HomeMy WebLinkAbout06/30/1992, 3 - STATE BUDGET GRAB MEETING DATE:
������i�i►IIUIIIIIIIIP� �IIIIIII city of san LUIS OBISPO �---3V - yz
COUNCIL AGENDA REPORT MUrme TEM NUMBER:
FROM: John Dunn, City Administrative Officelz::��_
Prepared by: William C. Statler, Director of Finance( ` ;f
SUBJECT: STATE BUDGET GRAB iI;r� ,z ; 199
CAO RECOMMENDATION CI rr CLERK
SAN LUIS oereoo. A
Approve an action plan for responding to a probable City fiscal emergency resulting from
proposed State revenue reductions for California cities.
OVERVIEW
Summary of the Problem
The State of California is facing an unprecedented fiscal crisis as it prepares its budget for
1992-93. In addressing an estimated $11 billion budget shortfall, a legislative "working
group" has identified 68 options in an effort to target at least $1 billion in revenue
reductions from California cities. Although the amount and type of revenue cuts to cities
changes daily, it is almost certain that cities will be called upon to share in the State's fiscal
problems at some level. Of the proposals currently being considered, revenue cuts to the
City of San Luis Obispo could range from $1 to $2 million annually.
These revenue reductions by the State come at a time when cities are also facing difficult
fiscal decisions as a result of the recession. For the City of San Luis Obispo, this has meant
General Fund expenditure reductions of $3.1 million during the 1991-93 Financial Plan
period as well as tough revenue decisions, including fee increases for planning, building,
engineering, water, and sewer services, and increases in our business and transient
occupancy taxes.
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Sales tax revenues for 1991-92 underscore the difficulties facing the City even without State
budget reductions. Compared with a revised projection of $6.1 million for 1991-92
(reflecting a downward revision from original conservative projections of $6.7 million),
actual sales tax revenues for 1991-92 are only $5.85 million. This is their lowest level since
1986-87, and reflects our seventh consecutive quarter of declining sales tax revenues.
In summary, as discussed in-depth during our budget process, we would be facing a very
difficult financial future even without the proposed budget grab by the State; with it, we will
have to fundamentally re-evaluate the basic day-today services we provide our community
as well as our longer-term public facility goals. However, based on the initial action plan
discussed below, it is our intent to implement this process in a rational and caring manner
while retaining our commitment to fiscal responsibility and our employees.
RECOMMENDED ACTION PLAN
Overview
As outlined in Exhibit A, the recommended plan for responding to the State's budget grab
consists of three key steps:
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COUNCIL AGENDA REPORT
I. Emergency Cost Reduction Decisions and Response Plan. The purpose of this step is
to take immediate action to effectively position the City in responding to the fiscal
emergency that will exist in the City if the State approves the level of revenue cuts
currently under discussion. Therefore, cost cutting measures are being recommended
for immediate Council action. This will provide us with the time necessary to begin
implementing a permanent reduction in ongoing operations that will "rightsize" us
for the level of revenue reductions being forced upon us by the State. Even if the
State's 1992-93 budget grab ends up being less than the recommended reductions,
these immediate cuts will assist the City in adjusting to what will undoubtedly be a
lower level of General Fund revenues for the foreseeable future.
II. Intermediate Budget Balancing Decisions. With a target date for Council action of j
September 22, 1992, the next step will be to analyze the actions necessary to balance
the City's budget on an ongoing basis. In other words, while Step I serves to
immediately bring the 1992-93 budget back into balance, Step H provides the City
with the time needed for more deliberate and long-term service level decisions. As
identified in Exhibit B, an important element of this step is to prepare a five year
revenue and expenditure forecast that will provide us with the background
information necessary in identifying required service level reductions.
III. Long-Term Financial Health Decisions Step III is the 1993-95 Financial Plan
preparation process during which we will address our long-term financial needs based
on the State's budget decisions as well as local economic conditions and related
revenue forecasts.
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Description of Step I Actions
The following provides a further description of the recommended actions for immediate
Council approval under Step I of the proposed plan:
1. Implement Immediate Hiring Freeze Until the budget balancing actions proposed for
review on September 22, 1992 are approved - or information is available that leads
us to believe that the impact of the State's budget shortfall on the City will be
significantly less than currently anticipated - no regular City positions that become
vacant will be filled. During this period, it is anticipated that recruitments for key
positions will continue to be conducted. Although it is generally intended that no
regular City positions will be filled until "Step II" decisions are made in September,
the CAO recommends an exception to this freeze to allow for the appointment of
two vacant department head positions: City Clerk and Public Works Director.
