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Important Trends You Should Look For In The COVID-19 Recovery

COVID quote

Wealth Is The Ability To Fully Experience Life.”

Henry David Thoreau

COVID-19

We’re living through unprecedented times. No one knows how events will develop as we emerge from the COVID-19 crisis. Yet there are specific unmistakable trends to watch. We want you to be aware of the trends and to look out for the critical choices that will shape our future.

Now is the time to support our elected officials as they negotiate the COVID-19 epidemic. The time will come soon when the quality of their decisions will affect how much pain and sacrifice Ventura residents must bear. As a community, we’ve shown that we are resilient and generous. The Thomas Fire is a recent example. The impact of the Thomas Fire could pale in comparison to the coronavirus pandemic fallout.

Lost Sales Tax Revenue From COVID-19

The City of Ventura relies on income from two primary sources: property tax and sales tax.

Property tax revenue is constant and predictable. Yet, the Ventura City Council has little control over property taxes.

COVID-19 devestates sales tax revenueSales taxes will be severely impacted by the COVID 19 pandemic, and Measure O depends on sales tax revenue. Sales tax revenue has already plummeted. The auto dealers, the casino, the Pacific View Mall and restaurants aren’t generating the taxes the city expected. They are the city’s most significant contributors to sales taxes. To make matters worse, the transit occupancy tax (TOT, or bed tax) has been non-existent for the past six weeks. With no date set to reopen businesses, the losses will continue to mount.

How will Ventura make up the difference in sales taxes? Consumers are reeling from the loss of jobs, reduced hours, and volatility in the stock market. State unemployment benefits will help some. It’s notable, though, the Unemployment Insurance Fund (UIF) has limited reserves, which will deplete quickly.

Furthermore, many businesses closed by the shelter-in-place order will not open. Those with large amounts of debt are most at risk. Don’t be surprised by some of the large businesses that fail in addition to the smaller, Mom-and-Pop establishments that will inevitably close—resulting in even more job losses.

Solutions Will Require Creativity

With the two primary sources of income for the City of Ventura in serious jeopardy, and the City Council has little control over either. Finding a solution will require ingenuity.

With no chance to increase income, the only option available is to reduce expenses for the city. Before COVID-19, the city faced a $4.1million annual deficit for the 2020-2021 fiscal year. After the business disruption from the epidemic, the $4.1 million deficit will be a welcome alternative to what is likely to happen.

City Major Expenses

COVID-19 firingsThe most considerable expense for any city is payroll—including benefits and retirement. The salaries, benefits and pensions are all controlled by labor contracts. In fact, because of the COVID 19 pandemic, these costs will likely blow up. The Ventura City Council’s control of this expense is limited to reducing staffing levels. Here are examples that the City Council is considering. See page 6.

CalPERS Damaged By The COVID-19 Pandemic

Before the start of 2020, CalPERS required Ventura to pay an additional $2 million above the $16 million it pays typically. Even though the economy experienced a decade-long economic boom, CalPERS is only 70% funded. The drop in the stock market following the COVID-19 panic hurt CalPERS’ investment portfolio even more. By October, the $2 million additional CalPERS requires Ventura to pay may be considerably higher.

Editor’s Comments

The City Council will be in the troublesome position of making significant, painful decisions to cope with the fallout. Payroll is the only controllable, significant expense that this Council can alter. While a hiring freeze is likely, it will have limited immediate effect.

COVID-19 will require many expense cutsThere are other costs the Council can influence. It’s time the City Council scrutinizes all the cost of services to consider less costly options. Those services can be General Fund items like fire and police, or they can be other operational items like water.

In fact, water directly impacts every household. The rates water users pay are approved by the City Council, even though Ventura Water operates outside of the General Fund.

Any increase to cost of water will be damaging financially to many families already burdened by the economic shutdown.

Lost sales tax revenue, steady property taxes, and an out-of-control, bloated retirement plan are out of the Council’s control. We hope they will focus on the things they can control and rein in expenses to avoid more extensive economic pain for the city and its citizens.

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

Councilmembers
Councilmembers
Councilmembers Councilmembers

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Politicians Expect You To Pay A Little Bit More

The Ventura County Star reports on Ventura’s Pension situation and mentions VREG.

The Ventura County Star Mentions VREG

We’re proud the Ventura County Star mentioned us in an article on pensions. The Star article lists VREG as a watchdog group.

Click here to go to the article.

We believe pensions and unfunded liabilities are ticking time bombs for the city. The Star joins us in pointing this out to Ventura citizens.

In Ventura’s budget starting July 1, the city will pay CalPERS almost $11 million. That’s the amount Ventura owes in unfunded liability. CalPERS projects that to at least double five years later, to over $22 million. That doesn’t include normal, ongoing costs.

That increase almost equals the revenue the half-cent sales tax will generate. The City Council supported the tax to pay for needs other than pensions. Taxpayers believed it was for infrastructure, public safety, homeless services, water quality and other priorities.

Taxpayer and watchdog groups accuse city leaders of misleading the voters. They knew Ventura needed the revenue to offset growing retirement costs.

The Star writes, “Venturans for Responsible and Efficient Government has made similar claims.”

How Bad The Situation Is Depends On Who You Talk To

City Finance Director, Gilbert Garcia, disagrees. He says the city will separate new sales tax revenue from the General Fund. It will be overseen by a soon-to-be-created citizen oversight board.

The state will pay money from Measure O to Ventura beginning in April. The oversight committee is not formed yet. That means no citizens won’t know if the money is separate until months after the fact. The city has had since November 9, 2016 to organize the citizens’ oversight committee. Yet, four months later citizens don’t have any safeguards in place.

The article notes. “How dire the situation is—or isn’t—depends on who you talk to.”

The article notes. “How dire the situation is—or isn’t—depends on who you talk to.” How true.

The Ventura County Star reports on the burden city employee pensions are placing on City Hall.

If you ask a public employee they think the whole thing is way overblown and there is no problem. The public employee does not care that they impose a real burden on their neighbors. They have theirs. They worked for those benefits.  The taxpayers owe them.

The Council members give the public employees what they want. They give little regard to the economic consequences on the rest of the citizens. It’s the hard working men and women who they will always expect to  “pay a little bit more.”

IF THIS UPSETS YOU, WRITE YOUR 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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