Fiscal Troubles Hit the Shores of Seal Beach the Hardest

Battered by recession and with budgets shrinking by the month, city leaders in Orange County do not know real fiscal troubles unless they have been to Seal Beach.

Talk about trouble, this is a town where money is so tight that for 15 months it could not afford to hire someone to manage its finances. Here, the position of public works director has been vacant for at least a year, leaving the responsibilities to a consulting engineering firm.

While cities such as Santa Ana and Irvine still have the luxury of paring staff positions to handle shortfalls, Seal Beach City Manager Jerry L. Bankston has pondered a budget trim that would cut to the heart of the city’s identity.

As a last resort, Bankston said his city may have to surrender control of its beach to the state.

“It is very simple,” said Bankston, who because of staff reductions also helps supervise the city’s street sweeping service. “There isn’t any room to talk about fat and glut at the city level. There are important services at stake here.”

Among municipal leaders there is little dispute that Seal Beach gives life to the dreaded worst-case scenario in a budget year described as the most severe in recent history.

By Wednesday, the start of new fiscal years for many municipal governments, cities were to move forward with gutted but balanced budgets and pray for economic recovery. Instead, all are waiting for yet another hammer to drop: the day the state decides how much it will take from cities to erase its $11-billion deficit.

The prolonged recession and its effect on property tax and sales tax revenues--key funding streams for most cities--has made this year especially difficult for local governments to pay their bills.

And no city seems to be immune from the combination of fiscal setbacks.

Garden Grove City Manager George Tindall said his city recently was forced to sell land to help balance its budget because there are no reserve funds. Last week, city leaders placed “for sale” signs on police cars to symbolize possible cuts that could eliminate patrol officers.

In Stanton, the state’s take in vehicle license fees and additional property tax funds could amount to 20% of the city’s general fund budget of $8.2 million.

But as bad as these situations seem, officials admit that their balance sheets look much better than the one Bankston holds in Seal Beach.

“I don’t know how cities like Seal Beach will be able to survive this,” Costa Mesa City Manager Allan Roeder said of the possible state demands. “This is a serious, serious condition.”

At worst, Bankston and Mayor Gwen Forsythe acknowledge that the city may have to consider the elimination of entire departments or the increase of user fees.

Maintenance of the city’s beach, including provisions for lifeguard services, cost the city about $819,000 annually. And revenue drawn from parking and other related fees do not pay for half that amount, according to city budget documents.

More realistic options, however, probably would come in the form of increased fees, such as for water, sewer and landscape maintenance.

Times correspondent Robert Barker contributed to this article.