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What Services Will Ventura Cut In The 2020-2021 Budget?

2020-2021 Budget Mocked By Laurel & Hardy

Another Fine Mess You’ve Gotten Us Into, Stanley.”

Laurel & Hardy

Sharpen Pencil To Balance 2020-2021 Budget

The 2020-2021 budget presents a challenge to the City Council. This Council must weigh how to close the budget deficit in the coming year.

The Coming Problem

the 2020-2021 Budget Makes People WhingeToday’s Council is still operating on the 2019-2020 budget that shows everything is fine. In six months we will be in a new budget cycle, how does that look? The city staff projects a “most likely” budget scenario that will have a shortfall of $4.1M.  How can the seven members of the City Council take action to save jobs and essential services for the citizens of Ventura?

The Seriousness of the 2020-2021 Budget

In two of these three scenarios, Ventura residents should be concerned about possible severe cutbacks in services and personnel.  Ventura has a 67% probability of significant shortfalls in the next fiscal year and the next four years after that. This Council may play a game of fiscal musical chairs with the budget hoping the music doesn’t stop and throw the city into insolvency. Is there a better solution?  It may be time for the Council to focus on a multi-year budget to better spend the limited money available to us.

The Council must come to a decision soon and may need to cut back services and personnel. If they don’t, the specter of insolvency looms over the city. The Council should inform citizens and allowed them input before taking drastic measures. Please keep reading!

What Can The Council Do With The 2020-2021 Budget?

The city staff presented the Council with several options to consider remedying the projected shortfalls. The team looked at revenue and expense items available to the Council.

Potential Revenue Enhancements to the 2020-2021 Budget

  1. The added revenue from proposed changes to Prop 13.​ These changes are beyond the City Council’s control. They are purely wishful thinking at this time.
  2. Increase the Transit-Occupancy-Tax (TOT) rate.​ The TOT, also known as the bed tax, impacts tourists visiting the city. Each 1% rise in the tax generates an additional $600,000 in revenue. The downside of increasing the TOT is that it makes Ventura less desirable for tourists to visit or may shorten a visitor’s stay.
  3. Additional revenue from cannabis sales might generate $500,000 or more.​ Prop 64 made recreational marijuana use legal, yet Ventura has been slow to embrace pot sales. Outgoing Police Chief Ken Corney believed Ventura should exercise caution when rolling out cannabis. Yet, even if Ventura pushed hard for cannabis sales, the revenue would barely dent the projected $4.1 million deficit.
  4. Other revenue-generating ideas.​ The city staff didn’t elaborate on what those ideas might be.

Potential Expense Reductions to the 2020-2021 Budget

  1. Limiting Overtime in the 2020-2021 BudgetReduce overtime for city employees.​ The largest single expense category in the city is staff salaries and benefits. Reducing overtime might save as much as $5.6 million in the budget.
  2. Reduce “extra help” expenses.​ Such a reduction would generate $2.3 million in expense reduction. Extra helpers supplement city workers.
  3. Reduce anticipated pay increases.​ That means fewer raises or smaller raises for city employees. Every 1% decrease in pay raises contributes approximately $800,000 in savings.
  4. Transfer some Information Technology (IT) or Internal Services Fund (ISF) costs to Measure O. ​The city staff believes transferring some of these costs to Measure O will support staff needs. The cost savings would be $120,000. If they do move those costs, though, it will represent a shift in policy.The Measure O proponents told voters the money would address specific needs. IT and ISF costs were not among those needs. Measure O money goes into the General Fund, so the City Council can use it as they see fit. Yet, using it for operating purposes would invalidate the spirit of the sales tax increase.  Using Measure O breaks one of then-Mayor Erik Nasarenko’s promises of the Measure’s benefits. The Measure O Oversight Committee should be concerned.We warned you.​
  1. Review warehouse costs. ​ This alternative lists no amount of savings.
  2. Review all discretionary spending:
  3. Museumm Cuts in the 2020-2021 BudgetReview the money Ventura pays to support the Ventura County Museum. ​ This option will save $250,000 per year. ​Prior Councils agreed to give the museum more than $1 million through the fiscal year 2022-23.
  4. Review the money spent on Ventura’s Libraries. ​ Savings could be as much as $250,000 per year. No one mentioned the unintended consequences of such a cut, however.
  5. CAPS may be cut in the 2020-2021 BudgetEvaluate Community Granting Programs. ​ The amount of potential savings is not listed. This category includes programs like Community Access Partners (CAPS). CAPS received a contentious fourth amendment​ through December 31, 2019.
  6. Assess contributing to Ventura’s Visitors Bureau. ​ The savings could be as high as $968,000.
  7. Examine other discretionary spending. This alternative included no specifics.

