Council Meeting Promises Some Entertainment

FUN ON TUESDAY AFTER LABOR DAY(AMENDED)Tuesday, September 7th, the Costa Mesa City Council will return from a long Labor Day weekend to deal with some sticky issues at their council meeting beginning at 6:00. Actually, the closed session will commence at 5:00, so if you want to address either of the two closed session items - labor negotiations with the bargaining units and real property negotiations dealing with the Fairgrounds - be there promptly at 5. (NOTE: With all the late requests for continuances and items withdrawn, this could be a short meeting. Don't blink!)

FIXING THE SANITARY DISTRICT FLEET - AT COST
At 6:00, though, the regular meeting will commence and a review of the agenda provides some fodder for contemplation. For example, in the Consent Calendar - items which may be lumped together for a single vote - item #6 tells us the City proposes to perform fleet maintenance and repair services on Costa Mesa Sanitary District vehicles. Reading that staff report we learn that the city will not make a profit since the Sanitary District will provide the parts and our staff will perform the labor "at cost". Interesting.

FARMING OUT OUR DRUNK WOMEN
Item 7 is an agreement with the Huntington Beach Police Department to house at their facility the dozen or so female "drunk in public" arrests Costa Mesa makes each year, apparently because we lack facilities to house them. I've called the PD for more information because we just spent millions of dollars to renovate our Police Facility, so I wonder why this need was not anticipated since we've had such an agreement since 1993! Unfortunately, there was nobody available today to talk about it. Such is life in the land of budget cuts.

MORE "FAIRGROUNDS" DISCUSSION
Then, the council will morph into the Orange County Fairgrounds Authority (OCFA) for a meeting during which they will consider - again - two items dealing with the lease with Facilities Management West. There's no reason to believe there will be new information, but there is no staff report attached to the agenda as of noon on Friday.

The council will then reappear as itself and start with the meat of the meeting.

GARCIA RECYCLING MAY BE CONTINUED
Public Hearing #1 will be the appeal by Garcia Recycling of the Planning Commission's revocation of it's conditional use permit for a recycling facility on West 19th Street. We assume there will be significant public input on this issue. The staff report was so long that it required six segments, individually downloaded! The Staff is recommending continuation of this issue until the meeting of October 5th.

NEIGHBOR APPEALS SCHOOL USE ON RED HILL
Next is the appeal of the Planning Commissions approval of a conditional use permit by a continuous neighboring business of the proposed school site on Red Hill. (NOTE: Late Friday a request from the appellant was received requesting a continuance to as far out as January. No word if the request will be considered.)

TRIANGLE SQUARE LED SIGNS
Then comes the biggie of the evening - the appeal by Mayor Pro Tem Wendy Leece of the Planning Commission's recent approval of huge LED light displays on the foundering Triangle Square retail center. Two signs, one 15X20 feet on the corner of Newport Blvd. and Harbor Blvd, facing outbound Newport Blvd. traffic and the second, and most controversial one, on the corner of 19th Street and Newport Blvd., facing the traffic emerging from the 55 Freeway ditch onto Newport Blvd. This sign, proposed and approved at 10X96 feet - nearly 1,000 square feet - that will wrap around the building just below the dome and will spill illumination more than 200 degrees around the corner. The image shown here was provided by a concerned resident, giving an idea of just what such a sign might look like.
INCREASE IN OVERALL SIGNAGE ALLOWANCE
In addition to being a huge distraction to drivers coming off the freeway, this particular sign will be in addition to the 2400 square feet of signage approved for the center, driving the approved total signage to just over 3400 square feet.

APPLICANT REQUESTS CONTINUANCE FOR A MONTH
My understanding is that several residents plan to attend and speak to this issue, even thought the applicant has requested a continuance until October 5th.