2. Eliminate Selected CIP Projects In immediately responding to the fiscal emergency
that may be forced upon us by the State, eliminating or deferring capital projects
gives us the most flexibility in reducing costs with the least initial impact on the
community. Accordingly, the CIP Coordinating Committee and the Management
Team have comprehensively reviewed the status of all General Fund CIP projects
��III��►�►►i���lllilllli�' lllllll city of San _.4Is OBISpo
COUNCIL AGENDA REPORT
that have not yet been initiated, and classified them into three basic groups as detailed in
Exhibit B:
a. Projects recommended for immediate deferral as of June 30, 1992.
b. Projects that should be considered for deferral based on further review and
Council direction when the scope of the fiscal emergency is better defined.
C. Projects that should continue to go forward even during this time of financial
difficulty and uncertainty based on six major criteria: public health and safety;
outside sources of funding;design substantially underway; long-standing policy
or contractual commitments;significant operating savings;or requirements for I
proper maintenance of existing facilities.
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Projects recommended for immediate or
� potential deferral total $3.1 million
summarized as follows:
Immediate Potential
Deferral Deferral Total
Public Safety $ 65,000 $ 220,000 $ 285,000
Transportation 429,000 930,000 1,359,000
Leisure, Cultural & Social Services 439,000 766,900 1,205,900
General Government 159.000 80.000 239.000
TOTAL $1,092,000 $1,996,900 $3,088,900
Any projects approved for deferral must be reintroduced through the 1993-95
Financial Plan preparation process in order to be considered for future funding.
3. Eliminate Undesignated Operating Carry-Over. Under existing Financial Plan policies
regarding our two-year budget approach, operating program appropriations not spent
during the first fiscal year may be carried over for specific purposes into the second
fiscal year with the approval of the CAO (1991-93 Financial Plan, page B-3). In light
of the current fiscal situation, carry-over into 1992-93 of undesignated operating
budget balances from 1991-92 will not be allowed.
4. Determine Non-Profit Agency Funding Levels for 1992-93. Under our two-year
budgeting approach, funding levels have previously been established for 1992-93 in
supporting grants-in-aid to a wide range of private, non-profit agencies and
community groups that provide social welfare and cultural services to our community.
Based on this policy commitment, the review by the HRC and PCC has gone
forward, and recommendations for Council consideration have already been made.
In addition to the HRC and PCC grants-in-aid process, multi-year commitments have
also been made to La Fiesta, ECOSLO, Chamber of Commerce, VCB, and the
homeless shelter program. In fairness to these groups that have made plans for
1992-93 based on the City's prior budget commitments, it is recommended that the
City continue to fund contributions to them based on currently approved 1992-93
levels: we should not put these agencies - who provide important services to our
community on very limited budgets - into the same kind of fiscal chaos that the State
has forced upon cities. However, in honoring our commitments for 1992-93, it needs
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i COUNCIL AGENDA REPORT
to be made clear to these agencies that the City's continued support for these
programs at a similar level in future years cannot be relied upon. The priority of
these programs and the related level of funding to be provided to them will be an
integral part of the budget balancing decisions to be made by the Council during
Steps II and III of the action plan.
5. Evaluate Operating Cost/Service Level Reductions In preparing for the Step II
decisions to be made by the Council in September of 1992, the CAO has already
directed every department to identify and evaluate further operating cost and service
level reductions. As reflected in Exhibit.C, this direction includes preparing options
reflecting 5% and 10% reductions from current operating levels, including their
impact on services to the community. Additionally, departments have been directed
to fundamentally reexamine basic departmental missions as well as services that i
should rely more on user fees and less on General Fund support.
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6. Designate Employee Working Group. It is recommended that an "Employee Working
Group" be formed in order to provide for involvement by a wide-range of employees
in identifying solutions to our impending fiscal emergency. Consisting of employee
association presidents and department fiscal officers, the purpose of this group is to
advise the CAO on cost saving ideas, especially in the area of lay-off mitigation and
employee retention measures that the City should consider in light of the magnitude
of the fiscal problems currently facing us. An informal first meeting of this group
has already taken place on June 26, 1992.
What External Actions Have Been Taken to Date?
