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City manager wants to boost economy

John Brown shares thoughts on economic development, budget cuts and sewer-water rates

By
ARGUS-COURIER STAFF
Published: Thursday, July 2, 2009 at 3:00 a.m.
Last Modified: Wednesday, July 1, 2009 at 3:46 p.m.

(Editor’s note: The Argus-Courier recently conducted an in-depth interview with City Manager John Brown. This first excerpt concerns the economic and budget situation in Petaluma. Future excerpts will focus on development and management issues.)

Facts

INTERVIEW WITH JOHN BROWN, PARTS 2 AND 3

The Argus-Courier's in-depth interview with City Manager John Brown continues in the next two issues:
July 9: Brown talks about development and planning issues.
July 16: In the third and final excerpt, Brown talks about management issues.

Argus-Courier: One of your goals was to create a more diverse economy in Petaluma, and early this year an effort was begun to select a consultant to help develop a economic strategic plan. What’s the status of that effort and when do you expect to see that plan completed?

John Brown: I think that plan takes about nine months once it actually gets activated. We went through a “request for qualifications” process first and we had a lot of interest in it — 14 or 15 actually submitted proposals and it took us some time to get through those.

We brought a small group of people together who had indicated some interest. That group did get together some weeks ago and went through that, short-listed it down to eight.

Now there is an RFP, it requires a little bit of touch-up and that’s why it hasn’t been sent out. People wanted more emphasis in some areas and less in others and I still need to clean that up a little. But all of these folks have been contacted within the last two weeks and been told to expect to get this and be ready to submit.

I would expect that we’re probably looking at about a month for turnaround on that. Between evaluation, selection and notice to proceed, we’re roughly two months out. Then, I would say, six to nine months. I would say we’ll see something before the end of the fiscal year.

My goal would be to get that done in time so if there were any budgetary adjustments that needed to be made, we could make those, and I’m thinking specifically with respect to the redevelopment budget, because I foresee some kind of an economic development specialist position coming out of this.

I just want to see how the analysis shakes out, what level is it that we’re looking for. I see myself looking for a jack-of-all-trades on that, but depending on the focus, that will color somewhat the level of position that we fill, as well as the qualifications that we’re looking for.

AC: You aptly predicted that this year’s budget would be a huge challenge, and many very difficult decisions have been made to reduce expenses, along with some new ideas such as outsourcing the management of the city pool. More cuts may be yet to come. What can or should the city be doing to generate more revenues?

JB: The easy answer there, although it’s sort of the small-ticket item, is to review all of our fees, our fee structures, our user fees, and try to increase those to the degree that they can be — and we’ve done some of that this time around, at least through the CPI-based increases.

The council and myself are sensitive that in this particular economic environment, putting a lot of new fees on people is counterproductive, because they’re already feeling the strain in so many ways that we don’t want to exacerbate that.

So some of the conversations that we might normally have about new taxes or increasing existing taxes, that really isn’t the kind of thing that I think any of us feel comfortable discussing right now.

One of the answers to your question is the more development that gets approved over the long run, the more financially stable we will be through the infusion of additional revenues.

There’s a balancing act that needs to take place there, and I’ve often said we can’t build our way out of this. There are quality-of-life issues, construction quality issues, community values issues that would preclude us from just saying “OK, we’re in a dire position right now, let’s just let everybody build.”

I don’t think we want to do that, because in the long run that won’t be beneficial. It’ll have infrastructure implications and municipal service implications that won’t be good — existing citizens will be paying for the cost of development, and the council wants development to pay for itself.

So within a framework of being selective about what it is that we choose to entitle, with an eye toward that being as beneficial to the community’s needs as possible, I think we need to build more — and obviously that’s something a lot of communities are seeing as a need.

Beyond that, I don’t want to just focus on development; that tends to be sort of retail-oriented. I have to come back to the economic development strategy, because we really should be developing our revenue streams from a variety of sources.

That is, a diversity of economic development of which retail is one part, and maybe even a small part. If you look at our vacancy rates right now in industrial parks and in office spaces, they’re very, very large, and we should be focusing a lot of attention on those two areas.

If we can fill these industrial park spaces with manufacturing jobs, we’ve created an increased tax base, we’ve brought more buyers in to populate the retail services that we currently have, as well as creating more stable and higher levels of pay for the people who live here, so that they’ll have more disposable income to spend.

We need to be focusing on that and the same holds true for the office spaces. If you put people into those office spaces, they’re going to go down to that deli down the street and eat lunch, and that creates jobs and that creates wealth for us. We need to get our plan done and we need to be working our plan.

AC: What can the city do, either traditionally or on a more innovative basis, to get those buildings filled with businesses that are hiring and prospering?

JB: We could be out trying to solicit business from various sources. Every city of any size is out doing that right now, and counties have entire economic development arms that are there to do that.

