Guest Opinion | Rick Cole: We Need to Look Ahead to Keep Pasadena a Successful City

[UPDATED] Why is Pasadena one of America’s most successful cities? Our brand is world famous – the place where Happy New Year’s begin. We are envied for our tree-lined streets, historic architecture and sunny climate.

Pasadena’s formula for success? Previous generations invested in our community: world-class museums, parks, landmarks, educational institutions and public services. They also built a diversified economy of office towers, engineering and technology firms, mixed-use commercial districts, and locally owned businesses.

With a balanced budget and healthy reserves, City government boasts a AAA credit rating. Yet in a changing world, we know current success doesn’t guarantee future success. As Stein’s Law of Economics reminds us: things that can’t go on forever, don’t.

Precisely because Pasadena has enjoyed decades of prosperity, we must now confront three realities: costs rising faster than income; a California tax system that is increasingly out of sync with today’s economy; and conflicting expectations from citizens about what to expect from local government.

Job One is holding down costs. Pasadena recently reached a three-year contract with the union representing police officers. It will increase our costs by 30% over the next three years, but still leave us paying officers below average compared to comparable nearby cities. Rising salaries, pensions, health care, workers’ compensation and equipment costs are outpacing revenue growth—not just in Pasadena, but throughout California. The same pattern holds true for fuel costs, liability insurance, equipment and more. In specialized markets such as police communications, huge corporations like Motorola dominate, forcing cities to pay whatever price they demand.

The second job is to allocate costs equitably. California’s local tax system has been patched together for nearly fifty years. Proposition 13 dramatically reduced local revenues, and Sacramento responded with a temporary formula for allocating property taxes that became permanent. Since then, cities have relied on an increasingly confusing patchwork of parcel taxes, user fees and special assessments to fund basic services.

The third challenge is simple: everybody wants what they want from government — and nobody wants to pay for it. Caifornians pay among the highest taxes in the nation yet just try to reduce any service and the howls can be heard from the desert to the sea. Pasadena residents expect their homes to be protected, their streets to be paved, their libraries to be open, and their parks to be green. Yet the majority of the revenue paying for those services comes not from residents, but from businesses and visitors.

As office and retail vacancies rise, large corporations squeeze local businesses and well-intentioned regulations make entrepreneurship harder, the goose is struggling to keep laying golden eggs.

Government also faces a unique challenge. While the private sector moves fast (and breaks things), government tends to evolve slowly—if at all. Yet today’s cities must prepare for emergent threats, including urban wildfires, homelessness, climate resilience and cybersecurity.

We know a recession is coming, even if we don’t know when. Revenues will fall. We won’t simply postpone nice things, we’ll be forced into politically painful cuts.

The Fire and Emergency Services parcel tax the Council placed on the November ballot illustrates the dilemma: investing in one essential service often means asking more of taxpayers or accepting less elsewhere. For those who ask – why can’t the city cut other services to ensure full funding of Fire needs? – the answer is this: sooner or later we are going to have to do both.

So what does that mean for city government – and for you, the residents?

City government is going to have to be far more disciplined about every dollar we spend. In the 20 months I’ve served on Council, I’ve routinely questioned the money we spend on consultants, labor contracts and procurement of equipment and services. I’m not the first Councilmember to ask these questions, but the scrutiny has become more consistent, especially in committee before issues reach the Council.

Because habits are deeply imbedded, we need to start tightening our belts now and not wait for the next recession to force us into hasty decisions. Just because we are Pasadena, our municipal government doesn’t always have to shop at the equivalent of Williams and Sonoma. Sometimes Target will do fine — and occasionally even Dollar King.

We also need to overcome our aversion to doing things differently. We don’t always have to be on the bleeding edge, but we should consistently be on the leading edge of technology and business process improvements. City Hall should become a learning organization—constantly measuring results, fixing mistakes and improving.

The question should always be the same: does this improve the quality of life or standard of living in Pasadena? Faster permitting. Quicker response times. Better outcomes. We should rigorously measure performance and do more of what works—and less of what doesn’t.

Finally, we can’t continue to take it for granted that businesses will choose Pasadena. Yet today’s success didn’t happen by accident. The city invested heavily in Old Pasadena and South Lake to create the places people now want to visit, shop, dine and work. We need to make similar placemaking investments in neglected commercial districts like North Lake, North Fair Oaks, East Colorado/Foothill and Lincoln Avenue. At the same time, we should systematically remove unnecessary barriers to entrepreneurship, beginning with our nearly 300,000-word zoning code.

Can Pasadena coast a few years more on inertia? Sure, but every year we stall will make the eventual reckoning more painful—and more divisive.. Now is the time to capitalize on the full value of our assets – and maximize our collective return.

I support the Fire parcel tax because I want Pasadena to be ready for the next disaster. But we should be honest with ourselves: taxes alone won’t secure Pasadena’s future, and neither will budget cuts alone.

The real challenge is building a city government that spends wisely, works smarter and supports the prosperity that funds excellent public services for us all.

Previous generations gave us one of America’s most successful cities. Our responsibility goes beyond preserving their legacy. We need to adopt their pioneering spirit to adapt to a changing world. That’s how we can give the next generation a city better than we found it.

Councilmember Rick Cole serves on the Council Finance; Municipal Services; and Housing, Homelessness and Planning Committees. As a former professional city manager, he was responsible for preparing 21 balanced budgets for the cities of Los Angeles, Santa Monica, Ventura and Azusa.