City manager calls on the reserves for aid

Deirdre Newman

City Manager Allan Roeder is suggesting something in the proposed

2004-05 budget for the first time in his almost 18 years managing the

city: dipping into the general fund reserves to compensate for a $2

million take-away from the state.

Otherwise, the $109-million budget was balanced without increasing

taxes or fees.

While the budget already accounted for a loss from the state of

about $867,000, it now faces an additional cut of $1.1 million for

the next fiscal year based on an agreement reached last week with the

League of California Cities and Gov. Arnold Schwarzenegger.

In addition to dipping into the reserves, Roeder is suggesting two

other means of dealing with the loss -- examining ways to reduce

employment costs and exploring a moderate increase in taxes.

“If you draw down the reserves, you’re also drawing down the

interest you’re earning to put back into the general fund,” Roeder

said. “So it cannot be, in my opinion, the total solution.”

The budget’s goals include maintaining all city-provided programs

and services at existing levels and focusing on providing quality

service.

Balancing it was a daunting process, Roeder wrote in his

introduction to the budget.

Originally, the total of all the departments’ operating budget

requests equaled about $99 million. But after departmental budget

hearings, Roeder was able to whittle that amount down to about $97

million, cutting amounts such as $355,000 on consulting and $217,000

on office equipment and tools. The proposed operating budget

represents a 3.6% increase over the current fiscal year.

The proposed capital improvement budget is about $11 million, a

36% decrease from the current fiscal year.

Mayor Gary Monahan said the big decrease doesn’t necessarily mean

the city is doing fewer projects. It just reflects that when revenue

for capital improvements for a project comes in, it’s not always

spent in the same fiscal year, he added.

“Some of these things take three to four years to happen and the

major capital expenditure is the year we’re actually pouring the

concrete,” Monahan said.

The proposed budget for the police department is about $32

million, a 2.1% increase compared to the current fiscal year. The

increase is mainly because of the Public Employees’ Retirement System

rate increase and the council-approved retirees’ medical benefits

increase.

The proposed budget for the fire department is about $16 million,

a .43% decrease from the current year. Included in this budget are

seven Automated External Defibrillators and other safety equipment

costing about $145,000 and paid for by the Proposition 172 Fund.

These defibrillators will be placed in city facilities to give people

the ability to save someone who has gone into cardiac arrest.

The proposed budget for the Development Services Department is

about $4 million, an increase of about 5.9% compared to the current

fiscal year. About $197,000 of the budget is funded by a community

development block grant for the city’s code enforcement program.

Also, $48,000 is included for the shopping cart retrieval program,

which the council decided on Monday it wants to continue.

Roeder is suggesting the unprecedented move of dipping into the

reserves since he believes the loss to Costa Mesa will be short-term.

As part of the agreement cites around the state made with the

governor, cities will incur a two-year loss of revenue in exchange

for Schwarzenegger’s support of a ballot initiative that has to be

passed by the legislature. The initiative would make it more

difficult for the legislature to take money from cities.

Roeder emphasized his suggestion to examine reducing employee

costs is just one part of the solution.

“That is not at all to suggest that I think we ought to balance

the state cutbacks on the backs of employees -- absolutely not,”

Roeder said.

The city hasn’t increased a tax or added a new tax for more than

20 years, Roeder said.

“It’s not a case where the city has always taken the simple route

and the moment things got tight, ran to raise taxes,” Roeder said.

“But I think if we look at the interest in demands -- like capital

projects, parks and recreations, all the kind of things we hear the

community wants ... I don’t think you can reasonably expect to do all

that off the same tax base you had back in 1980-something.”

Monahan said he was impressed with Roeder and his colleagues’

financial balancing act.

“I think the staff has done a very good job of protecting our

vital programs and services while dealing with huge uncertainties in

this year’s budget climate,” Monahan said. “I’m very proud of what

Allan Roeder and Marc Puckett have done and believe there are still

some tough decisions for the council to make. But I think at the end

of the day, we are still doing better than any city around.”

Resident Mike Berry, who with his wife Judy are perennial

budget-watchers, said he thinks the city should look to cut expenses

or increase revenue produced by programs it offers.

And, maybe even residents could pitch in to help, Berry said.

“For all of the citizens that have their special programs that

they would like to keep operating, they can make a contribution to

the Costa Mesa Community Foundation for that particular program,”

Berry said. “That may help keep some of the programs without the

city, as a whole, paying for them all.”