Potential Use of Fund Balances

  1. Use $3 million in 2021, $2 million in 2022 and $1 million in 2023 (or some other variation) from the Unassigned Funds.
  2. Use the Catastrophic Reserve of $15 million if a recession strikes.
  3. Use Measure O revenue. Certainly not its intended goal.

These three options are the most troubling items presented by the city staff. Using the city’s various fund balances should be considered as a last resort and, while it’s prudent for city staff to present them as options, the City Council should consider using them only in dire circumstances.

Considering the 2020-2021 Budget

The city staff assumed some projects would continue as planned. That is a false assumption. The City Council should consider all alternatives. More than ever, the Council should review “Business As Usual.”

  1. Do we the Citizens want to authorize spending up to a BILLION dollars on a water project?The Water Agency and the Council continue to put forward the need to spend $1 billion because we need drinking water, thus the need to use recycled wastewater by building VenturaWaterPure to satisfy supply needs. Are there regulations in place to allow that?  The State of California won’t have an approved test for water safety until 2024, at the earliest. Seemingly the purpose behind this is that the Council needs to ship the Santa Clara River effluent somewhere else. Yet, they could choose the most cost-efficient option of shipping that water to Oxnard’s Advanced Water Treatment Facility.  A $70 million option versus $1 billion. What do the citizens want?
  2. Should the Council ask city employees to contribute a higher percentage of their pay towards their retirement?
  3. Should the Council consider options for the Fire Department? Evaluate whether to merge Ventura Fire with Ventura County fire?
  4. Shouldn’t the Council and citizens know precisely how Homeless services cost and how they get allocated? Let’s ask for the facts as citizens. Just some of the costs include:
    1. The Homeless Shelter ($712,000 per year)
    2. The police Homeless Task Force (seven officers)
    3. A Safe & Clean Program manager
    4. An embedded mental health professional
    5. The Downtown Ambassadors
    6. The police and fire personnel that answer service calls in addition to the Homeless Task Force

Editors Comments

We’re confronted with several key questions when considering the 2020-2021 budget. How is it that after more than ten years of economic growth and market growth, and the imposition of a sales tax increase, we are about to face a sudden, significant budget deficit?  We believe it’s the cumulative effect of more than a decade’s worth of poor economic policy choices by both the city government and the citizens.

Ventura hasn’t projected a budget deficit this large since the 2008-2009 Recession. With the stakes this high, there is little room for error. Poor decisions could lead to the city’s insolvency.

Yes, we must solve the current budget shortfall. We expect this City Council will focus on meaningful change and keep citizens informed. This Council has a difficult task ahead and must weigh how to best spend the limited revenue we have and substantially cut expenses to close the budget deficit.

Citizens expect the Council to be astute when evaluating these alternatives and to have staff report as clearly as possible.  That’s why we believe taking on a $1 billion water project is lunacy without direct input from the voters.

The decisions the Council make with the 2020-2021 budget will have consequences for years to come. Citizens must help with input and oversight. Please consider contacting your representative and let them know you are concerned, want to be informed, and are watching the process.

Tell City Council You’re Concerned, Want to be Informed, and Are Watching the Process.

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Oversight committee

Update On the Measure O Citizens’ Tax Oversight Committee

Reason is, And Ought Only To Be The Slave Of Our Passions”
—David Hume

EARLY SIGNS OF A TRAIN WRECK

The city’s Measure O Oversight Committee has shown signs of being inadequately trained and poorly prepared for the job they were appointed to do. This is not the fault of the committee members themselves but a reflection of the City Council and City Staff.

The Measure O Citizens Oversight Committee conducted their third public meeting on August 10,2017 at the Sanjon Maintenance Yard (Ventura Water Department). Each of the three meetings has been at a different location. They are not televised or recorded in any manner. Few members of the public attend.

This new tax oversight committee, appointed following the sales tax increase approved by the voters in the last election, serves ostensibly to provide recommendations to the City Council on how the new $10 million, in new sales tax money should,or presumably, not be spent.

