The Lompoc City Council took another potentially significant step in its budget discussions Tuesday night, as the council members were presented with figures that suggested the city could save millions of dollars — and avoid any future bankruptcy talk — without imposing the proposed three new taxes.
The new figures, which were presented to the council by city staff, reflected across-the-board expense cuts of 4 percent, 5 percent and 6 percent, and marked the latest of several changes that have been made to the city’s 2017-19 biennial draft budget. An examination of those numbers, which were requested by Councilman Jim Mosby at a budget hearing June 8, took up much of Tuesday’s abbreviated budget conversation, which is set to continue with a budget-only hearing beginning at 6:30 p.m. Monday, June 26.
In other separate budget-related moves, the council members voted unanimously to extend the city’s contract with the Lompoc Chamber of Commerce for two months, at a cost of $9,000 per month, and, in a split 3-2 vote, to renew the city’s animal control services agreement with Santa Barbara County for just one month, at a cost of about $25,000, with the option for the council to possibly look elsewhere for those services.
Those two moves were needed after the council voted June 8 to extend its budget deadline to Aug. 31 instead of June 30. All other city services will continue under the current budget agreements until a new budget is adopted, but the chamber and animal services agreements were set to expire June 30.
Perhaps the most significant movement made Tuesday, however, was the revelation of the new budget totals with the three levels of cutbacks.
The new 10-year projection page presented Tuesday did not include any potential revenue from new taxes, but did include funding for all local nonprofits. The initial draft budget had cut funding to outside agencies and included estimated totals from three new taxes — a half-cent sales tax, a 2-percent increase in hotel bed taxes and a 6 percent tax on utilities — that City Manager Patrick Wiemiller proposed for inclusion on the 2018 ballot.
Wiemiller said on May 30 that getting those taxes on the ballot was the city’s only way, in his estimation, to avoid looking at bankruptcy.
According to the figures presented Tuesday by Dean Albro, the city’s accounting and revenue manager, the more aggressive 6-percent cuts, which also did not include city salaries, would result in the city saving about $2.1 million in the current budget cycle and about $2.9 million by 2027. That would result in the city’s end-of-year fund balance ballooning to about $8.1 million in 2027.
Albro said Tuesday that implementing the cuts could create issues with the city’s cost allocation formulas. Still, Mosby said he was pleased with just having the numbers to look at. He said he was inspired to request the cuts as an “exercise” after seeing similar slashes being considered or enacted by Santa Barbara County leaders.
“I know it’s not an easy item to do,” Mosby said of the cuts, noting that the council might want to look at staggering different levels of cuts over the course of several years.
The biggest financial obstacle facing Lompoc, according to staff, is the city’s obligation of about $70 million to the California Public Employees' Retirement System, or CalPERS.
At the June 8 meeting, Councilwoman Jenelle Osborne asked city administrators to explore the possibility of seeking a pension obligation bond to help ease that burden.
Wiemiller reported Tuesday that he had discussions with people experienced with those types of bonds and said he was told that the city wouldn’t save any money by going that route. He noted that the city of Stockton’s recent bankruptcy had left bond investors wary.
In other discussions Tuesday, the council was also presented with figures representing what the City Council itself costs the city.
According to those numbers, which were requested by Osborne, the five-member council costs about $185,000 total per year. Osborne had mentioned in the past that she would be willing to give up her council salary and benefits to help with the budget crisis, so she requested the totals, presumably, to open a discussion among the council members.
The council salaries weren’t discussed at length Tuesday, but City Attorney Joe Pannone noted that the council cannot adjust its compensation for the current council and that any changes couldn’t be enacted until 2019. He did point out, though, that a council member is always free to return his or her payments back to the city.
While the council quickly agreed to extend its contract with the Lompoc Chamber, there was significantly more discussion about the animal control agreement.
The city pays Santa Barbara County about $25,000 per month for animal control services, according to city staff, and some council members suggested the city might not be getting its money’s worth.
After being told that the county was seemingly unwilling to negotiate its charges for the services, which have risen sharply in recent years, Councilman Victor Vega went as far as to make a motion that the city just let its contract with the county expire. He said the council could then explore alternative options for animal services.
“Someone’s got to make a move here to save some money, so we might as well start here,” Vega said. “We’re always extending something. Why don’t we draw the line here? The county is already not going to negotiate.”
After Vega’s motion received no support, Osborne suggested that the city extend the agreement for just one month, rather than two, and begin the process of putting out requests for proposals to contract the services to another outside agency or agencies.
Osborne’s motion passed 3-2, with Mosby and Mayor Bob Lingl dissenting. Mosby said after the meeting that he would have felt more comfortable discussing the issue if someone from the county was there to speak on behalf of its animal control services.
Monday’s budget hearing will be held in the Council Chambers at Lompoc City Hall.