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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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How The Right Steps In The 2019 Budget Make Your Tomorrow Better

“Giving money and power to government is like giving whiskey and car keys to teenage boys.”

—P.J. O’Rourke

Ventura faces severe revenue shortfalls in six of the next seven years, the size of those during The Great Recession. Ventura is on pace to lose over $9.07 million over the next six years. You should be concerned about the financial conditions in the City of Ventura, and you should also know this budgetary crisis is avoidable if the City Council acts this year.

Ventura’s General Fund Financial Outlook For The Next 10 Years

Ventura city staff calculate the city’s revenue and expenses for the next ten years [see graphic]. Costs will exceed income for six consecutive years beginning in the fiscal year 2020-2021—that’s next year.

Budget projection shortfall

Pensions are the main reason for the rise in expenditures. Annual pension costs will climb to $31.48 million from $19.71 million by the fiscal year 2025-2026. That’s an $11.63 million increase. The city projects property and sales taxes to increase by only $10.6 million over the same period. Not a rosy outlook.

Budget negatively impacted by pensions

Next year (the fiscal year 2020-2021), Ventura faces a $2.52 million deficit because of the $2.17 million in rising pension costs.

Pensions cause budget deficits

The city staff estimations are optimistic. They do not factor in a recession, which some believe is imminent. If a recession comes, people will lose jobs. Also, if a recession hits, property and sales tax revenues will suffer and projected losses may be even worse. What’s more, the city plans to add no money to reserves in the fiscal year 2019-2020. Current reserve levels for the City of Ventura will keep the city government running for only 45 days.

Wasn’t Measure O supposed To Save The Budget?

Measure O passed three years ago and will continue for the next 22 years. It brings in $10.8 million in additional sales tax revenue each year. Still, it isn’t enough to cover the projected shortfalls. Why is that?

There are several reasons why Measure O can’t save the city’s budget. First, there is no consensus among the City Councilmembers about how to use Measure O money. Alex McIntyre, Ventura’s new City Manager, asked all seven Councilmembers individually how they would spend it. All seven Councilmembers gave differing opinions on how to use the Measure O taxes. Without clear direction, it’s difficult for the City Manager to focus the city staff on what’s most important for our city. Confusion over Measure O is one example of how the City Council is dysfunctional on the budget’s priorities.

vultures eyeing the budgetA second problem is how special interest groups lined up to get their share of Measure O. At the May 20th City Council meeting, Councilmembers Lorrie Brown, Jim Friedman and Mayor Matt LaVere tried to move funds from Measure O to the General Fund for Fire Station No. 4. The Star report said the Fire Department union members felt insecure (sic) about Station No. 4 funding coming out of a temporary tax fund. (The tax lasts for 25 years)

In 2016, The City Council sold Measure O to voters with the promise that Fire Station No. 4 would remain open with its funds. Voters agreed to the idea of a temporary 25-year tax. VFD is now trying to persuade the City Council that when Measure O expires, there may not be funding for Fire Station No. 4. They fearmonger that response times to calls will increase, and lives could be lost. A 4-3 vote defeated the motion.

While this City Council takes precious time debating moving funds from one column to another, the growing unfunded pension obligations put pressure on the entire city budget, even with Measure O.

The Canaries In The Coal Mine

The canary in the coal mine foretells budget problemsEconomic disasters are all around us. There is no reason to think that Ventura is immune to them. The City of Oxnard is preparing to lay off hundreds of employees. They also plan to close a fire station and reduce the number of fire personnel available to respond to emergencies. The Oxnard City Manager says, “We are down to bare bones.” What’s happening in Oxnard is a preview of what could happen in Ventura unless the City Council acts quickly.

Ventura County Medical Center is losing over $40 million per year. That adds more unemployment to our community. With the City of Ventura own forecast of financial shortfalls, the City Council would do well not to ignore the economic disaster warning like ‘a canary in a coal mine.’

How Do We Fix The Budget?

Ventura's budget has always been suspectThe budgetary crisis is entirely avoidable if the City Council acts now. The solutions are simple, but they are not easy. It requires significant political will and resolve.

Improve The Budgeting Process

Currently, the City Council approves the city’s annual budget one year at a time. It doesn’t consider subsequent years’ financial demands. Given that the 10- year forecast shows losses for the next six years’ budgets, to ignore the next six years will be pushing the problem “down the road.”

Now is the time to change this systemic shortsightedness. City Councilmembers have the opportunity to discuss budgeting on at least a 3-year basis, not one year at a time.

Not Filling All Open Positions In City Hall

To balance the budget over the next six years, the city staff has two potential solutions. They can increase revenue through taxes and fees or reduce expenses. Since it’s not easy or popular to raise taxes and fees, the alternative is to cut costs.

