Mar
15
(Los Alamitos, 3/15/2010, updated at 7:05 p.m.) The Los Alamitos City Council ran out of time when they met at 5:30 today for their annual mid-year budget review to consider additional budget cuts that would result in an “unprecedented” 2 year decline in General Fund Budget of over10%.
A projected shortfall of an additional $600,000 in the General Fund combined with an increase in Gas Tax Fund appropriations (expenditures) of 125,000 and additional income declines in the Pool and Garage funds for an additional shortfall of roughly 3/4 of a million dollars.
But at 7 p.m. tonight, after an hour and a half of staff briefing and Council questions and discussions, not one Council Member was even willing to move the staff recommendation to incorporate “Council comments and/or revisions to the Mid-Year Budget, and bring [the staff proposals] back for formal adoption at the meeting of April 5, 2010.”
The problem seemed to be a reluctance on the Council’s part to follow the city staff’s recommendation to dip into reserves to balance the budget, as voiced by Council Member Edgar as the meeting was winding down, just prior to Mayor Poe calling for someone to move the recommendation.
After no motion was forthcoming, Council Member Zarkos expressed his agreement with Edgar’s concern, then Council Member Mejia indicated a need for further discussion, a position which seemed to attract general support. So City Manager Jeff Stuart indicated he could schedule an additional Special Meeting at 5:30 in three weeks, before the April 5th Regular Council Meeting.
Personally, I think the staff had the right approach, and at this point the Council would do better to focus on reductions and income enhancement for 2010-2011, rather than micro-manage the staff’s recommendations for the 2 1/2 months of this year that will remain once the report is adopted. (The city’s fiscal year begins July 1 each year, as does the state’s.)
Perhaps the Council just needs more time to discuss the matter, but that might have been done in a more timely fashion by scheduling a vote (which would include discussion) for the 4/5 meeting. In any case, the other two businessmen on the Council seemed to be in agreement with Council Member Edgar that dipping into the city’s $5,000,000.00 reserves was to be avoided at all costs.
Details of the Staff Proposal:
The plan was to balance the books with an additional $378,000 in General Fund cuts, smaller cuts in the Pool and Garage funds, and tapping the last year’s budget surplus of $215,000 that was created by mid-year cuts a year ago.
Details from The Register:
As usual, our local O.C. Register reporter, Jaimee Lynn Fletcher, did an excellent job of summarizing the details of the problem and the solution in her excellent on-line article today:
Property tax revenue is expected to stay flat and sales tax revenue, in light of the recession, is expected to decrease by $315,800. Utility users’ tax revenue is also expected to go down $190,300, according to city documents.
Proposed reductions include reducing traveling and training for various city departments, reducing supplies and reducing expenses such as police department booking fees and helicopter services, among other cuts.
Two vacant positions, one in the police department and one in the community development department, will stay open to save the city about $102,300.
Pool Fund
There were hopes that the city could finally break even on the pool at the Base this year, but staff couldn’t find a way to make up for an additional Pool Fund revenue decline of over $24,000, although they did come up with about $9,000 of additional cuts in pool expenditures.
Garage Fund revenue declines of $12,740 were matched with $12,740 of cuts in Garage Fund expenditures.
Time to focus on sales tax revenue?
The result appears to be a structural deficit, which the Council will begin attacking at their Regular 7 p.m. meeting with a discussion of eliminating the 4th of July Fireworks program (details in a later post).
The income bind would seem to point to the wisdom of an all out effort to increase sales tax revenues, possibly through rezoning the Katella and Los Al Blvd. corridors to encourage more retail sales. Such a proposal from the Planning Commission has been languishing for almost a year, supposedly so it can be coordinated with the results of a study funded by SCAG.
Click here for the staff report on the budget shortfall. Unfortunately, the attachments referenced in the document do not appear to be available online.
As always, your thoughts, comments, and insights are appreciated, as long as they’re expressed diplomatically in relatively polite language.
Comments
2 Responses to “Council stymied by budget challenges”
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Um, there was no “surplus” last year. If I remember correctly we “borrowed” from the reserves. So any “surplus” that may exist must be put BACK into the reserves and then we can “borrow” from the reserves this year.
But in an economic downturn, let’s not lie about where the “surplus” is coming from.
Why does the city council meet for a budget meeting at 5:30 PM on a night when they will be having a regular meeting. They should have met earlier or on an another day so they could accomplish something. There is discussion as there should be, but when they do not agree on anything they have to stop for the next meeting.
This is extremely poor planning.
That is exactly what happened tonight. The budget meeting stopped shortly after 7: PM (as least for three councils members it stopped. Poe and Edgar continued there own meeting whispering on the dais)
Now they have to come back, once again at 5:30 PM before the next regular meeting.
Hello…it didn’t work tonight, what makes them think they can get it together at the next 1.5 hour time slot ?