asking us to consider emulating Vallejo. If our public employee unions were willing to emulate the Vallejo model and cost share 9% PERS, it would just about erase Richmond’s $9.5 million budget deficit.


I have discussed this with the Local 188 leadership, and they tell me that the situation is more complex than appears on its face, and this may be so. But the fact that Vallejo employees pay a substantial share of there PERS contributions is apparently a fact, and it may provide a model that can be useful in evaluating and negotiating a cost-sharing formula for Richmond that is both fair to our public employees and does not result in massive layoffs and reductions in service.


See also December 15, 2002 E-FORUM, “City Faces Daunting Economic Future by Funding New Retirement Plans,” June 4, 2003 E-FORUM, “Budget Time – Comparing Richmond With Other Cities” and July 9, 2003 E-FORUM “City Adopts "Hail Mary" Budget - Asks Unions For 5% "Give-Back."