Staffers cautioning haste makes waste
CITY HALL There’s an extra $1.3 million sitting in City Hall’s coffers, but chances are none of it will be spent anytime soon.
City staff is recommending the council wait until later this year, when they draft a new budget, so as to get a better grasp of what they face in the future. A structural deficit may loom in 2009.
If City Council decides to open its checkbook, staff has asked that the money be spent only on unfunded or under-funded capital improvement projects because the cash is what is commonly referred to in City Hall as “one-time moneys.”
The council could also designate broad categories to which the funds could be applied, such as transportation management/circulation improvements, which would include acceleration of the traffic signal synchronization plan and neighborhood traffic studies, according to Carol Swindell, City Hall’s director of finance.
“We would like for the council to hold off on spending the reserve until after they have had a chance to look at the whole spectrum of community needs,” said Swindell, who is in the process of preparing her first budget as finance director for Santa Monica. Swindell was hired by the council in December.
The council is expected to discuss the surplus, as well as other mid-year budget adjustments, tonight during a special session, which will be dominated by financial issues, including setting salaries for various department heads and the parking rates for the new Civic Center Parking Structure, scheduled to open in March or early April.
The changes in salaries are due to a voter-approved initiative passed last November, which made department heads “at will” employees, stripping them of civil service protections and creating a greater risk than what was experienced previously. With that in mind, the city manager requested a study of all department head positions, with salary levels being adjusted to reflect the “appropriate balance between internal equity and external competitiveness,”according to a city staff report.
In the past, salary levels for director positions were typically raised when positions became vacant so that City Hall could remain competitive in the labor market and attract the best and brightest candidates.
A mid-year budget review is standard, with each city department offering the latest information on their bottom lines. The fiscal year begins in July.
Total revenues for the current fiscal year are up by $3 million over what was originally budgeted. Much of that is due to increases in money paid under the business license tax, transient occupancy or hotel tax, parking citations and other fees. The increases have offset lower-than-expected returns on the tax charged when a property is sold, as well as decreases in building and permit fees and interest earned on City Hall’s investments, according to a city staff report.
With added revenues, the council is being asked to make some additional expenditures which have surfaced during the first half of the fiscal year. Some of those expenditures include $700,000 for unscheduled overtime for police officers, $430,000 for business license audit services, and $150,000 for replacement equipment at Barnum Hall.
That leaves an additional $1.3 million in one-time moneys, considered a “drop in the bucket” compared to City Hall’s overall budget of $442.6 million, said Mayor Richard Bloom.
“If you look at the overall budget, we could easily have a couple of bad months or months that just don’t meet our expectations and that could eat all of (the surplus) up,” Bloom said. “I don’t think we should be in a hurry. There is nothing that has been identified that requires a sense of urgency.”
Bloom said he is leaning towards the Finance Department’s recommendation of sitting on the funds for now, until the council has had more time to discuss next year’s budget.
“Let’s let the city manager provide us with guidance, along with the new finance director,” Bloom said.“This will really be the first time that we, as a council, will be able to talk with her in-depth about the budget.”
Originally published in the Santa Monica Daily Press print edition on February 6, 2007. Read the original PDF.