Preliminary Budget Released

IT'S THAT TIME AGAIN...
The 2013/2014 Costa Mesa Preliminary Budget document was released yesterday.  You can view it - all 290 pages of it -  HERE, plus Finance and Information Technology Director Bobby Young's accompanying letter HERE.

(Click on charts to enlarge)

$12 MILLION DEFICIT!
I'm not going to try to duplicate what Young has provided for our consideration, but will give you some of the high - and low - lights to chew on.  There will be a Budget Study Session on Tuesday, May 28th - immediately after the Memorial Day holiday weekend - at City Hall where Young and CEO Tom Hatch will present to the City Council and the public their views on this budget and their solutions to providing a balanced budget.  This preliminary budget has a $12 million deficit.

UP, UP, UP
This budget is $157,427,623, up 18.74% from the previous approved budget.  It includes more than $26.4 million in Capital projects - up 88.46% from last year!  The total Capital Budget is $31.1 million, up 50.46% from last year.  Clearly, the emphasis is on infrastructure, not people.

HEADCOUNT
Total full time employees will increase by 2, to 467, but is down by 30 from the 2011/2012 budget year and way down from the 611 a couple years ago.  Part time employees FTE's (Full time equivalents) are up to 77.82 from 63.83 last year and 60.84 in the 2011/2012 budget year.

SALARIES AND RETIREMENT COSTS
Salaries and Benefits total $80.1 million, up just under $2 million from the previous year.  The salary numbers are basically flat.  However, the number for Retirement costs is nearly $18.8 million, up more than $2 million from last year. This is a problem that is not going to go away and the half-million being allocated to pay down that debt doesn't begin to touch it.  Without some major significant changes in Sacramento and with CalPERS, the ONLY way our city - or any city - is going to get out from under the giant pension burden is via municipal bankruptcy where all previous pension obligations are wiped off the books.

LEGAL COSTS HARD TO FIND
The costs for "Legal" in this budget is $290,500, down from $415,500 last year.  However, that number doesn't include the huge legal fees we've been paying for litigation.  Those numbers are buried in a line item called "General Liability".  That number is just over $2.5 million, down about $100,000 from the previous year and down almost $1 million from the 2011/2012 budget year.  But, the meter keeps on spinning with no real end in sight.

LABOR NEGOTIATIONS NOT INCLUDED

Not anticipated in this budget is the result of current contract negotiations.  The members of the Costa Mesa City Employees Association (CMCEA) are negotiating under Mayor Pro Tem Steve Mensinger's COIN scheme and nobody really knows what to expect from that process yet.  Whatever numbers result from that negotiation - those employees have not received a pay increase since the economy turned south - will result in a budget adjustment sometime later this year.


TAKE A LOOK AND COMPARE TO NEWPORT BEACH
So, take a few hours and plow through the preliminary budget if you're interested.  For an interesting counterpoint you can read Jill Cowan's piece in the Daily Pilot about Newport Beach's new budget, HERE.  They receive more revenue from Property Taxes alone than Costa Mesa receives in Property and Sales Taxes combined.  In a city with 25,000 fewer residents they will spend more than $100 million MORE than Costa Mesa.