In case you missed it, there was an interesting pair of front-page headlines in last week’s Piedmonter. City Council: “Budget OK’d; municipal sewer taxes rising in July.” Education: “District withholds teacher raises.” Let that sink in for a minute and then ask yourself – which would you choose, paying more for sewers or paying teachers what they are owed? To answer that, you need to know a little about Piedmont’s sewers and a little about the teacher retirement fund.
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Like Piedmont overall, our sewers are the best in the East Bay. That was not true 20 years ago but after EPA made all East Bay cities replace their old lines, Piedmont increased the Sewer Tax and every few years replaces sections around town – this summer’s work will take the city to 80% completion, 8 years ahead of schedule. The Sewer Tax increase amounts to about $25 per parcel and raises an additional $60,000 to bring annual sewer revenue to $2.4M. Piedmonters rejected a 50% increase in the Sewer Tax a few years ago, and it’s a good thing they did – the need was not there.
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The need is there for the School District. At a recent School Board meeting, the business official said that District teachers will not get their 2017-2018 salary increases in order to maintain educational programming. The reason – school districts must increase their annual contributions to the underfunded employee pension funds (CalPERS and CalSTRS). The state has mandated these annual increases from the districts going forward and they represent a real problem for maintaining the School District’s current programming – read Rick Rausenbush’s assessment at
http://www.eastbaytimes.com/2017/01/31/piedmont-my-word-increased-pension-payments-threaten-states-schools/ to see how bad it could get for the Piedmont Unified School District (PUSD.)
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So back to the question, sewers or schools? That seems like a no-brainer given the condition of our sewer system and the PUSD projected deficits but it’s not that simple. City revenues and School revenues are two different pots of money and they don’t share. That’s too bad because the mantra of any resident, new or old, is that they came to Piedmont for the schools and stayed for the community. With the robust housing market, the City’s revenues are at all time-highs, thanks to the home sale transfer tax and property reassessments. In addition, the City benefits from state revenue increases more than PUSD – the new gas tax will increase City funds for street paving (TBD) and permanent funding increases to state public safety funds will bring $100K to Piedmont. As a result, the City has added two positions and is giving out 2% raises. The picture is not so rosy for the School District – the school has cut positions and programming and, according to the Superintendent, more cuts may be needed. For more details, see city and school budgets at
http://www.ci.piedmont.ca.us/html/govern/staffreports/2017-06-19/1718budget.pdf (City) and
www.piedmont.k12.ca.us. (School.)
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Another way to understand this funding disconnect is to look at how the City and School District maintain required annual reserves. Each is required to maintain reserves as part of their budget – for the City, it is up to 25% of the General Fund, for the School District, minimum 3%. For the past several years, the City has met this cap by transferring over $1M in General Funds to special accounts – this year $800,000 to Facilities Maintenance, $400,000 to Equipment Replacement. For the School District it is just the opposite – the school budget had to be reduced by over $400,000 this year in order to meet their reserve requirements.
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The Piedmont City Clerk recently proposed removing the 25% cap written into the City Charter so even more reserves could be held by the City. Instead, Council directed staff to undertake a review of the City Charter and address the 25% cap and other ambiguous Charter provisions. Perhaps there can be new Charter provisions so the City and School District can “share the wealth” so to speak. Such language won’t be forth coming from City Hall so residents should weigh in when this City Charter review comes to Council.
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Garrett Keating, Former Piedmont Council Member