The City of Ventura Finance Department did a yeoman’s job in attempting to provide the committee with a draft of proposed future spending of Measure O funds for the next 5 years. It was a suffocating spreadsheet which required detailed comments and direction on the evening of the meeting. If the purpose was to provide clear, informed and relevant information for the public and the committee as a basis for making decisions on how to spend the new tax money, it fell short.

The City Finance Department made a good effort to explain everything but the complexity of the subject required more than a brief meeting.

SPENDING PROJECTED TO EXCEED INCOME

For most citizens seeing this spreadsheet for the first time, be prepared to understand that
there is a projected deficit by the second year, and each year after that. See this detailed projection here.

Measure O overspends by $1.76 million in the second year

At first glance, the Measure O funding will be overspent by $1.761m in the second year. By the fiscal year 2022, the City of Ventura will be over budget (spending more than they expect to receive) by $3.732m. We must all keep in mind that this is a draft worksheet for discussion purposes only; but even so, to learn at the outset that the head of our finance department predicts a deficit in just 5 years for a new tax that will last 25 years does not bode well.

What is clear however is that the Committee is being asked to approve thisprojection, and that a very large percentage of those projections are for long term contracts for public safety and city personnel. History has demonstrated quite clearly that those “contracts” are never reduced thus we can expect more and more of this new tax money to be consumed for personnel and benefits.  Everything else – roads etc. – will be low on the list of priorities.

There were two things that the Measure O Committee needed to concentrate on. One was that the only annual budget recommendation that really needed to be discussed was for fiscal year 2018. The second was that they were only seeing a small percentage of the financial picture. The general budget line items were not presented, thus there was no way for anybody to perform an analysis of where money “should” or “should not” be spent, or to determine if the general budget had been modified and then back filled with the new tax money. Without a comparison to the general budget, it is impossible to perform that task.

For example, by not having the general budget for a  specific department, side by side to that departments proposed Measure O Funding, the Measure O committee had no way to determine if say $700,000 for sidewalks made sense because they have no idea if Public Works is spending another $1.0m or zero out of the General Fund Budget for sidewalks.

CITY DEPARTMENT PRESENTATIONS  

Each of the three sought the Measure O Oversight Committee’s approval to present their spending to the City Council. Public Works Director, Tulson Clifford, presented his department’s request for $6.1 million in 2017-2018. Police Chief, Ken Corney, presented his department’s request for hiring new officers in time to enter them into the training academy in October 2017. And, Nancy O’Connor, Parks Director, presented her department’s request.

Police in city government

Police Chief Ken Corney’s request was approved by the Oversight Committee

There were only 5 of the 7 Committee members present and this would present a potential problem for the Measure O Committee. After about 2 hours, the Committee Chair person suggested that no recommendations be made until all 7 committee members were in attendance. This was after hearing Chief Corney explained that timing was crucial and the funding for the Neighbor Drug & Crime Prevention required the hiring and training of 7 new officers at the police academy in October.  .

If it had not been for Committee Board Member Kristopher Hansen’s quick thinking and motion, to recommend to City Council the Police Chief’s request for funds, the outcome could have been detrimental to the Ventura citizens. Measure O Citizens Committee did their job and funds were approved for the police department and postponed for all other requests.

EDITORS COMMENT

To assist this new committee in their task and to maintain transparency for all citizens in the community VREG makes the following suggestions and recommendations:
  1. Have the entire department’s general funds budgets side by side the Measure O budget.
  2. The Department Heads provide a detailed cost breakdown on how the funds will be spent which matches the line items on the general budget.
  3. Discussing department spending five years is helpful but misleading. There are too many variables to factor over that period, such as personnel, maintenance costs, contracts, natural resources, safety, technology and public demand.
  4. Increase and improve the training for current and future committee members. Be satisfied they understand their roles,duties and responsibilities.
  5. Be sure they know Parliamentary procedures, so they help, not hinder, city government such as what constitutes a quorum to act.
  6. As needed, provide in-meeting guidance and direction from city officials whenthe committee appears confused or aimless.
  7. Hold the meetings in places that permit cable TV coverage. Transparency isimportant to Measure O. Thus far, it has not been transparentI nhibits transparency and confuses the public on where to attend meetings.
  8. Hold the meetings in the same facility. Moving from location to location

 

Addendum

 

THE STAFF PRESENTATION/REQUESTS FOR FUNDS

To help you better understand, we have included both Public Works and the Parks and Recreation presentations so you may judge for yourself that there is no correlation to the Measure O budget requests on a line by line analysis to the general budget. Here is a verbatim of what they were told:

PUBLIC WORKS

The Public Works Department is charged with designing, building, operating and
maintaining the Citys infrastructure including:

  • 75 buildings;700 lane miles of pavement and adjacent sidewalks;
  • 138 traffic signals;26 miles of alleys;
  • 22 parking lots; and
  • An extensive storm drain system (110 miles of storm drain lines, 2,400 storm drain inlets, and 9 miles of drainage ditches).

