Irvine city leaders are cutting back on the number of city-sponsored events in an attempt to dodge a structural budget deficit that could reach nearly $40 million in less than two years.
City council members and staff have been scrambling to curb a budget shortfall for months by looking to increase a slew of fees and eliminate dozens of vacant staff positions after their interim city manager told them they overhired over the past few years.
Now leaders are looking to bring down the number of events held by city hall to further decrease spending.
During their Tuesday night meeting, council members canceled the annual CicloIrvine event, a free-streets day that promotes riding bikes, walking and enjoying the outdoors in a car-free space.
Leaders said canceling that event will save the city about $677,000 annually.
That’s only a drop in the bucket for the estimated $37 million the city needs to save by July 2028. That deficit could increase to $47 million by the end of the decade if spending doesn’t slow down.
In a plan dubbed “Target ‘28,” leaders are looking to eliminate the city’s projected structural deficit by July 2028 by decreasing spending by $27 million and increasing revenue by $10 million.
“We became too wide and too tall too quickly,” City Manager Sean Joyce said at last week’s city council meeting.
Joyce said cancelling the CicloIrvine event would be the same level of savings if the city eliminated four employees.
Councilmember Kathleen Treseder, who helped get the CicloIrvine event started in the first place, said they need to prioritize people and their jobs.
“I love CicloIrvine,” Treseder said. “If we have four people whose jobs we can save by cutting CicloIrvine, I don’t want to have to look four people in the eye and say, ‘We’re letting you go.’”
Councilmembers previously considered and approved the new long-term budget plan during a meeting in late September.
Decreasing expenditures would mostly come in the form of staff cuts — leaders are looking to eliminate vacant positions as employees retire or resign and shuffle employees around to make sure essential services are still covered with the goal of not laying anyone off.
Staff said that full-time positions increased by 28% over the past few years.
Since 2019, costs for salaries and benefits have nearly doubled, increasing by 79%.
Salaries, benefits and overtime also take up about 69% of the city’s general fund budget — the most flexible pool of money available to municipalities.
“The employee costs are outpacing revenue, and full-time positions have increased by 28% in just six years,” Joyce said. “ That’s not sustainable, and that’s why we’re here and why working together to close these gaps over the next couple of years is so critically important.”
As of Oct. 13, the city has 70 vacant positions that they aren’t planning to fill. Leaders plan to reach 99 vacancies by July 2027 and 123 vacancies by July 2028 — as employees retire, resign or are terminated — to reduce spending and meet financial stability.
Council members are also expected to review all upcoming city events to see what can be cut down or potentially canceled to continue cost savings. The CicloIrvine event won’t return unless council members vote to bring it back.
“I’ll be frank. Some of these events — they’re all great — some of these events were implemented without proper city council discussion,” Joyce said.
“I’m trying to suggest to you that events of that scale should go before you, and there should be council support before we take on events that can cost several hundred thousands of dollars. However terrific they are, those should be considered and approved by the council before they’re implemented.”
Councilmember James Mai said the city should “exhaust all revenue options before increasing fees to residents,” adding the city should consider advertisers for things like alcohol.
“I think one of those opportunities to generate revenue is reevaluating our ban on alcohol, casino and gaming as well,” he said. “Most major cities and most major events have those sponsors, and they’re a significant revenue generator. I think that we, as a city, need to stop being prudes about this.”
City Manager Joyce said that if the city can increase revenue and decrease spending in other ways — like cutting down on events — then they might be able to keep more staff.
“This is the illustration of how many positions we would need to reduce to make substantial progress toward closing the gap — the $47 million gap,” Joyce said.
“To the extent that we realize savings throughout the year, that we spend less than we are budgeted — which often happens, by the way — that number of positions doesn’t need to be eliminated.”
Joyce said he’ll return to the council in early February with an update on the city’s sales tax and property tax numbers for this year — two of the biggest revenue sources for Irvine.
“While we have made meaningful progress, we still have a lot of work to do, and the hard part is ahead,” Joyce said.
“Further savings will require careful review of vacancies, workloads and looking for how we can modify how we deliver services in a more efficient way. We’ll need to make difficult decisions thoughtfully while maintaining critical services for our residents.”
Councilmember Melinda Liu said she’s also willing to cut some of her office’s events to decrease spending.
“If we can forgo some events just so we can save some positions that will provide the basic service to our residents and not impact the level of service and quality of life, I’m all for it,” Liu said.
“That’s why I’m willing to give up whatever event that I have proposed that is costing the city money. I don’t think we’re going to cut every one of them.”
