City of Orange Is in the Red; Municipal Mood Is Black

A large button on City Manager Ron Thompson’s desk has a simple request for visitors: “No Whining.”

It is a plea largely ignored, he admits, in a city that has eliminated 76 jobs since April, reduced library hours and slashed most city salaries just to pass a budget that still leaves it more than $2.5 million in the hole.

“These are extremely tough times,” Thompson said. “Morale in the city is at rock bottom.”

Like other Orange County cities, Orange is feeling the fiscal pinch of a sluggish economy and the transfer of local property tax revenue to the state. But where other cities have been able to adjust and adapt to the dismal financial trends, Orange continues to struggle.

A trip through City Hall is evidence of the hard times that have gripped the community. Rows of empty offices and vacant reception areas are spaced throughout the building. Instead of the buzz of workers, there is the hum of air conditioners. A new phone mail system has been installed because there are no longer enough people to answer incoming calls.

“I called one morning to let someone know I was going to be late for a meeting, and spent five minutes trying to get ahold of a live person,” Thompson said. “Finally, I just hung up.”

The city’s two branch libraries will soon be open just 10 hours a week each, and the main library will trim its hours from 52 to 37 weekly. Staff in the department has been cut from 80 to 48 in the past two years alone.

All the turmoil has left some residents pondering the city’s future.

“There’s a lot of concern for this city,” said Susan Leon, a longtime resident and assistant manager of the Rocking Chair Emporium, an antique store near the city’s downtown traffic circle. Leon said she is most upset about the reduction in library hours.

“It’s sad that things have come to this,” she said. “It would be nice if (the city) gets back on track.”

Jack McCarty, who settled in Orange seven years ago because of its “small-town feel,” said the city and its residents must begin making sacrifices to weather the financial storm.

As he sat in the Orange Public Library, McCarty said he would support a utility tax, or even the closure of his library.

“I enjoy this place a great deal,” he said. “But something has to be done. The city has to face the facts that these are tough times.”

A number of factors have contributed to the city’s financial woes, said to be among the worst in a county where virtually every municipality is suffering some effects of the economic downturn.

A conservative City Council has, with a few exceptions, resisted implementing significant increases in user fees or taxes to boost revenue, remedies adopted by other Orange County cities. Moreover, city coffers were robbed of $7 million in investment capital last year by con man Steven Wymer.

To the city’s critics, the budget crisis is linked to elected officials who moved too slowly to streamline government and attract new revenue sources, such as major businesses, when it appeared a recession was imminent.

Lynn Doti, an economics professor at Chapman University who headed a panel last year that looked into the city’s finances, said she believes the problems facing Orange were no worse than other cities throughout the county. But Orange officials failed to respond decisively to the economic downturn, she said.

“They should have reacted more aggressively to the recession. When they saw revenue leveling off, they should have curtailed expenses,” Doti said. “They felt the problem was going to go away.”

But instead of changing its operations a few years ago, the city used the money in reserve accounts to cover shortfalls in its budget. Now, the city’s reserves have been severely depleted.

Doti contrasted the actions of Orange officials with those in Anaheim, where city leaders recognized the severity of the financial climate more quickly and began making various budget changes, including layoffs, as early as 1990.

“We saw the handwriting on the wall several years ago,” said Anaheim City Manager James D. Ruth. “We took some action early that has really saved our bacon today.

“In times like these, things can happen very rapidly and you have to be willing to act rapidly with them and make some tough decisions,” he said.

But in Orange, decisions are rarely made that way, critics say.

Usually, the council asks that extensive research be done before it acts. An increase in a utility tax, which would have raised more than $5 million for the city, was discussed for months before the council rejected it as a revenue source.

Thompson said that without the tax, the city is desperately in need of another source of revenue, especially because sales tax revenue--the city’s lifeblood--continues to fall.

Earlier in the year, the council approved a 2% increase in the hotel tax and boosted water rates, but those actions still fall short of pumping enough money into the city to cover its expenses. As a result, the council last week approved a $47-million interim budget, even though the city’s projected revenue is $44.5 million. It was the only budget in the county to be passed with a deficit.

Many residents say the the city’s goals and priorities are unclear. Orange is a place, they say, where a small-town mentality clashes with big city realities; a place where the desire for parks and libraries competes with concerns for police and fire safety; a place where the aversion to taxes conflicts with the demand for city services.

Council members defend their actions, saying that decisions made in haste are often regretted at leisure, especially on issues as important as the budget.

“Until we get all the correct and right answers, I don’t give a damn whether the (July 1) deadline is met or not,” said Councilman Mike Spurgeon. “It’s not going to be done until its done right.”

Meanwhile, the cuts already implemented have had a devastating impact on morale at City Hall.

“You don’t want to be here, the mood is very sad,” said City Clerk Marilyn J. Jensen, a 28-year employee of the city. “I feel betrayed. I thought I was working for a fiscally conservative, very solvent city and it didn’t turn out to be that way.”

The morale problem, in part, stems from the fact that all employees, except those in the police and fire departments, took 10% salary cuts in April and were placed on four-day workweeks.

But the salary cuts weren’t enough to solve the city’s budget shortfall. Thompson was forced to lay off some of the same employees who had their paychecks slashed. Police and fire services, however, remained virtually untouched.

“Our police and fire departments are being treated like sacred cows,” said Larry Lykins, a spokesman for the Orange employees union. “They run around like chickens saying the sky is falling down and they can’t be cut. But in fairness, they should share some of the cuts and pain like everyone else in the city.”

Police and fire officials warned that cuts in their departments could threaten the safety of the city’s residents.

“We’re already underpaid and understaffed. We can’t take any hits,” said John Whiteley, president of the City of Orange Police Assn. “It comes down to priorities, and I think the city’s utmost obligation to its citizens is safety.”

City officials say that they may start looking into cuts in public safety. The contract with the police officers’ union expires this month.

“I would have sought legal recourse immediately to break the contracts with police and fire, “ said Jensen, the city clerk. “Now residents are going to lose a responsive staff at City Hall. They are accustomed to certain things being done automatically, (such as) potholes being filled and sidewalks repaired. And it’s not going to happen.”

Slicing in Orange

Budget difficulties have meant a 12% decline in department staffs during the last two fiscal years in the city of Orange. Only the police and fire departments have escaped the cutbacks.

Department 1991-92 1993-94 Change Police 278 282 +4 Fire 133 147 +14 Public works 89 76 -13 Library 80 48 -32 Water department 55 47 -8 Community service 65 41 -24 Community development 42 33 -9 Finance 38 30 -8 General services 30 22 -8 Redevelopment 16 13 -3 Personnel 13 6 -7 City manager 9 5 -4 City Council 7 1 -6 Total 855 751 -104

Source: city of Orange