City Council makes first step toward correcting $1.2M budget deficit
Oversight committee members object to diluting Measure L funds; mayor proposes replacing oversight group
News Review Staff Writer
When the Ridgecrest City Council met just days before Christmas, it had a series of hard decisions to make relating to further reduction of staff in order to balance underperforming revenues and the accommodation of financial obligations that management says were inadvertently left out of the budget.
The continuation of the city’s budget woes was outlined by Interim City Manager Dennis Speer at the Dec. 5 council meeting. He identified a new $1.2-million structural deficit between revenues and expenditures. This is on top of cumulative losses over the years — including a $2-million annual loss in redevelopment funds enacted midyear last budget cycle — which has resulted in a 22-percent reduction of full time equivalents at City Hall since 2009.
During this period of declining revenues, the council has relied heavily on one-time funds to balance the budget, citing the need to absorb some of the shock of job losses to staff and the inevitable loss of service to the community.
But critics argue that by not making the cuts at the time those revenue streams dry up, the council is creating an even larger deficit, calling for even larger cuts in the future. Statements from the public also point out that many of what were presented as cuts were actually cost shifts to different accounts, rather than a reduction of expense to the city.
Those conflicting viewpoints were at the heart of much of the debate during the five-hour council meeting.
The full force of the deficit was buffered by the use of a $620,000 windfall the city received from Kern County, reportedly an overpayment of the city’s redevelopment settlement.
Speer presented to the council the proposed $658,000 in cuts, which he applied to each department in proportion to the level they were funded.
Speer recommended that the council approve the cuts as outlined by department heads, with the ex-ception of a proposal to reduce the city planner to half time. He said that eliminating, reducing or outsourcing what is essentially a department of one would have an adverse impact on critical city services. He said $55,000 of transfers to special and capital projects would be available to cover that cost.
The brunt of departmental cuts — some $361,000 — fell on the police department. Citing the continuing need for public safety, Chief Ron Strand shifted that cost — which equates to about four officers — to the Measure L fund.
Some expressed concern that, although public safety is one of the areas the council had pledged to use fund for, that shift would cut deeply into what the city had expected to be able to spend on streets.
Parks and Recreation Director Jim Ponek said in the $118,000 he proposed for his department, the city would lose two maintenance workers and possibly have to close Pinney Pool.
Mayor Pro Tem Jason Patin said that since Parks and Rec was one of the city’s few revenue-generating programs, he was concerned about the potential losses associated with cuts. Ponek said he could not say what would be lost. “We never know until things play out.”
Patin said the city needed to consider outsourcing labor or forming a special district to fund parks and recreation. He recommended making no P&R cuts until an alternative solution could be found.
“This is going to hurt,” said Councilmember Jim Sanders. “But the city is hemorrhaging dollars. I’m hearing we should keep funding them, but I’m sorry — we can’t. We can’t afford to. We are losing dollars every day.”
Councilmember Lori Acton said she wanted to look at other ways to balance the budget, including a cut to the finance department, which she said was not taking its fair share of reductions, and collecting past-due bills from mandatory trash collection.
For a brief time during mandatory trash collection, the city was paying former vendor Benz on delinquent accounts. The city stopped when it determined that it was paying more than was owed (and subsequently won a court settlement on that subject).
“We need to collect money the city is owed to the tune of $722,000 from those who protested and don’t want to pay,” said Acton. Saying that she had a former career in collections, she proposed putting liens on residential properties until the money could be collected.
City Attorney Keith Lemieux said he did not know where that figure came from,and noted that determining who owed money could be more expensive than what the city could legally collect.
Acton also opposed the city’s process of financial reporting, which instead of tracking staff and equipment costs by department, divides the costs of administrative services between all departments.
Speer admitted there were problems with this, such as was pointed out by a wastewater worker who said that the city paid $250,000 from that budget to information services when that group didn’t even use a computer.
Tess Sloan, interim finance director, said that her department was absorbing the equivalent of a cut with the shifting of outside responsibilities onto her staff.
Sanders reiterated his concern that the city actions were not addressing long-term cuts. He said that he wanted to look at removing council health benefits. Holloway said that was only a token cut and should be left up to individuals if and how much they wanted to see that benefit reduced.
Mayor Clark and Patin said that council remuneration did not even cover the cost of obligations it imposed on members.
Former councilmember Jerry Taylor said during public comment that, based on Speer’s figures, the city was spending $4 per minute of money that it did not have. He added that the council benefits cost was more than $44,000. “It’s real money — you need to look at everything across the board.”
He also passed out a graph he said showed a much larger structural deficit than was being acknowledged by the council. He said that was because of the $4.5 million that had to be paid back to the wastewater fund (originally a transfer and later turned into a loan when the legality was challenged).
Taylor said the $575,000 currently padding the general fund was necessary for cash flow, but pointed out that the money also needed to be paid back to the wastewater fund from which it was borrowed.
He also asked the council to reconsider its previous allocation of $2.5 million in new park structures, in light of the fact that the parks and recreation director said the city does not have the resources to maintain its current facilities.
Measure L Oversight Committee Member Scott Garver said that shifting police costs to Measure L appeared to be legitimate, but that he thinks the council needs to give a more clear explanation to the public in order to foster trust between City Hall and the community.
Phil Salvatore, also a committee member, said that with Measure L being used simply to backfill an existing level of service, “People are going to be wondering what they got for their money.”
Measure L committee members have consistently pressed the council to consider public perception of expenditures if it wants to have a hope of passing another measure when the current one reaches sunset in 2017.
Earlier in the meeting, Clark brought up the possibility of reappointing members of the oversight committee. This was also challenged in public comment, as appointments had defined terms attached when they were made several months ago. Lemiuex said that committeemembers served “at the will of the council,” and that councilmembers were within their legal rights to reappoint if they so chose.
When the item returned to the council for a vote, Patin said that although he disliked floating the budget on one-time funds, he did not want to make cuts without having a plan in place.
“I think making these cuts will drive the plan you are talking about,” said Sanders. He said the council has talked for more than a year about having a plan and failed to come up with one. “We can’t wait for a plan. I hate firing people, but I don’t see how we’re going to make this work otherwise. If we don’t make these cuts, we need to come up with equivalent offsets.”
He added that the public needs to know that if the council takes its current course of action, it will not be retaining anything in the general fund.
In addition to the $361,000 for the PD being moved to Measure L, $88,400 was cut from parks and recreation, $6,580 from public works, $85,540 from general government and $32,900 from transfers. Some of those cuts are not being reduced as expenses, but funded through unused dollars.
The council also agreed to eliminate funding for grant writing, human resources and litigation consultants.
(Final numbers could not be confirmed with Speer, since City Hall was closed for the holidays up to press time.)Story First Published: 2013-01-02