10-point plan to be unveiled

Diminishing tax revenue has put Costa Mesa in the position of running a deficit of about $14 million for this fiscal year, but city officials say that next year’s deficit could be an additional $19 million unless some serious changes are made.

The City Council will review a host of proposals tonight, including laying off workers, cutting salaries and benefits, limiting overtime pay, implementing cost-recovery programs and, further down the line, raising taxes.

In previous months, the city has trimmed its budget by leaving positions vacant, holding off on scheduled vehicle maintenance and replacement, and postponing infrastructure projects. At the time, city executives said that those changes would have few if any noticeable effects on city services. That’s not the case with many of the proposed changes this time around.

The reductions in operating expenditures would lead to less emergency-response capabilities for the fire department, a reduction in traffic enforcement from the police, slower street maintenance and elimination of city-run programs among many other consequences, according to the city’s analysts.

City Manager Allan Roeder said Costa Mesa has been living on a slim budget for decades and the millions of dollars in reductions necessary to balance the budget can’t be made without some substantial impacts on the community.

No concrete proposal is on the table yet, but the city has compiled an outline of what a possible solution could look like that combines ideas from the council, city executives and employees.

“There’s probably something for everyone to dislike in it, which is probably to its credit,” Roeder said.

The outline — known as the 10-point plan — contains budgetary reductions and new revenue totaling more than $20 million. Its mainstays are laying off 23 to 25 workers, cutting employee salaries by 5%, giving employees incentives to retire early and not filling the vacancies, and slashing overtime pay.

Separate packets of suggestions by City Council members and employee union representatives accompany the 10-point plan with ideas that range from furloughing employees and cutting retirement benefits to raising a variety of taxes and fees around the city.

With an average annual operating budget of about $100 million each year, the $19 million predicted shortfall is roughly 20% of the whole pie, and the city is running out of reserves to cover expenditures that exceed revenues.

In the 2007-08 fiscal year the city spent $7 million of its savings; in 2008-09 it’s planning to spend at least $14 million more. That would leave less than $20 million in unrestricted reserves in the city’s coffers, Roeder estimated.

“We can’t continue to live on our [reserves] to meet our expenditures,” he said.

The meeting starts at 6 p.m. in Council Chambers at City Hall.

Reporter ALAN BLANK may be reached at (714) 966-4623 or at alan.blank@latimes.com.