CITY HALL — Life in Santa Monica could get more expensive for residents, visitors and businesses as City Hall works to close a potential $13.2 million budget gap that looms within the next four years without cutting services residents have come to expect.
The City Council will get its first crack at proposals next week, which include new programs that officials hope will net $1.1 million as well as increased fees that could bring in $1.45 million in new revenue.
The idea is to ensure people are paying the true cost of some services while City Hall continues to manage major blows to local finances from the state and federal level as well as maintain city services and special initiatives in the face of rising pension and healthcare costs, said City Manager Rod Gould.
“We believe we can make this city safer, more beautiful and more sustainable in the next two years,” Gould said. “This city will be in a better place two years from now if we’re given the authority to undertake this spending.”
The changes account for only a fraction of the $520.9 million budget projected for 2013-14, but are part of a $21.3 million package of cuts and revenue increases meant to stem the tide of red ink that could hit as early as the 2015-16 fiscal year.
They include everything from increasing the amount that residents pay for permits to park in their neighborhoods to a $25 filing fee for nomination papers in local elections. A $25 charge for outsiders to get a local library card and $2 price tag on Internet use at the library for those without one are also on the table, as well as a policy to auction off old computers rather than donate them to the Santa Monica-Malibu Unified School District or to nonprofits.
City Hall also plans to offer new services to raise revenue by providing passport photos and applications at the City Clerk’s Office.
The new budget also includes a review of 700 fees charged by various departments across City Hall to ensure it covers its costs. Roughly 70 of those fees would decrease as a result of the study, but 27 new fees were added and over 40 others went up by over 100 percent.
The most dramatic proposed increase appears to be the cost to put on a block party, which went up 1,285 percent to $227.
The changes to those fees could net as much as $2.1 million, although the Finance Department will only include $1.45 million as some of the changes can’t come into effect immediately and could reduce the number of people who use them, according to the report.
While those kinds of neighborhood events don’t seem to be too popular — officials estimate only 15 block party permits will be requested in a given year — other changes may hit closer to home.
The cost of purchasing a preferential parking permit will increase from $15 per year to $25 for the first two, and permits for additional cars will climb to $35 for a third and $45 for each one after.
Preferential parking zones blanket the city, with new districts approved as recently as the May 14 City Council meeting.
The fees haven’t been revisited since 1984 and they don’t cover the cost of signage, permit printing or management of the program, said Don Patterson, assistant director of the Finance Department.
Proposed increases for additional parking passes are less about cost recovery and more a strategy to control the parking supply in the city, he said. That, and an additional 350 parking meters at various points throughout the city, are expected to generate $1.3 million, according to the report.
City Hall also proposes to extend the hours on parking meters in high-traffic areas, which could net an additional $1.5 million, and the City Council approved a contract last week to squeeze tax dollars out of privately-owned parking lots throughout Santa Monica.
Overall, the proposals are one ingredient in a recipe of belt-tightening and revenue increases that city officials hope will amount to $21.3 million over the course of two years.
Even with those changes, City Hall has only two years until it starts running in the red under the most likely budgeting scenario. In the worst case, City Hall could be in the negative as soon as next year.
The new budget comes at a time when municipal coffers have been put under intense pressure from outside forces, namely the skyrocketing cost of pensions and health care for government employees and the loss of California’s redevelopment agencies.
As the Daily Press reported in April, the California Public Employees Retirement System administration approved increases to employer contribution rates, settling on policies that will increase costs as much as 50 percent over the course of five years.
That will mean $5.8 million from the General Fund in the 2015-16, increasing to $18.1 million by the 2019-20 fiscal year. Other city funds will also feel the pinch, with total costs across the city totaling $7.4 million in 2015-16 and $22.7 million in 2019-20.
The move will allow CalPERS to meet all promises to retirees in the system, and received plaudits from the Moody’s credit rating agency, which opined that the new accounting system will reduce the likelihood of sharp, one-year increases in pension costs and will likely benefit both local governments and the state in the long run.
That’s little consolation to local governments.
“This is an unprecedented increase that has the ability to cripple municipalities that have already suffered severe losses due to the recession and dissolution of redevelopment,” according to the city staff report.
The dissolution of Santa Monica’s Redevelopment Agency has also cost City Hall a pretty penny, with a $2 million hit to the General Fund so far.
Still more disruptions hang on the horizon, with Santa Monica bearing unknown costs from the state realignment policies, a program to reduce the prison population that has resulted in an increase in homelessness and crime; as well as the Patient Protection and Affordable Care Act, better known as Obamacare, that will cost the city $1 million a year going forward.
“As soon as we print a budget, it’s out of date and as soon as we send it, we know something else will happen between when it was received and when the council will consider it,” Gould said.
The ever-shifting reality of federal, state and local finances has caused City Hall to revisit the budget every six months.
The City Council will talk budget over the course of two scheduled meetings on May 28 and 29.