City Hall and the Budget Blues – The Search for Solutions Continues

Culver City’s Chief Financial Officer Jeff Muir was blunt. “Culver City has a very real budget problem. While we are better off than some cities in that we aren’t at a place where we are literally running out of cash reserves, we do have a significant gap between the revenues we expect to receive and the expenditures we will have.”

The City Council meeting on Monday May 10 had a close focus on the budget. As Muir presented his information to the meeting, the numbers reinforced the bad news. With Police and Fire Department payrolls taking up more than half the general fund, the crush between the need for services and the lack of revenue will bring more pressure to bear in the ensuing years.

Council member Andy Weissman remarked that this was “The fourth budget cycle I’ve had the opportunity to participate in, and it’s not what anyone signed up for when they embarked on public service. We have a tremendous responsibility here, and our in concern to minimize the impact on service, we need to be both cautious and respectful.”

Council member Jeff Cooper began with a laugh, as the most recently elected member of the council, he stated “I kind of knew what I was getting into, considering the problems precipitated by economy, and the issue of previous councils not taking action.”

Muir noted in observations after the meeting “If we don’t take action, this deficit will continue into the future and we will end up in a place where we no longer have reserves to bail us out.”

So what action should the city be taking ? In the current year budget, the city took the first significant steps towards addressing the deficit by eliminating 51 positions from the General Fund. In the proposed budget, they look to further address the deficit by more reductions to budgets in all departments (including eliminating 9 more positions), as well as pursuing the increase to the hotel tax rate from 12% to 14%, which would increase revenues by a projected $500,000. This would require voter approval, and so must wait for November.

There is also an expectation of significant savings through negotiations with the unions. Only one of the employee unions at city hall has offered concessions so far, and there are three other unions still to bargain. The city has been very cautious about the reductions thus far. They have endeavored to avoid laying off employees and visibly reducing services.

Muir concluded, “While there are no easy decisions to be made, the solutions are quite simple. We either reduce costs, which basically means eliminating positions, or we increase revenues, which the voters would have to do. I don’t think we can eliminate more positions without laying off actual employees and reducing services. Then the question becomes what services. I think there will be a lot of discussion over the course of the coming year as to what the community priorities are, and what it will take to pay for them.”

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