New budget keeps sights on a future that may be slim
CITY HALL With a focus on strengthening core services and performing maintenance and infrastructure improvements deferred during times of economic hardship, the City Council is being asked to approve a budget of $437.2 million, city officials said Tuesday.
The 2007-08 budget, which is $16.7 million (or 3.7 percent) less than what is expected to be spent this fiscal year, would help pay for expanded youth programming, a permanent location for homeless feedings and a new community maintenance department to fight against wear and tear citywide, with the hopes the city will save on repairs in the long run.The budget is expected to be adopted in mid-June.
Schools will continue to be funded as well under the proposed budget, which sets aside $7.2 million for the Santa Monica-Malibu Unified School District,an increase of $750,000.
City Manager Lamont Ewell said the budget is a “stable, fiscally prudent” spending plan that aggressively addresses priorities identified by the public.He said the budget also braces the city for a “cooling effect” in the economy that could lead to deficits in the next two years.
Ewell was quick to point out Tuesday that the budget is leaner than the current year because of a decrease in citywide capital projects, not a decrease in services.
“It is actually less... but not more conservative. I would say it’s more targeted, allowing us to focus on areas the public wants to see more of,” Ewell said on Tuesday afternoon, shortly before he was scheduled to present the budget to the City Council for discussion.
It will be Ewell’s second budget as city manager, and unlike last year, when he had just six months on the job to prepare, Ewell has had plenty of time to work with all departments, giving him a better sense of how to make City Hall leaner and deliver services more effectively.
The result is a reorganization of City Hall and the creation of a new community maintenance department to develop a cost-effective strategy to maintaining city assets like the Santa Monica Pier, Palisades Park and city owned vehicles.
The reorganization is represented in the budget’s overall theme, which is “translating strategy into result,” according to Ewell.
“We have spent the last 10 months looking at our internal process and we think we are now... ready to turn the corner and raise output for the benefit of the community.”
The new community maintenance department, which will be in charge of graffiti removal, servicing street lights and mowing lawns, would have a budget of $25 million and more than 200 employees.
With the city’s diverse sources of revenue, it has remained resilient relative to other communities in the state,allowing City Hall to focus on rebuilding the infrastructure while addressing community priorities, according to the city manager.
Tourism is up, unemployment remains low and the stock market is at record levels, all good news for Santa Monica.
The biggest perceived threat is the possible loss of the city’s Utility Users Tax, which City Hall levies on those who use electricity, gas, water, sewer, cable television and phone service.
In August 2006, the IRS discontinued applying the federal excise tax to nearly all telephone communication service, except local exchange services. The loss could amount to between $8 million and $12 million annually for City Hall.
The timing is uncertain because cities are fighting the IRS in court. Last year, the City Council decided to establish a reserve of $8.2 million to cushion the city from a potential loss in revenue. The 2008-09 budget plan assumes an additional $4.8 million reduction in revenues.
Ewell said the council could consider to reaffirm the tax through a ballot initiative in November 2008 and eliminate any ambiguity.
Another economic indicator to look out for is the housing market. The region is experiencing somewhat of a slump, with permits for new housing units in the county projected to drop by 7.7 percent in 2007 and another 3 percent in 2008 — the lowest level since 2002.
“We are seeing homes staying on the market longer than before, but when I say longer, instead of selling in three days, homes may be staying on the market for, say, two months,” Ewell said.
Property tax transfers are down 21 percent compared to last year, and the number of foreclosures are increasing. In 2006, there were a total of 140 foreclosures. So far this year, there have already been 114.
Ewell committed to going out into the community early on in the budget planning process. In a series of meetings held in December, city staff listened to what residents wanted to see their tax dollars spent on.
The budget is a direct reflection of that, according to Ewell. There is money set aside for streetscape improvements from Lincoln Boulevard to the west — a request of the Ocean Park Association, as well as funding to study diagonal parking in the Wilshire-Montana area.
The chief of police is looking at overhauling community policing after hearing from residents about the need for a change, and money is available to accelerate the synchronization of traffic lights.
The community meetings will be done annually, and Ewell promises to start the budget process earlier in the year.
As for how the budget compares to spending plans in other cities he has worked, the former city manager of San Diego and Durham, North Carolina, said Santa Monica does more than those cities would even dream of doing, such as the unique funding agreement with the school district.
“This is a community with a heart,” Ewell said. “In the last city I worked in, it was austere, counting every penny while cutting back on services, never having enough money. Here, we have a great opportunity to help enhance the quality of life and it’s nice to work with 2,100 people who take that seriously.”
Originally published in the Santa Monica Daily Press print edition on May 23, 2007. Read the original PDF.