Mayor crows about state of city

"This has been going on for 10 years and we’ve been handling it and we have a balanced budget but we cannot sustain this lifestyle,” Royce said.

The city’s deficit is approximately $3.5 million and remains as the city tried whittling away the gap by cutting 25 employees over 10 years, deferring capital spending and dipping into reserves. Unfortunately, Royce said, the city has hit a point where reserves cannot continue to maintain the bottom line and some capital projects need to be redone.

"We have a responsibility to the people of San Carlos to manage what we have here,” Royce said.

The fixes, he said, lie in charging user fees — "you’ll see a lot more of that” — privatization and prioritizing money decisions between, for example, public safety and parks in the next year instead of the next decade.

But while looking at ways to raise money, Royce said city leaders must remember it is a service organization that must be fair to its customers — the residents — with quality and competitive pricing.

Royce unveiled the annual assessment of the city before the Chamber of Commerce in an address aptly named "Why are the crows cawing?”

Much like understanding why the population of crows has grown in San Carlos, Royce told the audience the city’s current fiscal challenges can also be unraveled by looking at history and exactly how much money flows in and out of its coffers.

San Carlos, a city of approximately 28,000 residents, receives tax revenue of $850 per person — 27 percent less than comparable cities like Burlingame, Menlo Park and Redwood City.

The other cities, though, have utility and hotel taxes upon which to rely. Foster City has no downtown but pulls in twice as much property tax as San Carlos whose distribution rate is 13 percent, based on Proposition 13 levels.

"We just don’t get that much money,” he said.

A doubling of San Carlos’ property tax distribution rate would give the city another $9 million for a total of $18 million. In comparison, the city’s whole general fund is $24 million. As with all jurisdictions, San Carlos is finding it tough to meet unfunded state mandates on top of its own expenses, he said.

Although the city’s population remains flat, costs continue to climb based in part on benefits like medical insurance, said Royce, calling on 23 years of business experience at Hewlett-Packard.

The city’s ongoing money woes are punctuated by disappointments, Royce said, ticking off a lack of more transportation, four failed revenue measures, not building more reserves during the good times, not reacting fast enough to the dot-com bust and needing more diversity in government.

But for all the challenges facing the city, Royce also lauded what he said are some of the city’s accomplishments: Sewage line replacements, completion of the General Plan 2030, the San Carlos Marketplace, a synthetic turf athletic field at Highlands Park and green business certification.

And what of the crows?

Royce used a YouTube clip to show how crows have become urbanized, moving into cities and learning new ways to crack nuts in traffic. The crows actually like the areas because night street lights protect them from the owls which would us the dark to prey upon them.

Like the city now listens to its crows, Royce said it is leaders’ job to "listen to the people.”

Michelle Durand can be reached by e-mail: michelle@smdailyjournal.com or by phone: (650) 344-5200 ext. 102.