Called "Outside The Box," Alec's column focused on politics, policy, and predilections in Pacific Grove, CA. It was published in The Cedar Street Times, PG's newspaper at the time.
Sixteen of the columns are reprinted here. Some are slightly different than the previously published versions. All rights are reserved, and the contents may not be copied or reused without permission.
Read one or more of the columns by clicking on their links to the right.
Imagine
I hope you've had an especially happy holiday and find yourself lifted by the spirit of the season. If you haven't had a chance to look at the report I recommended to you last time, what better way to ring in the New Year than with a loved one, a glass of brandy egg nog, and a copy of PG's LEAP report? Well, maybe not right at midnight...
Whenever you wish, you can find it online and read it, or print it out if you prefer. Last time, I had to give you a lengthy link to an obscure place on the city's website. Now, however, the city has thoughtfully placed the LEAP report in the Quick Links list right on their home page at cityofpacificgrove.org.
As I mentioned, the report is packed with eye-opening insight and hope for the future. It offers common sense solutions that can maximize revenue without sacrificing the quality of life we love. Yes, we can have our cake and eat it too — if we use our heads.
Here are three teasers from the LEAP report:
I'd say we owe it to ourselves to stop regarding business as a necessary evil in PG, or worse, as a bunch of untrustworthy enemies who will hurt the community if given the slightest leeway. They are not that. Most business owners and their employees are our neighbors, providing the lifeblood of our city, making life better for themselves, their families, and for all of us. In fact, businesses are us.
The report recommends that business owners attend City Council and Planning Commission meetings to advocate for a stronger business climate. I'd go further. I'd say that all of us who can envision twin paths leading together to both community preservation and business prosperity should consider becoming volunteer lobbyists. One of the great things about living in our small town is that we are welcome to email councilmembers (under "About the City" click on "Mayor & Council") and discuss issues. Anyone can take action. And making a case for a PG that thrives can make a real difference.
Happy New Year, PGers! Take a moment and just imagine our city turning around in 2017.
Winners or Losers
Happy New Year. Let's start with a little honesty. Pacific Grove cannot survive on its present course.
Our expenses will continue growing rapidly. More and more of the pie will go toward the cost of municipal pensions, not maintenance, not the things we want. To pay for what we want plus those pension costs, we need significantly more income. We can't get that just by continuing to raise taxes because that becomes self-defeating to any economy, especially a small, highly taxed one like ours. So, in order to grow our income, we need more prosperity, more business.
However, Pacific Grove also needs to retain its character — and not just for the tourists. Virtually all residents want to maintain the peace and quiet and beauty and heritage of our old town. It's for those qualities that we live here.
So our only sensible choice is to come together to decide how we're going to accomplish both goals. But there's an obstacle. For all our good fortune, PG exhibits a particularly negative trait that has kept us in a box of our own making for a long time. I'm talking about our big streak of fatalism.
On one side, some folks say, "We won't even try to expand our business because no-growth people will block it." Other people say, "We've got to fight tooth and nail because they'll destroy this town with giant hotels and chain stores." Many believe there's no way for PG to build prosperity yet retain its character, so we don't sit down and work out a plan. If we did, there'd be more trust on each side and in the outcome. But we just say no — no, no, no, and no. Talk about fatalism. We all make ourselves miserable by squashing prosperity, hiding our agendas, and fearing the future.
There's a better way. What if we were all merrily rolling along on the same page? I know it's hard to imagine, but all we're missing is a thorough plan that everyone can live with.
A great movie mogul named Lew Wasserman once said, "there's always a deal to be made." To Lew, compromise was not another word for losing. Deal-making was not like war. It was and is cooperation, with both sides getting what they want and winning. The only losers are those who fail to make that deal. And there's certainly a deal to be made in PG — if we don't want our little city to become moribund and bankrupt.
Here are three ideas to throw in the pot. (1) Why don't we use zoning as our primary means of compromise? In other words, let's liberalize some regulations in existing commercial zones while maintaining tough restrictions in all the residential areas. (2) Why don't we let tourism grow as it will, but put our municipal effort into small, stable, quiet businesses that won't force us to expand the number of visitors ad infinitum? (3) Why don't we do more to expand routes in and out of town? The Presidio closed down one of them, and we just said, "Damn." There's that fatalism beating out tenacity. Maybe we can keep making our case — for community health or mass safety — until they cave.
These ideas are just that — ideas. In addition, there are all those in the LEAP Report, which is available on the home page at cityofpacificgrove.org. And beyond them, there are all your ideas! Hey, it's the New Year. Anything is possible. Let's get started.
The 12-Year-Old
The events of the week since Donald Trump became President remind me of something that happened last year right here in PG, at my home.
A girl came to our door. She was maybe twelve years old with an innocent-looking face and confident demeanor. She made a pitch for money for a school project, and I thought about how effective children can be as sales people. Normally it's pretty easy for me to say no to front door soliciting, but now I found myself worrying about pushing her over the brink toward a dispirited, cynical future in which she'd drop out of school and become a bank robber. It required a deep breath and fortitude for me to say, "Thank you, but my wife and I already have our donations planned out."
Her face contorted. She looked aghast and said, "Oh wow, you're… you're… a Republican!"
This young person had searched for the nastiest epithet she could think of. My first impulse was to laugh. But I couldn't. It was too jarring to see the innocence and confidence replaced in a flash by venom. In her world, it all made sense: not getting her way… obstacle… Republican… enemy… attack. All I could think about was who raised her, who passed along such scorn and prejudice to a 12-year-old.
As dreadful as the new President's personal behavior has been, I'm even more dismayed by the conduct of large swaths of his opposition. Mark Twain once said, "We all do no end of feeling, and we mistake it for thinking. And out of it we get an aggregation which we consider a boon. Its name is public opinion." In the case of Trump's election, there's a palpable, visceral hysteria in the people around us. The feeling is mostly fear, isn't it? And anger over the loss of the election. And truth be told, some degree of hatred for the other half of America.
And we're boxed in by that, aren't we? When we reduce the other half to labels, we take away their ability to be more than that. They can't have a good idea. They deserve our contempt and nothing more. They are not us.
