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Sacramento adopts $1.2 billion budget. Here’s how the city will spend your tax dollars

Steinberg raises concern that pension costs will devour Measure U revenue

With millions flowing into city coffers, Sacramento Mayor Darrell Steinberg raises concerns about the city budget showing the Measure U revenue will mostly be eaten up by skyrocketing pension costs in the four years starting July 1, 2020.
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With millions flowing into city coffers, Sacramento Mayor Darrell Steinberg raises concerns about the city budget showing the Measure U revenue will mostly be eaten up by skyrocketing pension costs in the four years starting July 1, 2020.

The Sacramento City Council Tuesday unanimously adopted what Mayor Darrell Steinberg called a “historic budget,” totaling $1.2 billion and including three significant amendments.

The three ideas were considered somewhat controversial when Steinberg first proposed them in late April, but by Tuesday, all council members voted unanimously to add the items to the budget for the fiscal year that starts July 1 — the first that includes new Measure U tax sales tax revenue.

They include:

Approval to set aside $40 million in new Measure U sales tax revenue for disadvantaged neighborhoods in each of the next five years, totaling $200 million. The City Council will have the option to vote each year to undo that allocation, or change the amount.

Steinberg originally proposed the idea in February during his State of the City address, which was heavily focused on disadvantaged neighborhoods and the death of Stephon Clark, the unarmed man who was killed by police in his grandmother’s Meadowview backyard in March 2018.

The firefighter union, currently in contract talks, came out strongly against the idea because they fear there will be little left for the department for projects such as reopening Fire Station 9. New Measure U revenue is expected to total $50 million.

“This is a moment to celebrate, but it is not a moment to rest,” Steinberg said after the budget was adopted. “All our efforts ... will be about maintaining the $40 million commitment for the next four years.”

Within the $40 million set aside in the first year, the city will make a bond payment between $7 and $8 million and receive $125 million upfront. After at least a year, the council could issue another 30-year bond to get another $125 million. Under that scenario, the city would pay up to $16 million for about 30 years to repay the debt. The city would pay roughly $425 million over the 30 years to receive the $250 million, estimated city debt manager Brian Wong.

Steinberg originally proposed the city pay much higher debt payments to receive much more upfront, which Councilwoman Angelique Ashby and Councilman Jeff Harris said could bankrupt the city. Then Councilman Steve Hansen proposed a lower amount, with safeguards such as adding more money to the city’s “rainy day” reserve fund and setting a city debt limit as a compromise.

“I always tell people who are coming up, ‘You always need to know when to declare victory,’” Steinberg said. “So when Steve Hansen came forward, everyone expects, ‘Oh he’s messing with my plan.’ But no, he actually used his head and took my framework and he was not only constructive he really helped a lot and I met him with a handshake and that’s the way the process should work.”

The city plans to spend about $100 million of the bonding revenue to build affordable housing; $100 million on economic development; and $50 million on city facilities like parks, libraries and fire stations.

Funding for 21 projects totaling about $16 million in surplus money in six council districts the mayor picked out as “early wins.” Some of the projects include $1.3 million to restore the Iceland ice rink in north Sacramento; $1.9 million for new baseball and soccer fields in north Sacramento; $1.3 million to expand “pop up” activity nights for teens; and $2.03 million for a bike trail in Pocket/Greenhaven.

The list was controversial because it left out funding for any projects in Ashby and Harris’s districts — the two council members who blasted the mayor’s bonding proposal. Both ended up voting in favor of the budget Tuesday, partly because the council promised to consider a funding plan for an estimated $14 million for the North Natomas aquatics center and a package of projects for Gardenland and Northgate in the next three months.

“When you leave out Natomas, north and south, and Gardenland and Northgate and River Park and two full council districts out ... that’s frustrating for me, but not enough for me to vote ‘no’ because I think the things in here are really important,” Ashby said.

Two citizens’ advisory committees and the City Council will decide how to spend the remaining roughly $32 million in new Measure U revenue throughout the year.

“We think this is a historic day,” said Chet Hewitt, president and CEO of the Sierra Health Foundation and a representative of a coalition of about a dozen business and community leaders. “There are many cities who will talk about equality. There are very few who are willing to act and do something about it and invest real money for communities that are poor and left behind. It is a great day in this city.”

Steinberg urged the coalition of about a dozen — which formed mostly to push for Measure U money to go to disadvantaged neighborhoods — to keep working together.

“Now you have made the beginning of a formidable force and I hope you don’t rest on your laurels or let that power fritter away after this debate and I know you won’t,” Steinberg said to coalition members, including Cassandra Jennings of the Greater Sacramento Urban League, Pastor Les Simmons, and Rachel Rios of La Familia Counseling Center.

The budget also contains about $23 million City Manager Howard Chan proposed for new projects and programs, including 149 new full-time city employees in homeless services, public safety, economic development, youth programming and other core city services.

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