Ides of March: Council hears city finances, although not dead, declining
March 26, 2010
By Peggy Kelly
Santa Paula City Council
The Ides of March, the day Roman Emperor Julius Caesar was assassinated, was perhaps the best day to deliver the message that city finances - although not dead - continue to decline, the city’s finance director told the City Council.
At the March 15 meeting Finance Director John Quinn told the council that property and sales taxes make up 70 percent of the General Fund and are “currently declining significantly; we have no control over that,” nor does the city have control over continuing state-takeaways. In addition, the state legislature is weighing retaining gasoline tax by creating an excise tax to be exempt from the law governing fund distribution. The city’s annual average gas tax revenue over the last four years has been about $516,000.
At the least Quinn said he expects any revenue payment to be delayed and the city’s fund is in deficit by about $423,000. Meanwhile, he noted, “We still have to struggle to find money for the potholes.”
The city has lost more than $1.5 million in general fund revenue over the past two to three years, and although the real estate market seems to be cautiously on the rise, the fallout from the crash is still - and will probably continue to be - felt.
Councilman Bob Gonzales asked Quinn what he anticipates in Fiscal Year 2011-2012. Although hoping for the stabilization and possible slow improvements that most experts are anticipating, for next fiscal year “It doesn’t seem to be in the cards” that things, said Quinn, will be much better.
There has been no salary increase for staff in years, and the 2010-2011 budget is projected to be “zero-based” on raises, although the cost of benefits will rise. The upcoming fiscal year is “going to be a very dismal year, very, very tight,” and it’s vitally important that the council consider “looking at programs as well as staffing” for potential cuts. “I think everything should be on the table,” ranging from employee furloughs to early retirement, among other money-savers and cuts.
Quinn said the city is “getting down to some very critical issues” that will be brought to council. Although “hard decisions” will have to be made, Quinn said they should be “long-lasting decisions and not accounting gimmicks to serve our purpose for one year. These things have to be embedded in our structure,” while ensuring city business can continue with proper staff.
In addition, the city’s information technology system needs upgrading. Quinn said the money for “will have to found someplace,” and the “only place” is the reduction of services or staff “or both.”
“I think it is very important that staff, the city manager and department heads propose solutions to the council,” said Councilman Ralph Fernandez. “It’s frustrating to me” not to know the inner-workings of city departments, information Fernandez requested.
Such insight, he added, would help define future proposed options and perhaps help in the creation of options or new solutions. With more staff involvement, suggestions would come from within: “From day one I think our goal has been not to touch staff.” Fernandez said he is also aware the city department “philosophy has been if we don’t spend it this year we won’t get it next year,” which he believes is not factual.
City Manager Jaime Fontes said the report and discussion was the “first step was to let you know where we are,” to be followed by how to meet the challenge. The “other mode,” he noted, is what the city is proposing to stimulate the economy. Full cost recovery for city services and the possible privatization of some services, he added, would also be explored.
Gonzales said in the past he recommended a suggestion box for staff cost-saving ideas. “Sometimes people in the trenches know best what is going on, but are afraid to say something, afraid they’ll be ostracized by their co-workers” or supervisors. But, added Gonzales, “they in the trenches know where the expenses are, know where the waste is.”
Fontes said a suggestion box would be created in a week.