During the week, young people have destroyed property and injured people. It's like the 12-year-old's little tantrum — I didn't get my way, so I'll hurt you until you give me what I want. They think their actions are justified by their anger at America, and yet the very reason their actions are unjustifiable is that we live in America. As a nation, we know that when we attack fellow citizens we sink to unacceptable levels. I think a clue to the agitators' rationale was written on one of their signs held proudly above the crowd on Inauguration Day. It read, "America has never been great."
Is that why they feel they can abandon our society's standards? I hope parents will steer their children toward practicing rational discourse and tolerance — two principles of conduct held dear in our imperfect land since at least 1636, principles that indeed helped make America great.
Unusual Suspects
Nearly two weeks ago, the City Council and top staff held a strategic planning session to develop an agenda for the time between now and the next election in 2018. The meeting was open to the public, but I couldn't find mention of it on the city's website. You probably weren't aware of it. Only about 20 observers showed up, and there were barely enough chairs, even for them.
I could only attend for the first three hours, but that's when the results of a survey were presented. It contained vital questions like, "What improvements could be made in the city?" People who'd filled it out were called "stakeholders." Their answers were intended to jumpstart the process of choosing key priorities. Did you get the questionnaire? Probably not. It was only sent to members of commissions, committees, and boards — about 65 people, of whom 43 responded.
Stakeholders? What about the other 15,000 citizens of PG? I know, the word was meant differently, but that's the point — the way it was and wasn't used should serve as a red flag. Here's why we should be concerned by the inbred nature of the survey and the planning session as a whole.
Those extremely generous city volunteers bring great value to the city, and in return, they have ample opportunity to influence the direction of PG. That's as it should be. And our elected officials work hard for us, especially considering they are paid a pittance. Listening to them speak at the meeting, I'm particularly hopeful about the newcomers, Nick Smith and Cynthia Garfield. But our leaders have virtually no access to the rest of us, except for those I call the noisemakers — the handful of usual suspects who constantly lobby against things.
You vote for individuals because you like what they say, but we all know that what they actually do in office can be completely different. In the absence of constant guidance from rank and file citizenry, their actions will be based on internal consensus, sometimes even on well-hidden personal agendas. I wish we could go about our lives and let city hall do its thing, but that just won't work. It cannot be healthy when the council, staff, and volunteers are most heavily influenced by each other.
The good news is: in place of a big city's aggressive media and constant polls — tools we lack — you can easily make your voice heard directly in such a small town as ours. And if you expect to be well represented by your city council, you need to grab that opportunity. The strategy meeting was an urgent reminder that the very people who are needed most are everyday residents with busy lives.
If you go to the "Mayor & Council" page, you can email them together or individually. Reach out constructively about your concerns. Tell them what you want. Stand up. If you care about what happens to PG, you are needed. Busy or not, please, stand up and participate.
I Changed My Mind
Luckily, I'm not a politician. They don't get to change their minds. For the rest of us, it can be messy, but it's the only way to improve on the mistakes we make.
When short-term rentals first became a reality in PG, I was unreservedly for them. If we can have long-term rentals, we should be able to have short-term rentals, I thought. And I had reason to believe that the complaints were mostly generated by a kneejerk desire to block change. Plus, STRs are a huge source of much-needed income for city hall as well as for some of our entrepreneurs.
Then one sunny day, it dawned on me. Short-term rentals are radically different than long-term rentals. Well, duh. If not, then the city wouldn't have radically different and separate rules governing them. The business model of STRs is much closer to hotels, motels, and B&Bs than to apartment rentals, which provide residents with essential alternatives to home ownership. Renters become a part of PG, whereas tourists come and go with no ties to the community. Again — duh.
I further realized that the complaints about STRs are based on more than noise or intoxication issues. To some extent, STRs deprive residents of the traditional qualities of a neighborhood. Familiar neighbors are replaced by strangers constantly packing and unpacking their cars. Inevitably, tourists behave like someone paying to have a good time rather than someone paying to have a good home.
I'm still in favor of STRs, but now it seems forehead-smackingly obvious that they should only be permitted where zoning allows offices, motels, or other commercial businesses. That's because STRs are businesses, not homes — and that is the bottom line. It means STRs in R-1 and R-2 should be phased out because the original, indispensable purpose of zoning is to provide reliable sanctuary for residents, not to use homes to expand the tourist trade. Other cities notwithstanding, PG may be breaking the law by ignoring or changing its zoning without citizen approval. And businesses need to join together and demonstrate their desire to defend PG's living standards as vigorously as everyone else — if they want residents to trust the business community. Now, some exceptions might make sense. STRs could be allowed in R-1 B-4, the dunes section where the lots are large, houses are well-separated, and everyone who moved there knew that tourists would be part of the view. Another exception could be houses adjacent to existing B&B's.
And STRs could remain just as lucrative for city hall, yet become much more palatable for residents if Type A and Type B licenses are combined into one type that allow unlimited numbers of STRs, but only in limited areas.
It's embarrassing, but admitting a mistake is better than continuing to support policy that's wrong or doesn't work. I recommend changing your mind every so often. You'll feel better for it.
The Shortfall Mystery
It's been more than two weeks since Mayor Kampe delivered his annual State of the City address to nearly 200 PGers. You can find the text on the "Mayor & Council" page of cityofpacificgrove.org. I still feel the happy glow of being reminded about our city's delights by this beloved mayor at the height of his political skill and powers. But his very lovability makes it easy to overlook the more ominous elements in his speech.
He enumerated several expansions of city revenue, including the 1% sales tax increase back in 2008, plus the new Measure X increase that brings your total sales tax to 8.75% starting next month. That's almost what tourists pay for their transient occupancy tax. And he mentioned the $1 million per year tax windfall from legalized short-term rentals and the separate funding that's in place for sewer upgrades. The mayor said PG has raised city service fees and would likely raise more.
On top of that, he said the city council has initiated a "surge in the maintenance budget," which means they're taking $1.4 million from our reserves for infrastructure work. He proudly stated that the city achieved a surplus and built reserves for the 9th straight year, but didn't make it clear they're now reversing those hard-fought gains and shrinking our reserves by more than 10% in this fiscal year alone.
