Sunday, May 3, 2009

Letcher: time for Tucson to make tough choices
Tucson, Arizona | Published: 05.03.2009

Mike Letcher was named Tucson city manager about two weeks ago after the City Council decided to forego a national search to replace former manager Mike Hein, who was fired last month. Letcher, the former deputy city manager who has 30 years of city management experience, has the daunting task of guiding the city through tumultuous economic times. His first task: Recommend a budget for fiscal 2010. Letcher talked with the Star's Editorial Board last week about the budget and his plans for stabilizing the city's fiscal situation. We've excerpted some of his comments here.
Star: What are your reactions to the public hearing on Tuesday night, when so many Tucsonans expressed opposition to tax increases?
Letcher: We need to spend a lot more time communicating with the public on line of sight between the money we're asking them to pay and the services that they are provided.
It's really critical because last night I heard repeatedly don't cut public safety, "Why did you cut public safety, why are my potholes not being filled?"
And the reason why is because we don't have the money.
I also heard last night that "Why haven't you cut like I had to, 25 percent of my budget and overhead?"
Well, the city of Tucson has already cut over 20 percent; and we're hit over the next two fiscal years. By the time we get done, unless this economy picks up, we're going to have over a 30 percent cut overall in our budget.
I heard, "Why don't you reduce salaries a few points?" We've reduced them 2 percent through furloughs.
There wasn't an opportunity for us to really explain what we've done and why we are where we are now. Once people understand what's at stake — if you cut, here's what's going to be cut, here's the results of the cut — we're fine.
And they need to understand if we don't get the increased revenues what's going to happen. We have totally eliminated our residential street maintenance. We're barely able to keep up with potholes. We have problems getting the weeds in our medians. We have cut hours at the pools and we've trimmed staff in parks and recreation.
If we don't get these revenues, other things are going to happen.
In addition to that, we are fenced in, we are boxed in. Someone mentions, "Well, you should take some lessons from the county. But the county has property tax, a significant amount of property tax. We get $11 million from property tax, and it's capped by the city charter. We're fenced in. We don't have an easy out or a stable source of revenue.
So, Letcher starts right off the bat by admitting they are cutting back on BASIC city services: Street Maintenance and Parks and Rec. This is important, read on...
Star: Why put $2 million in the housing trust fund that could contribute to reducing the proposed $10 million rental tax or any other revenue shortfall?
Letcher: I have heard that. It's not just the housing fund. There's some folks saying why even have money go toward human services? We spend about 76 percent of the general fund to maintain core services, police, fire, et cetera. For human services, it's 24 percent.
A society is not just built with brick, mortar, police, fire. It's built also about how do you take care of those that are least in society. That's what our society's about. That's what's made this country a great country. But the bottom line is we think that we've taken a balanced approach.
Now we get to the meat and gristle. They are 'spreading the pain' around. Little off the city teat, a little off of basic services.  Churchill said it best,"The inherent vice of capitalism is the uneven division of blessings, while the inherent virtue of socialism is the equal division of misery." This is an upside-down and bass-ackwards way to approach city funding. The first responsiblility is to fully fund your core services: Police, Fire, Water and Utilities, Roads, Parks and Rec. ONCE, and only once those are funded, if there is money left over, then you can fund the pet projects and freebie human services. 

And the comment about taking care of the 'least'? Thinly veiled socialism. These are non-profit groups that have gotten so used to lining up at the easy money ATM of the City of Tucson, they have forgotten how to raise their own funds. Yes, holding fund raisers, bake sales, car washes and the like take time and energy - but this just goes to show that once someone becomes DEPENDENT on the government for their livelyhood, they will always rely on the government for their livelyhood. I am not saying it is easy to tell all the non-profit leaches it's time to find another host for a year or two, but that is what needs to happen.
Star: We haven't heard an explanation of the rental tax is fair. We think that's what people most of all want in taxation. We know we have to pay some. But is it fair?
Letcher: The council took action last night on raising the transit fare. They still have to make some decisions on that. We are going to be going to the council to adjust fees. But those aren't going to raise $10 million dollars, as the 2 percent renter tax would do. We do have not a lot of options in the city to raise $10 million. That's the problem.
I don't think it's a question of being fair. It's a question of what options do we have available. Again, if we had a tax like a property tax that was stable, that generated the money, we would be fine. The problem we've got is we've got a sales tax, both state and local, that has bled $68 million dollars, that's been sliding.
And so the only option we've got to raise that kind of money without making some significant cuts is the tax that's in front of you. It's not a question of fair, it's a matter of what options do we have.
NO, the option that you seem to fail to grasp is that when the budget is bigger than the supply, do not grow the supply, but TRIM THE BUDGET. Why is this so hard to understand? It's not about unfair taxation. It's about the people's desire to have the city stop raising taxes as the answer to budget problems. CUT SPENDING!!! How many more times can it be said?

