Costa Mesa budget gap could reach $15M

COSTA MESA — The city could face a budget shortfall of up to $15 million next fiscal year, depending on how much deferred maintenance the City Council wants to address from previous years, Chief Executive Tom Hatch said in an e-mail to employees.

When you add this year's existing budget gap, about $1.6 million, and an estimated $3 million from increased pension costs next year, Costa Mesa is already starting off nearly $5 million in the hole, council members said.

If the city aims to make up for the many cuts made in recent years — street and park maintenance, equipment replacement — the costs quickly add up.

"Some members of the City Council have expressed concern that we cannot keep deferring some issues and that their expectations is that this coming budget will fund these items," Hatch wrote in a weekend memo reviewed Thursday by the Daily Pilot. "These expectations will likely push our budget shortfall from $5 million to nearly $15 million."

The city has laid off more than 100 employees over the last three years, but also drastically reduced some city services or eliminated some altogether.

"What we call 'non-essential services' keep getting cut and cut and cut," said Councilman Steve Mensinger. "In my 25 years in the city, I've heard that we're getting caught up, but we're not … roads don't fix themselves."

Council members said they are trying to stay ahead of the curve. They recently voted to dissolve the police helicopter program it shares with Newport Beach, netting an estimated $2 million. Those savings wouldn't be realized until July.

Most recently, the council also approved issuing more than 200 layoff notices to city employees as it looks to outsource their jobs and save on pension costs.

Hatch plans on opening up the services to private bidders in the next 20 to 60 days and should receive responses a month from then, according to his e-mail.

As the outsourcing picture comes into focus, so will an idea of what the city can truly afford, officials said.

"Your budget is what you want, not what you need," Mensinger said. "That's based on what the community wants. They want all these great things, so then you go to your budget and say what you want. Now what do you really need? Unless revenues come up, which they're not in any great, sustainable trend, then we get to what we have to cut."

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