The mayor's speech was also chock-full of new expenses — five managerial staff positions filled, ten new public safety employees hired, along with a restoration of employee healthcare, and upgraded police equipment like video cameras in vehicles. In addition to all the sewer and lesser infrastructure upgrades, there's the grey water project. And he spoke of quite a few more expenses in the near future.
Then there's the wooly mammoth in the room. Mayor Kampe pointed out that CalPERS has adopted a "more realistic" view of their unfunded liability — saying it's much larger than previously projected. They've begun phasing in higher charges to the cities, but no one knows how big the upcoming hits will be. One recent annual increase for PG went well over $1 million. In a few years, the wave will pass, but for now, this is the thing that could do us in.
I can appreciate the case for added expenses. Taken individually, they make sense. But add them together, and they aren't worth a hill of beans up against one fact: we can't afford them. You know as well as I do that the deconstruction of our reserves is not a one-time anomaly. Having tasted blood, the council will take more each year, not less. And when CalPERS' bills become unaffordable, we won't have anything to fall back on. The mayor's address has left me with a big question — how does the council expect us to pay for everything?
He himself summed up by saying, "I predict a shortfall in the near term compared to our needs." No kidding! But the council said financial sustainability was a top priority two years ago, and again said it's a top priority for the next two years. That means they failed, but will presumably try harder. And they must. Sustainability means solvency. It means survivability. So why go backwards? The council is using up all their sources of revenue like never before. Frankly, that's likely to ruin PG, not fix it.
The Mayor is an extremely smart, even gifted guy. That means he has thought this through. So why doesn't it all add up? In my column's very first paragraph of the new year, I wrote, "Pacific Grove cannot survive on its present course." Now I hope you see why I said such a thing.
A Saga of Sweet Success — Part One
Dateline 2027: In the past ten years — since April 1, 2017, to be exact — everything has gone just right for the city of Pacific Grove.
For each of those years, this idyllic spot has never received less than 20 inches of rain, and every drop has fallen between the hours of midnight and six am. There have been no earthquakes, lightning strikes, or sewage spills. Only four burglaries took place, after which the culprit returned the valuables to their owners, then turned himself in to a police officer — who gave him a cookie. A family that lost its pet pig bought two orphaned Labradoodle puppies, gave the cutest one to their neighbors, and lived happily ever after. Unfortunately, there were two near-drownings. They befell a bride and groom during their wedding at Lover's Point. But both were saved by a local good Samaritan who exclaimed, "I love tourists! I want them all to feel at home in PG!" So, the newlyweds moved into a beautiful blue house on Spruce Avenue and opened a nationally renowned lifeguard training school.
Ironically, the healthy rainfall totals have been unneeded because the desal plant opened ahead of schedule in 2020, and the Aquifer Storage and Recovery system worked even better than expected, and the "Pure Water" purification process was widely accepted. As a result, Pacific Grove has been drought-proof for seven years now — and thanks to our grey water recycling, we pay a lot less for municipal water than our neighbor cities. Of course, everyone pays a lot less thanks to Cal-Am having forgiven half the cost of all its improvements. Apparently, the unexpected windfall was negotiated in exchange for a guarantee that Cal Am could retain ownership for at least ten years. The usual suspects were up in arms about the deal, but no one else wanted to hear about it once they saw their new water bills. And thus, the guarantee has been honored.
During this time, Pacific Grove's number-one industry fell to second place, and yet became significantly more profitable than ever. Our golden age of tourism began unexpectedly in 2020 when US News, Travel & Leisure, and CNN all named PG "The Most Romantic Resort Town in America" (no longer just in the west). The opening of the Ritz-Bella Resort and smaller Holman Hotel had contributed to that status, and by 2022, we became the go-to place for high-end getaways. Many older motels closed or became annexed to upscale lodgings, then upgraded accordingly. By 2024, Pacific Grove had 20 percent fewer rooms, but 100 percent occupancy. Despite the snazzy rooms and sky-high room rates, visitors overwhelmingly said their favorite thing about PG was its genuine old-fashioned character.
Back in 2017, fiscal solvency was the city's biggest concern. CalPERS was confiscating more and more of PG's limited budget. All the councilmembers were throwing up their hands and saying, "there's nothing we can do." And rather than continuing to sock money away, they began spending down the city's reserve funds. These were sure signs that none of them expected things to turn out well.
How did the money issue turn out? To be continued in the next edition of this column.
A Saga of Sweet Success — Part Two
Dateline 2027: This is the second half of the story of how everything has gone just right in Pacific Grove during the last ten years. And I'm delighted to bring you the happiest ending anyone could hope for. Nope, it's not the discontinuation of the city's portion of the sales tax, though that did happen in 2025. And it's not the restoration of the library to its original Carnegie design, though that was finished this year and was made possible in 2023 by the digital replacement of all image-free books. And it's not The Retreat Heritage Park, also begun in 2023, entirely financed by two anonymous donors, inspired by the development of Colonial Williamsburg, and scheduled for completion in 2033.
I ended Part One of this retrospective without telling you how the city's money issue was resolved, or if we were even able to maintain fiscal solvency. Well, ten years ago, no one would have believed the steps taken by the City Council in 2018. Their multi-prong approach included: a resolution to increase municipal taxes and fees, but only with sunset clauses and voter approval; a balanced budget rule limiting annual expenses to less than expected income; the formation of a separate general fund dedicated to maintaining reserves at 50% of annual expenses, but with strict rules of access; establishment of ad-hoc committees to fan out and persuade other California cities to join in lobbying against CalPERS' policies, and to continue seeking cost-saving partnerships with neighboring cities. As it turns out, the Council's most beneficial decision was simply to promote business expansion in PG.
The city had an apparently rock-solid reputation for hostility to businesses (and homeowners), and for imposing equivocal, byzantine ordinances on many. So onlookers were stunned when the time and cost required to deal with city regulations was cut in half within a year. Another ad-hoc committee was simultaneously formed to recruit small technology companies to move to Pacific Grove. Word went out that the city was actively pursuing businesses and rolling out the red carpet for ones that would bring few employees and many dollars to PG. By 2023, five companies anxious to escape the Bay Area had set up shop in our city. Three thrived, one went belly up, and the fifth was bought by Apple for $3 billion, yet insisted on maintaining its headquarters in Pacific Grove. That's when technology surpassed tourism as our top industry. Combined, these businesses increased our population by a grand total of 501 souls. Glorious as it was, however, even this was not the happy ending of the last ten years.