Some of this infrastructure was installed over 100 years ago, and much of it has
reached or exceeded its useful life. The following infrastructure improvements are needed to protect the environment for the safety, enjoyment and prosperity of future generations:

  • Improve streets, sidewalks, alleys, and provide safe facilities for pedestrians and cyclists – $191 million;
  • Clean and protect the beaches with storm water and drainage repairs – $34 million;• Protect and seismically improve bridges $27 million and
  • Repair public buildings and facilities $27 million.

Public Works has reviewed the infrastructure needs and prioritized projects based on existing conditions, risk, liability, and other factors. While we recognize that not all of these improvements can be made in year one, this proposal contributes to the long-term sustainability and resilience of Venturas infrastructure. The proposed Measure O budget for Public Works projects in FY 2017-18 is $6.1 million. These projects include pavement overlay on Telegraph Road (Main St. to N. Mills Dr.) and replacing the storm drain at Harbor Blvd. and Olivas Dr.

PARKS, RECREATION AND COMMUNITY PRESENTATION

            PRCP focus for Measure O will be aimed at delivery of service to activities that “reduce blight, assist the homeless, and maintain or improve existing facilities and infrastructure”.

            Safe and Clean. Expansion of current program allows for additional staff to respond to homeless debris cleanup as well as general trash, debris, weeds, in right of ways, sidewalks and roads.

            Urban Forestry Tree Maintenance. This proposal provides resources to prune 10,000 trees each year, in addition to the approximately 6500 trees that are currently trimmed annually. Expected outcomes will allow for all city maintained trees to be on a 3 to 5 year pruning cycle (species dependent). The current pruning cycle is 7-9 years.

            Median Maintenance. Current maintenance of medians is approximately once per month, medians only, minimal sidewalk maintenance at best. Expanded funding of the program will allow median and sidewalk maintenance on main arterials to be performed twice per month.

            Aquatic Center Maintenance. The Aquatic Center, at Community Park, opened in 2002 and most of the hard components of the center-pumps, motors, tanks, and the pools themselves, have a finite useful life, and need regular maintenance and replacement. There is no sinking fund associated with the pools and adding ongoing funding allows optimal maintenance, and helps keep the pools operating safely.

            Preserving Park and Recreational Facilities. Community Park has one entrance, at Kimball Road. The master plan for the park includes an additional entrance from Telephone Road, at Ramelli Avenue. Hundreds of people enjoy Community Park daily, and on weekend the number of visitors is oftentimes in the thousands. A second entrance improves access to the park, and allows for larger softball, soccer, and swimming events.

Restroom at Arroyo Verde. Many of the park restrooms are closed on a regular basis due to issues with cleanliness and safety. The City of Portland, Oregon developed a stainless-steel restroom. These restrooms have been installed in their downtown areas, and are frequented by tourists and the homeless. The restrooms main features are fabrication-alone piece, ease of cleaning, and drastically reduced cost due to prefabrication.

Have An Opinion? Share It With A City Councilmember.

Click on the photo of a Councilmember to send him or her a direct email.

Erik Nasarenko,
Mayor

Neal Andrews,
Deputy Mayor

Cheryl Heitmann

Matt LaVere, Ventura City Council

Matt LaVere

Jim Monahan

Mike Tracy

Christy Weir

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       Editors:

R. Alviani          K. Corse          T. Cook         B. Frank
J. Tingstrom    R. McCord       S. Doll          C. Kistner

Busting Ventura’s Budget Myths And Fantasies

Winston Churchill

THE TRUTH IS IN- CONTROVERTIBLE, MALICE MAY ATTACK IT, IGNORANCE MAY DERIDE IT, BUT IN THE END THERE IT IS
—Winston Churchill

PENSIONS BUST BUDGETS
[Grappling with Money and Economic Reality]

The City Council race concluded with the reelection of Councilmen Andrews, Monahan and Tracy plus a new councilman, Eric Nasarenko.  Our new Councilman was elected as Deputy Mayor at the last Council meeting and will serve in that capacity next year.  We congratulate each member of the Council.

