The Garden Grove City Council Tuesday approved a $218-million budget for the 2016-17 fiscal year that includes millions in new spending even though the city’s projected revenues are expected to fall more than $4 million short of its expenses.
The $3.05 million in new budget requests includes the hiring of five additional police officers, funding for the city’s cable television program, park maintenance and the cost of adding two new city council members.
As they have done in recent years, city leaders will likely again use one-time fixes to cover their deficit, including land sales and taking from funds set aside for worker’s compensation and property tax lawsuits.
Mayor Bao Nguyen expressed concern that the city has too often relied on one-time measures to balance its budget.
“I just want everyone to know we are in trouble and…just based on the numbers, I don’t see us going into the black any time soon,” Nguyen said.
In Garden Grove, like neighboring Santa Ana, public safety costs have been at the forefront of this year’s budget debate, with many residents, the police union, and police chief Todd Elgin lobbying the City Council to hire more sworn officers.
The city has reported a 45 percent increase in crime between 2014 and 2015, according to data compiled by the Orange County Register, which is among the highest increases countywide.
Police agencies across the state have blamed to Gov. Jerry Brown’s prison reform programs, known as Prop. 47, as a driving force behind increased crime, although that claim has yet to be proven by research.
A recent proposal by Nguyen to lift a ban on marijuana dispensaries in favor of taxation and regulation also prompted an outcry from residents concerned about whether such a policy would exacerbate crime issues and drug use among youth. Yet, despite the ban staying in place, it is not enforced and dispensaries continue to operate illegally, according to Elgin.
City staff’s initial proposed budget would have reduced the deficit from $5.6 to $3.9 million, and included the hiring of three police officers. Council members, however, pushed for two more officers, bringing the projected deficit back up to $4.27 million.
The five new hires will bring the number of sworn police staff up to 166, which both Elgin and union leaders say is still 23 fewer than the countywide average for officers per 1,000 residents.
Elgin says injuries and upcoming retirements mean the department is often short and frequently requires officers to work overtime.
It is probably unrealistic to expect the city to hire 23 officers, especially given that expenses continue to rise at a faster rate than revenue is coming in, said finance director and assistant city manager Kingsley Okereke.
Hiring five new officers will cost $904,427 this coming fiscal year, an amount that could increase each year as pension rates are expected to keep rising, Okereke said. Public safety already makes up 68 percent of the city’s basic services budget, a ratio similar to most cities across the state.
City officials are largely banking on the promise of new tax dollars from new hotel and economic development projects, such as the Great Wolf Resort Waterpark Hotel which opened earlier this year.
Staff estimates that hotel bed tax revenue will rise from $19.5 million this fiscal year to $29.2 million by 2020.
“Some of those projects could come alive and infuse additional revenue into our coffers,” said Okereke. “[But] if expenditures continue to grow at the rate they have been for the past few years, it would be tough to get into the black. I’m cautiously optimistic.”
At a budget session earlier this month, council members floated the possibility of a public safety tax or increasing fees to fund public safety costs, although neither proposal was discussed in detail.
“It’s been ten years that we haven’t increased fees…if we had a proactive plan [for public safety] we’d be at a much better place,” said Councilman Phat Bui at the budget session.
City Manager Scott Stiles says he hopes to develop a plan to hire four more officers within the next two years.
Responding to a reporter’s question, Stiles said the city has not discussed alternatives to reduce crime aside from hiring additional officers.
In addition to new police officers, the City Council approved a number of new spending requests, including:
- A new administrative analyst in the City Manager’s office
- $7,500 toward translation and bilingual services
- $60,000 for annual Garden Grove Open Streets event
- $83,000 in tablet and software costs for Police Department
- $26,984 in funding for two additional council members, as part of the districting process
It’s still unclear whether the city will save money by severing its contract with Orange County Animal Care.
The City Council voted in April to end the contract, not only because of the increasing annual contract costs but also because the county was requiring that the city pitch in another $4.1 million for its build a new county animal shelter.
Compared to the $1.3 million cost of the county contract for the 2015-16 fiscal year, the city expects to spend more than $1.3 million in 2016-17 for initial start-up costs and $878,360 each year after that.
They’re hoping to get back $400,000 in revenue from the fees residents pay to get their dogs and cats licensed.
Resident Josh McIntosh suggested city employees who live outside the city take a 15 percent pay cut to reduce budget pressure and make room for public safety increases. Employees who live in Garden Grove and pay taxes there receive a 10 percent pay cut, McIntosh said.
“I didn’t like it either when it happened to me in 2010, a few months after I purchased a new home,” he said. “Our city employees make a pretty decent living, especially considered the income of the average resident.”
Although it won’t go into effect until the 2017-18 fiscal year, the City Council also voted Tuesday for a $200 monthly vehicle stipend for council members.
Resident Maureen Blackmun said she felt the council was underpaid.
“I think when you’re underpaid, you find other ways to make up for that,” said Blackmun. “There should be a salary increase, and if not that, a vehicle stipend.
Contact Thy Vo at [email protected] or follow her on Twitter @thyanhvo.