We Limit What We Do
When Lafayette first incorporated in 1968 it received no property taxes and, because it had no shopping mall or big box stores, it also collected few sales tax dollars. Thus – born more out of necessity than anything else – the original City Council had no choice but to provide only a few essential services, namely, the “Four P’s”: police, public works, planning and parks. That elemental frugality and limited scope was written into the City’s original mission statement (it’s still there, in fact) and is now firmly imprinted in the organization’s DNA. While other cities may deliver swim centers, water parks, botanical gardens, zoos, tennis facilities, sailing clubs, and the like, Lafayette has largely stayed true to the Four P’s. Don’t be surprised, when you call, if we say, “Sorry, we don’t do that.”
We Contract for Almost Everything
Most homeowners, when they paint their house, take the time to acquire two or three bids in order to assure a good price from a qualified contractor. Lafayette does the same thing. We competitively contract for street and sidewalk repairs, traffic signal maintenance, roadway striping and stenciling, and downtown median landscaping; the orange-shirted workers you see tending the plants and changing the banners downtown are contract employees. This newsletter was designed by a contractor. Lafayette’s recreation instructors are contractors. Our meeting minute takers are contractors. Even the City’s police officers are contract employees. By contracting for services we hope to ensure that – like the homeowner looking for a painter – Lafayette gets the best combination of price, quality and flexibility.
A Small Non-Union Staff
All those contractors mean that Lafayette needs fewer full-time equivalent employees, and we have just 39. That makes us much smaller, from an employee standpoint, than most cities with a comparable population. El Cerrito and Lafayette, for instance, both have about 23,000 residents but, at 190 employees, El Cerrito’s staff is about 450% larger than Lafayette’s. Our smaller workforce is not only less expensive, but also allows for a personal, collegial, and cooperative council-staff relationship. The evidence? About fifteen years ago, Lafayette’s employees ended their relationship with a local public employee union, choosing instead to negotiate pay and benefits issues directly with the City Council, through the City Manager.
No Defined-Benefit Pension Plan
One of the signature benefits that most California public employees receive is a defined-benefits pension. Unfortunately, however – as we have seen in the newspapers – underfunded pensions have not only forced dozens, perhaps hundreds, of cities and counties to cut back on services but even brought entire states and nations to the brink of insolvency. Lafayette, in stark contrast, does not offer a defined-benefit pension plan to its employees. Instead, just like most workers in the private sector, City employees are enrolled in a 401-style defined contribution plan. At the end of each pay period the City deposits the equivalent of 10% of the employee’s salary into a tax-free savings account, and agrees to sock away another 5% if employees match that contribution. The goal is to provide a fair and reasonable retirement to our dedicated public servants – but one that doesn’t bankrupt the City.
No Unfunded Obligations
Because there is no defined-benefit pension plan, Lafayette has no long-term unfunded pension obligations (although the County Sheriff, which provides police services to Lafayette, does). And, while the City does provides a limited retirement health benefit to its long term employees (we pay 50% of premium costs for employees who retire after age 62 with at least ten years of service), we have worked with an actuary and the City’s independent auditor to ensure that the liability for that program is fully funded.
We have delivered one every single year for the last twenty years. Even during these recessionary times, with sales and property taxes dropping faster than expected, we’ve managed to make the ends meet.
A Big Reserve
What do we do with the savings? Usually, we add it to the City’s reserve, which now totals over $7M. Like any well-funded savings account, this healthy reserve acts as a “revenue smoothing” device during recessionary times and allows the City to maintain consistent levels of service. The reserve also serves as a bulwark against extraordinary expenses that may result from a natural disaster. Since Lafayette is at risk for earthquakes, wildfires, floods, and landslides, the importance of maintaining a large reserve cannot be underestimated. One recent example: when the storm drain under Mt. View Drive blew out last winter, the cost to fix it was $850,000. This was easily covered by the City’s large reserve.
AAA Bond Rating
Lafayette’s conservative financial practices – no pension obligations, balanced budgets, very strong unreserved general fund balance – are what Standard and Poor’s called out when it raised its bond rating for Lafayette from AA to AAA. Only 25 of California’s 490 cities, and only 169 cities nationwide, have earned this highest-possible bond rating.
Volunteer Councilmembers and Commissioners
We had to laugh, when in the wake of the City of Bell scandal, the local Grand Jury asked all Contra Costa cities to fill out a complex spreadsheet describing all of the various forms and amounts of compensation that the City’s councilmembers and commissioners receive. While the request (precipitated by the outrage around Bell’s $100,000 pay for its councilmembers) was understandable, Lafayette’s submission was clogged with zeros because our councilmembers and commissioners serve as unpaid volunteers. The only expenses we typically incur are those to pay for volunteers to attend – wait for it! – ethics training.
We’re TransparentIt was Justice Louis Brandeis who coined the marvelous phrase: “Sunlight is the best of disinfectants,” In June 2009 the Lafayette City Council ordered the preparation of Lafayette’s first Open Government Statement and, in so doing, Lafayette moved to placed the City at the forefront of open government practices in California. This document contains the information that is most requested by the public, press, and watchdog agencies, including salary ranges for all employees, actual compensation for the top five earning city employees, the city manager employment agreement, and the City’s whistleblower policy. It is available every day to any party during regular business hours at the Lafayette City Offices, and online any time within just two clicks from the home page at www.lovelafayette.org.
Citizens Audit Our Operations
Twice in past 15 years (and most recently in 2008), the City Council has asked residents who are experienced business managers to join an all-volunteer Finance Review Committee to audit everything City government does and make recommendations regarding how Lafayette can operate more efficiently. In both cases, the committees found that Lafayette spends less per capita than most cities in Contra Costa County. Indeed, in the most recent report, the Committee noted that Lafayette has “done a very good job of identifying and acting upon opportunities to manage the taxpayer’s money with prudence,” and “appears to be more fiscally prudent than many of the cities in our study.” Most of the Committee’s recommendations to reduce costs were implemented.
Lafayette really is different, and these differences distinguish your town from most other California municipalities. To be sure, the city still has its challenges, the most notable being a multimillion dollar road repair backlog. In our ongoing effort to chip away at that problem, we will continue to embrace best practices from both the public and private sectors; we will expand our efforts to be transparent; and we’ll be constantly on the lookout for opportunities to reduce costs.
We like to think of Lafayette as the Southwest Airlines of cities – low cost and very efficient, with highly satisfied customers. 86% of Lafayette’s residents, when polled in 2009, said they were satisfied with the services provided by the City of Lafayette. Thanks for your support.