Costa Mesa is looking to lay off four employees and eliminate 11 vacant positions to balance next year's proposed budget.
Though the city ended last fiscal year with a $3.8-million surplus and projected in March to end this fiscal year with an extra $200,000, a string of new spending projects by the council majority has pushed next year's proposed budget $1.1 million into the red, according to a staff report from Tuesday's City Council study session.
Costa Mesa has doubled its spending to about $20 million for capital projects — such as street and sidewalk repair, and park maintenance — set aside $1 million as a contingency fund, and squirreled away $500,000 toward a plan to eventually buy local motels that receive a disproportionate amount of police calls.
"Infrastructure degradation costs more money the longer you ignore it," Councilman Steve Mensinger said after the study session. "And these calls to motels cost up to $1 million a year in resources."
Costa Mesa, like other California cities, also lost a reliable tax revenue stream when the state dissolved the redevelopment agencies, or RDAs.
Staffing for Costa Mesa's RDA cost more than $600,000 annually, according to staff reports. Officials argue that such a loss makes the staffing unaffordable, leading to the four layoffs. The council is also planning on creating two new code enforcement positions.
But with more than 150 layoffs between 2008 and 2010 and the city looking to outsource several services, employees are wary of deeper cuts to help this council. At the height of the recession workers agreed to a temporary 5% pay cut, increased pension contributions and the creation of a new retirement tier for new nonpublic safety hires.
Orange County Employees Assn. spokeswoman Jennifer Muir called the council's spending misguided.
"A budget is a statement of a city's priorities," she said, adding that "when it comes to executive pay, pet projects, high-priced lawyers, there's plenty of money. But when it comes to the community, there's nothing left."
About 200 city employees are under OCEA's umbrella. In the last year the city has created or filled executive positions and hired consultants as part of a citywide restructuring.
City staff did suggest, however, the creation of two new code enforcement officer positions.
Finance Director Bobby Young proposed cutting 15 positions, among them three maintenance jobs, and shifting those workers into other divisions. The proposed transition kills the city's in-house street rehabilitation program, which means 10 to 15 fewer streets will be paved in the next fiscal year.
It also saves about $555,000, according to projections.
Many of the cuts, according to Tuesday's staff report, could lead to slower or delayed services for the public and other city departments.
"I don't know if I can live with a reduced level of service when we're going to set aside $500,000 for this, $200,000 for that," Councilwoman Wendy Leece said.
The cuts will be up for a council vote at its June 19 meeting.