MEDICAL MARIJUANA DISPENSARY URGENCY ORDINANCE
After some housekeeping issue, the final two items on the agenda, for which there are no staff reports available, might generate some interest. The first, New Business #1, is an urgency ordinance dealing with medical marijuana dispensaries, but no staff report is available, so we don't know why the urgency ordinance is necessary and what it will accomplish. I expect we'll see City Council Candidate Susan Lester speak on this one, since this is the only plank in her campaign platform.(NOTE: Late Friday this item was pulled from the agenda. No word about reasons for removing it, or why it was on the agenda as an "urgency item" in the first place!)

A BUMP IN THE BIA TAX
Finally, the council will consider a resolution permitting an increase in the assessment for the Business Improvement Area (BIA), raising the assessment from 2% to 3%. Apparently the BIA doesn't have enough cash to promote Costa Mesa properly, so want to dip into the pockets of visitors for just a little more. You will recall that a 2% increase in the Transient Occupancy Tax (TOT) will appear on the November ballot.

HAVE A GREAT HOLIDAY!
Have a great Labor Day holiday. Posting of comments may be delayed over the weekend.

Budget Calamity Has Arrived

THEY WERE RIGHT!
Remember that advice folks used to give you, "Hey, quite worrying about it, because things can always be worse!"? Well, neighbors, things just got worse - a whole lot worse.

RUMORS OF STAFF REDUCTIONS
Late Friday afternoon a rumor was passed my way indicating that several members of the City of Costa Mesa staff had been told that, due to severe budget constraints, their jobs will soon be eliminated, and that all City divisions will be holding meetings Monday to discuss the current budget situation with the staff.

"THE ELEPHANT" PUSHED THE DOOR OPEN
Most of us who pay attention to things going on in our town have been very distracted by the activity and controversy swirling around the attempt by our city to acquire the Orange County Fair and Events Center and all the ancillary drama associated with that process. Some of us, though, knew that the real elephant in the room was the budget - this year's budget that's about to expire and the 2010-2011 budget that is about to be formulated. Well, the elephant finally forced the door open for us all to see - and it ain't a pretty sight.

ROEDER WAS RIGHT - BAD TIMES ARE HERE
For more than two years City Manager Allan Roeder and his top staffers have been warning us that, unless something dramatic from a revenue standpoint happened soon, the City of Costa Mesa would be in for some very difficult times and that residents could expect to see serious reductions in service as a result. Those times have arrived.

CREATIVE EFFORTS HELPED 09/10, BUT NOT ENOUGH
During the current 2009/2010 budget year Roeder and the staff created a plan to try to keep us solvent by juggling union contracts, service requirements, enhanced retirement benefits to encourage early retirements and a full array of other solutions to the budget problems we faced. Even with the amazing cooperation by the employee bargaining units and creative, flexible plans by the staff, we will still end up falling $9 million short the way it looks with about six weeks to go.

BAD NEWS TO BE DELIVERED ON TUESDAY
On Tuesday, during the scheduled Study Session, Roeder and Budget and Research Officer Bobby Young will present to the City Council the truly bad news about the 2010-2011 budget. The staff report for those items is available for review on the City website. I'll try to give you a few direct links to some important segments of their presentations below.

BUDGET DOWN ALMOST 1.5%
In a nutshell, the City budget for the year beginning July 1, 2010, will be down almost 1.5% from last year. You can read about it HERE. An attachment to that report which displays a list of vacant full time positions not budgeted in fiscal year 2010-2011 can be read HERE. There are 71 vacant positions that will not be included in next year's budget. Young's revenue projection commentary can be read HERE for the details. All sources of revenue are down dramatically.

PRIORITIZATION OF SERVICES REQUIRED
Part of the plan this year is the need for the City Council to prioritize city services - to make the hard, painful decisions required by the abysmal financial condition we find ourselves in. The staff report on that process can be found HERE. Attachment B of that staff report is entitled, "Programs/Service/Facility Impacts from Recommended Reductions" and can be found HERE. I strongly suggest each of you take the time to read through this document and it's companion, Attachment C, "City of Costa Mesa Prioritization of City Services", HERE.

