CITY HALL — Faced with a projected budget deficit of nearly $10 million, City Manager Lamont Ewell has asked all city departments to trim 3 percent off individual budgets for the coming fiscal year and 5 percent for 2010-11.
That means programs could be cut, capital improvement projects put on hold and positions left vacant. Department heads are in the process of identifying cost savings while keeping in mind that any suggestion made could affect their ability to deliver services to the public.
The recommendations will be given to Ewell, who will be responsible for drafting a budget and presenting it to the City Council for approval before July 1, the beginning of the next fiscal year.
The current fiscal year’s budget is $567 million, the largest in city history that was characterized by Ewell as “aggressive,” addressing costly infrastructure and community needs despite current conditions.
“Cities, unlike the federal or state government, are required to balance their budgets and cannot carry over deficits or print new money,” Ewell said of the current economic crisis. “So we must live within our means. Our ability to reduce expenses is our best and most viable option.”
Ewell said public safety is his highest priority and will do what he can to maintain the current level of service. That said, he has placed a hold on filling any new positions, unless they are “critical to essential services that are provided directly to the public.”
“And my office has to sign off on their approval,” Ewell added.
The economy is soft and the Transient Occupancy Tax, a charge for each hotel room occupied and the highest projected revenue source last year, dropped precipitously when comparing the month of January 2008 to January 2009, approximately 29 percent.
“Given the news we are hearing from GM, Ford and Toyota, I anticipate that our sales and use tax, of which 22-25 percent is derived from new car sales and leases, will also fall short of anticipated projections,” Ewell said.
Without Santa Monica Place, City Hall is also losing approximately $1.2 million in tax revenue annually.
But despite all the bad news, Ewell said he speaks with other city managers daily and Santa Monica is in a better position than most, leaving him feeling confident that City Hall can weather the storm without much disruption.
“I have a few tools to work with,” he said.
Even so, Ewell still expects suggestions from each department, helping to spread the impact so that no one agency bears the brunt.
One by one
For Joan Akins, acting director of Community Maintenance, that means more than $800,000 in spending reductions. Reductions could include freezing vacant positions and cutting overtime.
Akins recently met with the department’s three division managers to talk about the proposed cuts.
“We explained to them the requests and most everyone living on the planet realize the whole world is having this economic crunch so none of us were surprised,” she said. “There is not fat in our budget and so it’s going to mean you leave vacant positions.”
Akins said that the budget reductions might be noticeable to the public in terms of maintenance.
“If we had any (projects) that we were about to begin or had not done, we would not start those,” she said.
In the Housing and Economic Development Department, which is facing a $331,000 cut for the upcoming fiscal year, holding off on hiring consultants could result in a savings of $131,000. That along with a hiring freeze could get the department where it needs to be.
“It’s difficult because so much of what we do in public service is a labor intensive process and when we started looking at the cuts, there was only so much consultant cost or other non personnel cost that you could cut,” said Andy Agle, director of Housing and Economic Development.
“We’re trying to find ways to still provide the services that we provide, which are people intensive,” Agle added. “Responding to reduced budgets is a challenge.”
Greg Mullen, the city’s head librarian, said he has to make $550,000 in reductions to meet the city manager’s request. With a budget dedicated mostly to staff — meaning salaries and benefits — Mullen said he is forced to look at a small range of categories, including supplies.
Two vacancies in the reference department will be frozen, which include salary and benefits for a savings of $200,000. Cuts in the material budget will result in having fewer copies of new materials and fewer new titles added to the collection.
“Probably, what people will experience is it would take longer for them to get a copy of a new book or popular book,” Mullen said.
There are also cuts planned for office supplies, staff travel and overtime budget.
“We’re not eliminating things altogether,” Mullen said. “For the most part, we’re cutting it down.”
Making it more difficult is the fact that more people are using the library than in years past. With little money to hire repairmen, Mullen has seen in increase in people renting do-it-yourself titles.
Mullen said he has seen a 20 percent increase in activity at the library in terms of items checked out.