During the election campaign these candidates asked to be elected so that they could help to bring about changes in City policies to:

  • improve the development of business
  • create and maintain parks
  • seek to improve streets
  • finance libraries
  • find ways to provide housing for lower income citizens
  • improve the gateways to Ventura on the North and South of Highway 101
  • create a more favorable regulatory structure to encourage development of housing
  • improve services to our citizens.

One thing that stood out for all four of these Councilmen was their plea that if the voters returned them to office and elected Mr. Nasarenko then a newly constituted Council could and would be more cohesive, and bring about the promised changes.

Their promise of change is laudable, but nothing can or will be accomplished without the money and revenue to realize those changes. That objective requires sound financial planning—an accurate and realistic budget with realistic income and expense projections.

From Where Will The Money Come In This Year’s Budget?

On June 17, 2013 the old City Council was presented with a Proposed Budget for 2013-2014. They were shown a power point presentation, explained by our City Treasurer, which was based upon a printed 569 page budget book submitted by our City Manager, Mark D. Watkins, on April 23, 2013. This budget was approved on a vote of 6 to 1 after a 30 minute hearing.  Nobody from the public appeared to comment.

It’s hard to overcome a $1.6 million deficit, if this year’s budget has no new revenue items.

Council members asked few questions, but did make statements “for the benefit of the television public” concerning their views on this budget.  Nobody asked any questions about the projected income, or questioned the expenses in this complex document other than Councilman Andrews.  He voted “no” on the motion to approve a budget projecting a deficit of $1.6 million in our next fiscal year (July 1, 2013-June 30, 2014).  He explained his no vote – “We have cut too far and we need to look at public safety costs (police and fire pension benefits)”, meaning that the Council needed to look at ways to address the enormous pension costs before considering anything else such as new taxes.

Two Council members made statements that the general fund be unburdened by shifting some costs from the general fund to special tax assessment districts — taxes on real property.  Councilman Morehouse wants to shift a $500,000 public lighting cost to property owners, although conceded, when asked by Mayor Tracy, that this might also be funded by increasing sales taxes.  Councilwoman Weir commented at length about the special assessment costs imposed by other cities, such as Camarillo and Oxnard, for street repair, landscape maintenance, parks, public safety and libraries.  It was clear from these comments that their solution for our City deficit is to tax our way out of it.

Where’s The Transparency In The Budget?

This published budget is long, complex and difficult to read.  It consists of real number-clots, number slabs by department and sub-department(s) with pages of swimming line items in minute detail. It is difficult to read, interpret or understand as a financial planning document.   For example, members of VREG tried to determine how the projected income was calculated, and what the public pension costs (the largest item in the entire budget) would be for the next fiscal year.  The income information could not be found.  The pension data was sprinkled throughout all 589 pages and explained by esoteric line items and number for every department. The City Treasurer was asked about the complexity of this document.  He conceded that this was the equivalent of a “data dump”. A good management tool for a City Council it is not.

Focusing first on the income side.  The City Treasurer at the June hearing projected income of $86.7 million. This is $4.3 million more than was collected in 2012-13, an increase of 5.2%, twice the estimated U.S. Gross Domestic product estimate of 2.5%.

No explanation has been given on where this new source of revenue will come from.  That question was put to one candidate during a candidate forum in October.  A citizen asked, “What plan does the city have to grow their revenue by that amount of money?”

The answer was revealing (click on the quote to see video of his answer):

Ventura City Budget

There is a $1.6 million deficit in this year’s budget. As a higher percentage of Ventura’s General Fund is spent on police and fire pensions, less revenue is available for other services.

 

The projected deficit of $1.6 million and sagging income expectations are bad  The annual cost of  salaries and benefits  for public safety — police and fire —  is bad, and will grow to fifty-two (52%) of the total general budget  in the next fiscal year

Unfunded Pension Liability Is Staggering

Then there is the matter of how much will have to be paid to CALPERS to pay the unfunded pension obligations of City employees, police and fire personnel in addition to the annual operational costs.  In 2008 those unfunded obligations totaled $48 million.

In October, 2013, CALPERS reported that the market cost of those unfunded liabilities have increased by 360%, and  as of June 30, 2012, totaled $173,412,464.  CALPERS also added a note in that report that if the City wanted to terminate our contract with CALPERS it would cost us $600,421,434.

