The possibility of Lompoc filing for bankruptcy was openly discussed by city officials Tuesday night at the city’s first budget hearing, which concluded with the City Council taking the bold — and for many, unexpected — step of killing any further discussions of new taxes.
Tuesday night’s meeting in the City Council Chambers was the first of two scheduled hearings specifically planned to discuss the city’s biennial budget draft for fiscal years 2017-19. The meeting, which lasted a little more than two hours, was at times contentious as council members Jim Mosby, Dirk Starbuck and Victor Vega took issue with the proposed budget, which was first presented by city staff May 2, being balanced under the assumption that three new tax measures would be approved by voters on the 2018 ballot.
Mosby, who suggested that the city could find other ways to “tighten its belt” besides taxing its citizens, made a motion that the council remove any potential ballot measures from future budget discussions and direct city staff to return at a future meeting with a balanced budget that doesn’t take into account the proposed tax measures, which were anticipated to generate about $10 million in revenue.
The motion passed 3-2, with Mayor Bob Lingl and Councilwoman Jenelle Osborne each dissenting. Both Lingl and Osborne said they felt it was too early in the process to completely rule out the idea of the tax measures.
Mosby said it was “foolhardy” to proceed under the assumption that the measures would pass and he remained resolute in his position that the potential taxes, which he referred to as a “white elephant,” should be taken off the table.
“We’re asking people out there to do without,” he said, referring to city residents, “and I think we need to go forward and be frugal and be fiscally responsible.”
Lompoc City Manager Patrick Wiemiller said the city would bring new numbers for a presentation at the City Council’s June 6 meeting. Another budget hearing is also scheduled for June 8.
Tuesday’s move was a significant step in the budget process, which needs to be completed with a budget approval by June 30.
Wiemiller, who initially introduced the idea of new taxes at the May 2 meeting, continued to advocate for placing the tax measures on the 2018 ballot. The taxes being proposed were a half-cent sales tax increase, a 2-percent increase in Transient Occupancy Taxes, or hotel taxes, and a 6-percent utility users tax.
Wiemiller appealed to the council as a citizen on Tuesday and asked that they allow him and his fellow voters to make a choice on the taxes, and he said that bankruptcy could be a very real possibility without the ballot measures being approved.
“I’ve avoided using the words ‘Lompoc’ and ‘bankruptcy’ in the same sentence before, but I’ve been over and over this and I really see that we are … in a pivotal point,” Wiemiller said.
“I’m not saying this to be overly dramatic,” he later added, “but we are at a point where we’re either going to put this before the voters for their consideration … or I believe we’re looking at bankruptcy. I do not see another way out of this.”
That assessment was disputed by some members of the council.
Mosby, in particular, pointed to the city’s budget for fiscal years 2013-15 and noted that the expenditures for the city at that time were around $57 million. This 2017-19 budget proposal includes expenditures of about $69 million.
Mosby advised city staff to look back at those leaner years for suggestions on how to cut back. He then suggested that some staff positions and city programs should be cut before going to residents for “money that they don’t have.”
Vega also noted that many people in Lompoc are struggling and suggested that the tax measures would just put even more of a burden on local residents and families.
Starbuck, as he has in the past, continued to state his belief that the measures wouldn’t pass even if they were placed on the ballot, which would leave the city in the same financial situation it currently finds itself in.
“I don’t think they would vote to raise their utility rates,” Starbuck said of Lompoc voters. “I’m just thinking that if we put all of our eggs in the thought process of passing three ballot measures to balance our budget, we’re not gonna win this.”
The biggest financial hurdle facing Lompoc, according to staff, is the city’s obligation of about $70 million to the California Public Employees' Retirement System, or CalPERS.
To pay for those pensions and still have a balanced budget, the city proposed, in addition to the potential new taxes, to cut all funding to outside agencies. Some speakers at Tuesday’s meeting asked the council to go against that recommendation and continue funding to some of those agencies.
Several advocates of the Lompoc Museum made their case to continue its funding, and Ann McCarty, the executive director of the North County Rape Crisis and Child Protection Center, requested that the council continue funding the Lompoc Police Department’s victim advocate position, which is also on the chopping block.
The council did not discuss those specific requests Tuesday.
Mayor Lingl seemed to agree with the picture painted by Wiemiller regarding the city’s future and suggested, well before Mosby’s motion was made, that the council at least consider letting the voters decide on the new taxes.
“We’re all advocates for the citizens, but we also have a fiduciary responsibility to keep the city afloat,” Lingl said. “What I’m seeing right here is that it may not be afloat in two years unless we do something with this council now.”
Mosby acknowledged that the tax idea could be brought back if the council voted to do so, but he said he was looking forward to seeing the other ways that potential revenue could be generated.
“When I see the budget (proposal) here, I see more growth, more expense,” he said. “What’s around the corner is at the level of catastrophe. We are obligated to make sure that the pensions are paid for, but I think we need to make some cuts, and I don’t see cuts here.
“There’s a lot of things that can maybe get tightened up,” he added.