LIST OF PERSONNEL REDUCTIONS
Perhaps the most painful document you will read is Attachment D, "List of Recommended Personnel Reductions", HERE, which outlines in agonizing specificity, just which positions will be either reduced to Part Time or eliminated completely. Of the 77 positions mentioned, 51 are Full Time slots, 47 of which will be eliminated and 4 will be reduced to Part Time. The remaining 26 positions are Part Time jobs that will be eliminated. This is in addition to the 71 currently vacant unbudgeted positions mentioned above.

HOW SERIOUS IS IT?
How serious is this situation? Well, let's just look at public safety as an example.

FIRE DEPARTMENT REDUCTIONS
In the case of the Fire Department, thirteen (13) positions are on that list of vacant slots that will not appear in the 10/11 budget PLUS another six (6) Full and Part Time positions on the list of recommended reductions for a total of nineteen (19).

POLICE DEPARTMENT REDUCTIONS
In the case of the Police Department, seventeen (17) are on the vacant list and another twenty-nine (29) members of both the sworn and civilian staff, Full and Part Time, are on the list of recommended reductions, for a total reduction of forty-six (46) staff members .

(Two above photos courtesy of Daily Pilot)

GOT YOUR ATTENTION?
Does that get your attention? Similar draconian cuts are spread throughout the city staff, all of which will result in dramatic reductions in programs and service levels. Things are bad, folks - really bad!


PRIORITIZATION PROCESS - PUBLIC INVITED TO PARTICIPATE
The staff has provided the mechanism for the City Council to prioritize services and staff reductions and also asks the public to perform a similar exercise using the tools provided. The results of both council and community input will be compiled to help the council make the final, difficult decisions when the final budget is approved next month. The deadline imposed on the submissions of these prioritization forms is May 25th.

NO MEAT LEFT ON THE BONES
It has been clear to me for the past nine months that all the flesh had been scraped from the carcass of our city government - that the only thing left was the skeleton. We will now begin the tragic process of dismembering the skeleton, deciding just which appendages can be sacrificed, all the while hoping to retain enough of the framework of our city so it can continue to function.

PAINFUL DECISIONS IMMEDIATELY AHEAD
Over the next few weeks our elected leaders and the City staff will face what will certainly be the most difficult decisions they've had to make during their careers in public service. Some of them are almost too painful to contemplate.

LET THE PEOPLE DECIDE TOT AND BUSINESS LICENSE TAX
However, some of this pain might be avoided if they chose to place two issues on the November ballot - an increase in the Transient Occupancy Tax (TOT) and the Business License Fees - both of which have been historically at or near the bottom of the list state-wide. No one wants to see tax increases - I sure don't - but the council should give the voters of this city a chance to voice their opinion on these two issues via the ballot. We are being asked to participate in the prioritization process - we should be given a voice in November, too.

New Fees On Council Agenda

SOMETHING TO CHEW ON THIS WEEKEND
The agenda for Tuesday's Costa Mesa City Council meeting is now available for viewing, HERE. It's full of stuff that could generate some significant resident interest - if they're paying attention.


THREE NEW FIRE DEPARTMENT "REVENUE SOURCES"
For example, there are three items submitted by the Fire Department that are revenue-generators at a time when we certainly do need new sources of income. However, each of these items reach directly into the pockets of Costa Mesa residents for "fees" at a time when most can probably not afford them.

Emergency Medical Services - This fee, which will now charge residents and non-residents alike, is supposed to generate $543,900 in additional revenue to the city by charging fees for services provided when a person receives medical attention and is transported by an ambulance. Currently, residents don't pay these fees. This fee is kind of like picking your pocket as you lay bloodied and battered on the gurney.

Fire Department Fire Prevention Fees - These fees, to be assessed against businesses who receive fire prevention visits by members of the Fire Department, are supposed to generate an additional $500,000 in revenue to the city. Theoretically, these fees will represent 100% cost recovery for providing these services - which businesses don't have an option to accept or decline. The firefighters just wander in, check out your business, then send you a bill.

