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City succeeds despite economy

Profile: The Signal sits down with Santa Clarita Manager Ken Pulskamp to discuss how City Hall stays

Posted: January 22, 2011 9:05 p.m.
Updated: January 23, 2011 4:55 a.m.

Across the country, scores of local, county and state governments are so strapped for cash that budget deficits are chronic, some are near bankruptcy and states are teetering on insolvency. The city of Santa Clarita has been able to avoid these problems.

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Behind many successful businesses are savvy business owners who are almost a brand unto themselves because the company is so closely identified with the owner. For example, which is the better known name: Donald Trump or the Trump Organization?

On the other hand, there are other very successful businesses in which the owners are unsung heroes behind the scenes.

Outside of investors, how many people recognize the name Sergey Brin as being synonymous with Google? Yet Brin was one of the co-founders.

Across the country, scores of local, county and state governments are so strapped for cash that budget deficits are chronic, some are near bankruptcy and states are teetering on insolvency.

The city of Santa Clarita has been able to avoid these problems. And one of the unsung heroes behind the scenes is Ken Pulskamp, city manager. But he won’t take the credit.

Pulskamp credits the City Council for tending to the business of managing the budget and putting the city’s financial health ahead of politics for the sake of the residents.

The Signal sat down with Pulskamp this week to ask how the city of Santa Clarita continues to provide services and make local improvements for the benefit of residents in what has been an unquestionably challenging economy.

What is the fiscal calendar and city budget?
The fiscal year runs July through June, and the 2011 city’s budget is $185 million.

How much has the city lost in revenues?

Since the downturn in the economy, Santa Clarita experienced a 15 percent — or $13.9 million — loss in the general fund since 2007.

Our largest revenue source, sales taxes, went down 23 percent, or $7.5 million.

Where does the city stand today?
We’re in the black. We have 15-percent reserves. And we haven’t laid off a single employee. The budget is always on time and always balanced.

Explain how “15 percent reserves” works.
We hold back 15 percent of the general fund, keep it in reserve.

It doesn’t get allocated in the budget for spending, and we invest the money.

But the city continues to provide the same level of services to residents and local improvements are ongoing. How do you manage to achieve this?
Citizens want government to live within its means, take the money it gets and spend it wisely.

I always tried to run Santa Clarita like a business. I make budget decisions like it’s my own money.

The political system is usually set up so that politicians figure out what they can get before their term ends.

Our City Council is focused on doing what makes sense for future generations so we have a sustainable future.
 
We’re not a small town any more. Do you think the system we have of rotating council members into the position of mayor, rather than electing a mayor, plays a role?

Yes. Because we don’t directly elect a mayor, the City Council and mayor work together to make decisions that are in the best interest of the community.

So not electing a mayor takes the politics out of the budget decisions?
The City Council understands that decisions made during good times are more important than decisions made during bad times. It’s too late to make decision when times are bad.

How does the budget process work in Santa Clarita?
The budget planning is already in full swing four months prior to next year’s budget. We always keep employees informed and ask for their input on budget issues. Some suggestions may be modest, but all modest suggestions implemented over time add up to savings.

We engaged the staff at all levels within the organization to identify cuts to operating expenses and dozens of ideas poured into my e-mail box, helping us save millions of dollars.

We use conservative five-year projections for planning to make sure that ongoing expenses are not exceeding ongoing revenues. It helps us determine if budget decisions made today will be viable tomorrow.

I take the budget to the City Council for approval. The council has always been in sync with the goals placing a high value on fiscal management and being fiscally conservative.

We also budget one-time grants, one time only.

What do you mean by “budgeting one time only?”
If we win a grant, for say road improvement, we place that item in the budget only for the length of time we will have the money to spend on a road-improvement project.

So you’re saying other government entities will place that one-time grant into a budget and then leave it there?
Yes. And then they continue to spend money for that item, long after they have any money coming for that project.

What about staffing? And how have you managed not to lay anyone off?

We’ve always kept the staff very lean.

There are four department heads plus the two fire and police department heads. Most cities our size have 12 department heads.

And we have one of the lowest full-time staff per resident ratios when compared to other cities with a similar population (2.2 staff per every 1,000 residents).

Rather than hiring in departments where more employees were needed, we shifted employees from other departments that experienced a loss of work.

For instance, during the recession, development (construction) shrank from sky-high to almost zero. We created a 21-point business plan to focus on economic development for the city. The division needed help so we shifted employees to the Economic Development Division.

We reduced staffing through attrition and we’ve implemented hiring freezes, which resulted in a loss of 10 percent of our work force, or 35 positions.

We haven’t cut any salaries, but there haven’t been pay raises in two years.

Tell us about the grants the city has received.
We formed an interdepartmental team of employees that aggressively pursued federal and state resources. The city has secured $36.5 million in grants since January of 2009. Of that, $17 million is ARRA funding.
(Editor’s Note: ARRA stands for the American Recovery and Reinvestment Act of 2009. It was stimulus money that was meant to create new jobs, spur economic activity and invest in long-term growth.)

What kinds of projects does the city spend this money on?
Well, for example, we used the money for one-time infrastructure projects in the community, like re-paving streets in need of repair and installing solar panels at the transit division’s maintenance center so that 97 percent of the power needed is provided by the panels. We pay our taxes and want to ensure we get the funds back to support the city.

Many cities have received various grants and just sat on money. In some cases, cities are even in danger of losing certain funds.

The money is meant to be spent to stimulate the economy. Public agencies often receive the money and just sit on it.

We target projects, get them done and spend the money.

When we went back to Washington, D.C., we were told by the White House staff that we were doing more with the money than any other city in America that they knew of.
(Editor’s Note: In comparison, the city of Los Angeles was reported to have been granted $630 million, but as of early November had only spent 16 percent. L.A. City Controller Wendy Greuel reported only 55 jobs had been created with ARRA funds.)

You say you employ “full-cost recovery” when setting fees. What does this mean?
Santa Clarita updates its fee schedule every year to make sure that fees are in line with the actual cost of providing a service.

Setting fees this way eliminates the guesswork, and we include members of the business community so they understand how fees are set.

The city also practices “revenue diversification.” Explain this.
We are very protective of our general fund so we can continue to maintain the same level of services to residents. But residents sometimes want new services. We’ll create programs that are self-funded, to pay for those services, so the money doesn’t have to come out of the general fund.

One example is the landscape maintenance district program. After Valencia was finished by the developer, people in other parts of the city wanted their areas to look as nice.

We created special assessment areas in the city where property owners pay an annual fee as part of their property tax bill. We are able to use that money to create and maintain landscaped mediums and walkways.

The city contracts out for many of its services. Why?
The contracts eliminate the expense associated with personnel and liability. And it gives us access to excellent resources we wouldn’t be able to afford as a small city.

Give us an example, please.
We contract with the L.A. County Fire Department for services. During a wildfire, the county has access to equipment like bulldozers and Super Scooper aircraft to fight the fires. We wouldn’t be able to afford to buy our own.

As a resident, I’ve always had very positive interactions with the city in general. Why is this?
We run the city like a business.

We didn’t want it to be hard to navigate like other governments.

Even when you come into City Hall, it looks more like a business.

We keep someone in the reception area to help people. Employees are trained to have a bias for “yes.”

We have a talented staff and we value creativity, teamwork and an informed work force.

People always say, “You can’t fight City Hall.” We don’t want people to fight City Hall. We’re here for them. What’s good for business is good for Santa Clarita and what’s good for Santa Clarita is good for business.

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