Over the next two weeks, the city of Costa Mesa will be considering a series of actions in adoption of the coming year's budget that will impact everyone in this community.
I was encouraged to submit my thoughts on this important subject to the Daily Pilot in the hope of engaging the broader Costa Mesa community in the important decisions ahead. Irrespective of whether one is of the perspective that the issue is one of a "spending problem" versus a "revenue problem," everyone should understand that there is a problem that demands attention.
The coming year's budget is the third in succession in which we face declining revenues — a situation familiar to most businesses and households in these recessionary times. The city has steadily reduced operating expenses, trimmed payroll, reduced reserves and deferred capital purchases while doing our best to limit their impact on direct service to the public.
Together we've made the changes necessary to conduct our public financial business responsibly and in some respects are doing a better job with less. City employees were part of this in terms of reductions in salaries or relinquished previously negotiated raises along with reductions in benefits. The public workforce today is smaller today than at any time in the past 25 years.
With the beginning of this current budget year, our forecast was that prior sharp declines in tax revenues would begin to level off. As of March of this year, revenues were, unfortunately, still declining, which prompted additional action by the city in freezing positions and suspending planned expenditures.
While these actions saved an additional $5.1 million, the economic decline will still require the use of at least $3 million in reserve funds. By the end of the current fiscal year, the city will have used about $30 million in reserve funds over the past three years.
All of this means that the city faces hard choices for the coming year. With a $16.4 million shortfall to be addressed and already having reduced reserves to a prudent level, cutting department budgets for three years running, creating as many vacancies as possible through early retirement incentives, salary and benefit reductions, and a host of other cost cutting efforts, the city now faces the additional prospect of reducing services, laying off personnel and increasing revenues. In my professional judgment, it will take all of the above and likely additional steps to provide a balanced budget as required by state law.
For these reasons, it is critical that members of the community take an active part in the debate over the coming year's budget. Hard choices for your City Council will be harder still without your voice. This is as much about balancing quality of life as balancing the ledger. Those programs, employees or services saved by your voice will be replaced by other budget cuts, increased fees or reduced services in other areas.
Be prepared to voice not only what you support but what you can live without as well.
Information on the budget is available at the city's website, Costa Mesa branch libraries and City Hall. The City Council's budget study session is scheduled for 4:30 p.m. Tuesday, followed by a community budget session 6 p.m. Thursday, with scheduled budget adoption on June 15. All meetings are scheduled at City Hall, 77 Fair Drive.