Budget Workshop Observations
Last Thursday evening City Manager Allan Roeder and Budget and Research Officer Bobby Young presented the public budget workshop for any and all residents and others who might be interested.
ATTENDANCE TRIPLED! (TO 9 PEOPLE)
In years past there have been 3 or 4 or of us who attended and received a very thorough briefing on the budgets. This time - out of a city with a population over 113,000 - the number of attendees tripled to nine! Most of those attending were either political appointees, former appointees, former council candidates or just plain activists - like myself and one other. The exception was one older gentleman who told us he's been a resident of Costa Mesa since 1966 and this is the very first public meeting he's ever attended. He sat quietly and attentively during the almost three hour meeting and asked the occasional question. It was great to see new faces.
"FUND BALANCE" EXPLAINED
Roeder and Young did a good job of explaining to those of us in attendance precisely where we are budget-wise. They gave us a clear definition of "fund balance" - another word for the city's reserves. They explained that the fund balance is a collection of earmarked chunks of cash, some of which is mandated for a particular use by policy, others that are designated for specific uses and the remainder is undesignated and available for budget-balancing purposes.
SIGNIFICANT DROP IN THE RESERVES
We learned that a year ago the total in that pot was right at $66 million and that it is down to $52 million as close as they can tell with a couple weeks to go in the fiscal year. As Finance Director Marc Puckett told the council at their study session, it's taken the city 56 years to accumulate this balance and, if things continue the way they're going, it could all be gone in a couple years. Scary stuff...
LAST YEAR WE USED MORE THAN DOUBLE THE PLAN
We were reminded that a year ago a little over $6 million of the fund balance was designated to balance this year's budget. Then, at the first of the year, another $4 million or so was peeled off because our revenues were in decline. Finally, as we approach the end of the year, it looks like the city will have used around $14 million - more than double the original projection of fund balance use - to make ends meet.
NOT MUCH LEFT FOR THIS YEAR
What is left of the funds available for balancing the budget is just over $6 million, and the current proposed budget uses a little over $3 million, leaving slightly more than $2 million of available, accessible funds for possible use later in the year if things continue to decline in the economy.
$19 MILLION IN CUTS NECESSARY
We learned that the city is almost $19 million short of balancing the budget without severe cuts. The proposed budget that was presented to the council two weeks ago, and which was discussed at length at their study session last Tuesday, lays out a methodology - a 10-point plan - by which a balanced budget can be produced. There are many unknowns in that plan - how much our sales tax revenue and property tax revenue will actually be, for example - and it is going to take a lot of teamwork and cooperation by all city departments and their labor force and the organizations that represent them to make it work.
5% CUT IN LABOR COSTS - AGREEMENTS NOT YET REACHED
Right now the plan calls for a 5% reduction in labor costs and, although the bargaining units have been meeting with city staff, nothing final has been worked out. Roeder told the nine of us that he's pleased with the way that process is going and is hopeful that agreements can be reached within a couple months.
UNKNOWN NUMBER OF EARLY RETIREES
Another unknown that is part of the plan Roeder and his staff created is a program permitting early retirement for some city employees who are nearing the combination of age and service requirements. Many of those who might be eligible for that program may take advantage of it and that will take the pressure off and reduce the probability of layoffs.
HOW MUCH WILL THE STATE STEAL, ER, BORROW?
And, we still don't know for sure just how much of our Property Tax revenue the state will steal, er, borrow, from us. We think it will be 8% - roughly $3.5 million. And, there's a possibility that the state, in an attempt to balance it's budget on our backs, will also withhold our gasoline tax revenue - nearly $6 million.
IN A PERFECT WORLD THIS BUDGET WILL BE APPROVED...
Tuesday the council will discuss and debate the budget as proposed. In a perfect world they will simply take advantage of all the hard work that's been done by the staff and bargaining units over the past nine months or so when this process actually began and move to accept the budget and the components necessary to make it work. I'm a realist, though, so I don't think things will go that smoothly.
NIT-PICKING THE PROCESS
It's almost guaranteed that a couple of the council members will attempt to squeeze blood from this turnip by nit-picking at already beleaguered departments. For example, Mayor Mansoor suggested at the study session that the city either stop providing meals at the pre-council meeting dinner sessions or significantly reduce the quantity (and quality?) of those meals. Yet another example of a small mind at work. At the study session it also sounded like Recreation programs might be in jeopardy.
WATCH MONAHAN LIKE A HAWK
Having watched the tape of the study session a couple times now, I find myself wondering what Gary Monahan is up to. In the past he's demonstrated a tendency to quick-pitch the process, sliding a controversial suggestion/proposal into the mix in the heat of battle.
SENIOR CENTER AND GANG UNIT TARGETS FOR CUTS?
For example, during the study session he asked some interesting questions about the Costa Mesa Senior Center, leading one to suspect he may suggest a reduction - or elimination - of funding for the center. He also made the curious observation that he didn't know why the Police Department needed a Gang Unit... is he planning to suggest it be disbanded? It doesn't take a Mensa member to realize we need the Gang Unit because we have gangs in this city... duh!
I'm sure the council meeting Tuesday will be well-worth watching. Unfortunately, it's going to directly conflict with game 6 - if there is a game 6 - of the NBA playoffs. We hope the Lakers are considerate of our needs and simply whip the Orlando Magic's butt on Sunday and help us avoid a problem.
Labels: Budget Proposal