As our fears diminished, and our prosperity grew, folks noticed a certain light-heartedness seeping into the spirit of the community. Somewhere along the way, anger faded. Political opponents and rabble-rousers started getting along, and we all stopped trying to disenfranchise each other. It was no small thing: Pacific Grove actually became carefree. So the happy ending was — we got happy.
Imagine that.
A Special Inquiry: The Thing About Reserves
On April 21, an article in the Monterey Herald provided an eye-opening picture of our City Council's robust spending plan for their upcoming annual budget. Dan Gho, the Public Works Director, was quoted as saying we'd spend close to $2 million on capital improvements. It does make sense to upgrade infrastructure during an economic up-cycle, but spending our sewer fee money, donation money, grant money from the state and elsewhere, and our currently generous supply of city tax money is apparently not enough.
The City Council also plans to spend down some of our city reserves again, as I predicted. In PG, reserves are simply the money that's left over at the end of fiscal years. We have no separate account to hold those funds; there is no "lockbox." So choosing to spend reserves is easy — far too easy — when you consider that it's synonymous with approving a deficit budget, meaning more money goes out than comes in.
I was curious why the Council would want to reverse course and spend down our savings immediately after they'd built it up with such fiscal sacrifice over the preceding seven or eight years. I emailed all of them to ask about it. Nick Smith and Cynthia Garfield failed to reply. I believe Ms. Garfield was under the weather, but Mr. Smith's unresponsiveness is disappointing, considering that I reminded him about it in person and that a balanced budget was his top campaign pledge.
All the others acknowledge that we need to hold reserves. Bill Peake writes, "Reserves are needed for emergencies, large unanticipated expenditures, and cyclical downturns in revenue." Rudy Fischer explains, "Many cities and most public agencies have some reserves, and I think that is prudent. Having your own money on hand can be the cheapest way to pay for something." Ken Cuneo sums it up succinctly: "A city without reserves is in a precarious position." However, most of them want to make the point that our reserves shouldn't be "excessive," as Robert Huitt puts it. Mr. Peake comments, "There is a useful limit to reserves." But he doesn't say how to determine that limit. None of them do.
Luckily, there is a non-partisan, expert paper on this subject called "The Adoption of Reserve Policies in California Cities" (at californiacityfinance.com). At the time it was written, more than half of all listed cities held reserves that were greater than 20 percent of their annual operating budget, and about one-third were at 50 percent or more. Pacific Grove's reserves are now at 45-50 percent.
The Reserve Policies paper comes down on the side of cities that keep higher reserves, like ours. It lays out four concrete criteria and says that at very least these should be considered when formulating a reserve policy. The criteria are: cash flow needs, exposure to natural disasters (in PG: earthquakes, tsunamis, other ocean flooding), exposure to economic impacts (in PG: tourists suddenly not visiting for reasons such as an epidemic or terrorism), and vulnerability to actions from the state (in PG: think CalPERS, Water Control Board, Coastal Commission, and the other 340 state bureaucracies). So, in PG, we're seriously exposed to all of these.
None of the councilmembers identify these or any factors as criteria for a "best practices" level of reserves. Frankly, they seem to pull numbers out of the air. At least Mr. Peake gives an explanation for his figure, reasoning that smaller cities like ours have less flexibility in handling unexpected fiscal changes. He says we should have reserves greater than 20 percent, "for example, 25 percent." Okay. Mr. Fischer says it should be 25-30 percent. Fine. Mr. Cuneo calls for a dollar figure that would equal 25-35 percent. Good. But the mayor doesn't want to play. When asked for a target, Bill Kampe only replies, "the Council set a goal of reserves at 10 percent for the general fund."
Wait, a goal of 10 percent? Mr. Peake references this too, but says city policy describes 10 percent as a minimum, not a goal. Hmm. And Mr. Huitt asserts there is a minimum reserve he would never vote to undo, but instead of naming the amount, he says, "What that number is depends on many factors, including immediate economic conditions, mid-range and longer term projections, and the definition of 'genuine emergency.'" Hmmm.
What's going on here? I'll tell you what I'm reading in these murky tea leaves. On one hand, they think we should have less money just sitting there, unbudgeted and unspent. About "excessive reserves," Mr. Huitt says, "Taxpayers' money should be spent on and invested in the essential services and projects that people want and need, not held in low-interest-bearing savings accounts." Mr. Fischer adds a cogent thought: "I don't think we should be taking in a lot more money than we need to operate, because then inflation simply eats some of it away."
On the other hand, several think we should have substantially more in reserves than the current policy's baseline amount. But they haven't applied any systematic approach to formulating a policy, and as a group, seem unmotivated to reach a new, formal consensus. Implicit in several comments is that they simply don't want to settle on an amount or a policy. However, explicit in the paper's findings is that every city should have a clear, specific reserve policy.
Here's the thing: we could be struck by a terrible earthquake or storm, we could experience temporary flat-lining of the tourist trade, and it's a virtual certainty that CalPERS will hit us with one or more million-dollar increases in our bill over the next few years — they've said as much, and they've already done it once recently! As Mr. Cuneo pointed out, "CalPERS… tends to drop surprises on cities." But other than this comment, not one of them even mentioned CalPERS, not until I asked about it in a follow-up to Mayor Kampe, who replied, "The core issue is that reserves allow us to respond to one time unanticipated events… CalPERS will be a long-term, continuing change, not a random event."
No, sir, CalPERS will be both — clearly. The previous CalPERS bomb was the poster child for unanticipated events. The next one will be just as "random" because the year and the amount are unpredictable, based on nothing but CalPERS' internal nonsense.
One of the purposes of reserves is to give a city time to adjust to sudden major changes, whether or not the changes extend into the future. One of the reasons for having a formal policy is that it prevents future councils from whittling away at reserves on a whim — "We have 40 percent reserves, but we'll never need it, so let's spend some, cut back to ten percent, maybe five…." More than anyone, the members of our City Council must know how tempting that will always be.
