Are We Doing More With Less OR Less With More?

How Does Berkeley Compare to Neighboring Cities?

There has been lively discussion on Nextdoor about Berkeley’s $1.1 billion bond -- Measure L. One claim that captured our attention was the statement that “Berkeley’s tax rates are just above average for Alameda County” and they are “lower than Emeryville.” This statement threw us because our research shows that Berkeley spends more per-capita than other cities in Alameda County and our performance indicators, such as street quality, are lagging.

Recognizing that “spending” and “tax rates” are not the same thing; we decided it would be valuable to examine these Nextdoor claims. We consulted the Alameda County Tax Analysis website to obtain the tax rate for every city in the county. Detailed results are below. We found that Berkeley ranks 3rd among 14 cities in terms of “tax rate” and in addition Berkeley has among the highest charges for “special assessments.” As we have also noted previously Berkeley’s spending per capita, among cities with a comparable population, is the 3rd highest in California. Further, Emeryville’s rate is the lowest in Alameda County, and they have some of the nicest streets in the East Bay.

Fundamentally, our concerns with Measure L revolve around its vagueness and whether the funds would be spent effectively. Further, we believe tomorrows grandchildren should not pay for yesterdays potholes by repaying excessive borrowing.

In short, we have investigated claims on Nextdoor and still believe the evidence tell us that we are doing less with more.

Planning, Prioritization, and Accountability

The Ballot Argument Against Berkeley’s Mega Bond (Measure L) Questions Whether Funds Would be Spent Effectively

A group of residents, Berkeleyans for Better Planning, have submitted the argument against Measure L that will appear in the November 2022 voter guide. The signatories represent a broad cross section of residents known for their thoughtful civic engagement. The complete list is below.

Berkeleyans for Better Planning intends to establish a formal campaign later this month. The submission of ballot arguments is an important early step.

WOM Berkeley: Real Residents with Real Concerns

We Are Your Neighbors Not Special Interests

In recent exchanges on Nextdoor, some have expressed concern that WOM Berkeley is a front for “real estate interests”. We embrace this skepticism because politics is full of efforts to deceive voters. We hope the testimonials below can serve to reinforce that WOM Berkeley is a grassroots effort by Berkeley residents concerned about the direction of our city.

 

Residents supporting us with include:

• Steve Kromer: West Berkeley
• Eric Friedman: “22+ year Central Berkeley resident. I own one home and no other property/ADU. My interest is in seeing Berkeley governed wisely and well.”
• Jessica Behrman: “I'm grateful for the important action you take for our community.“
• Barbara Gilbert: Vincente Avenue
• Todd Andrew: North Berkeley
• Isabelle Gaston: "I contributed to this website as well. I don't have any real estate interests or special interests either. My only interest is having facts available to residents who will be voting on this issue in November. Thank you.”
• Fran Haselsteiner: "I know that the site is not produced by "real estate interests" but grassroots residents who are exhausted by Berkeley's incompetent government. They are my friends, and I am a retired 38-year resident.”
• Ian Kelley: For what it’s worth I was near the ground floor of the creation of this website (I am not a “contributor” but am part of a long-running conversation with the folks who are). I have lived in Berkeley for 17 years, raised three children through our public schools, and have voted for EVERY bond which has ever come across my ballot.
• Gordon Messer:
• Alison Huetter and Jed Waldman: South Berkeley. Long-term Berkeley residents Three kids went through the public schools. We have voted for every bond measure, assuming our tax dollars were being reasonably well spent. From talking to neighbors that have been paying better attention and looking at facts and numbers, we are waking up and have joined this grassroots organization to help educate ourselves and others. I wish WOMB existed earlier but better late than never.
• Jessica Behrman: 46-year Berkeley resident, 39-year homeowner in Central Berkeley. Over that period, I have seen and experienced deterioration of the city we love. Expanding this trend, our city officials continue to bring us unsustainable proposals and decisions, like the $650MM bond measure, which was based on incorrect calculations and untested assumptions. I hope enough people look through the WOM site to begin to understand the road we're on. We are lucky that one of our fellow citizens was moved and talented enough to create it on his own time and dime - it's not a front for any special interest group. As for me, I am not a real estate professional or investor, and I do have a special interest: Truth and transparency from our city officials; Decisions based on verified data.
• John Hitchen: I am a 50 year Berkeley resident, and a 37 year property owner, and I simply believe that the city should focus on maintaining infrastructure and public safety, not grand social programs better left to the County, State, or Federal government. I was a member of the Public Works Commission for 5 years, until it was combined with the Transportation Commission, and routinely questioned the direction of the city in maintaining our streets, buildings, and other infrastructure. Thank You for starting this group, and I will be happy to be listed as a supporter of your cause.
  Sincerely,
  
• Damian Park, Central Berkeley.  I own one home and have no property interests besides that.  I support government that lives within its means rather than continually promising too much to everyone and then asking taxpayers for more and more help (i.e. bonds).
• Mary BehmSteinberg

Add your endorsement, contact us at: WOMBerk22@gmail.com

WOM Berkeley is a 100% volunteer effort. This effort takes place after a long day’s work and putting our kids to bed. We can agree do disagree, but PLEASE understand our perspective comes from a sincere belief in what is in the long-term interest for our community.

We hope you will hold those who champion Berkeley’s Mega Bond to the same standard. Soon, you will be receiving glossy mailers that cost tens of thousands of dollars for each distribution. Historically, these mailers have been paid for by organizations that are the recipients of the bond funds. Please ask those that will be asking you to vote “yes” about THEIR “real estate interests” because they are substantial and real.

