Fountain Valley discusses possible solutions to increase city revenue, reach financial stability
Fountain Valley city officials and community members gathered Tuesday in council chambers to take stock of a 20-year financial sustainability draft plan aimed at generating city revenue and achieving fiscal stability.
The draft plan, presented by the city’s Finance Director David Cain, follows Fountain Valley’s recent decision to adopt its 2016-17 budget with tighter restrictions on city services, as it will need $1.7 million of its general fund reserve to help balance its budget.
The city may run out of money by 2020 if fiscal problems aren’t addressed, according to the plan.
“If we don’t address it now, the structural deficit will continue to grow,” Cain said. “We can’t put a Band-Aid on it for a year or two. We’re not in that position.”
The city gathered community input on what services ranked highest for residents through various meetings and surveys conducted within the last few months. City staff then developed possible solutions for revenue enhancements through a 20-year period.
Significant cuts began in 2008, as the city faced “state takeaways,” increased costs and the elimination of California’s redevelopment agencies, which gave local governments the ability to capture a greater share of property taxes.
Cain said about $116 million has since been taken away from local revenue after Proposition 13.
In 2002, the city reduced its workforce from 257 to 221. Healthcare subsidies were also reduced and city employees have been required to contribute more to their retirement funds.
Contracting city services for trees, landscaping, janitorial and street sweeping are being done to help cut down city costs, but Cain said more needs to be done.
Some proposed options include:
Closing Fire Station No. 2, saving about $1.5 million a year.
Eliminating police programs such as the cadet programs, saving about $200,000.
Removing recreational and senior programs or increasing fees to cover costs, saving an estimated $1.2 million.
- Ending general fund capital contributions for road and park maintenance, saving about $550,000, which also poses a risk of facing higher costs if left unattended.
Cain said the most viable option would be to have local control and require residents and nonresidents to pay a 1% sales tax, generating about $11.5 million dollars instead of a parcel tax paid entirely by residents that would average to $700 per parcel or banking on transient occupancy taxes from city hotels.
Unlike other cities that can “build their way out,” Mayor Cheryl Brothers said Fountain Valley doesn’t have vacant land.
City leaders will continue to gather community input until July 19, when a final version of the 20-year sustainability plan is presented to the City Council with a formal recommendation.
Vega is a contributor to Times Community News.
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