Right now is the time for them to raise the minimum level to a reasonable amount — now, before finalizing another budget. And wouldn't it make sense to have two different reserve funds? One would hold a minimum of 33 percent of our annual operating budget, except in clearly defined emergencies when reducing the fund's size would only be permitted by a two-thirds vote of the Council, and replenishing it within two years would be required. The other fund would hold seven percent at the beginning and end of each fiscal year, and would be used for cash flow fluctuations. And the most important safeguard — these reserve funds must be established as separate from the general fund.
For Mayor Kampe, Robert Huitt, and any others who think we're holding too much in reserves, this would be a one-time opportunity to free up (yes, spend) a few thousand dollars without guilt. Formalizing the remaining 40 percent reserves would guarantee appropriate savings for any eventuality into the future. So, no more accumulation is necessary if they act now. The hard part is over.
If they don't act now, human nature being what it is, those existing reserves will evaporate. You know it. Everyone knows it. We'll never have another opportunity like we do now. Be patient, councilmembers — interest rates are rising, and you'll get all the roads and sewers fixed.
To readers, if you agree that the only sensible choice is to put realistic reserves in a virtual lockbox, tell the City Council now. You might be surprised by the effectiveness of speaking up. You can send an email to them all at once if you go to cityofpacificgrove.org, click on "Mayor & Council," and look to the right. It really is now or never.
Full Disclosures
Last October, I set out to write at least a year's worth of these columns. We've already passed the halfway mark, so I think it's time to reaffirm that "my goal is to offer up thought-provoking ways to look at issues." I pledge again that "I have no hidden agenda, no interest in holding office, and I'm not a surrogate or partisan." I'm independent-minded and open-minded, and consider it part of my job to differentiate between facts and opinion, to never disguise one as the other, "to form opinions that flow from accurate observations and common sense, and to make the route clear." I hope I've lived up to that so far. I invite you to contact me and let me know.
New disclosure: I'll be joining the city's Economic Development Commission as an at-large member, pending appointment by Mayor Kampe and approval by the City Council. Well, maybe that won't happen, but I hope it does. I look forward to learning and participating.
While I'm at it, a related disclosure: my wife, Kim Murdock, chairs the Administrative Hearing Officers in Pacific Grove. They are unpaid, independent, quasi-judicial magistrates who hear legal appeals involving city code and ordinances. And she was the one who heard the notorious pet pig case.
Proud disclosure: I'm bragging on Kim when I tell you that the Superior Court just upheld her decision unequivocally. If you followed the story in the news, you may wonder how that could have happened. And the answer makes an important point about the media. When you read her decision (arrowkite.com/km hearing decision.pdf), you'll see a sizable disparity between what was reported in news stories and the actual facts of the case, even down to who the victims were.
Back when I introduced myself in this column, I ranted about the media. And now, frankly, I'm even more concerned about them than about our President. At least Trump can be stopped by the branches of government, but media cannot (and should not) be stopped.
But when we see news organizations willfully mixing opinion and persuasion with facts, we owe it to ourselves to stop being their consumers — especially when we agree with their opinions. To preach to the choir hurts the choir the most. The anti-sermons lull us into abandoning thought and just hitting the same old notes. Propaganda is the enemy of news, make no mistake. It creates profoundly false impressions of what's going on around us. Seek and demand real news, the truth.
Grudging disclosure: writing this column means I'm media myself — a sort of local talking head in print, a mini-pundit. In the past, I've asked you to distinguish between local newsmakers and noisemakers, the latter being those who seek influence without getting hired or elected to important positions. As a class, they tend to take shortcuts. Many are outright liars and damage our community. They hold no power, but do hold sway. At election time, they're more likely to mislead you than newsmakers are. So, my most painful disclosure is — this column makes me a noisemaker, too. All I can say is listen and choose carefully. Choose those you trust, and for God's sake, ignore those who play on your emotions. Mark Twain said, "We all do no end of feeling, and we mistake it for thinking."
Now Gimme Money, It's What I Want — First Verse
Out of the blue, I heard a PG lady exclaim, "We should pay higher taxes." I was taken aback because I'd never actually heard anyone say that before. And yet, I wonder how many of you agree. Not that it matters, because we lucky souls will surely get steeper taxes, like it or not. Our taxes have been rising inexorably, even on a percentage basis, and that rise won't just continue, it will accelerate.
Here's why, at least in Pacific Grove. Our City Council does more to expand municipal programs (creating expenditures) than they do to support citizens' prosperity and businesses (creating revenue). Just look at what they usually discuss in council meetings. And if our cute little government's expenditures exceed its revenue stream, that means more money goes out than comes in. And that, in turn, infuses our leaders with a certain fervor to separate us from more of our money.
Beware, our city and local agencies can get sneaky, though they play the same old tricks and expect us to keep falling for them. For example, they charge as many different types of taxes (and "fees") under as many different names as possible. That way, they squeeze every last dime out of us, and we don't see what a huge bite they take. Another trick is to stop funding things — like roads, for instance — then they announce our byways are in dire need, and we must save them by paying a new tax. Like in a shell game, we don't notice the money that previously paid for roads has vanished. Poof.
Most of our councilmembers are unassuming, nice, quiet people. Maybe too quiet, and that's another trick. For instance, they work really hard to avoid discussing what we'll do if CalPERS tacks another million or two on our annual bill. All they say — unanimously, by the way — is that the state's to blame. Why make a point of that? To divert public wrath. See, when the bill comes due, they'll be able to say it's out of their hands and we have no choice but to pay up. Oh, and we'll need higher taxes for that. Our councilmembers may not be hardened politicians, but believe me, they learn quickly. And yes, the state's largely to blame, but if PG's unprepared, that will not be the state's fault.
More and more of our lives are run by bureaucracies, whether It's PG's Community and Economic Development Department, or any of the 350 different bureaucracies at the state level. Unlike politicians, they don't answer to the voters. Or even to the politicians. They are not representative government. Not long ago, a 70 percent majority of voters wanted Monterey Peninsula Water Management District to shut down, but couldn't make it happen. The people's rights were truly trampled. And to top it off, MPWMD hit us with a large tax (excuse me, fee). Gotcha! They imagine they're indispensable and must go on exerting their power at all costs. But at all costs to us, not them.
