COSTA MESA — After listening to hours of complaints about cuts to the Police Department and other criticisms, the City Council early Wednesday morning approved about $6 million in cuts and adopted a balanced budget for the fiscal year 2011-12.
The council voted 4 to 1, with Councilwoman Wendy Leece dissenting.
While the $115-million budget funds most of the current city services, it sets a tone of austerity that the council majority hopes to continue into the fall, when council members plan to have a final vote on outsourcing half the city's staff.
Some Costa Mesa leaders have drawn national attention for their conservative reform proposals they say are necessary to save the city from crushing pension costs. Employee unions and other critics argue that the council majority has exaggerated the crisis to advance its own political agenda.
"I'm very happy with this budget," said Mayor Pro Tem Jim Righeimer, who championed the cuts.
Atop of the $3.3 million savings to plug the budget deficit, he requested last week that the city cut an additional $2.8 million to set aside some money for contingencies. All of the savings were approved at the meeting.
In the standing-room-only council chambers Tuesday, Righeimer and Mayor Gary Monahan tried to quiet the crowd. People hissed at them and cheered for the council's critics, like one who sang a country ballad blasting council members, and another who said the council had waged a "hostile takeover" of the city. At one point, Monahan threatened to adjourn the meeting to calm everyone down.
The most contentious item was a Police Department restructuring estimated to save up to $1.8 million annually. The plan would reduce the number of active officers from 139 to 131. An earlier proposal also considered replacing the two sworn school police officers with three non-sworn employees, but the council rejected that idea. Instead, it decided to keep the two school police officers. Also, council members suggested adding reserve officers at the schools, or spreading out the current officers' schedules so they work five days a week, instead of four.
Righeimer said that "many of us roll around at night and can't sleep because we have to lay off somebody, and it's not an easy job."
The police proposals helped spur the resignation Monday of interim Police Chief Steve Staveley.
"There's a point in time where I reached an ethical dilemma: stay and take their money and be quiet about the foolish council decision-making, or reject their money and call them on it," Staveley said Monday.
Many audience members said they were concerned that Police Department changes would make the city less safe. Leece warned it would jeopardize gains the city had made in recent years reducing crime.
"We're going to leave ourselves vulnerable for many crimes to happen, and I think it's it is foolhardy," Leece said.
Other cuts included the elimination of an animal control officer. A worker from a local animal shelter, Tiffany Kaufmann, waved a sign in support of animal control officer Yolanda Macias.
"If they take away Costa Mesa animal control, then they're basically giving a death sentence to a lot of animals," she said.
To achieve some last-minute cuts, City Chief Executive Tom Hatch proposed leaving some of the 29 vacant city positions unfilled, or eliminating some of those empty positions. He also said the city could spend half of the $100,000 budgeted to hire an economic development consultant; economic development is one of the priorities identified by this business-minded council. The council approved all of his ideas.
Most of the public comments came in the beginning of the meeting, while the actual budget wasn't adopted until past 1 a.m. Only a handful of people spoke in favor of the council majority's plans.
In February, the city announced the potential layoffs of 213 city employees — nearly half the city's workforce — across 18 departments. Tuesday's budget, however, assumes most of those employees will still be working for the city, as companies are still responding to the outsourcing proposals.
Not until the fall will the council be able to decide which outsourcing plans are cost-effective, city spokesman William Lobdell said before the meeting.
The financial debate took a tragic turn in March when city maintenance worker Huy Pham, 29, jumped to his death from the roof of City Hall. He was to receive a layoff notice later that day.
Since that time, council members have reported threats of violence and vandalism of their property. More than 10 police officers stood sentry at the meeting Tuesday.
One of the underpinnings for cuts, the conservative council majority argues, is that the city is facing rising pension costs. Costa Mesa spends about $15 million per year on employee pensions, and the city forecasts that number reaching $25 million in about four years. That number, though, assumes that the employee unions don't agree to pay some of their retirement costs.
During the recession, the city withdrew more than $30 million from its reserves.
Leece said the city doesn't have a budget crisis that would justify firing public employees, especially police officers. About 20 police officers have applied to work in other municipalities, union representatives say, in advance of the restructuring proposal.
"One city cannot accomplish pension reform without severely damaging that city," Leece said.
Other opponents of the council majority, led by the Orange County Employees Assn., have conducted a PR campaign attacking the conservative philosophy of outsourcing, and have tried to engender sympathy for city employees.
Lisa Major, assistant general manager of the Orange County Employees Assn., presented the results of an audit funded by OCEA. It examined the city's 2008, 2009 and 2010 financial statements, and said the city could reallocate $26 million to possibly save city services and jobs, among other recommendations.
Councilman Steve Mensinger disputed that the audit had found any unused funds.
"This isn't hidden money," he said.
Righeimer added: "This whole list is a road to bankruptcy."
The city will study the OCEA audit in more detail, Hatch said.
Earlier, Colin McCarthy, president of the Costa Mesa Taxpayers Assn., critiqued the city budget. McCarthy is also a planning commissioner. He said the city should be more conservative with its sales tax estimates, and that it should spend more money maintaining City Hall instead of paying as much as it does in salaries. McCarthy also said the city should contain "skyrocketing" firefighter overtime.
In April, the city forecast a $5-million deficit, but various department heads revised their annual requests and the deficit was cut to $3.3 million. Since then, Hatch proposed a series of cuts that eventually balanced the budget.
One bright spot in the budget is an expected increase in sales-tax revenue, the city's largest single revenue source. The city's total sales-tax receipts climbed 14% in the past year to $39.4 million, and are expected to reach $41.7 million this coming fiscal year
By The Numbers
CEO Tom Hatch has suggested the following changes for budget savings, among others:
$1.4 million savings by restructuring the Police Department
$283,000 savings by using narcotics seizure funds for police dispatch computer equipment
$200,000 less to update the general plan
$174,000 savings by eliminating the telecommunications manager position
$140,000 savings by eliminating the emergency medical services coordinator position
$98,000 savings by eliminating one of three animal control officers