Anaheim Budget Shows Substantial Growth

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The Anaheim City Council last week approved a budget that shows substantial growth in revenue and additional services for residents, including the hiring of new police officers and firefighters, after-school programs and long overdue repairs to sidewalks and streets.

However, Mayor Tom Tait says the city’s long-term financial outlook remains plagued by a structural weakness – namely skyrocketing personnel costs –exacerbated by tax subsidies for luxury hoteliers.

The fiscal year 2015-16 general fund budget consists of $286.2 million in revenue, which is an 8 percent increase over the previous year. The city’s major revenue sources – sales, property and hotel room taxes – all show significant projected growth.

That increase is expected to mean a $10.4 million surplus over the $275.6 million in scheduled expenditures. Council members allocated $200,000 of the surplus toward the city’s reserves and steered the rest toward new services and one-time projects.

Much of the surplus spending plan – $4.5 million — will go toward public safety. The city is planning to hire 10 new police officers this next fiscal year and is in the second year of a four-year plan to hire 48 new officers.

Also included in the additional public safety spending is the hiring of three new firefighters and funding for a new-hire fire training academy.

The public works and community services surplus spending includes: repairs to sidewalks and streets; illuminated street signs; daily after-school programs at 10 parks; the expansion of a neighborhood mobile after-school program from once a week to twice a week; the installation of air conditioning and heating at the Peralta Park recreational building; and the repair of damaged drainage at Olive Hills park.

Council members and the city’s finance director praised the budget, saying it shows that residents are the city’s “highest priority.”

“The investments and the financial outlook for the city is just extraordinary,” said Councilwoman Kris Murray.

Said Councilwoman Lucille Kring: “It’s going to something for everybody in every single part of the city.”

Tait, meanwhile, supported the budget but did not hesitate to point out inherent structural weaknesses in the city’s finances.

Tait noted that the majority of the increased revenue, some 5 percent, is going toward growing public employee contract obligations. That means the city’s revenue must grow at least 5 percent just to “keep level.”

With that consideration in mind, Tait said it wasn’t sound fiscal policy to have approved on the same night a policy to award tax subsidies to luxury hotel developers. Under that policy, any developer of a four-diamond hotel would receive 70 percent of the hotel’s generated room-tax revenue for 20 years.

Tait argues that if the city’s growth isn’t substantial in future years and at the same time steers tax revenue back to hotels, it could spell trouble for the city’s financial picture.

“I’m concerned about the long-term health of the city,” Tait said.

Please contact Adam Elmahrek directly at aelmahrek@voiceofoc.org and follow him on Twitter: @adamelmahrek

  • CitizensForAnimal Shelter, OC

    The city of Anaheim is responsible for the largest quantity of animals who end up in the County Animal Shelter. In 2014, 6,817 came in from Anaheim alone. A total of 31,527 from the 18 cities which contract with the county for animal services. There has been reporting in the L.A. Times, O.C. Register, the Voice of OC as well as two Orange County Grand Jury reports in the last two months alone, bringing the total to 5 OC Grand Jury Reports total against the 74 year old deteriorating county shelter. The Orange County Board of Supervisors (the responsible entity) has not taken sufficient and appropriate action to help deter the number of animals coming into the shelter nor replaced the overburdened, outdated shelter. Killing IS NOT THE ANSWER. Its time the cities withdrew from contracting with the county and join with neighboring cities to build a state of the art animal shelter, stop the killing by providing spay and neuter vouchers and low cost spay and neuter sources and educate, educate, educate. Orange county stands out like a “sore thumb” compared to surrounding counties. Please check out facebook page; Citizens for Animal Shelter, Orange County. Don’t just say you love animals, Anaheim, you have the power to make a positive difference.

  • David Zenger

    Yeah, we’re in great shape all right. The City Council is borrowing money to repair asphalt and is leaning on the TOT to back fill the ARTIC hole, a hole that is only going to keep getting bigger.

    Obviously there was a deal to put more police union members on the payroll. That union is not going to keep supporting all the Kleptocracy’s boondoggles unless it can get its beak wet, too.

  • Cynthia Ward

    Anaheim has been anticipating “better than expected returns” for decades, and the more reliant we become on tourism to the exclusion of developing any other employment or tax base, the worse the crash is going to hit us when (not if but WHEN) the cyclical economy comes around AGAIN and folks cancel their vacations and business cuts their travel budgets. When Anaheim first hosted the Resort our economy was balanced with agriculture and manufacturing that offset the seasonal income of tourism. Over time we have increasingly looked to tourism and its low paying jobs as the salvation of our funding issues, and it is flat out stupid to do this! As agriculture disappeared and manufacturing dried up and blew jobs overseas, while reliance on tourism increased, the percentage of the economy produced by tourism contributing to General Fund revenues from the Resort should have increased. In 1995 when we approved the idea of collecting additional TOT and selling bonds to enable the Disney expansion, tourism generated just over 22% of revenues. Today we owe bond holders about $800MM on the one and a half billion initially owed (getting there) have created an entire underclass of our population to be trampled upon and exploited, resulting in the animosity and class warfare that comes with having created “two Anaheims” for profit, and tourism produces….wait for it…not quite 24% of General Fund revenues. Ladies and Gentlemen, a TWO PERCENT GAIN!! Yeah, we are hosed, and the returns promised to us of increased TOT from hotels building off the success of the Disney property we do NOT enjoy taxes from (100% diverted to bonds) we are now diverting to the hoteliers. So when and with what do we pay these escalating bills? Anyone else get the idea that when the bills come due the leaders backing this insanity will have returned to the communities Pringle recruited them out of, having extracted what they needed from us while here? Thank you Mayor Tait for exposing the lies and fiscal insanity of your companions on Council. now it is time to hold Council and their enabling staff accountable for the decisions that will haunt our grandchildren. All decisions that affect future revenues need to come with a long range impact report, showing how this segment of future revenues and obligations lays out over DECADES not just a 5 year view, so we can fully understand what future generations need to pay and ensure we leave them capable of doing so. Why is that so hard for City Hall to understand?