What's the more challenging situation for elected officials: leading cities that must make budget cuts? or overseeing a budget flush with some extra potential to provide new services, to backfill deferred expenses, and to redress some previously ignored inequalities?

In the case of Mayor Marilyn Ezzy Ashcraft, she may not actually be liking that Alameda is in the latter position — the position of having a budget surplus.

I wonder if that discomfort is what led to the direct outcome of the city's transportation efforts coming out of City Council's May budget workshop with no more project funds or staff headcount. (No other department or program came out with additional funds or staffing either; the residual fund balance remained as originally hashed out internally and drafted by staff.) But more subtly — and perhaps more unfortunately — this discomfort with the city's budget surplus had the indirect effect of making relatively useless the planned review of the city's progress on its transportation programs during that budget workshop.

A seemingly good problem to have: Extra funds on hand

While I'm no expert on how municipal budgeting works, let me try to start by providing this overall context: the City of Alameda is doing well financially and has what looks like ample room for our decision-makers to maneuver.

At its May budget workshop, City Council was presented with a proposed budget with a $29.34 million "residual fund" balance — surplus funds expected to arrive in the city's General Fund without currently being budgeted toward designated expenses over the coming fiscal year.

This residual fund balance continues two ongoing trends:

• a trend for many years of the City of Alameda budgeting conservatively relative to its estimated revenues
• a trend since 2020 of cost savings from vacant staff positions and larger than initially projected revenues from taxes on commercial and residential property transfers

A graph in the staff report shows these two trends over the past 12 years:

Note that we're not talking about budget totals here. The question isn't how much property transfer tax is coming in in total — the question is how much of that tax revenue is coming in relative to the originally projected amount.

My novice understanding is that the city's budget process works on a 2-year cycle, with this May workshop representing a "midcycle" adjustment to last year's "baseline" budget based on performance to-date and on updated projections for future revenues. The updated budget then goes into effect for the upcoming fiscal year, which starts on July 1, 2024.

Given this ongoing process of estimating and revising estimates, there will naturally always be signs of uncertainty that are open to interpretation: Can we depend upon revenues going up — or are revenues just fluctuating? Is the economy solid — or is the economy softening? When talking about "the economy" should we be thinking about the city, the Bay Area as a region, the state of California, and/or the nation as a whole?

Staff used phrases like "structural imbalance" that sound like they could be scary. And their staff report included phrases like "economic headwinds have impacted some General Fund ongoing revenue categories." But the structural imbalance for the FY 2024-25 Adjusted Baseline Budget is $782 thousand — in the context of the $29.34 million residual fund balance. And as far as "economic headwinds" go, it's true that the Bay Area may soon fall into a recession... because it's always true that the Bay Area may fall into an economic recession!

If an elected official wants to give an excuse about something they don't want to fund, they can always reach for the reason that the Bay Area may soon fall into a recession.

I don't mean to be too glib about this — it's just something that you see over time in California and in the Bay Area: the regional and state economies are cyclical. Silicon Valley's tech industry goes through booms and busts, as do some of the other massive industries that contribute toward California having what's effectively the GDP of the 5th largest country in the world.

This is something to be managed wisely by our elected leaders. Up at the state level, it's to the great credit of Jerry Brown in his second tour of duty as governor that he fixed many aspects of what was broken budgetarily for California. Down here at the city level, the ongoing residual fund balance since the Great Recession suggests that Alameda's leaders have been similarly prudent.

All this to say that Alameda has financial room to maneuver in general, and City Council had a specifically large residual fund balance going into this particular budget workshop. Whether they — the Mayor and the City Manager in particular — would actually want to use any of this capability is a completely different question.

The state of transportation programs in Alameda is good (?)

I've been writing so much about this particular budget workshop because the City Manager and City Council had identified it as an overdue opportunity to review and discuss the status of the city's progress on transportation:

• When the city's annual report on transportation was delivered to the Transportation Commission in February, I was concerned and I expressed my concerns at that meeting, as did members of the public. [I won't try to characterize any comments from other TC members, just to make it clear that in this blog post, I'm only speaking for myself.]
• When that report was delivered to the City Council in March, councilmembers and members of the public expressed concerns as well.

Many of these concerns were around delays and cuts to the Neighborhood Greenways and other traffic safety improvements to residential areas, such as Safe Routes to Schools.