Just in case you can't figure it out, here's the quickie guide to working the budget:

Start with the estimated income for next year. Make sure that income amount is realistic in nature!

Then fully fund Police and Fire, subtract from the income amount, if > zero, continue on...
Next, fully fund Water and Utilities,  subtract from the income amount, if > zero, continue on...
Next, fully fund Roads,  subtract from the income amount, if > zero, continue on...
if < zero, now you go back and start to reduce each department
Next, fully fund Parks and Rec,  subtract from the income amount, if > zero, continue on...
if <>
Next, fully fund any other neccessary services,  subtract from the income amount, if > zero, continue on...
if <>
Next, fund your human services departments,  subtract from the income amount, if > zero, continue on...
<> if <>
LASTLY, pet projects, non-profits, etc,  subtract from the income amount, if > zero, continue on...
if <>

How simple is that?
Star: Do you actually expect the City Council to approve this budget?
Letcher: This is a proposed budget. And that's what the purpose of the public hearing last night was, to hear from the community and see what the community wants. We would expect by June 2 that the council would have to approve a tentative budget. The policy makers now have to decide where they need to go.
Read: No, it's just some razzle-dazzle...We'll go back to Hein's budget, everyone will be happy since it does not raise taxes in the process, and people won't notice how much pet projects are still alive in it. It's the old bait and switch. Hein's budget was going too gather heat as well, so let's make it SOOOooooo overly bloated, that when they go back, everyone thinks they won, everyone is happy.... but you think we don't see what is going on?

We won't notice? Yeah, come November you'll see just how much we didn't notice...
Star: Why not cut spending more? 
Letcher: Seventy-six percent of our money is the core, things that people see: parks, roads, cops, paramedics, all that, fire. So we can continue to cut. But it's going to have huge consequences, down the road.
The problem is, the physical appearance of this community is not acceptable. I live here in Tucson. This is my home. When I drive to work, and I have people visit, my mom was here three weeks ago — potholes, there's trash blowing all over the roads. Our parks we can't maintain as well as we should.
And it's very simple that if we keep cutting, I can cut people; I can continue to cut finance people because that's what we've been cutting. I can continue to cut procurement people. We can reduce the clerk's office. But the real money is in everything people want.
If we can give people a line of sight — what we're trying to do now is stop this, is to stop the decline and then we can start building this place back. But we're going to need to do something other than have the city rely on sales tax. It's that simple.
Ok, again, you still have 24% going to???? If you started slicing into that, you could have the cops that keep downtown safe, the fire department necessary to provide emergency services, the parks department to keep the parks clean, and roads to keep up on road repairs. Quilters, 'urban artists', and the like will not improve the 'look' of Tucson, so why fund them when we can't afford it?
Star: How are you going to pull that off though politically?
Letcher: I have a lot of faith in the democratic process. We have got to take time, and we can't just talk to people when we need money or have a problem that we need to fix. You talk to them throughout the year. You share with them. You give them more information. The more that they understand about the consequences of the actions that they take.
So we're going to start talking. In July, one of my goals is an engagement process in the community to really listen and to say here's what our problems are, both short term and long term. And then we make informed decisions.
It's about how are we going to maintain our police, our fire? How are we going to improve our streets? How are we going to make sure our parks are taken care of? How are we going to make sure that people who need to be served are taken care of?
And then we figure out where we're going to go. And as long as the community does that, then we're fine. I'm fine with it. But without that, what you've got is chaos.
He actually has the order right, as he goes through the services... now if he just would fund in that order, everything would be great!
Star: What about selling assets?
Letcher: One of the things we're trying to do is a stability plan to ask, how do we recover from this?
We're trying to get a three-year plan together for recovery. And one of those strategies in that plan for recovery is going to be can we dispose of assets. That's a two-edged sword: We can sell the asset, but if you use it for recurring costs, you burn through it like a savings account.
But what it does is buy us time. Let's say we get out of the recession in two years. If that buys us time to limp through and to get the two years and we stabilize.
We'll roll this thing out this summer, first with the council and then the community, this whole stability plan. And it's really what the community wants to do.
I'm not going to do something that is going to burden this community, like for a quick fix to make my life easy. My goal is just to stabilize the city.
Plans, strategies, yes, they are all neccessary, I would want them to have some plan... but the first step is mandating via Town Charter a minimum of expectation for Police and Fire. If the City Council cannot get it through their heads that this is what the town wants, then we must take the ability for them to have the freedom to choose away from them. Yes, I hate limiting the freedoms of the people, and it pains me to have to go to this kind of solution, but this has gone on for too long. The City Council has lost touch with it's people. They worry only about their pet projects, only about the leaches that show up in their offices on a daily basis asking for funding for their underwater basket weaving social program, rather than the needs of the average Joe or Jane out there working hard to make a better life for themselves.