 

Sincerely,

 

Within Our Means Berkeley

 

Making Our Grandchildren Pay for Yesterday's Potholes?

City Council Wants Future Generations to Pay For Their Failures 

The environmental activist Wendell Berry wrote: the world is not given by his fathers but borrowed from his children. The Berkeley City Council’s $650 million mega bond is the embodiment of taking from our children. When City Council discussed the mega bond, they debated how to make the cost “acceptable” to voters. Their solution was to use a credit card and spread the repayment period over 45 years. Unfortunately, as we all know, credit card companies charge interest, so the cost of repayment will be upwards of $1.2 billion.

Long repayment periods make sense in some situations. For example, we took this approach to cover the cost of under-grounding Berkeley’s BART tracks. Under-grounding benefits our children by providing future aesthetic and environmental returns and preserving space. However, in the case of Berkeley’s mega bond, City Council is asking future generations to pay for yesterday’s problems. Specifically, City Council has failed to maintain our parks, sidewalks, bike lanes, Marina and other infrastructure.

To be clear, our infrastructure is in desperate need of repair, and Within Our Means Berkeley actively supported a new tax for this specific purpose. We spoke at City Council in favor of a parcel tax dedicated towards repairing our streets and sidewalks. We supported a parcel tax because it is a “pay as you go” policy. Rather than using a credit card, you collect a dedicated “repair tax” each year and then spend it to fix what is broken. The costs are paid up front rather than pushing them down the road and saddling future generations with burdensome interest payments.

Why would City Council forgo this common sense approach in favor of imposing burdensome interest payments on future generations? We suspect the answer may lie in the fact they are not committed to fixing infrastructure at all. They have competing visions for how the $650 million will be spent. City Council’s priorities include a $122 million recreational pier, approximately $100 million to renovate the Civic Center, and $200 million for subsidized housing. By opening a $650 million line of credit, City Council will have a blank check to spend as it chooses. It is unclear whether any of our existing infrastructure will be repaired. What is clear is that our grandchildren will be left to foot the bill. 

$1.2 Billion in Debt is a Lot to Be Tied To - 

The Embodiment of Taking From Our Children

WOM Berkeley Identifies Flawed Financial Analysis

We Live Within Our Means : Our City Council Should Too

www.WOMBerkeley.org

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August 2, 2022

For Immediate Release

Berkeley CA: 

WOM Berkeley Identifies Flawed Financial Analysis for Berkeley’s Mega Bond Measure; City Revises Cost Estimates Upwards by 22%

Hours before the Berkeley City Council was poised to approve a $650 million bond measure, WOM Berkeley identified a flawed financial analysis that underestimated the borrowing costs to residents by 50%.  The flawed analysis was included in the  330 page agenda package. With less than 24 hours to review the package, the WOM Berkeley research team was struck by the city’s claim that the mega bond would cost the average homeowner $250 per year. Geoff Lomax, a WOM Berkeley volunteer, sent the City Council and Finance Department an analysis that suggests the actual cost would be $495 per year. After receiving the inquiry, the city quickly revised its cost estimate upward by 22%. The Mayor's Office also contacted Lomax and indicated that the Finance Department had been asked to respond to the WOM analysis. The Mayor’s Office then attributed the flawed estimate to “the Municipal Advisor.” Lomax noted, “City Council should suspend any action on this measure until its impact on residents can be accurately determined.”

For more information contact: WOMBerk22@gmail.com

Ominous Financial Report Points to Funding Shortfalls

City Council Chooses to Ignore Warnings in Favor of $650 Million in New Spending

2022 has been a challenging year financially. The combination of decades high inflation combined with a 20% decline in the value of investments has resulted in widespread pain. The latest cause for alarm is the city’s retirement fund that reported a -6.1% return for the 21-22 fiscal year. The city was banking on a +6.8% return meaning the net gap is 12.9%. Some suggest “the market will rebound,” but even if it bounces back, this piece describes the difficulties in making up for investment losses.

Rather than heed these warnings and adopt a precautionary fiscal stance, City Council is proposing residents take on $1.2 billion in new debt amounting to nearly $10,000 in additional spending per resident.

Why Inflation and Pension Liabilities Matter

City Council could not have chosen a worse moment to embark on the largest borrowing spree in the city’s history. Two factors, inflation and pension labilities, create enormous risk for city’s residents who will be asked to foot the bill. Inflation is already driving up the cost of borrowing today as the city issues new bonds for subsidized housing, school construction and infrastructure repairs. Perhaps more consequential are the findings of the California State Auditor and Government Financial Officers Association. The State Auditor ranked Berkeley among the worst in the state for pension cost risk (giving the city a score of 0).

The State Auditor Warns of the Risk of Future Costs

The Financial Officers Association explains how this pension risk can impact the cost of the proposed $1.2 billion in new debt.

Debt and pension burdens are measures of the financial leverage of a community. The more leveraged a tax base is, the more difficult it is to service existing debt and to afford additional debt, and the greater the likelihood there will be difficulties funding debt service. …accrued net pension obligations could divert revenues out of future budgets and lead to funding shortfalls. The City’s score here is equivalent to a “Ba” bond rating (the second worst rating).

Source: A Risk-Based Analysis and Stress Test of Long-Term Debt Affordability for the City of Berkeley

In other words, Berkeley’s growing pension gap could impact the city's “credit” (bond) rating, driving up borrowing costs for current and future bond measures. Rather than take precautionary steps (like more modest borrowing and earmarking new revenues to shore up the city’s pension fund) City Council wants you to approve up to $650 million in new spending.