Do you really think all this works? It may disturb you, but I submit that every effort by local agencies to raise more money hurts our community. I mean every single effort. Next time, my case.
Now Gimme Money, That's What I Want — Second Verse
Last time, I told you about a PG lady saying, "We should pay higher taxes." Because our City Council and other local agencies would love to make her wish come true, I promised to argue for this premise: every single effort by local agencies to raise more money hurts our community.
Kiplinger lists California as the least tax-friendly state in the country. And that doesn't take into account our higher local sales tax and big fees tacked onto big utility bills. Taxes hurt. More taxes hurt more. Our City Council being hellbent on raising new revenue will hurt you the most.
Example one: short-term rentals infesting our residentially-zoned neighborhoods are PG's poster children for city overreach and dollars-over-sense — bringing major revenue for the city, major misery for residents. The consequences may soon bite all of us on our you-know-whats. Stay tuned.
Example two: Measure P deserved harsh criticism — driven by apparent desperation to expand revenue, the City Manager and Council displayed arrogance and ignorance in trying to tax admissions. It was defeated by a huge margin, but if passed, it would have effectively put an end to small events put on by small organizations. As it was, it caused plenty of turmoil, anger, and fear.
Example three: parking tickets used to be about preventing real abuse. Fewer officers provided the right balance. Now, PG enforcement has become LA-style revenue enhancement. That's why we have more painted lines, more parking meters, and a fleet of meter carts. As of June 1, they handed out 1,990 parking tickets year-to-date. Last year at the same time, that number was 877. Coming soon — we'll hate the parking enforcement officers and they'll hate us.
Example four: our taxes once paid for city oversight of home improvement, but they passed more pervasive rules, then declared them too expensive to enforce. Now any homeowner engaged in home improvement pays steep add-on fees. And nothing is more insidious for Pacific Grove.
Several years ago, I bought a new front door. The city charged $100 for the privilege. Recently, I inquired about fixing my front steps. Apparently, the fee schedule is so complex they couldn't explain it. So, I gave a sample cost of $500 and was told they'd tack on $177. That's 35 percent. I grew up in New York where the mafia charged less protection money. But it's even worse than legalized larceny. We all see the decaying houses where owners don't have the wherewithal to take on the city. Our historic and non-historic homes can be protected at less cost, with less micro-management.
Succeed or fail, every effort to increase taxes leads to costly political battles and lasting distrust. Every tax increase diverts a bigger percentage of our community's means away from families, small businesses, and their investors, and redirects it into inefficient, overpriced use and misuse by city bureaucrats. Nastiest of all, and most contrary to our values, every tax makes life hardest for the least affluent among us.
In a recent email, reader Ross Cowart gave me permission to share his situation with you: "We came back to our home town to live out our senior years. We can't really afford to live here, but we do without in order to be home."
The very definition of gentrification is to force people to choose between living in their hometown and living within their means. I ask you, and I ask the lady who believes in higher taxes, is this really what you want? To embrace higher taxes is to embrace indulgent spending, to spend indulgently is to gentrify, and to gentrify is to lose the soul of PG.
Back in the Saddle (Now All I Need Is A Horse)
Where were we?
Oh, right — when we left off last year, I was writing this column about the policies, politics, and predilections of Pacific Grove. The alliteration snuck up on me, I promise. Then I took a sabbatical to write my novel — still working on it (and loving it), but if I don't resume this column now, I never will. And since my original promise was to write at least a years' worth, you'll once again be seeing these pieces in the Cedar Street Times, at least through Election Day.
As before, I'll strive to offer thought-provoking ways to look at local issues. I hope to continue demonstrating that I'm independent-minded and open-minded. Even in this kind of column (not news), I consider it part of my job to differentiate between facts and opinion, to never disguise one as the other, and to do my best to base opinions on accurate observations and common sense.
FYI, the hardship for any writer of something like this is the constant, dark suspicion that all those carefully written words aren't making a gnat's worth of difference. When I started, a local activist tried to hit me right where it hurt — suggesting my column wouldn't change anything. I decided to keep going and see what happened.
I'm very pleased (and a little shocked) to tell you that two proposals I made last year are actually moving forward. Coincidence? I may never know, but I do know it's good news regardless.
One: You may recall I made a case for larger city reserves, proposing a protected emergency fund equaling 33 percent of our annual budget and another 7 percent fund for cash flow fluctuations. According to City Manager Ben Harvey's cover letter with the new draft budget, the city has adopted a Reserve Policy setting aside 35% for both purposes. I'm in awe of the Council's shift on this issue.
Two: I wrote a column in February, 2017 about short-term rentals, and now the forthcoming STR initiative is in line with my proposal. Whether the particular case I made contributed to it or not, the ballot measure is a product of many citizens' participation, and that's what it takes. Here's a relevant portion of my column suggesting a ban on residential STRs:
"… Now it seems forehead-smackingly obvious that they should only be permitted where zoning allows offices, motels, or other commercial businesses. That's because STRs are businesses, not homes — and that is the bottom line. It means STRs in R-1 and R-2 should be phased out because the original, indispensable purpose of zoning is to provide reliable sanctuary for residents, not to use homes to expand the tourist trade. … Some exceptions might make sense. STRs could be allowed in R-1 B-4, the dunes section where the lots are large, houses are well-separated, and everyone who moved there knew that tourists would be part of the view. Another exception could be houses adjacent to existing B&B's. And STRs could remain just as lucrative for city hall, yet become much more palatable for residents, if Type A and Type B licenses are combined into one type that allows unlimited numbers of STRs, but only in limited areas."
However, there's more to confront in the STR issue, so my next column will do so. And as we march toward another election, some of these pieces will be devoted to upcoming measures and candidates. By then I'll have a horse in those races.