This is only going to get worse because CALPERS has announced it will consider adjusting (lowering) its expected rate of return in 2015 by 1/4%, and that the actuarial life of public safety personnel is not shorter than the average person, as previously assumed, but is the same.  That means these pensioners, starting at age 55, will get paid benefits over a longer period of time.

Cities nationwide are grappling with the growing retiree-benefit pension costs which are eating up more of city general funds.  That leaves less money to spend on parks, libraries, maintenance of trees and parkways, street lights and an asundry of public service projects.  Ventura is not alone. As a higher percentage of a City’s general fund is spent on police and fire pensions, less revenue is available for other services and projects.  Detroit, Stockton and San Bernardino are models of cities that refused to accept economic reality.

If the total unfunded obligation cost does not get the attention of our new City Council, then perhaps the most recent CALPERS Actuarial Valuations predicting our annual payment obligation will get their attention.  In 2013-14 the required annual contribution total will be $8,530,730.  In 2014-15 the required payment will increase to $9,489,593.  That is more than $1 million more to be paid out of the General Fund

  Editors’ Comments

Why there are no protests by the citizens of Ventura for changing the pension plan of public safety personnel?  What will it take to get Venturans excited and concerned about this problem?

When the question of pension reform was presented to our City Council members in the past the traditional answer was that this problem could only be addressed on a statewide level; Ventura will not be the “lead dog” and venture out into this new territory; and, as unfounded as it may be, that Ventura would no longer be competitive in hiring the best employees.

This unfunded obligation to public safety personnel is a budget buster.  Nobody wants to make a decision.  In the meantime, Ventura will reduce services, charge more fees (or taxes) from its citizens and ignore the obvious “train wreck” that is ahead because it either lacks the leadership or vision to act responsibly for the future of this City

All the campaign promises in the world are worthless unless and until this new Council establishes a realistic budget, and finds real solutions to our public pension obligations.  Trying to tax ourselves out of debt is not a solution. Requiring greater employee contributions to their own retirement (8 – 10%), and creating a defined contribution plan for new hires will solve the problem in time.

That is why you were elected!

Editors:

R. Alviani      K. Corse      T. Cook

J. Tingstrom  R. McCord   S. Doll

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Government tax burden

No New Tax Will Make Up for Lost Investments and Bad Management

“A government big enough to give you everything you want, is big enough to take away everything you have.”   —Thomas Jefferson

THE VENTURA BUDGET CRUNCH

[SEND IN THE CLOWNS]

“Clowns to the Left of me, Jokers to the Right, here I am, stuck in the middle with you.”—Stealer’s Wheel (Joe Egan & Gerry Rafferty)

On January 24, 2009, at 8am the City of Ventura held a special meeting at the Police/ Fire Department community room with the full City Council to discuss the city budget.  This  “public hearing” was on a Saturday and was not televised. The usual coterie was present.  The other half of the room was occupied by City personnel.

Once the current budget figures were shared with the audience, reflecting a lower projected income  of $83 million. City Manager, Rick Cole stated, “if we must, we can run this government on $83 million.”.  The projected  deficit was $12,000,000.

THE GOVERNMENT THREE STEP

[Tea Party anyone?]

First, steps forth our fine State legislature, which seeks more tax money from the citizens, with a quadruple  whammy:

  1. Raising the Sales Tax by 1%
  2. Doubling DMV registration
  3. Reducing the dependent tax credits
  4. Increasing personal state income tax by  .125%.

If you want to follow the bouncing tax ball visit the calculator on The Sacramento Bee web site to see how much more you will have to pay, if all of the proposed tax increases pass.  Fill in a few figures and voila – your new tax burden.

Here is our projection of the impact on the citizens of Ventura.   Assume 70,000 Ventura Households, an average annual income of $75,000 and that our city projects tax revenue of $7,000,000 of every increase of ½% in tax.

Cost to Ventura Citizens

State Sales Tax Increase (1%) $14,000,000
DMV 50% increase ($160 average x 2.5 cars per household x 70,000) $28,000,000
Additional Income tax ($140 per 70,000 households) $9,800,000
Loss in dependent tax credits (2 children per household) $29,400,000
Total $81,200,000
Cost per Ventura household (Total divided by 70,000 households) $1,160

Second, steps forth the City of Ventura with the local version of the sales tax.  A proposal to add ½% to raise our local rate to 7.75% from 7.25%. (Don’t’ forget the State has already added 1%, so it will be a  9.75% sales tax, if Ventura voters approve the local measure)

Ventura’s 1/2 percent sales tax $7,000,000

Now steps forth the Ventura Unified School, which is considering a real property Parcel Tax on City of Ventura residences and real property to cover their budget deficit.

