Monday, September 19, 2011 | The Santa Ana City Council on Monday will for the first time publicly address an ever-worsening built-in budget deficit that could climb as high as $30 million by the time the city’s next fiscal year begins in July 2012.
How the council will get out of the mess remains unclear. But an analysis of city budgets back to 1980 shows that the sources of the deficit are steep declines in revenue caused by the recession and spiraling public safety budgets that grew rapidly in the middle of last decade.
Between 1980 and 2000 the city did not incur a deficit, according to budget documents from fiscal year 2000-01. In fact, during that period the city finished most fiscal years with multi-million-dollar surpluses, the largest, $9.3 million, in 1996-97.
That, however, was also a period during which Santa Ana politicians were eager to cut deals with public safety unions that gave politicians public-safety-first credentials. As a result, public safety went from 50 percent of Santa Ana’s general fund budget in the early 1980s to 60 percent by the 1990s.
In the last several years, the cost of public safety has consumed well over 70 percent of the general fund budget.
“They [public safety groups] support and endorse candidates. They say, when negotiations come around, remember us, we supported you,” said John Acosta, a council member between 1981 and 1992.
One reason public safety unions are so effective is residents admire police and firefighters, Acosta said. In one instance of candidate promotion, fire union members drove through town in a privately owned fire truck emblazoned with the names of City Council candidates — including a younger Miguel Pulido, who today is serving his ninth term as mayor.
Pulido did not return a phone call for comment.
In 2001, the police union negotiated a new pension deal, which allowed officers to retire at age 50 with 3 percent of their pay for each year worked. Rising pension costs, according to budget documents in 2005, was one of the major reasons public safety costs were increasing dramatically.
Those costs rose from a projected $96 million in fiscal year 2000-01 to an actual $161 million in fiscal year 2008-09.
The 2005 budget documents also list rising heath benefits and workers compensation as other reasons for the increases in public safety costs.
Salaries and pay have also increased. More than 800 city employees — mostly police and firefighters — received total annual compensation topping $100,000, the Orange County Register reported.
The resulting effect on other city services has been disastrous, Acosta said. He points to the city’s streets, crumbling from cracks and potholes, as an example of what happens when the budget is consumed more and more by one type of cost. “We have the worst streets in the county,” Acosta said.
And the rising cost of public safety has not translated into more boots on the ground.
According to John Franks, president of the Santa Ana Police Officers Association, there were 335 police officers in the city 10 years ago. Five years later, that number shrank by a few officers. Today there are 318.
Although the cost of public safety decreased between 2008 and 2010, it’s scheduled to rise again this fiscal year, as a deferred, across-the-board pay raise goes into effect for the police department.
Franks says the union is ready to make the kinds of concessions necessary to balance the budget. He suspects that salaries and pension benefits will be on the negotiating table.
“I want to see the city succeed, and I want the budget to be balanced. Whatever we can do to do our part, we’ll do it,” Franks said. “Obviously my main goal is I don’t want to see my members laid off. I don’t want to see my members losing their livelihood.”
Chris Roelle, president of the Santa Ana Firemen’s Benevolent Association, wasn’t as conciliatory in a statement sent to a Voice of OC reporter, but Roelle said the union was interested in working with the city to be “part of the solution.”
“We have worked closely with the City during the last two fiscal years and made significant contract concessions to help reduce costs,” Roelle wrote. “These concessions have included deferring pay raises, agreeing to staffing reductions, increasing the amount we individually pay toward our PERS [retirement] contributions, as well as a number of other cost cutting actions.”
Making cuts elsewhere in the budget will be a challenge. The city is already operating at bare-bones staffing levels, officials say. Increases in revenue were predicted for this fiscal year, including a nearly 10 percent rise in sales tax revenue, but they haven’t materialized.
Councilwoman Michele Martinez, the only council member to return phone calls seeking comment, said that cuts to public safety have become a must.
“Our residents said that we can’t cut public safety. Where do you want me to cut? We have nowhere else to cut,” Martinez said.
Earlier this year, the city awarded a $98,900 contract to the municipal consulting firm Management Partners Inc. to, among other tasks, craft a budget stabilization plan that would address the city’s built-in deficit over the next five years.
The firm is planning to make public possible solutions to the city’s deficit at Monday’s council meeting.