Smiles (Almost) All Around As Costa Mesa Adopts Budget

A BALANCED BUDGET

The Costa Mesa City Council met in a Special Meeting Tuesday night to consider the Final  2015-2016 Municipal Budget.  All council members were present, although Katrina Foley showed up 15 minutes late.  You can read the staff report, with separate links to nine (9) attachments HERE.

DUNIVENT/HATCH LED THE DISCUSSION

Interim Finance Director Steve Dunivent led the staff discussion, trading off with CEO Tom Hatch from time to time.  Of the approximately 55 people in the audience, just about half were staff members, on hand just in case questions were asked of their organizations.  Sixteen (16) members of the public spoke and half were what I would describe as youth sports supporters, on hand to praise the council for their plans to make bold moves to provide more playing field time by lighting some and putting artificial turf on others.  The other eight (8) people spoke of broader budget issues.

BUDGET UP NEARLY 6%
Dunivent told us that the Preliminary Budget was $147,835,876, up 5.68% from the year just ending.  That amount includes an Operating Budget of $118,083,807 - up 2.72% - and a Capital Budget of 22,299,929 - up 14.82%.

SALES TAX TOPS REVENUE SOURCES
 Of the $112,954,190 General Fund Budget, 46% is from Sales Tax and 22% is from Property Tax.

SAFETY TOPS THE EXPENDITURES
Of that amount, 54% will be spent on Public Safety - Police and Fire.

CAPITAL PROJECTS
The Capital Improvement Budget shows 43 projects recommended by the CEO for a total of $22,299,929, of which roughly half - $11,263,536 - comes from the General Fund.  Of the remainder, $7.6 million comes from Gas Tax and Measure M2 funds; $1.3 million comes from Drainage and Traffic Impact Fees; $763,889 comes from the Narcotics Asset Forfeiture Funds; $530,296 from Comm. Block Grant Funds and $800,000 from other grant funds.

CHANGES
Subsequent to the Study Session held earlier this year the following changes were made to the Preliminary Budget:

• Cost of new full and part-time positions - $825,000
• Street Cleaning program correction - $152,000
• Updated Sales Tax forecast - $571,000
• Partial pre-payment of Park Fund Loan - $1.5 million
• Partial reimbursement of Fire expenses - $400,000
• Replace certain leased vehicles -?

 AND MORE
Additionally, other changes were made:

• Increase reserves - $500,000
• Replace Police Station Emergency Generator - $600,000
• Fire Station 4 Improvements - $800,000
• Sports Fields turf, lighting, stadium seating - $1.9 million

NEW FIRE FEES RECOMMENDED
Also recommended are four new potential revenue sources - cost recovery fees for the Fire Department:

• Residential Apartment Inspections
• Business Inspections
• Insurance Reimbursement
• Fire Station 4 Training Center

"IT'S GONNA TAKE MORE MONEY"
During the initial discussion Gary Monahan observed that it's going to take a lot more than $1.9 million to accomplish all the things related to sports fields and was referred to the attachment which shows the planned use of the funds - most of it for design and/or feasibility studies on the projects.  The actual construction would be further out.  He suggested that, before we get too far down the line on any of those projects that the School District should be consulted about their participation in the project.

PUBLIC COMMENTS
Public commenters included:
Frank Albers, who expressed gratitude for the sports fields, lights and related items and observed it's not easy to prioritize these issues.

Bob Graham suggested some provision be made for picnic tables in most of our smaller parks so families could find a resting spot in the shade of trees.  The discussion included the observation by Ernesto Munoz, Director of Public Services, that we do not have a fund specifically for furniture and fixtures in parks - only a maintenance fund.

Lou Desandro praised the council for a budget that is balanced both financially and from a resident standpoint.  He specifically mentioned the plans for turf and lights.

Flo Martin provided numbers that showed that our public safety budget is actually less than the current year, and that the head count in both Police and Fire are down but calls for service are up.