The City has taken a leadership role in informing the community about the State's budget
grab from cities and in trying to convince the Governor and the Legislature that this
approach is simply wrong, and as such, should not be pursued. A summary of our external
efforts to date is provided in Exhibit D, and a Fact Sheet summarizing the State's proposals
and their impact on the City is provided in Exhibit E.
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What's Next?
It is difficult to prepare and implement plans in responding to a problem that has yet to be
defined. Nonetheless, we must take appropriate action based on the best information
currently available that balances the need for responsibly positioning us for the tough
decisions and outcomes that are undoubtedly ahead of us, with retaining our commitment
to acting in a deliberate manner that considers priority services and employee impacts. We
believe that the proposed action plan accomplishes this balance.
To provide the Council and community with an update on the State's fiscal decision-making
and its impact on the City, a briefing on the status of these issues has also been scheduled
for the July 7, 1992 Council meeting.
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COUNCIL AGENDA REPORT
EXHIBITS
A Preliminary plan responding to State revenue .reductions to the City
B. Capital Improvement Plan project deferral recommendations
1. Projects recommended for immediate or potential deferral
2. Projects which should continue to go forward
C. CAO direction to Department Heads regarding permanent long-term cost savings
D. Summary of the City's external responses to the budget crisis
E. Fact sheet regarding the State's prospective budget actions and their impact on the
City
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92-93BUDGETWABRPRT.WP
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Action Plan Responding to State Budget Grab EA1 it —
p 9 9
STEP I
Emergency Cost Reduction Decisions and Response Plat (June 30, 1992)
A. Council meeting to describe situation, solicit ideas, and prioritize actions
B. Initial recommended actions
1. Implement immediate hiring freeze
2. Eliminate selected CIP projects
3. Eliminate undesignated operating carryover
4. Determine policy for funding private, non-profit agencies for 1992-93
5. Direct departments to identify and evaluate further operating cost and service
level reductions
6. Designate "Employee Working Group" to advise the CAO on cost saving
ideas, especially in the area of layoff mitigation/employee retention measures
STEP H
Intamediate Budget Balancing Decisions (June 30, 1992 through September 22, 1992)
A. Prepare five-year revenue and expenditure forecast
B. Recommend operating cost and service level reductions as necessary
1. Across-the-board
2. Targeted
C. Identify further capital project deferrals
D. Reconsider hiring freeze/identify key positions that should go forward
E. Re-examine indirect cost allocations
F. Develop layoff mitigation/employee retention plan
G. Consider possible new revenue measures
1. Examine non-resident fees
2. Consider new fees as well as increases in existing fees
3. Evaluate other revenue measures
H. Consider use of General Fund balances below 20% policy levels
STEP III
Long-Term Financial Health Decisions (1993-95 Financial Plan Preparation Process)
A. Start in early January with strong Council policy guidance
B. Prepare realistic revenue projections and consider revenue options
C. Consider further operating cost/service level reductions
D. Consider eliminating and deferring further capital projects
92-93BUDGET\RESPDND.WP
Exhibit&_Z
General Fund Capin Project Deferrals
PROJECTS RECOMMENDED FOR IMMEDIATE DEFERRAL
Public Safety
Fire Station No. 2 Storage $ 65,000
Transportation
Bikeway Projects 99,000
' Offsetting grant from State ($40,000)
' Higuera - South to Madonna ($19,000)
* Orcutt - Broad to Bullock ($40,000)
Murray/Broad Circulation Improvements 107,000
Other Neighborhood Traffic Improvements 100,000
Grand Avenue Medians 123,000
Leisure, Cultural& Social Services
Swim Center Improvements 99,000
• Multi Purpose Room Improvements ($85,000)
• Landscaping ($14,000)
Picnic Table Replacements - various park sites 19,000
Meadow Park Improvements (parking lot improvements, etc.) 28,000
Santa Rosa Park Improvements - Campfire Area 12,000
Sinsheimer Park Improvements 81,000
' Park Fencing ($15,000)
' Outfield Drainage ($16,000)
' Backstop Renovation ($50,000)
Laguna Lake Dredging Equipment 200,000
General Government
Corporation Yard Bulk Storage & Composting Area 120,000
Radio Transmission Facilities (Phase II) 39.000
Total Immediate Deferrals $1,092,000
POTENTIAL PROJECT DEFERRALS
Public Safety
Fire Heavy Rescue Trailer $ 15,000
Fire Training Facility 205,000
Trmrsportation
Street Reconstruction Program (1992-93) 700,000
Traffic Signal Upgrade Projects 100,000
* Madonna @ Oceanaire ($70,000)
• Johnson @ Lizzie ($30,000)
Laguna Lake Sediment Removal (Zone 9 flood control project) 130,000
Leisure, Cultural& Social Services
Open Space Acquisition (from $1.5 million total budget) 600,000
Santa Rosa Park Softball Field Restrooms 53,000
Johnson Park Irrigation Project 49,000
Public Art Projects 64,900
General Goverment
Corporation Yard Trash Transfer and Drainage Improvements 50,000
Corporation Yard Landscape 30.000
Total Potential Deferrals $1,996,900
92-93BUDGET\2DEFERALS.WP c J
Exhibit g- —
General Fund Capital Projects that Should Go Forward
Criteriafor:Retaining the.Proiect.
