In an effort to head off further cuts in revenues stemming from California's budget crisis, a coalition of seven foothill cities--from Burbank to Temple City--are recommending that the state take a series of drastic steps to resolve inefficient budget practices.
Cost-saving measures suggested by the coalition include elimination or suspension of mandated but unfunded state requirements--such as air pollution reduction efforts, waste-water quality standards, landfill monitoring, recycling programs and even the mailing of absentee ballots.
Although many of the mandated programs, such as pollution reduction and waste management, "are very noble causes, we just don't have the money to carry them out," said Ray Cruz, an executive assistant to Glendale City Manager David H. Ramsay. "We need not just get over the (immediate) hump, but look at the long term also, instead of just looking year to year."
Cities throughout the state "are fighting like crazy" to stave off further reductions in property tax revenues proposed in January by Gov. Pete Wilson, said Debbie Thornton, spokeswoman for the League of California Cities in Sacramento.
The governor, at the urging of many legislators, is proposing to shift $2.6 billion in property tax revenues from cities, counties and special districts from throughout the state in order to make up a shortfall in funds to support education, typically financed out of the state's general fund.
The state budget has been hit hard with recession-related revenue losses of about $33 billion over the past three years, analysts say. The losses are approaching the state's annual general fund budget of almost $38 billion.
But cities argue that the state has failed to correct its own deficiencies in the wake of the budget crisis and is unfairly placing the burden on local governments, which have already trimmed their own spending to the bone.
"We have had a continuous erosion into the property tax revenues of local government," Cruz said. "We are not trying to be greedy, we are just trying to keep our own (tax funds)."
In January, State Sen. Newton R. Russell (R-Glendale) called for formation of the coalition, composed of the seven cities in his district--Burbank, Glendale, La Canada Flintridge, Pasadena, San Marino, South Pasadena and Temple City.
Because of the wide disparity in the size and type of cities in the coalition, they represent a microcosm of the plight of cities across the state, officials said.
The senator is seeking advice on "how best he can go to bat" for cities facing a predicted 22% cut in property tax allocations in the next fiscal year, beginning July 1, said Wellington Love, Russell's chief of staff.
Recommendations to the Legislature are expected to be completed by the cities and presented to Russell within a week, officials said.
Love said the senator will use the recommendations from the coalition "to debate the issues in Sacramento and try to get some relief for cities."
Cruz said one of the most controversial issues in the coalition's recommendations is an endorsement of a proposal by Los Angeles County and other government groups that the state spread the cut in property tax revenues to cities over five years, rather than take it in one big bite. That could result in four years of deficit spending by the state, which would also be subject to a 1% cap on increased spending each year under the proposal.
Most cities do not like the proposal because they think the state should have to balance its budget just as cities do, Cruz said. However, he said, it is a realistic approach in the wake of "the harsh realities" of the economy.
"The concern here is a philosophical one," said Gabrielle Pryor, city manager of La Canada Flintridge, the smallest city in the coalition, which has a population of 20,000 and only a $4-million annual general fund budget.
She said local elected officials and residents hold to a "very, very deeply felt premise that the state, like cities, should balance its budget each year. But as a manager, I say I don't think they can."
Despite objections to encouraging a state deficit, Pryor said her tiny city at the foot of the San Gabriel Mountains can ill afford further losses, even though the city has only a minimal property tax.
She said a state cut of $76,000 in the current budget forced the city to reduce its contract for Sheriff's Department patrols to only one car per shift. A threatened further reduction of $200,000 next year would mean that badly worn and damaged storm drains, including one that undermined and collapsed a street earlier this year, would go unrepaired.
"We can't afford to fix the storm drains; all we can do is barricade the streets," Pryor said.
The plight of South Pasadena is far different, even though it has a slightly higher population of 24,000. It relies heavily on property tax revenues to feed its annual $10-million general fund budget, which was cut by $400,000 last year, and faces another $1.2-million loss this year, said Kenneth C. Farfsing, city manager.
On Tuesday, during the first of a series of budget meetings, Farfsing presented what he described as "real controversial cuts" to the City Council. He is recommending that 16 full-time and 29 part-time positions be eliminated from the city staff of 137. Reductions would eliminate city jailers, paramedics and school crossing guards.
Farfsing said the pact by the seven-city coalition "was very unusual" and "shows the desperate straits the cities are in."
In contrast, Pasadena, with a population of 133,000, a $110-million general fund budget and 1,400 full-time city staff members, coped with a $4-million loss in tax revenues last year "by tightening everything and looking for ways to use technology, rather than people," said Mary Bradley, finance director.
But, facing an additional $3.8-million loss this year, Bradley said, the city is "starting to hit actual public services" in order to balance its budget, including reductions in library hours, tree trimming and street sweeping.
While the population in Pasadena has remained fairly stable for the last few years, growth in neighboring Glendale has mushroomed to almost 190,000, largely due to a recent glut of multifamily development, placing unprecedented demands on city services and the inherent costs.
At a public meeting Monday night on a proposed fire protection assessment district, City Manager Ramsay told a largely hostile crowd of more than 100 that the cost of supporting services is skyrocketing while revenues are dwindling.
"The general fund of the city of Glendale is in big trouble," he said.
After painstakingly paring $8 million from its budget last year, the city expects to cut another $6.4 million from the $82-million general fund budget this year.
The city used to receive 18 cents for every dollar paid by residents in property taxes, Ramsay said. That dropped to 16 cents on the dollar with the state cuts last year and is expected to fall to 12 cents on the dollar this year.
"We think that is a very alarming figure," he said.
As cities lose more and more revenue with the double whammy of the prolonged recession and the state budget crisis, they have to find new and innovative ways to finance municipal services.
Ramsay said Glendale's annual property tax revenues have declined to only $16 million while the costs of police and fire services, most of which are accounted for by salaries and benefits, have climbed to $45 million.
"Property taxes simply don't pay the bills," he said.
Ramsay also said "there is no silver bullet" that will resolve the growing crisis in municipal finance. He said that advocacy of the plight of cities at the state level--such as the foothill cities' coalition--is needed "to get the message across: Don't pick the pockets of local government."