City Manager Patrick Wiemiller recently presented a grim picture to the City Council — either place three new tax measures on the November 2018 ballot, or the city may be required to declare bankruptcy.
The council majority, consisting of Jim Mosby — the leading opponent — Dirk Starbuck and Victor Vega, seemed coordinated in their attack on Wiemiller’s presentation. How they became experts at city finances is unknown, however it was clear from the start of this meeting they didn’t seem to comprehend the seriousness of the situation.
In previous meetings this crew seemed to think the city could build its way out of the problem. But, as Wiemiller pointed out, the income derived from new construction simply wouldn’t fill the void. To gain needed revenue the city would need 10,460 new housing units. There is space for less than half that number available, assuming additional annexations to the west would be approved by the Local Area Formation Commission, which is doubtful.
The city isn’t a business and doesn’t acquire cash to operate in a traditional businesslike manner. It operates from taxes and fees for providing services. State law specifies the council can approve fees, but voters must approve tax increases. In this case three council members made the choice for voters.
To put this in perspective, folks need to know the only thing city councils are required to do is pass a balanced budget. That doesn’t mean everything folks want will be funded, it only means the income and outgo must be balanced. Another factor is that some 200 different funding sources are for specific purposes and cannot be used for just anything the council wishes.
Without additional revenue, the next two-year budget cycle will be short $1.4 million. In fiscal year 2019-21, short $7.9 million. In FY 2021-23, $9.9 million, and in FY 2023-25, $11.5 million. This shortfall continues for the next 10 two-year budget cycles.
These shortfalls are being caused by city contributions to the CalPERS retirement obligation, which was made decades ago by politicians who are long gone.
So, let’s assume these three council members prevail. What’s next?
Without any increases in income, city services will diminish dramatically and since income won’t match outgo, the city may have to declare bankruptcy. Three other cities have declared bankruptcy and all three were sued by CalPERS, which has unlimited resources to engage in litigation. None of these cases has been decided.
Bankruptcy also means the city credit rating will drop like a rock. Bonds will be more expensive and some companies may not want to risk doing business with the city. It’s harder to determine what such an action will have on future development.
In FY 2019-21 the city manager will have to find an additional $7.8 million to cut. The current budget for parks and recreation is $5.5 million, so an additional $2.3 million will have to come from the public safety portion of the General Fund budget.
Last week I wrote that it’s time for the old guard to be replaced with strategic thinkers. This action is the perfect example of why we need people on the City Council who can look beyond the horizon to anticipate problems and work to seek solutions.
I neither support nor oppose the proposed tax increases now, because I simply don’t have enough information. The people of Lompoc stand to lose a substantial number of services, and they need to have a voice in this matter.
Ron Fink is a local activist and can be reached at: firstname.lastname@example.org.
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