Longstanding
Outside Design Contractural Significant Maint
Public Funding Substantially or Policy Operating of Existing
Safety Available Underwav Commitment Savings Facilities
Public Safety
Police station HVAC impry a a a x
Fire station# 1 replacement x a
Underground tank monitoring
&removal
X
Transportation
Orcutt road widening X. x:: %
Traffic signal upgrades
Monterey @ Santa Rosa x x a x
Palm @ Santa Rosa x x x x
Mill @ Santa Rosa x x x a
Elk's lane bridge x x x
Nipomo street bridge x x x
Balance of Bikeway projects x x z
Street reconstruction — 91/92 x x x x x
Leisure, Cultural& Social Sery
Recreation admin facility a x
Playground improvements x x x x a
French park— final phase x= X.
Mission playlot a x x x
Park sand&edging replcmnt a.: a. z x
Parks irrigation telemetry sys x x
Sinsheimer park energy impry
Stadium lights x a: a .. x
Tennis court lights a x x a
Swim center filter replacement x x: x x
Golf course irrigation project a x x x
Balance of open space funding
X.
Performing arts center x x
Mission plaza improvements x x
General Government
Energy imprvments—City bldgs x a:
Seismic safety corrections x x x x
City Hall fire alarm replacement x x x
Information system impry x x x x
Notes
1. It is recommended that CIPprojects funded through the enterprise and agency funds(water,sewer,parking,
transit,and whale rock)also go forward based on their independent funding from the General Fund
2. Detail project descriptions as prepared during the budget review process are available upon request from
the Department of Finance.
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Exhibit c_
Illii���li�lilii�i
Jill'i city of sAn luis oBispo
II II II
990 Palm Street/Post Office Box 8100 • San Luis Obispo, CA 934038100
June 24 , 1992
MEMORANDUM
TO: Department Heads
FROM: John Du
SUBJECT: Per nen ng-Term Cost Savings
Following up our discussion on the morning of June 23rd, I am
asking each of you to develop, by July 24th, a list of potential
ongoing cost savings from your departmental operation.
In the review process, please re-examine the basic mission and
responsibilities of your department. Are there functions or
programs that can be deleted, or significantly reduced? Please
identify in all cases what the service level impact would be.
I am also asking you to fundamentally re-examine the City revenues
provided as a result of your departmental services . Please
identify opportunities for new revenues and for increasing present
revenues. Please keep in mind the impact of those fees on both the
continuation of our services and on our citizens.
Thete is no doubt our .revenues are going to be reduced because of
the State budget situation and its fiscal impact on us and the
recession with its associated drop in sales tax revenue.
Therefore, please propose reductions at two levels, five and ten
percent, of your total departmental operational costs . Please work .
with your departmental personnel in developing your proposals.
In addition, if you have ideas for cost savings/revenue
opportunities in areas outside your department, those ideas should
be forwarded as well . In order to develop the best possible
approach to dealing with this challenge, I need cost saving options
which are viable and real . I am depending upon the Management Team
to exercise a considerable amount of leadership in this regard.
I extend my thanks to you and the employees who assist you for a
conscientious, quality response to this request.
JD:mc
C. City Council
Division Heads
Departmental Budget Officers
h/budgcO
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Exhibit
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III IIII
City o san hues oaspo
990 Palm Street/Post Office Box 8100 • San Luis Obispo, CA 93403.8100
MEMORANDUM JUNE 19,1992
TO: CITY COUNCIL
FROM: JOHN DUNN, CITY ADMINISTRATIVE OFFICER
SUBJECT: BUDGET CRISIS EXTERNAL RESPONSE
I thought it would be helpful to the Council to have a summary of actions taken by our
City and our neighbors to provide an external response to the state budget crisis and the
financial emergency that it has created for all California cities.