Jay Humphrey observed that this budget had the look of funding pet projects instead of doing what is best for the broader community.

Robin Leffler echoed what Flo Martin said and expanded on the issue.  She mentioned the use of Reserves to keep the city afloat during the economic downturn, but that we've not replenished those reserves yet now that the economy has bounced back.  She also wondered why anticipated consulting costs are up 17%.

Chris Cox emphasized the need for stadium seats at Costa Mesa High School.

Bret Woods expressed the need for a study for lights at Kaiser School, citing a big increase in registrations of his organization, AYSO 97.

Cynthia McDonald cited the need for a vision - a plan that meets the needs of all the people, not just a few groups.  She cited the need for people to feel safe and referred to the Orange County Business Council report to the Planning Commission that showed the need for more jobs and more dense housing.

Ralph Taboada expressed concern about the budgeting practice of not using actual head counts, but using projected, anticipated hires.  He suggested the proposed budget is over-projecting by 65 bodies, with a cost of $3.5-4 million.  In response to that issue, Dunivent told us that there is a build-in vacancy factor which, this year, would result in a $3.1 million savings

Beth Refakes stressed the need for more Public Safety staff, agreed about the replacement of the Police Emergency Generator and the need to get buy-in from the school district on field changes.

Mark Arblaster expressed appreciation for the budgeted number for lighted fields, citing a decade-long quest on his part for lights.

Brett Eckles echoed the need for lighted fields and the need to prioritize those projects.  He suggested the Joint Use Agreement needs to be updated and followed.

Chuck Perry spoke of the need to work with the school board and thanked his pal, Mayor Steve Mensinger, for meeting with Supervisor Michele Steel to look at Talbert Park recently.

Joanne Purler expressed the need for more fiscal responsibility, particularly managing the pension debt and cited her apprehension about municipal bankruptcy.  She also cited that she feels less safe in the city now because of delays in response times and the increase in crime.

Mary Spadoni expressed concern for the reduced Police Department budget.  She wondered why the emphasis was being placed on budget dollars for children when the census shows the city is aging, not getting younger.  She also expressed the need to follow the lead of other neighboring cities in establishing a plan to pay down the pension debt.

APPARENTLY NOT MANY ACTUALLY CARE
I always find it ironic that fewer than two dozen residents took the time to address the council on the budget.  I don't expect to see a thousand people turning out for this meeting, but most of the names above will be familiar to those who read this blog.  Many of the same activists take time out of their busy lives to study issues and present their views to the council for its consideration.  And, of course, there are special interest groups - like youth sports - that show up when their issue is on the table, like last night.

MONAHAN SPEAKS!
Council members then had their turn to address the budget.  Gary Monahan was first up - and gave a shout out to me in the back of the room to be sure I knew that he actually had something to say last night.  Thanks, Gary...

"EASIEST BUDGET IN A LONG TIME"
He observed that there had been no infighting - it was the easiest budget in a long time.  I agree - it sure seemed that way.  He spoke on many issues, among them park furniture; turf and lights; the re-paving of the City Hall parking lot that's in the budget (Munoz said it's essential to do it now instead of waiting) and collection of Park Fees.  Director of Development Services Gary Armstrong advised that those fees - $13,000 per unit - are typically collected at occupancy, so they dribble in during the year.  Dunivent does an educated guestimate for the purposes of the budget.

HEAD COUNT
Monahan also addressed the "head count" issue, which is when we learned of the "vacancy factor" that's included in the budget to the tune of $3.2 million.  He also stressed the need for more fields.

WHAT?!
Mayor Pro Tem Jim Righeimer opened his comments by stating, "We have more than enough land in this city to do whatever we want to do."  And stressed it was just a matter of prioritizing.  Well, I suppose, technically, that's correct.  If you throw in Fairview Park and the other 29 parks, we have lots of open space.  And, if you factor in eminent domain and his tendency to create ordinances to make existing businesses feel unwelcome, he may be right.  Then he said, "Folks, it's going to rain this year - drought over!"  So, I guess he REALLY DOES know everything!  I just shook my head - but continued to listen because when he gets started on this kind of a roll you never know what he's going to say next.  I'm glad I did.

