Cash-strapped cities consider joining forces
Faced with multimillion-dollar budget deficits brought on by spiraling revenues and escalating employee costs, Burbank, Glendale and Pasadena are considering consolidating a wide range of services and programs to save money.
Early discussions have focused on joint police dispatches, technology services and joining together to buy supplies from paper clips to brake pads. Long-term ideas include a bus service linking the three cities.
The goal is to pull inspiration out of desperation, officials said, as they try to weather the recession.
The ideas are in their infancy, but officials stress that they won’t be easy because regionalizing services probably will lead to staff reductions.
“I think we have tremendous relationships with Burbank and Pasadena and in the past we’ve had a number of areas where we’ve cooperated effectively,” Glendale City Manager Jim Starbird said. “There can be more areas, though. And in these times of budget pressure, there is enough critical mass to get over some of the organizational resistance that might arise.”
Though each city faces unique budget challenges, the common thread is a gaping shortfall that must be filled by the start of the new fiscal year July 1.
Burbank officials have proposed freezing vacant positions, cutting public services and raising some service rates to close a projected $5.8-million budget gap for 2010-2011.
Officials there have grappled with budget reductions in six of the last eight years as revenues continue to lag behind the rising cost of salaries and benefits. Revenue from sales tax has also fallen over the last two years.
Compounding the headache, the state recently took $16 million from the Burbank Redevelopment Agency, and may take $3 million more next year.
In Glendale, officials are looking for $3 million in employee salary and benefit concessions as part of a strategy to deal with a projected $8.1-million deficit. The upcoming budget represents the third consecutive year that city leaders have had to plug a significant shortfall.
Glendale’s Redevelopment Agency was forced to turn over $11 million to the state this week, and may have to give up $2 million more.
And in Pasadena, officials are anticipating a $5.7-million gap, which could prolong a hiring freeze and furloughs and possibly lead to layoffs.
Pasadena’s loss of redevelopment funds over the two-year period is about $12 million, effectively cutting reserves in half, officials said.
“In times like this, when you’re really pressed to the wall, it’s either look for these kinds of economies or frankly watching your service levels continue to diminish,” Starbird said.
“You have to look at the impacts on labor, budget savings, service levels, and then look at the amount of brain damage you have to go through to actually pull this off,” said Burbank City Manager Mike Flad. “When you are dealing with 80% of your budget being labor, efficiency means less people.”
The cities plan to start by examining consolidation of services for maintenance and animal shelters, and purchasing supplies such as chain saws and bullets.
“I think we’re just all looking for the new normal,” said Julie Gutierrez, Pasadena’s assistant city manager. “And that really has to do with us looking at using more regional programs and services, and transportation really lends itself to that.”
The three cities already work together as stakeholders in Bob Hope Airport. They also share a stake in the Magnolia Power Project in Burbank, adding to annual savings accrued through membership in the Southern California Public Power Authority.
Despite the possible economic benefits of consolidation, city officials acknowledged that they could face some opposition in their respective constituencies.
“Each of us have different commitments to the quality of service depending on the quality of service we’re providing,” Flad said. “For instance, Burbank might have higher standards for quality of service at its animal shelter, or vice versa.”
In Pasadena, libraries are partially funded by a parcel tax, so it has more money per capita and a higher expectation for library service.
“The cities that have a higher level of service in a given area may not want to see that degraded, even if it means saving money,” Flad said.