Although it is still not clear what specific action will be taken by State budget writers, it
became apparent by June 10 to the League of California cities and to our staff that
proposals then being seriously discussed in Sacramento had a high probability of being
adopted and would have a devastating effect on city finances.
The League took a number of actions in a leadership role to generate pressure both in
Sacramento and on the Central Coast. On June 11, Richard Kirkwood, the current
president of the Central Coast City Managers, was named Area Manager by the League
to direct our response. David Gray from our staff was asked by the League to serve as
a public information officer to assist our cities in developing a media event and
coordinating a response to the State. The City of Santa Barbara had a news conference
that day to call attention to the effect on fire services. (You will recall that Councilmember
Hal Conklin of Santa Barbara is the current president of the League.) A joint letter from
the mayors of San Luis Obispo County was- quickly prepared and original signatures
obtained and forwarded to Senator Hart in his capacity as member of the state Budget
Conference Committee. The City of Santa Maria scheduled a meeting with
Assemblywoman Seastrand for June 19. Our City scheduled a strategy session with area
city managers for June 15. Members of the Council were notified of this meeting and
Councilmember Roalman attended. Contact was made with the editor of the Telegram-
Tribune to provide a briefing and seek their understanding and support.
In accordance with the League recommendation, on June 15 an urgency meeting of
area managers was held at San Luis Obispo City Hall. Reports were received and plans
made for developing a county-wide strategy. It was decided at that meeting that
communications would be sent to the Governor and again to the area legislators
opposing the revenue loss. Cities would adopt resolutions and a rally would be held in
San Luis Obispo to focus the public's attention on this crisis.
On June 16 a letter was sent by our Mayor to the Governor and legislators opposing
the proposed cuts. A news release was sent announcing a rally on the steps of City
Hall for the following day. A fact sheet was produced by our Finance Director, Bill
Statler, describing the crisis. A resolution was prepared and adopted by the Council at
3-Id
its regular meeting that evening. Leaders of city employee organizations were notified of
our responses to the crisis and their support was enlisted. Plans were begun for a trip
to Sacramento, if needed, to dramatize the cities' response.
Despite a conflict with a chemical leak on the Cuesta Grade, a rally was held as a
media/public education event on the steps of San Luis Obispo City Hall on June 17.
Representatives from all cities in the county were present and comments made by four
.mayors and a number of councilmembers. News coverage was provided by television,
radio and newspaper. More than 100 people were in attendance including many city
employees in uniform to illustrate the potential loss of essential city services. Signs were
provided to the crowd with slogans that said "Save Our City Services" and "Stop State
Raid on Cities'. The staff was helped by having inside information provided by
Assemblywoman Seastrand's office and Senator Maddy's office on the latest news from
Sacramento.
A letter following up a previous conversation with Assembly Member Sam Farr was sent
along with copies of our city news release, fact sheet and table showing the magnitude
of the proposed cuts to cities on June 18. (Sam is a personal friend from my Monterey
days, chairs the Assembly Local Government Committee, and has been a strong
advocate for cities before the Local Government Working Group of legislators formed to
advise the Budget Conference Committee.) Plans were continued for a trip to
Sacramento as early as June 19 or the following week. A memo was sent to Senator
Maddy's office in Sacramento seeking their assistance in facilitating a Sacramento
meeting with the Senator, other key legislators and members of the Wilson Administration.
Word was received this morning via Paso Robles City Manager Rich Ramirez based on
a conversation with League Manager Don Benninghoven that the cities' mobilization to
Sacramento should be postponed until a clearer budget picture emerges. Apparently the
Democrats and Republicans have resumed their political posturing over the solution to
the budget crisis. Schools and the teachers' unions have been asked to "share the pain"
and this has prompted another outpouring of advocacy by other budget interest groups.
The Bank of America has announced that it will honor the state fiscal warrants that were
to be issued in lieu of direct payments. This has had the effect of relieving the pressure
to meet the July 1 fiscal year deadline that had been the focus of legislators. Speculation
now is that some legal mechanism will be found to keep the State operating for an
extended period of time without a formal budget agreement and adoption. This may buy
additional time for cities but planning must continue for some eventual revenue loss. Our
latest information is that Assemblywoman Seastrand still intends to meet with city
representatives this afternoon in her office in San Luis Obispo to provide her perspective
and the latest news on legislative action.
