Santa Monica City manager Susan McCarthy is optimistic about a 2004-05 fiscal year proposed budget, which will shrink the city’s current budget gap of $16 million to a $4 million gap.
McCarthy presented the Santa Monica City Council with the proposed budget Tuesday, May 25th.
“The proposed budget for fiscal year 2004-05 and the budget plan for fiscal year 2005-06 reflect cautious optimism about the city’s financial future,” McCarthy said.
The budget for the fiscal year beginning Thursday, July 1st, is approximately $377 million.
The Santa Monica City Council is expected to adopt the budget Tuesday, June 15th.
The proposed budget is a decrease of $5 million, or 1.3 percent, from the current 2003-04 budget, which is approximately $382 million.
However, McCarthy is relieved that a current $16 million gap between revenues and expenditures will be reduced to an estimated $4 million gap.
TIGHT BELT — McCarthy said the proposed budget includes “reorganizations, redeployments and/or position reductions” for six full-time employees.
Those employees work in the city Environmental and Public Works Management-Maintenance Management Division and the Community and the Cultural Services-Open Space Management Division.
Employees at the Main Library, which is under reconstruction and has yet to be opened, are also affected.
If the proposed budget is approved, currently vacant police positions will be frozen and landscape maintenance services will be reduced.
The proposed budget also includes reductions in city grants to nonprofit organizations and eliminating some currently vacant civilian employee positions.
The proposed budget plan for fiscal year 2005-06 that begins July 1st, 2005, includes a 20 percent decrease in funding for Virginia Avenue Park and the Main Library.
“Santa Monica’s municipal government enters this two-year budget cycle having survived — we believe — the worst of the economic downturn and having reduced substantially the gap between projected general fund revenues and expenditures that loomed before us,” McCarthy said.
FIND FUNDS — McCarthy recommended three measures “to augment and speed the anticipated recovery of current revenue streams.”
She said the City Council should:
n adopt new fees to recover costs of providing social services to individuals;
n place a measure on the ballot for the election Tuesday, November 2nd, to increase the transient occupancy tax; and
n increase marketing efforts by the Convention & Visitors Bureau to promote Santa Monica as a tourist destination.
COLA — City Council members previously requested cost-of-living adjustments (COLA) in pay for city employees, but the 2004-05 proposed budget does not include specific provisions.
“Most city employees make $11.50 per hour, which can help support a family of four in Santa Monica, but some city employees make less than that,” said mayor pro tem Kevin McKeown.
“All city employees need to be paid a living wage,” McKeown said.
McCarthy said she and her staff would try to find ways to provide cost-of-living adjustments before the City Council meeting Tuesday, June 15th.
Finding more revenue will be difficult, she said, since the city agreed to give at least $6 million annually to the Santa Monica-Malibu Unified School District in exchange for community use of school facilities.
LAST WORD — McCarthy acknowledged that budget woes are affecting local governments throughout California.
“While California has an energetic new governor, the underlying causes of the state’s structural deficit remain untreated,” McCarthy said.
“We anticipate a minimum of two more years during which Santa Monica and other California communities will experience revenue decline as the state retains, borrows or diverts local funds,” she said.