FIELD USE
He then spoke about the lights and field issues and stressed the need to use the Joint Use Agreement to work with the school district to "get it done!"

PENSION DEBT
Then he launched into a mini-rant about Pension debt, the complaints about which he referred to as a "broken record".  Attempting to correct the record, he said not all the cities around us are solvent, then said, "Newport Beach is the wealthiest city in the world but has the worst pension debt per person ratio".  He told us the employee organizations are just going to have to change their formula to take less for existing employees.  He said putting more than the current extra half-million toward pension reduction is futile when CalPERS is raising our costs 50% in the next 5 years.  He said there's no reason to throw more money at it.

RESERVES "NUTTY"
Then he went off on a rant about Reserves, stating that having $85 million in reserves is "nutty".  He neglected to mention that those reserves are what got us through the economic downturn, but doing so wouldn't fit his plan.

BORROW, DON'T PAY FOR THEM
Then he told us that we should be borrowing money for things like new Fire Stations, a new library, etc. instead of paying cash for them.  He compared it to the mortgage on our homes.

DEFINING "SAFE"

He threw in the "this budget is phenomenal" phrase that he uses every once in awhile, then off he went again to address concerns expressed by speakers about public safety.  He said it's not important for you to feel safe, but that you ARE safe.  He griped about public safety taking up 54% of the budget, then threw in his "crime in our city is caused by who you attract".  Well, let me tell you, recently we're "attracting" a whole lot of trouble.  AB109 - the early prison release law - and Prop. 47, which reduced punishment levels for many crimes PLUS the proliferation of sober living homes and homeless folks have cause crime in our city to jump dramatically.  The May Part 1 Crime report - just released - shows those crimes are up over 40% from the year earlier - again.  According to state and county officials, Costa Mesa leads Orange County in the number of probationers and parolees AND group homes, too.  And yet, we still have a dramatically diminished police force - 25 open positions today - and we barely have enough seasoned officers to train them when we hire them.  And, officers still leave at an accelerated rate - including one of the first four officers we hired after Righeimer allowed then-Chief Gazsi to begin recruitment again.  That officer just went across the street to Newport Beach. (click on image to enlarge)

MORE SQUEEZING OF BUSINESSES
Then came the issue of "motels".  You will recall his earlier statements about making the operators of "problem motels" take a "more realistic view" of the value of their properties by squeezing them with code enforcement and police and fire attention.  You'll recall we imposed a new ordinance that penalizes the motel operator if their calls for service exceed a specific number.  Last night he said, " We will continue to make ordinances that will make it harder to be here."  He said "I feel safe in this city.", but of course, he just said how you "feel" is not important... it's whether you ARE safe or not.  He praised about-to-become Chief Rob Sharpnack as the leader we need for the CMPD.  I agree.  The question in my mind is whether he and Mensinger will not try to micro-manage the department and actually give Sharpnack a chance to do the job.

GENIS
Sandy Genis stressed that this budget was very conservative, and that she was disappointed that we had to use Fund Balance to achieve a balanced budget.  She stressed that park lights are a priority and that we should identify parks in need first.  She reminded us that 20 years ago, during her earlier tour, there was a move afoot to try to build fields at Fairview Park, which was rejected.  However, the upshot of that activity was the acquisition of The Farm, now Jack Hammett, Sports Complex - our premiere sports site in the city.

FOLEY

Katrina Foley said there had been a lot to take in, and emphasized that she'd only been on board for half the budget cycle - and observe that it's always interesting when Righeimer speaks.  Boy, is that putting it mildly.  She said she was not going to nit-pick the budget, but stressed that she thinks we need a long term view.  She's been stressing that for months.  She said our plans should be sustainable and she's happy that families are getting prioritized.  She praised Jake Knapp for his appearance in the U.S. Open Golf Tournament last week as an example of what happens with a supportive infrastructure for the youth of the city.  Knapp didn't make the cut, but he did score better than Tiger Woods.  She also stressed the need for a good working relationship with the school district and the need for a strong public safety presence in the city.  She said we're trending the right way - but the numbers don't support that optimism.