Parcel Tax ($200 per parcel times 32,000 parcels $6,400,000
Recap of TOTAL PROPOSED NEW HOUSEHOLD TAXES $94,600,000
Cost per year per Ventura household in new taxes (State, City, VUSD) $1,351

A NEW TAX — THE PATH OF LEAST RESISTANCE

[The City Council with rose colored glasses]

The Ventura Unified School District (VUSD) has worked out alternative budgets that will get them through this financial crisis. With careful management, over the next two years, The VUSD can adjust and reduce expenditures by $20,108,500, making the need for a new property (parcel) tax unnecessary. Some members of the School Districts Budget Advisory Committee are thinking that it is just  easier to just get more funds from the general public in the form of a new property tax.

The City of Ventura is pursuing its own path to financial Armageddon.  Facing a $12,000,000 deficit, because income will only be $84,000,000 against expenses of $96,000,000 (they project and hope), the City manger is realistically seeking and trying to operate within the existing revenues by reducing staff and expenses.  An effort to be applauded, given the specter of five years of depression.

On the other hand the City Council has other ideas — save this fireman’s benefit, this policeman’s job, the library, the arts, the homeless etc. — programs unrelated to essential governmental functions, which they lavishly funded, and pay scales they generously promised to pay between 2003 and 2007, when our elected officials knew we did not have the money for such increases. ( See 2003 Budget Report, Donna Landeros, City Manger, Economic Overview)

The temptation to resort to the citizens and seek new taxes seems to be the politicians path of least resistance at all levels of government.  Ventura is no different.  What if instead those programs were eliminated and pay and benefits were modified , so as to allow the government to operate within their existing  tax income?   While workers in the private sector are cutting expenses, laying staff off, not funding 401K matches and eliminating raises, the public sector seem to feel they are immune from economic realities and seek more money from YOU.

Editors’ comments:

What say you, citizens of Ventura? At what point does living within our means and going back to the basics really take affect? If this is the worst economic crisis since the “Great Depression” or “World War II”, at what point does government start reducing programs and staff to only provide the necessities that only city government  should provide? Or, that only state government should provide? As long as there are economic constituencies (public employees) within government who define their own job description, bargain and politicize through unions their own pay and benefits, the citizenry will always be in danger.

CONTINUED PROBLEMS ADD TO FINANCIAL DEFICIT

While the City seems proud that it only lost $10 million in investments in 2008, they defend their loss by comparing the loss to the average citizen’s 401K losses.   Hardly a realistic comparison given that the investment policy for a municipality is  and should be much be more conservative and  restrictive.  Some at the City makes it sound as if it is heresy to suggest that they should not have lost anything.

The City Attorney on the other hand  is crying “fraud” on the part of Lehman Brother and WaMu — a distraction away from the real issue. None of the four members of the Investment Committee have investment licenses,  nor the experience and qualifications to oversee a $200 million portfolio in this current financial market. Months before the Lehman and WaMu  debacle,  the City had a prior warning of problems due to  a potential  $10 million loss they had invested with Bear Stearns.  It turned out that the Bear Sterns was acquired by JP Morgan and thus avoided bankruptcy, however at this writing we do not know how much JP Morgan is willing to pay the City of Ventura on that investment.

It is easy to raise taxes and bury our heads in the sand. It is difficult to make the tough decisions that will avoid a future disaster but we have reached the point of critical mass. The City is under funded in its pension plan by over $60 million as of 2007, which is exacerbated by the 52% drop in value of  the pension fund investments by CalPERS, the pension investment manger for Ventura. Over $362 million (Page 70 of the Comprehensive Annual Financial Report, page 102 of the PDF) is owed in future pensions and this amount is growing each year.

EDITORS’ COMMENTS

If we can’t sit back, inject humor and laugh in these hard economic times it has  truly become a” foul wind.” Hope you enjoy the humor of this.

In this current economic crisis, we had to reduce our staff. We had no laternative. RANDY HAS TO GO !

Editors:

B. Alviani         S. Doll           J. Tingstrom

K. Corse           R. McCord    T. Cook

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