San Juan Capistrano City Council members, still smarting over a dip in reserves this year caused by unexpected legal costs, signed off on a bevy of cuts Tuesday night to balance the 2010-11 budget and give the community a $208,835 de facto litigation reserve.
The council had directed staffers to prepare a budget that protected the city against a repeat of 2009-10, when it was hit midway through the year with heavy, unexpected legal fees.
Councilman Mark Nielsen said the conservative approach arose from the unpredictability of the number of lawsuits the city could find itself embroiled in during a given year. Chief Financial Officer Cindy Russell said the city learned the hard way as it spent $750,000 from its reserves in the middle of this fiscal year on legal bills.
City Attorney Omar Sandoval agreed, saying that in most lawsuits, the city is the defendant and litigation is nearly impossible to predict.
“We don’t go around asking people to sue us,” Sandoval said.
It was a perceived budgeting mistake that council members didn’t want to see happen again. The projected deficit for fiscal year 2010-11 was $743,843. But per council direction, city staffers came up with a budget that cut $952,678 in expenses, thus leaving the surplus.
The largest cuts include postponing a $475,000 project to make digital copies of older city documents, and creating a six-day furlough for city staffers — which will save the city $247,744 — over the winter holiday period.
Smaller cuts include squashing plans to buy software to allow residents to listen on the Web to audio of council meetings, saving $6,000, and a reduction in maintenance of historic buildings, saving $5,000.
Also included in the cuts was a commitment by the city attorney’s firm not to go ahead with an increase in fees, though the amount saved from that had yet to be determined.
Not all reductions are going to see savings dumped back into the general fund. For example, $61,750 of the savings from postponing the document imaging system will go into the water operations fund. Another $57,000 from the same cut will go toward the sewer operations fund.
The effect of cuts like the furlough was not lost on Councilwoman Laura Freese.
“Some of these cuts are going to hurt — I apologize,” Freese said. “But we have a responsibility — a fiduciary responsibility to the people of San Juan Capistrano.”
Though council members were in agreement over the proposed cuts, they tussled over whether to hire an economic development manager. Leaving that position vacant — along with others — was part of an additional package of cuts that council members decided not to implement. Leaving some positions unfilled would have saved the city $288,000.
If hired, one of the responsibilities of the economic development manager would be to pitch sites in the city to developers.
Council members Sam Allevato and Tom Hribar said the position didn’t seem necessary to fill right away, but Nielsen and Freese said it was too important to let go.
And Nielsen argued that even though the city had seen a recent surge in development offers, taking a “reactive” approach would not be good enough over the long run.
“If we wait six months to start, we’re not going to have a person for a year, and we’re going to miss the boat,” Nielsen said.
More than 30 line items in the budget ended up being cut, and council members lauded staffers for the painstaking process.
“We trimmed everything we could trim without turning off the air-conditioning,” Freese said.
The council vote to approve the budget was 4-0, with Mayor Londres Uso absent from the meeting.