The STRaight and Narrow
Google "Machiavellian." On the left side, you'll see synonyms such as devious, wily, and treacherous. On the right side, you'll see a Wikipedia thumbnail that says Machiavelli "has often been called the father of modern political science." No wonder we're in dire straits. That's obvious at the national level. At the state level, it should be crystal-clear to anyone who can bear to pay attention. But locally, in PG, it's not so apparent. In fact, things seem to have improved under the current City Council.
However, councilmembers want us to know it won't last. In his State of the City address last February, Mayor Kampe described the steeply rising costs of city pensions over the next five years and our broadly falling revenues during a future "inevitable downturn" in the economy. He said, "Together, these effects can quickly extinguish budget surpluses and shift us into deficit." Yes, and just three weeks ago in these pages, while hyping her opposition to banning residential STRs, Councilmember Cynthia Garfield wrote, "We cannot count on this booming economy to continue."
One of Machiavelli's primary doctrines was that the end justifies the means. His actual words were, "For although the act condemns the doer, the end may justify him." The Council's end goal is to maintain a luxurious budget in good and bad times. They claim that's the justification for STRs and resulting tax revenue. But it isn't. And recent experiences in Pacific Grove demonstrate how Machiavelli's theory is wrong.
Not long ago, when the City Council decided more revenue was needed, they knew they were up against an unruly populace that had already voted down many of the ways to raise revenue. So the Council felt they had to get creative. They built up PG's ability to collect many more parking fines. They started raising fees for city services while keeping in place pointless ones. For example, I can't find any city code that restricts garage door choices, yet I recently paid PG $60 to get Planning Department approval of a photo of the new garage door I wanted. A city handout states that one or two city permits are required "for almost all projects." Seriously? That's taxation in disguise.
Two years ago, the Council expected us to approve a new 5% admissions tax that would have forced businesses and non-profits to collect, track, and submit money for nearly all paid public events.
And there are short-term rentals. Mayor Kampe called STRs "one of the most emotional issues for our city." Indeed. And the City Council made it so. First, they devised a plan with plenty of restrictions, but allowed STRs anywhere in PG. When citizens complained, the Council undercut their own plan by reducing the number and density of STRs, but still allowed STR businesses in residential zones, thereby making both sides unhappy. So now what has happened? Voters have taken the decision out of their hands. Take that, Machiavellians.
What do all these schemes have in common? It's something more than mistakes and misjudging constituents. Perhaps without even realizing it, most of our Councilmembers lost their moral compass. I'm not out to demonize them. In fact, I believe the very reason they lost their way is that they care deeply about the future of PG. The city does need more revenue. I think it's a certain amount of desperation that led them to believe the end justifies the means.
But the reason Machiavelli's premise is wrong is simple — it's self-defeating. Voters see when something is unfair or unethical and often push back in unexpected and powerful ways. And Machiavelli himself would agree that if the end fails to be accomplished, then the means are not justified. And most of the rest of us would agree that if it's not right, don't perpetrate it on the public in the first place, especially when the underlying goal is critically important.
Councilmembers may feel insulted by this. But stop and look at the results of the four efforts I described — each one angers constituents and is widely derided. Of the two ballot measures, the public voted one down, and it appears they'll oppose the Council again by voting to ban residential STRs.
I hope our seven friends will reconsider their approach. The question of how much revenue the citizens will ultimately allow the city to collect is answered in part by this thesis: the higher the taxes and fees, the more that citizens need them applied in straightforward, fair, and minimally-invasive ways. If the city had pursued clean paths to more revenue from the beginning, we'd be in better shape now. The good news — it's never too late to change their ways.
A Special Report: Benjamin Knew Best
My last column was about the importance of city revenue being raised by scrupulous means. For instance, since the primary purpose of zoning is to safeguard the integrity of neighborhoods, it's wrong of the city to allow short-term rental businesses in residential districts for any reason, including revenue, no matter how critical the need. This sort of unethical revenue collection is self-defeating, because it results in public anger, turmoil, and ultimately, the reversal of the unprincipled tactic. Then that causes even more uproar. Want an example? How about that time when our forebears dumped overtaxed tea into the sea, then kicked the existing government off our shores? Talk about disruptive.
Then how, you ask, should we raise that critical revenue? Yup, that is the question, but first, I want to make something clear. The biggest threats to the well-being and survival of our city come from the state. Despite the Water Board's approval of the desal plant — finally! — they still hold us hostage with the threat of a 60 percent reduction in our available drinking water. And every year, the state takes a large chunk of our property tax money and an even larger chunk of our city tax money.
A city consultant says we now owe $40 million in unfunded liabilities, i.e. pensions. The city projects that about 16 percent of this year's general fund will go towards paying it — that's $4 million. There's only one reason for such an exorbitant budget-buster: CalPERS. This giant pension plan for government employees can charge cities whatever they want, and since CalPERS can, CalPERS does constantly increase the annual bill. Unfortunately, it's an incompetent bureaucracy that will continue to hurt more and more member-cities and individuals in California, especially government employees. So if the voters block residential STRs (which they should), resulting in less revenue to the city, and if our councilmembers' declared need for more revenue is accurate (which it is), then how will PG get by?
Ironically, as bad as CalPERS is, the biggest driver of cost increases is our own city council. As a longtime community leader once pointed out, "Even new politicians are all about feel-good. Spending is easy for them." Regardless, the number one solution is for the city to cut costs. A penny saved truly is a penny earned. Cost savings are new revenue.
And there's plenty to cut. Did you know that only police and fire personnel are required to have a CalPERS pension plan? So why didn't we move all other city employees off CalPERS and set up a city pension fund for them years ago?
Back in 2008 or so, a councilmember told me that PG must offer higher police salaries in order to compete for officer candidates. I thought no, that's fear and laziness talking. This is a nearly idyllic town with minimal risk of violence, where any police officer would love to spend his or her career. Recruitment might take more time, but then as now, if we're in fiscal danger, shouldn't we make the effort to find good officers willing to take smaller salaries in exchange for a great department in paradise? Spouses would have less fear of losing their loved one…. Do I really need to make this case?
It was also back then that the city council gave the police department a 30 percent raise all at once, and to pay for it, we raised our sales tax from 7.25 to 8.25. Now, according to indeed.com, our average police officer is higher-paid by about $10,000 than one in New York City or Los Angeles. And that's before pension benefits. Compare our crime stats and quality of life to those two hell-holes, and ask yourself what's going on.
