Budget Planning Creates Long Hours for City Officials

When the City Council met Monday, July 2, it wasn’t for a regularly scheduled meeting; it was, instead, a continuation of its meeting from the prior Friday morning.
This continuation was born of the fact that the Friday meeting, which was a preliminary look at the formal budget proposal coming later this month, lasted more than six hours. This was not unexpected, at least as reflected in various conversations with city officials in the days leading up to the meeting. The city is, after all, undergoing a deliberately prolonged budgeting process not least because of a mutual desire to overhaul the way San Marino’s government conducts business.
The idea is to wed the best fiscal and planning practices from commercial business with the reality and needs of government and bureaucracy.
“What I hope to get out of this is a very manageable budget, which can address the needs of our residents while respecting the need to save funds for the future,” said Mayor Steve Talt in a phone interview this week. “In looking at the process we’ve gone through this year, there is little question in my mind that we’ll need to address, as soon as reasonably possible, looking at our financial policies to see whether we can change the process to make it more effective.”
Getting there isn’t a simple process — not that anyone was deluded into thinking it would be — and city officials routinely refer to the 2018-19 fiscal year as “Year One” in their plan to rearrange things. The goal for this year is — at the very least — to establish the foundation with which the city can work for the foreseeable future.
Each side is well represented, even if by many newcomers: All five members of the City Council have varying backgrounds running private practices or businesses, and the city’s administration, although mostly new, comes with a wealth of municipal experience.
“They all (the City Council) have really only seen private sector budgets for the most part,” said City Manager Marcella Marlowe in a telephone interview last week. “By the same token, most of us (in administration) have only seen municipal budgets. The idea of meeting in the middle is tantalizing and attractive, but it’s not something we can do overnight and it’s also not aided by the fact that we’ve had to clean up a lot.”
Part of getting to the proverbial “square one” in this process has been overcoming years of a city government that has either been in flux because of personnel transitions or has suffered from decentralized operations and budgeting. The brief tenures of many department heads, along with a City Council composed entirely of first-termers, are working against them in that regard.
“There have been a lot of changeover and a lot of transitional government,” Marlowe said. “That’s several years of transitional government to pick back up and no one has institutional memory of it.”
Thus far, Marcella’s moves have further decentralized the administration’s organizational chart and also centralized how items are budgeted.
Previously, her department handled both the current Finance and Human Resources departments’ duties and budgets; now they’re functionally three separate departments with individual budgets. Other departments also have wholly absorbed some line items that were previously distributed proportionally among each sector: the Finance Department now handles all information technology items, the Parks and Public Works Department handles all building maintenance and the Human Resources Department handles all workers’ compensation premiums.
“Those are some of the departments that have some of the heaviest scrutiny on them,” Marlowe explained, “so when you bury all the costs together, it’s kind of hard to figure out what’s going on and where. When you do that, you have a lot of overlap that doesn’t necessarily make sense and isn’t necessarily efficient.”
Talt, who has maintained a law practice for two decades, said that just because accounting and accountability practices between the public and private sector are different doesn’t necessarily mean the budgeting must also be different. This year’s process has, notably, brought department heads before the City Council to specifically outline and explain what a line item is, what exactly it’s paying for and what the long-term goal for the department is.
“My conclusion is that we can take a lot of what the private industry has to offer, at least in explaining why we need to spend the money we’re spending,” he said. “It may or may not, in the end, change the amount we’re spending on an item, but it’s going to provide more rationalization so that we understand it.
“We’re a service organization,” Talt continued. “That’s the way cities have to take a look at themselves. Where the cost savings can come in is in the way we approach providing service. That includes, for example, making sure that employees are compensated not just because they’ve been here for a year, but because they’ve done a good job.”
Marlowe said she felt the work and interaction between councilmembers and administrators has been productive and professional, even amid the often public disagreements on an item or issue.
“It is a team where we’re all really coming together and trying to run this as a group,” she said. “There’s been a lot of fascinating components. In the end, I’m pretty happy with how the process has been going. I think that for the most part, the council has been willing to go along on this ride with us and figure out what’s a good budget. There’s been a lot of collaborating between the council members and us.”
Talt, who is in the third year of his term, said there were new challenges this year, but nothing extra work could not overcome. Specifically, he pointed out that centralizing entire line items such as building maintenance meant he would have to go through each department in previous years to compile a comparable cost.
“I think that the decentralizing of the management budget into various aspects and then centralizing some of the funds is, in the long term, going to be more helpful,” Talt said. “This is not a one-year process, and I do think that this year we’re achieving some results. I think the main takeaway this year will be that ‘government as usual’ is not going to be done here as far as the budget process. We are going to be taking a look at things from more of a personnel matter either to achieve savings or provide a better service to the public. That’s the balance.”

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