  1. Great job Peter! Let us also remember the lessons you have outlined here when the budget comes out and Tucsonan's can vote in memory of what is proposed. The rent tax is ridiculous. If there is going to be any increased taxation it needs to be in the form of increased sales tax. This is the fairest tax and would not need to be raised that much. Sales tax also get all those who live outside the city, but work or shop inside the city. It includes the illegal aliens as well. Tucson enjoys a very low sales tax rate in comparison to the surrounding municipalities.

    We keep annexing more land and as we get more land to police, the number of Police is shrinking. Police and Fire can't even keep up with attrition. You cut retirement services to Police and Fire and those eligible for retirement who planned on staying a few more years are starting to retire now before the changes take effect so they aren't included in the cuts. Meanwhile you slate only two police academies for the year, with no promises they will actually be funded or occur.

    As for the public perception of Tucson being dirty, thats just a line. If he really cared about cleaning up the city he would institute city code restricting Vagrancy, squatting on public and private land and public drunkenness. You' d do like most cities our size and have a drunk tank where those arrested could sleep it off. Howmany homeless camps do we need to clean up of their discarded bottles, needles and other trash before we realize they are a big part of the litter problem. Thats not to mention the crime they are responsible for.

    Want more money? Tell the court to stop suspending the fines of those found responsible for civil and misdemeanor offenses. After all, thats part of the punishment. I'm tired of hearing how broke we are and then hear "I find you responsible, but will suspend the fine" At least collect the fine to gather the money it took to bring the Officer or Inspector to be there on their day off.

    Want yet another Idea? Run our own Jail. We'd have to build it (oh look, work for construction workers), but we could run it for 1/2 to 1/3 of what the County charges us. Paart of it could be that drunk tank i mentioned before.

    Another idea? Ok, why not? The city has a contract with Gary's towing to tow and store cars for the newest 30-day impound law. We get a small fine from the driver, but Gary's has become very wealthy collecting the pickup, transfer and storage fees. We have the land, start doing this yourself and then you collect the fees. This won't make Police any more motivated to tow for thirty day either, because the way the law is written has taken motivation out of it. If the criteria are met (such as the driver of a car has a suspended license) then the Officer must impound it. There is no discretion in the matter. The only difference, the city gets the money and we create jobs for tow truck drivers and lot attendants as well. Sure Gary's loses their income from the city, but that is the free enterprise system. I say "Oh well, let them get contracts with DPS and PCSO" AS for the new tow trucks we'd need to buy and maintain. They'd be paid for in a few months and the maintenance is a drop in the bucket. If we started with only a few trucks and waited to buy we could by some from Gary's as their volume decreases and they don't need all those trucks any more.

    And hey, this is just one city employee throwing out ideas related to what he see in the scope of his work. I am sure there are a lot more ways to cut costs or bring in revenue out there.

  2. I wanted to throw in an update. Mr. Larry Lopez of TPOA was on the Jon Justice show yesterday ( and mentioned a statistic that threw me... the 2.4 officers per 1000 that would be mandated by the addition to the town charter is LESS than the FBI recommendation of 2.9 officers per 1000. We are WELL below the number of officers then, and yet we still hem and haw and balk at meeting even the 2.4 per 1000 number. Sad and scary.