Fire Department Costs Recovery Program - These nifty new fees will supposedly generate more than $180,000 in new revenues for the city. They cover the costs of responding to an automobile accident within our city and could really mount up if, for example, the scene of the accident isn't promptly cleared by the police in attendance. They are based in great part by the kind of vehicle that responds, and are charged for increments of an hour, with 15 minutes being the shortest time. The proposal says we will contract with an outfit called EF Recovery, who has apparently convinced our staff that, for 14% of the fees collected, can recover 98.5% of such insured fees. I went to the web site for this company and there is absolutely nothing there that indicates they are even in this business. On their site they appear to be marketers of consumables used at accident sites and otherwise by public safety organizations. It makes me curious about their claim of 98.5% success rate when they don't even mention being in this business on their site.

NEW "FEES" TOTAL $1.2 MILLION
So, these new ordinances - with which the Fire Department will stick their hands directly into the pockets of residents - are projected to generate around $1.2 million in additional revenues for the city beginning July 1, 2009.

REMEMBER LAST YEAR?...
Last July 15th, during their deliberations of the Transient Occupancy Tax (TOT) and Business License Fees, the city council decided to "receive and file" the proposal to put those two items on the ballot for the residents to consider. As a result, we missed the boat for another two years before either item can be considered again. The short-sighted council missed the chance to increase the TOT by a couple points - which would still have left Costa Mesa among the lowest in the state - and thereby probably cost us an estimated $2 million in increased revenue. Had the voters approved that modest change we would not be looking at having our pockets picked with these new fees. The TOT affects only visitors to our city, not the residents. And, there was no one from the hospitality community that spoke against a possible increase in the TOT last year.

BUSINESS LICENSE FEES
Our Business License Fees are laughably low. As councilwoman Katrina Foley mentioned during a recent meeting, her small law firm in Newport Beach pays more for it's business license than Nordstrom does at South Coast Plaza! Even a modest adjustment to those fees would have generated significant increases in revenue for our city. Again, no one from the business community spoke on this subject last year.

LAME (BRAIN) LEADERS TO BLAME
So, once again the narrow-minded, lame-brained knee-jerk majority on the city council has demonstrated clearly why it's important to elect people to the council that have more than half a brain between them. By digging in their heels in their anti-tax posture they have caused great harm to the residents of our city.

MORE FUN ON THE AGENDA
Also coming before the council Tuesday are some items that generated a lot of interest within the community. It will be interesting to see who shows up Tuesday to speak on them this time around. Those items are:

Off-street Parking Standards
Residential Driveway Widths
Modifications to our Fireworks Ordinance making offenses administrative citations
The bogus and inconsequential 5% pay reduction for the city council members - which cannot take effect until after the 2010 elections.

I wonder how many passionate residents will show up Tuesday night to discuss these issues.

Transient Occupancy Tax Increase is Overdue

(chart courtesy of City of Costa Mesa)

COUNCIL TO DEBATE TOT INCREASE

At the very end of their meeting on Tuesday, July 15th, the Costa Mesa City Council will consider the question of whether or not to place two tax measures on the November ballot - an increase in the Business License fee and/or an increase in the Transient Occupancy Tax (TOT), also known as the "bed tax". These issues were discussed extensively at the council study session last Tuesday. While both items certainly need serious consideration, I'm going to focus this entry on the Transient Occupancy Tax.

LOWEST "TOT" IN COUNTY
At 6%, Costa Mesa has the lowest TOT in Orange County. Even if you include the additional 2% earmarked for the Costa Mesa Business Improvement Area (BIA), Costa Mesa's TOT is still well below the county average of 10.5%, and has not been adjusted for almost three decades. At it's present level it generates around $6 million in revenue - 5.34% of the total. (See chart above) As an aside, the current Business License fees generate just under $1 million.