Last year, the Monterey Police Chief earned $297 thousand including benefits, while our own Chief Christey earned $314 thousand — to oversee a department that's about half the size, in a city that's half the size, with roughly one-quarter as much crime. Her department added nine new employees last year, expanding it by more than 25 percent, and essentially replacing our long-time, dedicated, and very inexpensive reserve officers with sworn officers in order to qualify for accreditation.
One of the nine we hired is a CALEA Project Manager whose job is to facilitate accreditation, which calea.org says will benefit the city by improving "the delivery of public safety services by maintaining a body of standards… and recognizing professional excellence." Their site also admits that "less than one percent of all [small] law enforcement agencies in the U.S. are engaged with CALEA." Maybe that's because most departments feel they can't afford to devote so much time plus a dedicated employee to something they already accomplish for themselves. At our city website, you can find the 2017 police annual report, including their mission, values, and code of ethics. Reading them touched me deeply, and they will touch you too. Frankly, our department doesn't need CALEA's help, but this is the kind of expense that happens when money is thrown at a department.
We are on an unsustainable path. To get off it, we need to achieve substantial cost cutting. We can do that by taking all employees off CalPERS who don't need to be on it, by outsourcing some jobs and combining others, and by discontinuing the automatic "step raises" that employees get every year regardless of merit. And by negotiating salaries and departmental budgets harder.
How can we hope to make these changes now if we haven't before? We must turn over all the hard calls to someone outside the city staff structure. The City Manager cannot do it. It's human nature: he doesn't want to upset people he works with every day. Actually, he's only there three days a week, but it's still like negotiating with family. Furthermore, he himself is a CalPERS pension beneficiary. So who should do this tough negotiating? Maybe someone from the City Attorney's office. Maybe an independent contractor. It should be the best person for the job.
Next. There is another thing we can do to bring financial health and stability to Pacific Grove in the longer term. This is where my column earns its name. I heard that a new office-based business tried to lease a space on Forest and was recently told by city employees that they weren't wanted there. Maybe that's apocryphal. But I've come to the conclusion that creating a nurturing and prosperous business environment can no longer be left to City Hall. We've all fallen into the habit of looking to government to fix our problems, but in this case, isn't it vividly clear that the PG city government will never do what it takes?
Therefore, rather than letting this economic boom go unleveraged, I say this is the time — right now — for all PG entrepreneurs who have successfully created commerce to take action together and help pave the way for more businesses to succeed in PG. The best way to start this bandwagon rolling is through an existing organization, like the Chamber of Commerce.
I'm not talking about more tourism, or even much more retail, although the city needs some "anchor" stores that will generate business for others. I recently walked through a Mast General Store in North Carolina. It was exactly that — an old-fashioned general store and part of a small multi-state chain. One of our businesspeople should go enroll them in leasing our great but misused property at Lighthouse and Forest. That could be a poster child for an anchor retail business for PG.
However, other than a few of those, I'm talking primarily about quiet office businesses — the kind that make boatloads of money with only a few people in a beautifully restored upstairs office. So many businesses in the Bay Area are really dying to move to… well, a place exactly like Pacific Grove. They just need a little encouragement — perhaps including assistance in dealing with landlords, no business taxes for a couple of years, whatever works.
Why would our PG business owners engage in this? Because this type of rising tide in the community indeed floats everyone's boat higher. Prosperity for one really is prosperity for all. This is the opportunity to take on a new challenge —transforming PG for the better.
Last Words
This is my first column since the election, and it's my last regular column. I'm grateful to you, readers, and to the editor, Marge Ann Jameson, who has allowed me to write what I want, despite not always agreeing with me. That reflects a dedication to a belief I share with her — we're best off when we consider all sides.
Speaking of that, I'd like to tell you what I learned during the 2018 campaign. For me it was traumatic. Not the outcome — I expected the worse than we got — but I was disturbed by the conduct of many PGers (including myself once or twice) as we campaigned for or against measures and candidates.
I learned that locals who consider themselves partisan activists are ready and willing to behave like soldiers following their leaders into war — a propaganda war using lies, misdirection, alienation, false accusations, and false logic. This conduct is justified by the fact that our designated national leaders behave the same way — from Trump to Pelosi. However dishonest and debased they may be, we carefully watch them on TV, then mimic them. Party leaders and rabble-rousing news organizations decided the campaign must be fought like trench warfare. No quarter given. Trump out-Trumped. The end justified by any means. And this war footing was naturally picked up by local campaigners.
But to go to war, the human psyche needs to be adjusted. Soldiers do not talk things over. They kill. Most people can only bring themselves to do so — literally or figuratively — by seeing people on the other side as the villains in the narrative, as sworn enemies. And once the other side is evil, there's no longer any need for understanding, or any hope of finding common ground. Thus, war turns politics into religion — blind faith versus blind faith replaces a meeting of the minds. And that's why the essential American tradition of civil discourse is in critical condition, a casualty of this war.
Some of you may be in denial even as the bodies are being buried. How could this apply to you? As Walt Kelly said, "We have met the enemy, and he is us." In April, 2017, on "Face The Nation," Ohio Governor John Kasich said, "I am begging people… to understand their responsibility and their ability to bring this country together. And stop waiting for politicians to get it right. They're not going to get it right until they get a message from us."
Have you noticed that when others act with the highest integrity, nothing warms your heart more? That's because it's the world we want. Rather than alienating each other, shouldn't we respect our fellow PGers, first by being honest, and then by listening to them for facts we may not know and for new ideas that might contribute to the best outcome for our city?
We know the image that tourists have of PG is an illusion. But what if there's something to learn from it? Just by looking at our houses, they may see our true heritage better than we do — our celebration of individuals, all the idiosyncrasies, even eccentricities, all the good and bad ideas — the independent-minded spirit of Pacific Grove that has forever butted up against its heaven-bent soul. We lose sight of those two contrary 19th century virtues, even as they draw visitors to us. By not honoring this legacy, we miss the real gift of PG.
I hope you'll always risk considering contrary views and thinking outside the box.