Budget Study Session Blues

ONE DOWN, ONE TO GO
Tuesday afternoon the Costa Mesa City Council held the first of two budget study sessions - the next one will be at 4:30 p.m., June 11, 2013 in Council Chambers.

YOUNG BREAKS THE BAD NEWS
This meeting, conducted primarily by Finance and Information Technology Director Bobby Young, presented the cold, hard facts that the preliminary budget created using council and department heads desires for the next fiscal year would result in a $12 million deficit.

SPENDING UP 18.74%!
Young broke the presentation into two sections - the Preliminary Budget and the Preliminary Capital Improvement Program Budget.  The former included a PowerPoint presentation showing 22 slides and took just under an hour.  If you wish to plow through the 290 page Preliminary Budget document on the city web site you'll find it HERE.  In a nutshell, with just about $139.5 million in anticipated revenues and just under $157.5 million in appropriations, the budget as prepared would require $18 million in Fund Balance dollars - reserves.  The increase in spending represents an 18.74% increase over the fiscal year ending the end of June.

CAPITAL SPENDING UP OVER 50%!
The Operating Budget is relatively flat - up only $270,083.  However, the Capital Improvement budget is $31,156,387 - up a whopping 50.46%!  At this point it's easy to see where cuts must be made.

HATCH SLASHES CIP BUDGET
CEO Tom Hatch prepared a list of 63 separate line items from the Capital Budget with his recommendations for reductions to produce a balanced budget.  His proposals slashed that $31 million to $18.3 million and included some VERY interesting inclusions and cuts.  Unfortunately, his list is not yet available online for your reading pleasure.

STREETS AND DRAINS INTACT, BUILDING MAINT. CUT

For example, he left intact almost all funding for Street Improvements - right at $10.4 million.  He left out line item 25, Westside Improvements ($250,000).  He left in major Storm Drain funding of almost $3.4 million, but deleted $1.25 million in much-needed Broadcast Systems upgrades for the council chambers.  In fact, in the section identified as "Building Maintenance", which included those broadcast systems, Hatch left in only $500,000 of the just under $2.7 million requested dollars, and that was half of the line item #63, Building Maintenance Projects.

PARKS, INCLUDING CMHS TRACK, SLASHED
Under Park Development, with a total requested of just over $9.7 million, Hatch left only $3.05 million.  He funded only $500,000 of the $3.5 million requested for Costa Mesa High School Track and Field upgrades.  Several members of the public showed up to support the CMHS improvements - most looking like they had just jogged over from the track.  Council members Wendy Leece and Sandra Genis expressed concern that the Newport-Mesa Unified School District - the organization primarily responsible for that facility - still had bond money available to put toward this project.  Hatch was directed to contact school board officials to determine if they're willing to participate in this project using some of that bond money.

MORE CUTS AND SAVES
Another item not included in Hatch's pared-down recommendations was just over $1 million upgrade to Jack Hammett Field #1 and $275,000 for bluff stairs at the south end of Fairview Park.  He did leave almost $836,000 for a Fairview Park Multipurpose Trail and $650,000 for parking lot lighting, also at Fairview Park.

THE NEXT ONE WILL BE INTERESTING
It's going to be VERY interesting to see what the council comes back with at the next study session on June 11th.  Mayor Jim Righeimer has recently been making a big deal of having had two balanced budgets - rightfully so.  We'll see how the council under his leadership juggles the numbers this time around to accomplish that feat.