HIGH SCHOOL STIPENDS

She then DID nit pick the budget just  a little.  The council had agreed to provide $50,000 each to the three high schools that serve the city - Estancia, Costa Mesa and Newport Harbor.  She requested that the two Costa Mesa schools receive more - $75,000 - and Newport Harbor receive $50,000.  That sent Righeimer into a mild state of apoplexy!  He practically jumped out of his chair, berating Foley for "making last minute changes to a budget we all agreed with!"  Apparently his memory holds less than 12 months worth of data, because almost exactly a year ago his buddy, the mayor, did precisely that when he yanked $600,000 out of the $1 million library fund to replace brand new median landscaping near his home.  I thought Righeimer's head was going to explode - kind of like in "Mars Attacks".  Monahan disagreed with Foley's idea, citing the fact that 60% of the children who attend Newport Harbor High School live in Costa Mesa.  Some people didn't notice that she said the difference would come from the City Attorney's budget, which she said Tom Duarte had agreed to by reducing his budget by $197,000.  He said nothing.  If that's true, that would make this year's budget even with last year's for that department.  Anyhow, this issue didn't get resolved and it may come back to the council at a future date.

MENSINGER

Mayor Mensinger went last and supported Foley's idea, which launched Righeimer into low earth orbit again.  Mensinger stressed the field use issues and the need to prioritize them.  He praised the Public Works department and Director Ernesto Munoz specifically for all the good work they've been doing.  He gave a kind of pep talk, citing that "positive things are going on."  That may be true if you're not a cop or firefighter, who are being required to work backbreaking overtime just to TRY to keep this city safe.

WHAT DID HE SAY?
Interestingly, Mensinger said, "the builders are helping us out a lot of ways." and I wondered exactly what he meant.  Did he mean in his campaign war chest?  He then said, "It's all about families.", and I wondered if he could be any more disingenuous (which used to be his favorite word until he figured out what it meant).  He closed his segment by saying, "We are a great city and it's only going to get better."  Well, I'm excited!  Are you?

VOTES NOT UNANIMOUS

Then came the votes on the six items to be considered.  Monohan made the motions and various others seconded them.  The first two - the Fiscal Year 2014-2015 adjustments and transfers and the Fiscal Year 2015-2016 budget resolution both passed on 4-1 votes, with Genis voting NO, although she was not specific why she voted that way.  And the rest - the Partial Park Loan prepayment; the Partial Fire expense reimbursement; Salary resolutions and job descriptions for certain new jobs and Direction on new Fire Fees - passed on 5-0 votes.


VANS IS COMING BACK!

Then, as the council members took turns wishing everyone a safe July 4th holiday and cautioned us about using Fireworks (Monahan exhorted us to buy LOTS of fireworks for the kids), the Mayor let the cat out of the bag.  Actually, he didn't just let it out - he threw it out and lit it on fire!  He announced that Vans, the very successful and once-Costa Mesa-based company, was moving back to town.  He told us that escrow on the old ICN Pharmaceutical building will close today and that Vans is moving its headquarters back to the town where it began - good old Costa Mesa.  It will bring with it 500 jobs and maybe create another 500 more and has plans to expand that facility to accommodate the workers.  He told us this had been a secret - even from senior

city staff (which made me cringe a little) - until just within the last couple days.  Of course, this is wonderful news, and I found myself hoping he didn't violate any confidences by making this

announcement in a televised public forum last night.  Visions of a cat out of the bag bounced around in my head.
 

NEXT MEETING IN TWO WEEKS
The next council meeting will be July 7th, following the Independence Day holiday.