While Westminster City Council members have struggled to make any decisions about how to deal with a $12.6 million structural deficit that is only expected to rise in coming years, they have made at least one thing clear: public safety will be a priority.
For the city to cut its way out of a $12.6 million structural deficit, the City Council would need to make a thirty percent reduction across the board. In one hypothetical scenario, where cuts would be made to each department proportional its share of the general fund, the police department would take the largest hit – an $8.4 million cut.
“You have to know the difference between need and want. You need a fire department, you need your police department,” said City Councilwoman Diana Carey. “You want a park. You want senior services.”
Employee salaries, benefits and pensions make up the bulk of expenses for most government agencies, along with rising employee pension costs, which are a major driver behind the city’s ever-increasing expenditures. Public safety comprises 76 percent of the budget, with the police department alone accounting for 53 percent. Westminster spends more on public safety per capita than neighboring cities, according to a financial consultant’s report.
Carey has been the most vocal proponent of a one-cent sales tax initiative that the council voted to place on the November ballot, arguing that the city has a revenue problem stemming from a low tax base and residents are willing to pay for additional services. Carey argues that the city can’t and should not make any more cuts – but if they do, police and fire should be last in line.
Even City Councilman Tyler Diep, who suggested the council make a $3 million cut to its budget for the 2016-17 year, said in an interview after the June 22 council meeting that the city should focus on preserving services that private business can’t provide, like public safety and infrastructure needs.
Although salary cuts and downsizing are not off the table, with two council members and the mayor facing re-election in the fall, and the possibility of new revenue if the sales tax increase passes, the council is unlikely to recommend any major cuts for the 2016-17 fiscal year.
Diep and Mayor Tri Ta have said the city should make major budget cuts rather than passing new taxes, but so far it has been a game of chicken to see who, if anyone, will suggest the cuts.
At a study session Thursday evening, council members made a dozen suggestions about how to trim the budget including the city’s $15,000 membership in the Association of California Cities; school crossing guard services for two of three school districts, because they don’t chip in for the service; a $3,000 annual donation to the Mayor’s Ball; magazine subscriptions and a $60,000 contract with the website Behind the Badge to produce positive stories about the police department.
Council members also suggested the city stop waiving fees for events, requests which they have routinely approved in the past few years.
“We can’t afford to waive fees…and have our taxpayers pay for it,” said City Councilwoman Margie Rice. “We got to quit being so nice.”
Staff will also look at the city’s automobiles and decide which, if any, can be eliminated.
Diep questioned whether those cuts would have any real impact, pressing City Manager Eddie Manfro to estimate how much those suggestions would save.
“I can’t imagine that it’s more than a low six figures,” Manfro said
When Diep pressed for a more specific number, City Councilman Sergio Contreras called on him to make more specific suggestions.
“We can go back and forth about how much we should cut but anything over or around 3 million, we’re looking at substantial reductions,” Contreras said, referring to Diep’s proposal for a $3 million cut. “If you’d like to make some recommendations, to see some real cuts, by all means make some.”
“I threw that number out there with no illusion that there is a majority on this body to vote for it,” Diep replied.
Even if the sales tax initiative passes, the city is still likely to pursue cuts of some kind, as expenditures continue to increase faster than they can keep up with. Services like school crossing guards, park maintenance, and business and planning permits are likely to take a hit.
Rice, who also supports the sales tax initiative, says that while staffing cuts would be devastating, employees should all take a pay cut.
“Employee median pay for full-time, year-round is $106,536, and median pay and benefits is $130,638…They’re paid good, they’re paid well,” said Rice, reading off a budget document. “And yet I hear, ‘I didn’t get a raise, I didn’t get a raise.”
Rice said employees deserved the pay, but “When you don’t have any money, it’s time to tighten your belt and cut, not keep spending.”
Carey suggested the city do a salary comparison study to ensure that, while not offering the highest pay, wages would be competitive enough to attract qualified candidates.
“You do not have to be at the top of the pay scale but you do need to be in the middle to attract and retain your employees,” she said.
In reality, council members would not be able consider any salary cuts until the next round of negotiations begins with employees’ unions during the 2017-18 fiscal year.
Council members, however, have not discussed whether or not they would cut or waive their own pay.
In 2015, council members each made an average of $26,569 in salary and benefits combined, according to Transparent California, not unlike other cities its size.
In addition to a salary and benefits from the city, both Rice and Diep also receive a salary and benefits from the Midway Sanitary District, where they serve on the board.
Rice received $25,463 in salary and benefits from the city in 2015, and another $16,069 from the Sanitary District, according to a compensation report.
Diep received $25,462 in salary and benefits from the City of Westminster and $25,275 from the sanitary district in 2015.
The council also considered several suggestions from their citizen Financial Task Force. The most feasible options include moving city hall into the city’s largely empty police department and approving a policy that no new capital improvement projects should be improved without identifying money for ongoing maintenance.
“It looks like common sense but in the past we have been guilty of building things and figuring out how to maintain them after the fact,” Manfro said. “We can’t do that anymore.”
So far, a campaign committee has formed in favor of the sales tax increase but with little activity to show so far. The Orange County Taxpayers’ Association blanketed residents with mailers and robo-calls against the sales tax initiative even before it came before the council for a vote.
The only resident to speak at Thursday’s study session, Roger Fierce, criticized the ballot statement for the sales tax initiative, which makes no mention of a budget deficit.
The statement characterizes the initiative as addressing “state takeaways of local funds, protect property values, drinking water supplies and prevent more cuts to: 9-1-1 response times, police officers/firefighters/paramedics; drug/gang prevention, domestic violence/sex crimes/human trafficking units; and other general city services.”
“The title is misleading – does this portray a budget deficit? Are all the tax dollars going to go to police services?” Fierce said.
City staff are preparing another study session to illustrate how the “doomsday scenario” – if the council were to cut their way out of the structural deficit – would impact city services.
Meanwhile, staff will return in late July with a largely status quo budget that maintains current service levels, but considers several of the expense trimmings suggested by the council.
“The idea of a status quo budget, it’s not ideal for anybody considering that it does perpetuate the deficit…but it is a placeholder of sorts to keep the city moving forward until we see what happens during that critical moment in November,” said Manfro. “One way or another, win, lose or draw, we are still having this budget conversation in December.”
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