Ventura City Hall, city budget

The single largest expense category is city employees. Cutting staff is the obvious choice to reduce expenses. To avoid the unpopular cutting of current employees, the City Council can take a less unpleasant path and cut positions in the budget that the city never filled.

There are currently sixty unfilled positions at City Hall. If each vacant position costs the city $100,000 per person (salary, overtime, retirement and benefits), the cost to budget for these open positions adds to the projected deficit (losses).

If the city reduces the unfilled positions to thirty instead of sixty, the savings to Ventura would be $3 million per year. A $3 million reduction in expenses will balance the budgets for the next six years.

This decision puts the City Council on the horns of a dilemma. Should they hire all sixty positions now and later fire employees during the budget shortfalls? Alternatively, should they hire only thirty people knowing they can add personnel if the city’s economic situation improves? Eliminating unfilled staff positions is less disruptive to city government than laying people off.

Economic Development

An alternative toward improving the budget is to attract new or expanding businesses to Ventura. Several Councilmembers understand this and agree. More business and local jobs are the best solution for filling the budgetary shortfalls. More jobs generate more sales tax, encourage community spending and increase property values. Higher property values increase property taxes and reduce blight.

economic development adds to the budgetImagine the stimulus to the community of filling the old Star Free-Press building or the Toys-R-Us location would have.

The city has already taken the first step in this direction. City Manager, Alex McIntyre, has moved the Economic Development division under the City Manager from under Community Development. Elevating the reporting of this department to the City Manager signals the increased importance economic development has for the city.

Empower The Economic Development Manager

Another simple step the city could take would be to empower the Economic Development Manager (EDM). The EDM must have readily available an inventory of all commercial locations, complete with square footage, zoning, parking, pricing, and a list of commercial real estate agents and contact information.

The City Council must be ready to provide incentives to new or expanding businesses. The incentives must include fee reductions and process simplification to entice the companies. One such motivator must be a single contact within the city who will guide the relocation process through the bureaucracy.

Finally, the EDM must identify and target new commercial business to locate in Ventura.

Each of these positive steps toward economic development has one drawback. They are long-term solutions. None of them will happen quickly enough to fix a budget by next year.

Streamline the City Hall Experience

The city has started reorganizing boards and commissions that oversee Planning, Design Review, Historic Preservation, and other committees filled by residents appointed by the City Council. While this is a good start, it must go further.

Reducing boards and commissions saves staff time in preparing and attending meetings. The staff attends about 20 meetings a month. Fewer meetings will allow more time for the employees to better supervise operations in planning, design review, code enforcement, etc.

The city must look at other ways to reduce staff time in other duties—especially if the city hires only thirty of the sixty unfilled positions. All staff operations should be scrutinized to end obsolete or redundant activities.

Revamp Ventura Fire Department

Now is a good time to modernize the fire department. Ventura Fire operates in much the same way it did 100 years ago except the needs are far different:

  • Building codes are stricter making fires less frequent
  • More buildings have sprinkler systems
  • Over 75% of calls are for paramedics

Each fire station has paramedics on duty to serve those calls. In addition to Ventura Fire, each medical emergency requires an ambulance from a private company in case a victim needs transporting to the hospital. Rolling a fire truck plus an ambulance seems like duplicated efforts.

VFD adds pressure to city budgetAny change to the Fire Department would likely be unpopular with the public. That makes it a subject considered by Councilmembers, to be too controversial to discuss.  The fire department union will become protective of their fellow firefighters and will want to preserve the status quo.

As they have in the past, the unions will apply pressure to the Council. Since four of the seven elected Councilmembers received campaign contributions from Ventura Fire in their last election, the politicians will likely concede as they have in the past. Ventura Fire Department needs reorganizing. Now is the ideal time to do it.

Editor’s Comments

The community will not support another tax rate increase. Pension costs already absorbed the entire $10.8 million raised by Measure. Still, citizens ask why the city doesn’t repair their streets and sidewalks. We can’t hope for an economic miracle to increase revenue, so the city must take steps to curb expenses. Ventura must:

  • Lower expenses by not filling all open positions at City Hall. Add those costs back into the budget
  • Design and target new commercial businesses to locate in Ventura
  • Offer incentives and fee reductions to bring more jobs to Ventura
  • Streamline the City Hall process and operations to reduce staff time. It will accelerate the processing time for building and licenses
  • Streamline medical response procedures within Ventura Fire. Find ways to reduce fire department costs for those calls. Dispatching a private ambulance and fire trucks with paramedics every time is expensive
  • Hold in-depth discussions at the City Council to expand budgeting to a 3-year basis, not one year at a time

INSIST THE CITY COUNCIL MODERNIZES THE BUDGET PROCESS

Below you’ll find the photos of our current City Council. Click on any Councilmember’s photo and you’ll open your email program ready to write directly to that Councilmember.

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