“At the same time we are trying to scale back budget wise and we’re trying to scale up service.”
He said people are having to save money by borrowing books rather than going out and buying them.
Some departments are finding savings thanks to attrition. City Attorney Marsha Moutrie said a number long-time attorneys retired over the last year. New hires come aboard at a lower base salary.
Using more technology could also be a way to save. Barbara Stinchfield, director of Community and Cultural Services, which is forced to cut about $670,000 of it budget to meet Ewell’s request, said she is trying to find ways to cut back on printing brochures and other materials, and instead use the Internet to disseminate information.
“In going through this decision making process, we’re looking at cuts in the administrative area, whether it’s salary savings or efficiencies with supplies, travel and training,” said Stinchfield, whose department is responsible for providing youth, recreational and senior programs.
There could include some increases in program fees for residents, but only those programs which have not seen an increase for several years. That’s for 2010, that is if the reductions are still needed.
“When you get down to $1.1 million, it’s very, very painful because if we were to have to reach that target, we’ll have to have some service reductions,” Stinchfield said.
“Our department uses seasonal employees for summer programs or part-time employees for recreational programs and if there were to be an impact that would be where the impact would be,” she added. “We would first propose to hold permanent positions that are vacant open before we would do that.”
Planning Director Eileen Fogarty said she is focused on finishing the Land Use and Circulation Element, a planning document that will dictate development in Santa Monica for at least the next 20 years, and will not make any reductions that would affect that. However, she is going to have to scale back on plans to streamline the planning process, and four or five positions will be frozen.
“It’s tough for everybody,” she said. “When you are forced to make these cuts people still expect you to get the work done . People will have to do more with less.”
So far, Fogarty said her staff understands that City Hall is struggling because of the poor economy and is ready to make sacrifices and work harder.
“It becomes hard when no one knows when this is going to be over,” she said of the recession.
SMPD Police Chief Tim Jackman has already decided to cut the We-TIP program in which people who give solid leads can receive rewards via a nonprofit. To participate in the program, the SMPD must pay an annual fee, around $5,000. Jackman said the program has not been as effective as he would like given the amount of money spent.
“We may rejoin them at some point in the future if their marketing efforts improve, but right now, with the budget issues we have, it’s not worth the money,” Jackman said.
Supplies and equipment are areas to find some savings, he said, but they represent only about 10 percent of the department’s budget, the rest being officers’ salaries. Even then, cutting back on supplies is difficult.
“That includes gas for all the cars,” Jackman said. “If they are running on empty, we have to put gas in them. We need paper for printers and copiers.”
Overtime for officers could also be cut back. That means fewer officers possibly on the Third Street Promenade, the Santa Monica Pier and Pico Neighborhood. Jackman said the department evaluates overtime spending regularly and cuts back during certain seasons when the city’s overall population shrinks. Jackman emphasized that any reductions in overtime do not impact regular patrols or the Neighborhood Resource Officers program.
“It is very important for the community to know that the basic patrol service is always provided, period,” the chief said.
While public safety is a high priority at City Hall, Jackman believes budget reductions should be felt by all departments. It is equitable and helps his officers maintain a high level of service. For example, cuts to Human Services would directly impact homeless outreach, possibly creating more problems on the streets.
“We all have a role to play and support one another.”
Reaction from rank and file
Stephen Demmer, a member of the Revenue Division and the president of the Santa Monica Municipal Employees Association, the union representing over 900 city workers, said he is monitoring the situation closely to see what Ewell and the City Council ultimately decide. The union has not taken an official position on Ewell’s request.
“It’s still too early,” Demmer said. “People are just hanging tight.”
SMPD Lt. Doug Theus, president of the Police Officer’s Association, said his members are concerned but understand the economic climate and that cuts will have to be made. While they like overtime, they realize that it is “a luxury.”
“We’re taking it in stride,” he said. “It might be a little stressful, but we are not making any cuts and everybody is keeping their jobs. Everybody is happy about that.”