Oceanside Budget Deficit Rears Its Ugly Head Again

Just when Oceanside thought its dark fiscal days were over, and that last year’s $5.8-million budget deficit was nearly erased, comes word of a new $4-million deficit in the city’s current budget.

The city that has already reduced its work force and cut police and fire services is now considering raising fees and taxes--including for business licenses, hotel-motel occupants and impounded vehicles--to help solve the latest monetary crisis.

Meanwhile, the deficit has deepened divisions on the City Council and become an issue in the campaign to oust Vice Mayor Melba Bishop from office.

Mayor Larry Bagley claims that Bishop, his chief political adversary, and her supporters on the city staff have trumped up the budget problem for political gain.

“They’ve come up with this deficit ghost to scare people,” Bagley said, arguing that the deficit is a ruse to help Bishop defend her controversial actions to balance last year’s budget by cutting fire and police services--including grounding the Police Department’s two helicopters.

But Bishop scoffed at such notions, insisting that the deficit is real and was caused largely by poor fiscal management when Bagley and his ally, Councilman Sam Williamson, were part of a previous council majority.

“I don’t have to manufacturer deficits; he (Bagley) and Sam Williamson did a good job of doing it when they had a power bloc on the council,” Bishop said.

Bishop, who leads a new majority with Council Members Nancy York and Don Rodee, is accused by recall advocates of abusing her power by usurping the authority of directly elected Mayor Bagley and by chopping the police and fire budgets. The recall vote is set for Oct. 29.

This latest fiscal predicament has surprised Oceanside officials, who were sighing in relief over surviving last year’s financial calamity.

In November, after initial upbeat fiscal forecasts, the city learned it faced a $5.8-million deficit caused by overspending and dwindling revenues.

The recession curtailed housing development, so the city received fewer planning, building and engineering fees. Meanwhile, the deployment of 22,000 Camp Pendleton Marines to the Persian Gulf prompted a sharp decline in retail business, which reduced the city’s sales tax revenue.

After a 12% citywide spending cut, a hiring freeze and cutbacks in the Police and Fire departments, Oceanside was heading for fiscal 1991-92 with a brighter outlook.

Sandra Schmidt, the city’s finance director, at first figured the city would start the new fiscal period, which began in July, with a $500,000 deficit to erase from its $53-million operating budget. The total budget, including capital projects, is $265 million.

After thoroughly examining the books, however, Schmidt discovered problems that now threaten to increase the deficit to $3.9 million.

Among the problems, Schmidt said, is the fact that the city hadn’t paid enough into an employee health fund, and that $1 million borrowed from one city account for a riverbank revetment project hadn’t been repaid.

“The city has deficits in the general fund and internal service funds that cannot be ignored,” Schmidt wrote in a report to the council.

City Manager John Mamaux is proposing several measures to balance the budget, including increasing the fees for business and card room licenses, a higher hotel-motel occupancy tax and charging more to retrieve impounded vehicles.

Further, he wants to help offset the deficit by shifting part of $4.2 million the city generated by refinancing its new Civic Center.

If the council approves those actions, Mamaux believes, “we’re not going to have to cut services,” which he said are “bare bones now.”

The city staff has not yet recommended how much to increase fees and taxes, but will go before the council over the next month with specific proposals.

“All that stuff is going to be done piece by piece,” city spokesman Larry Bauman said.