IN ONE HAND, OUT THE OTHER
The 2% BIA assessment is collected by the ten member hotels in the city, who remit it to the city. Then the proceeds are funneled to the Costa Mesa Conference and Business Bureau, which uses the money for business development on behalf of the city. A portion of those funds are directed back to the participating hotels for their business development programs.

2% EQUALS $2 MILLION
A modest 2% increase in the TOT could mean an additional $2 million in revenue to the city, which would still retain it's competitive edge by remaining well below the average of other Orange County cities.

SOLVENCY OR NOT?
If the voters in Costa Mesa are given a chance to consider this issue on the November ballot, their response at the polls could mean the difference between solvency and extreme financial hardship for the city. According to City Manager Allan Roeder, "... from a staff perspective, we believe such an increase will be needed to support existing service levels as opposed to adding more personnel or paving more streets or building more parks. I fully understand that isn't very sexy in terms of voter appeal. But as we have pointed out in recent years, the annual cost of operations for existing services already places us in the situation of having to use Fund Balance (revenues in excess of projections & budget savings) to balance the ensuing year's budget. Short term that isn't of great concern but it is becoming a reoccuring "theme" both in good economic times (as we've had for the past 3 to 4 years) and under present day circumstances."

INCREASE NEEDED TO STAY AFLOAT
What that means, folks, is that Roeder and his excellent staff feel we need an increase in the TOT in order to keep levels of service where they are right now. In light of the obvious current economic downturn, and without a way to augment what will almost certainly be a decline in sales and property tax revenues, the city leadership will face some difficult decisions in the years ahead.

PAINLESS PICKPOCKETING
I strongly support an increase in the Transient Occupancy Tax, and have done so for many years. This is a virtually painless tax for Costa Mesa residents. We simply reach a little deeper into the pockets of our visitors and drag out a couple more dollars for each night they spend in one of our many lovely hotel rooms. On a $100 per night room that would be $2.00.

50% + 1 MAJORITY OF VOTES REQUIRED
For an increase in the Transient Occupancy Tax to be implemented it must first be placed on the ballot by a majority vote of the City Council. Unless the tax increase is specifically designated for a special purpose - the purchase of parkland, for example - passage requires only a vote of 50% +1. If it is earmarked for a special purpose, a two-thirds approval by the voters is necessary.

ROEDER'S ALMOST OUT OF RABBITS
We have not had an increase in the Transient Occupancy Tax in almost three decades. Even though Roeder and his staff have done a masterful job of performing magic to keep the city financially solvent over the past several years, it looks like they are just about out of rabbits to pull from the hat. The current economic climate makes it essential to approve a TOT increase now.

INCREASE WOULD DOVETAIL WITH DECLINES
According to city officials, if the TOT is approved in November, additional revenue would likely begin to flow into the city coffers at approximately the same time the impact of declining sales and property taxes - which represent more than 70% of the city's revenue (see chart above) - is beginning to be felt.

SERVICES TO BE CUT?
Without new sources of revenue the city may be faced with reduction of services - fewer police and firefighters, more potholes left unfilled, fewer programs for our kids.

WHICH CANDIDATES OPPOSE IT, AND WHY?
I'm led to believe that some members of the City Council may oppose an increase in the TOT, which really doesn't make sense to me. If that is the case, and any of those opposing it are running for re-election, this will certainly make for some interesting questions at the candidate forums this summer and fall.

IN SUMMARY
1 - Costa Mesa's Transient Occupancy Tax is the lowest in the county
2 - An increase would be invisible and painless to Costa Mesa residents
3 - The almost-certain decline in both sales and property tax revenue will adversely affect our budget
4 - The city needs the additional income to maintain current service levels

NOW IS THE TIME
Unless you are OK with the probable decline in services provided by the city, now is the time for an increase in the Transient Occupancy Tax. Now is the time to contact your council members to let them know how you feel. Here's an email address that will get your views to the council: op2council@ci.costa-mesa.ca.us. Write today...