It took more than three hours and a head-spinning flurry of votes, motions, counter-motions and substitute motions Tuesday night, but Costa Mesa officially has its budget in place for the new fiscal year that starts July 1.
When all the dust settled and the City Council granted its approval on a 4-1 vote — with Councilman John Stephens opposed — the overall size of the 2018-19 spending plan was unchanged from staff’s original proposal of $163.7 million — about $568,000 larger than the budget for the current fiscal year.
However, much of Tuesday’s discussion centered on a much smaller figure: $40,000.
That was city staff’s estimate of the revenue gap created when the council tweaked or scrapped some fee increases originally included in the budget.
Stephens and Councilwoman Katrina Foley suggested plugging the hole with a corresponding cut to the legal costs charged by Jones & Mayer, the law firm Costa Mesa contracts with for city attorney services. Foley said the figure could come from trimming the amount the city is billed for administrative services such as shipping, couriers and postage.
“Trust me when I tell you, however we want to slice it and dice it ... Jones & Mayer can find $40,000 in our fiscal year to help us balance our budget,” said Stephens, a business litigation attorney who is a partner in his own firm. “I know it because I do it.”
Council members eventually decided instead to divert $40,000 previously allocated for a stadium bleachers project at Costa Mesa High School. Foley said that effort is no longer moving forward, so the funding can be repurposed.
Council members also asked staff to research how much money has been set aside for projects in the capital improvement program that are no longer on the table so they can determine whether those funds are available for other purposes.
“I do hope that when we do come back we have a full analysis of the CIP and whether or not there are extra funds sitting in an account somewhere,” Foley said.
Another sticking point Tuesday was whether to budget two additional full-time positions in the city Finance Department — a tax auditing specialist and budget analyst — at a projected annual cost of $100,000 each.
Stephens said it would be prudent to wait to devote money for those roles until after the city’s new finance director, Kelly Telford, comes onboard later this month.
Mayor Sandy Genis, however, said the additional employees are needed sooner rather than later.
“These are two important positions and, especially if you look at how much trouble we’re having here, to say we don’t need more help with finance — seriously?” she said.
Overall, the adopted budget will boost the city’s full-time staffing from 476 to 479.
The short-lived $40,000 hole in the budget stemmed from the council’s decision to change staff-proposed fee increases for various parks, recreation and community services programs.
Among the recommendations were a new $5-per-person administrative levy for trips provided through the Costa Mesa Senior Center, a proposal to start charging for the currently free Recreation on Campus for Kids, or ROCKS, summer program and a suggested $10-per-player, per-season field-use charge for certain nonprofit organizations.
After talking it over, the council voted 4-1 to charge the new or increased recreation fees only to non-Costa Mesa residents and to scrap the proposed field-use charge.
Councilman Jim Righeimer opposed the action, saying: “There’s costs to operate these things and we should pay for these things. You shouldn’t have it free.”
On another 4-1 vote, this time with Mayor Pro Tem Allan Mansoor opposed, council members approved a 53% increase in building permit fees, which staff said would bring Costa Mesa’s charges in line with other Orange County cities after more than 20 years without an update.
That decision also included an increase in the cost for project or permit applicants to appeal decisions to either the Planning Commission or the council from the current $690 and $1,220, respectively, to $3,825.
Call for belt-tightening
Though the budget is only slightly bigger than the current fiscal year’s, several residents implored the council to tighten the city’s belt, especially in case there is an economic downturn.
According to staff, the city’s expenses are projected to grow faster than revenue over the next five years.
Mansoor said he would like the city to “start to identify cuts and savings so that the next budget does not exceed revenue projections.”
“If we don’t make some adjustments, we are going to see cuts in service in the future,” he said.