Readers of this blog may also recognize how often I've been asking in recent months whether the City of Alameda is leaving money on the table in terms of not having sufficient capacity to apply to as many infrastructure grant-making programs as possible.

In response to questions and concerns, staff proposed using this May budget workshop as an opportunity to take stock of progress on transportation initiatives.

And here's how they took stock: the City Manager and two department directors effectively told City Council that everything is good and getting better. Transportation and civil engineering positions that were previously unfilled are now filled. Some additional funds for ad-hoc Vision Zero safety projects (for flashing beacons at the spot where a 84-year-old pedestrian was killed on Mecartney Road, for a to-be-determined improvement where a motorcyclist was killed at Lincoln and 9th, and to "address concerns raised by Bike Walk Alameda") were included in the draft budget update, with $500k coming from a combination of that residual fund and a gas tax fund. In conclusion: No new additional staff positions or consultant budgets or major construction dollars are needed, because nothing is structurally wrong.

When Vice Mayor Tony Daysog read aloud a comment from a resident asking about delays to transportation projects on residential streets and when Councilmember Tracy Jensen asked additional questions about the city's transportation resources, the City Manager and department directors only had upbeat news to report because — to be frank — I sense that the overall context was that no new requests to use that residual fund balance would be received — so all the news effectively had to be positive.

With all the status reports being positive, there was no room for discussion of questions like: What percentage of relevant transportation grants from the Bipartisan Infrastructure Law the City of Alameda is applying to? Are there more that the city could apply for if it had more staff? Are both transportation and sea-level rise initiatives being given sufficient attention or are they competing for scarce internal resources? Maybe I'm wrong about this topic and perhaps staff are already reviewing and applying for all relevant grants. A more detailed discussion by City Council could have put those questions to rest by providing concrete information — for example, a matrix listing the grant programs that the city has applied for, the grant programs that city staff has assessed but deemed irrelevant, and ones that could be relevant but are skipped due to lack of resources to apply and/or to administer an award.

And with all the status reports being positive, the Neighborhood Greenways probably did get an overdue burst of attention leading up to this meeting and afterwards. But there was no debate about how the 2024 transportation work plan represented a downsizing of the original plans — which was one of the factors that originally motivated this planned discussion — just a mention by the City Manager that due to these delays, staff may come back in the future to propose removing Slow Streets barricades before having any new generation of street-safety treatments to replace them with. The format of the discussion also didn't leave room to ask whether staff resources had just been diverted from other commitments in order to suddenly make Neighborhood Greenways a priority.

But who knows.... The format of the budget workshop with the City Manager and two department directors delivering positive message about the city's 2024 transportation work plan just didn't seem to this listener to leave any room for genuine questions about staffing capacity, for genuine questions about tradeoffs, or for constructive criticism.

And the positive message about 2024 also left no room for mention of 2023. Because to explain why the city is only committing to one Neighborhood Greenway this year (out of nine planned in total), one must recall happened last year: The "re-think" of Grand Street. That process of public outreach, redesign, and re-budgeting for just under half a mile of street through the wealthiest neighborhood in Alameda delayed almost all other transportation initiatives in the city. In my blog posts, I've also suggested that it's implicitly set for city staff a new higher (perhaps almost impossibly high) expectation for public engagement for safety projects on residential streets. Leaving aside my own personal interpretations of the effects, the annual reports for 2023 do explicitly acknowledged that Grand Street led to delays for other projects.

But whereas last year the City Manager magically found millions of dollars from the general fund to build a fancier project for Grand Street, in this year there was no openness to City Council discussing how to build out staffing or consulting resources — so such a pile-up doesn't happen again — or to provide more resources to residential safety projects that may now have to meet higher expectations (not to mention inflation on those construction costs).

To bring this back around to the starting point of this blog post, the more I reflect on this May budget workshop meeting, the more I assume that we're just seeing the result of decision by the Mayor to not open the door to a discussion that could have resulted in using any of that residual fund balance and a decision by the City Manager to present the city's overall transportation programs as not needing any additional resources. It doesn't matter whether these were mutual decisions, coordinated decisions, or even explicit decisions... the result is the same: No room for an open discussion or an open debate by the entire City Council.

When will there be a future opportunity to take a more comprehensive and clear-eyed assessment of transportation progress in Alameda? I don't know... but I hope at that point our leaders will be open to asking questions that risk yielding answers like Alameda can have the safer streets that are in our plans, policies, and shared goals by carefully assessing our organizational needs and spending some the money that we already have in hand.