Bearers Of Bad Tidings
As I reported previously, on Tuesday Costa Mesa Budget and Research Officer Bobby Young and City Manager Allan Roeder briefed the City Council on the current financial condition of the city. The news is bleak.
THE 10-POINT PLAN WORKED
On the positive side, the news is less bleak than it might have been had the city not taken measures prescribed in Roeder's 10-point plan last year. Regardless, the news is so dire that even more extreme measures were presented to the council for their consideration as possible ways to avoid scraping the bottom of the Fund Balance barrel to meet our financial obligations in the fiscal year that ends June 30, 2010.
Young told the council and assembled staff that all major revenue sources - Sales Tax, Property Tax and Transient Occupancy Tax - are down and, in the case of the Sales Tax and TOT, down significantly. Property Tax showed a slight dip, but is expected to drop like a rock in the next fiscal year.
Roeder presented the council with seven recommendations and strategies to consider:
1 - Freeze on filling all current vacancies (except Police Patrol and Sworn Fire to meet minimum standards)
2 - Freeze all Capital Outlay Purchases and Capital Improvement Projects using General Fund Revenues. No, that doesn't mean street projects will stop - most of those are performed through the use of grant funds.
3 - Place a moratorium on new programs and services, expansion of existing programs and services and new projects requiring General Fund support.
4 - Review use of Equipment Replacement fund reserves.
5 - Initiate discussions with Employee Associations regarding wages and benefits. Once again, this is where the money is and there is no reason to expect that additional concessions will not be necessary to balance this year's budget and next year's, as well.
6 - Prepare tax schedules with alternatives and supporting resolutions for Transient Occupancy Tax (TOT) and Business License Tax for the November 2010 ballot. Yep, they are back! Once again the council will be asked to consider placing before the voters an increase in our TOT - and maybe the Business License tax, too. Both are cellar-dwellers when compared to other Orange County cities. In fact, our TOT, at 6%, is near the bottom state-wide. Even a 2% increase will place us below the minimum for the county.
7 - Submit all City Programs and services to City Council for budget prioritization. This is a biggie! This kind of exercise has not been done for nearly a decade. It's going to force the council to make tough decisions about how this city spends it's diminishing dollars.
FUND BALANCE ACCOUNT IN JEOPARDY
More than a year ago Roeder cautioned the council about the precarious condition of our city's finances. He and the staff created a plan that, making some assumptions about issues that were unpredictable, might get us through this year. Sadly, the economy kicked us in the teeth with more ferocity than anticipated. As a result, unless some of the items above are implemented immediately, it will be necessary for the city to dip even more deeply into the Fund Balance account - $9.3 million as opposed to the projected $4.6 - to balance the 2009/2010 budget. And, even more disconcerting, there will be insufficient funds remaining in the account to help with the 2010/2011 budget next summer. If we end up using that $9.3 million this year, the city will have used more than $30 million in Fund Balance to balance our budget in the past two years!
NEXT WEEK IS DECISION TIME
Roeder and staff hopes to have information available to the council at their meeting on the 16th to be able to make informed decisions on some or all of the proposals above.
TWEEDLE DUMB AND TWEEDLE DUMBER
As expected, "the usual suspects" stood before the council to rant about the budget. Judi and Mike Berry - Perky and Dumbo - attempted to influence council decisions by presenting made-up numbers. Their predictable puppet show is getting very old. They imagine themselves financial experts, yet Perky couldn't get her numbers right and Dumbo was, well, himself - confused and confident.
THE MOUTH RANTS, AS USUAL
And, our municipal racist laureate, The Mouth From Mesa North (an aging, frustrated, mediocre actor who throws himself before any camera available), presented his blustering self to the council and told them flat out that he could cut 20% from the budget and not cut a single person. His two-minute tirade - it seemed much longer - was the same old stuff about buying and demolishing what he considers slum buildings in the city and complaining about the cost of the city helicopter. Later councilwoman Katrina Foley and City Attorney Kim Barlow set the record straight on his complaints. Much of what he wants to do is illegal - never a worry for him, the alleged lawyer. Police Chief Christopher Shawkey explained why we use the current style of helicopter instead of the Tinkertoy machine The Mouth prefers.
SERVICE LEVELS SURE TO FALL
The city is in deep guano and things are only going to get worse. Forty of the 54 people who opted for the retirement incentive will not be replaced. In addition, if the hiring freeze proposed above is implemented it will begin to affect service levels almost immediately. Things like streets being swept less frequently, delays at the Planning counter and slower responses to every kind of inquiry or call for service - except public safety calls - can be expected. Roeder will attempt to quantify those impacts for the council at their next meeting.
LET YOUR LEADERS KNOW HOW YOU FEEL
It's important for the residents of this city to communicate with our elected leaders to let them know what OUR priorities are in these difficult financial times. Some tough choices will be made in the next few months, so now is the time to let the City Council know how you feel. Call them at 714-754-5285 or send them your opinion via email at firstname.lastname@example.org.