The last three months have been a whirlwind, and we are not done yet. Hundreds of Dixonites are still out of work due to slow reopening and dozens of small business owners are being hit hard by the damage done by being unable to open or ply their trades.

As the entire economy tries to find its footing and the markets struggle to find optimism when huge questions have yet to be answered—about the future of the workplace after so many have worked from home, labor availability due to more lucrative unemployment benefits, the powers of state governments to suppress economic activity, and many more subjects—the City of Dixon has the undertaking of creating a budget and five-year forecast for the future.

Recently, the Dixon City Council met to go over the Proposed 2020-21 Fiscal Year Budget as drafted by the Finance Department. In light of the lockdown, the vast majority of discretionary projects have been postponed or cancelled effective back in March, and the city’s draft budget reflected that continuing through the next fiscal year.

The Finance Department also reviewed and revised revenue sources and brought them to much more conservative expectations given the likely pace of the economic recovery, yet still presuming that there will not be any additional lockdowns issued by our governor.

In light of the fiscal outlook, the city is expected under the current draft to have a $1.4 million technical deficit next year that will be made up by the healthy reserves.

While we do have the reserves available to fund this deficit, the five year forecast contained in the proposed budget projects that within 3 years, the city would have a true deficit of half a percent, or $134,471. By the fourth year, we would be $3.6 million in the hole. This would mean that in three years, the city would have to raise taxes unless actions are taken today to address the situation.

Granted, there could be a quick recovery, however it is also important to note our place in the business cycle. This “gray rhino” event, as the economists would say, may not create the short-term carnage we are concerned about, but it may leave wounds that will likely fester into the next economic recession, especially that it has been 11 years since the depths of the Great Recession.

Whether or not the recovery from this pandemic serves as the next stage of the business cycle, or if it happens down the road, it would behoove the City Council to take the necessary steps to minimize the impact on the city reserves.
 

At the budget meeting, I floated a three-step proposal to the rest of the council that would allow us to not impact the reserves by eliminating deficit spending.

First, we would factor in the $767,000 carry-forward savings from this current fiscal year created by the cancellation of discretionary projects. That reduces the $1.4 million dollar deficit to a much more reasonable $650,000.

With that smaller number in mind, we could then cut $180,000 from the city attorney’s budget, still leaving a more-than-gratuitous half-a-million dollar budget for legal services.

Finally, the remaining $470,000 could be made up by doing a minuscule 2% across the board cut from each general fund department.

In three steps, we keep the city’s reserves stable and untouched in case things get actually worse due to, for example, another shutdown, a housing market collapse precipitated by the executive actions allowing mortgage delays and tenant nonpayment, or a natural business cycle correction that puts us in a recession.

Ironically, we know the hang-up in this plan already, and it’s not about cancelling discretionary projects or cutting a small percentage across the board. Already the council raised its number one concern about this plan at that meeting, and I urge you to check it out online if you haven’t already. The number one concern raised was about reducing the City Attorney’s budget.

One Councilmember exclaimed at one point, “We can’t control who sues us!”

However those who have paid attention to the council meetings over the last few years already know that, “who sues us” is only a small fraction of what makes up the city attorney’s very large bill to the City of Dixon. The vast majority of his billings are in fact outsourced legislative responsibilities by the council, and secondly who the city sues.

I happened to learn this quite intimately when I was sued by the city within weeks of getting sworn in. That little project alone cost over $50,000 and resulted in the California Attorney General throwing out the complaint due to “overwhelming evidence” that I hadn’t broken the law. I would also point out that while this witch hunt put me under considerable duress, it only cost me one-fifth of what it cost the city and I had a bigger, better, and more knowledgeable firm advising me. 

The council majority here in Dixon has demonstrated again and again that being right is not a priority when it comes to legal actions, and winning is all that matters. This hubris is enabled by having a law firm that not only writes the codes and resolutions we vote on, but will happily engage in whatever litigation the council wants because it simply results in higher and higher billing. 

The council majority bristled at the idea of constraining its behavior and adapting its legal strategies when I made this suggestion, which I pointed out was only reasonable given that the rest of the organization of the incorporated City of Dixon was being asked to constrain itself by doing more with less.

It is the responsibility of the council to draft and approve the city code, ideally with an in-house city attorney who will review the drafts and give suggestions that clarify or better accomplish the goals of resolution. The city attorney should not be writing these ordinances whole cloth and unrequested and then bringing them to the council for consideration.

We can have a balanced budget next year and be fiscally responsible, but not if our council is more attached to the city attorney’s legal firm and cushy representation than to the pocketbooks of Dixonites. If the council maintains their path, it would be clear that their loyalty is to the city attorney at the potential expense of city employees being furloughed and increasing taxes on Dixonites.

Deficit spending is a failure of leadership, so let’s demand that our leaders do the right thing. Let’s pass a budget that is in line with the values of Dixon’s hardworking and enterprising citizenry.