Our City and our staff have been pleased to take a leadership role in this effort by
committing the necessary time and resources to oppose any unfair distribution of the
State's financial burden onto cities. Staff appreciates the interest, support and
cooperation provided by the Council in this continuing effort.
C. League of California Cities
City Managers in San Luis Obispo County
Management Team
Deb Hossli
David Gray
EXTRESP 3711
Exhibit.=
jli i� city of San US OBISp0
FACT SHEET
THE STATE CONTINUES ITS BUDGET GRAB FROM CITIES
Robbing Peter to Pay Paul
BACKGROUND - THE STATE'S BUDGET CRISIS
To assist in identifying solutions to the State's $11 billion budget gap, Legislative "working
groups" have been formed, including one on how local government can help solve the
State's fiscal crisis. This working group has developed 68 options in an effort to target $1
billion in budget cuts and grabs from California cities. The most significant of these is
shifting away from cities two traditional sources of their revenues - vehicle license fees
and a portion of property taxes - in order to provide funding for State programs and service
responsibilities.
This approach to funding the State's budget shortfall is wrong. Cities have also been hard-
hit by the recession, and have already made tough revenue and expenditure decisions.
These proposed budget grabs simply pass the buck for the State's fiscal problems to cities,
who are neither responsible for the State's revenue shortfall, nor responsible for providing
State services or programs.
WHAT IS BEING PROPOSED?
The most serious of the State's budget grabs would shift vehicle license fees and a portion
of property taxes away from cities and allocate them to programs and services that are State
responsibilities.
This proposal would cost the City of San Luis Obispo $2 million annually.
HOW WILL THIS AFFECT THE CITY?
Two options are available to us in addressing this major shortfall: increasing local revenues
.or reducing service levels. The City has already made very tough decisions in both of these
areas over the past several years, including fee increases for planning, engineering, building,
water, and sewer services, increases in our business and transient occupancy taxes, and $3.1
million in expenditure reductions during our 1991-93 budget process. Additionally, the City
is committed to a program of productivity improvements that has already resulted in a
reduction of 7 positions. Contrary to the State's handling of its fiscal affairs, the City has
addressed its financial needs in a responsible and forthright manner, and it is being
punished by the State because of it.
Service impacts. On the expenditure side,.this budget grab represents almost 10%'0 of our
General Fund operating expenditures. This level of expenditure cuts - coming on top of
reductions already made -would significantly impact our ability to provide essential services
to our citizens. It is not possible at this time to say what specific programs would be
affected or by how much - this is a decision that would be made by the Council during an
open public hearing process (an approach that the State itself does not use); however, it
should be noted that police and fire protection services account for almost 50% of General
Fund operating programs; and other key programs financed by the General Fund include
street maintenance, parks & recreation (including child care), and financial support for
many cultural and social service activities such as La Fiesta, the Mozart Festival, Farmer's
Market, and the homeless shelter.
Examples of possible service reductions Offsetting this shortfall solely through expenditure
cuts would require the equivalent reduction of 38 police officers (we only have 41 police
officer positions, and 56 sworn police positions in total).
It is unlikely that police services would be impacted to this degree. However, since public
safety services represent almost 50% of General Fund operating costs, it is equally unlikely
that police and fire services can be unaffected by this budget grab. If this reduction is
simply distributed proportionately among all General Fund programs, staffing would have
to be reduced as follows:
Required Fxis
Reductions Regular Staffing
Police 11 83
Fire 7 55
Public Works 9 68
Community Development 4 26
Recreation 2 71
Other Departments 5 38
TOTAL 38 281
WHY SHOULDN'T CITIES HELP THE STATE?
■ The State's budget problems are its own. It is unfair to ask cities to solve problems
that they did not create.
■ Cities have already helped the State. Over the last year alone, the State has shifted
(or outright taken) over $500,000 annually from the City of San Luis Obispo in
cigarette in-lieu revenues, fines & forfeitures, booking fees, sexual assault exams,
and property tax administration fees.
■ Cities are facing the same kind of revenue shortfalls as the State due to the
recession, and have already made tough budget decisions on both the revenue and
expenditure side because of it. It is simply unfair to ask cities to do more; further
budget reductions will have a very significant impact on the delivery of essential
services to the community.
ARE THERE OTHER ALTERNATIVES FOR THE STATE?
Yes. For example, the State's existing revenue system includes $20 billion in loopholes that
are not being used at all to close their $11 billion budget gap. As long as the State fails
to close these loopholes, it is wrong to force cities to drastically reduce essential health and
safety services.