One of the bigger benefits that this community has to offer is what it is and where it is.

We can talk about writing down the rent or waiving a fee or streamlining the development process — all of which are tools that we can use to help attract these folks — but I feel like the real attraction here is the location.

What I’ve found to be true, as I’ve traveled around, is that CEOs will move their companies where they want to live and where their employees, their managers, want to live.

So one of the things we need to do is be cognizant of the quality of life — we need to protect that, we need to increase the livability of this community as much as we possibly can, because that’s a big component of how it is we’re going to get people to say, “Yeah, we want to be there.”

As well as the more traditional means of sending somebody out and trying to seek them, as well as creating a set of financial incentives that may or may not be what they’re really looking for.

AC: You may have been the first city manager, at least in recent history, to go out and make a call on a local business that was considering moving out of town, Calix.

You had a meeting with them, and from that meeting decisions were made, and they’re not leaving; they’re going to stay. Do you see your role becoming more active in both retention and attraction?

JB: Yes. Retention is clearly a very big piece of this. We need to keep what we have here now, and we do have a diversity of business, and it is my responsibility to try to make those connections.

The chamber was extremely helpful in letting me know that there was somebody there that I needed to go talk to, because I didn’t know that, and frankly my part of that really wasn’t very big.

There were a few things they wanted, they weren’t big-ticket items, and we did what we could do and it turned out for the best, at least for us.

I’m really happy that they’re still here, and I would do that again and again, as long as I’m aware and there is something that I can do.

AC: Have your negotiations with employee unions produced any substantive changes from the budget adopted by the council on June 15?

JB: Not really. We have, in fact, closed a deal with the fire department. The fire union provided us some relief from the minimum staffing level, which allows us to maintain more vacancies than we otherwise could bear.

But we had anticipated that, and you may recall I was telling the council that I thought I had a tentative agreement on that, but I just didn’t have the ink. But now I’ve got the ink, so that’s going to go ahead and happen.

We have some tentative agreement with the AFSCME union that’s going to give me some opportunity to redirect what would have been pay increases that they were going to be granted this coming year, to either carrying some of the laid-off folks longer or maybe being able to bring some back.

We’re in the process right now of costing just exactly what that gets us in the general fund, so I can make some decisions about how far we go with that.

AC: Are you anticipating getting a surprise from Sacramento regarding additional property taxes borrowed?

JB: I’m hoping not. You try to follow that stuff, and on a daily basis it’s off the table, it’s on the table — recently I had heard that the property tax borrowing wasn’t being considered any longer, and so our threats had to do in the area of jail booking fees and the taking back of the gas tax, and also apparently the redevelopment takes are back on the table again, even though the courts have indicated they could not do that.

Those are the areas I’m paying a little bit more attention to right now. The street fund is affected, PCDC is affected by those, and I’m hoping that the $1.1 million in the property tax borrowing doesn’t come to pass.

As I indicated to the council, if it does, it gives us the ability to borrow against that Constitutional guarantee that they will have to pay it back in three years, so I’m hopeful that we have options there that will alleviate any impact that might otherwise make. We’re not planning for another $1.1 million in cuts.

One thing we tried to do last year is to come back to the council regularly with updates. I see me coming back in 90 days or thereabouts with an update on where we are with this budget.

If there are any significant problems at that point, or those that appear like they will be, we’ll be trying to adjust for those as they arise. I’m not going to wait until next year’s budget-development process to try to fix that.

AC: Last November, residents beat back a proposal to roll back sewer and water rates. It appears likely Petaluma will see another ballot measure to roll back sewer rates next year. What is the city doing to anticipate this latest challenge?

JB: We just started a new rate study, and this something we’ve been talking about for some time.

It did take us a while to get there, but I did meet with the consultant who’s doing this rate study, and among the things that he’ll be doing — in terms of trying to determine what the appropriate rate should be — is taking a very hard look at what our current operating practices are, how we’re costing capital projects, whether we’re using too much consulting or not enough, whether we’re getting good value for those things.

The notion is, if there’s an opportunity for us to reduce our operating and capital expenses.we are either — in a best-case situation — giving some rate back or — probably more likely — keeping the rate increase very low or not as high as it otherwise would be.

We’re trying to go through that analysis, so we would deliver that by the next calendar year.

It’s a pretty extensive process. Part of what he’s going to be doing is looking very hard at what our capability within the wastewater enterprise is to absorb that kind of a hit, in the event the voters did decide the next time around to agree to that — what would we have to give up, how long would we be able to carry that debt.

We are talking about an $8 million number, so it’s the sort of thing where we probably won’t be able to carry it very long or offset enough operations to make that last.

(Contact Corey Young at corey.young@arguscourier.com)

VIDEO OF INTERVIEW WITH JOHN BROWN:

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