By Jorge Casuso
May 27 – Make sure you take extra change when you go swimming, return your library books on time and, as Bob Dylan once advised, watch the parking meters.
Higher fees at the municipal pool and libraries, and a hike in parking fines, coupled with increased enforcement, will help the City balance a proposed $510 million budget for fiscal year 2009-10 presented to the City Council Tuesday night.
The proposed budget manages to avoid the layoffs and cutbacks other cities across California and the nation are increasingly facing by using $8.2 million the council had set aside in the event the City lost local communications taxes to the federal government, City officials said.
In addition to generating more funds by boosting fines and fees, the City would save $2.3 million if management agrees to forgo $2.3 million in annual bonuses, officials said.
“Compared to other communities, Santa Monica has again been able to weather this storm,” said City Manager Lamont Ewell, referring to an economic downturn he described as a “global and national meltdown.”
“A lot of communities are fighting with labor unions and trying to take away cost of living adjustments and drastically cutting services, including fire and police,” Ewell said during a press briefing in his office Tuesday.
The budget -- which represents an 8.1 percent decrease from the current $524.7 million fiscal budget -- manages to actually increase the general fund by 1 percent to $262.3 million.
The completion of major capital projects such as the Annenberg Community Beach House and a sewer line on 2nd Street and Colorado Avenue help account for a decreased budget that boosts the general fund used to deliver services, Ewell said.
Santa Monica will actually increase its public safety expenditures under the proposed budget, which calls for adding the cost of staffing the City’s own dispatch center that will require nine new hires, and adding three parking officers and one crime analyst.
“We still have made public safety the highest priority,” Ewell said. “The budget keeps our services intact.”
The increase in some City fees will help fund some of the services.
The biggest new revenue source will come from the hike in parking fines -- from $40 to $47 for expired meters and from $52 to $61 for street sweeping and preferential parking violations.
Coupled with increased enforcement, parking fines are expected to generate an additional $2.2 million in revenues.
“People’s behavior will dictate whether they get a ticket or not,” Ewell said. “We get flooded with complaints” from residents angry that preferential parking spaces are being illegally occupied.
Increased fees at the Santa Monica Swim Center -- which haven’t been raised since 2003 and which can only be raised to cover the costs of the program -- will generate another $192,000.
Hikes in the fees for City youth sports programs and for the use of City meeting rooms will generate an additional $59,000, while an increase in late fees for library books, which haven’t changed since 1994, will generate another $59,000.
The increase in fees and fines will help offset a decrease in tax revenues during the sharp economic downturn.
Property taxes are expected to dip by 1.1 percent, while sales taxes are expected to plummet by 8.9 percent, in large part due to a dearth of auto sales and the closure of Santa Monica Place for a major renovation.
Hotel bed taxes also are expected to decline by 3.6 percent during the upcoming fiscal year, after a precipitous 28 percent drop last month.
“The market has changed dramatically in the last six months,” Ewell said. “We’re not seeing travel from abroad and businesses are shy after AIG’s fiasco,” he added referring to the lavish travel expenses reported by executives of the bailed-out insurance giant.
While tax revenues are down, the State is expected to take a $3.2 million bite out of the City budget in order to help bridge a $24.3 billion deficit by siphoning tax money from cities and counties.
Under law, the State can only take such a measure twice in ten years and must reimburse the funds with interest in three years. Ewell, however, is “not very confident the State will be able to pay back the money in three years.”
In the midst of declining tax revenues and State borrowing, Santa Monica will receive $18.9 million in stimulus funds.
Of that amount, $12.8 million has been earmarked for transportation and nearly $1.5 million for bus stops. More than $500,00 will be used for homeless prevention and nearly $1 million for energy conservation.
A contemplated $6 million annex to City Hall was scrapped from the upcoming budget, and the money will be shifted to help improve city streets, including Ocean Park Boulevard east of Lincoln and streets in the Borderline Neighborhood on the Venice border.
The new budget will keep the City’s $25.6 million reserve intact for use in the event of a major catastrophe.
“Neighboring cities are going into those funds” to help balance their budgets, Ewell said.
Still, there are storm clouds on the economic horizon.
Ewell worries that the national recession may be more pronounced, and in fact different, than previous economic downturns the City has managed to quickly shake off.
“It will take a few months to see the full impact of the economy,” Ewell said. “We believe there’s a good possibility this economic downturn is different, and there won’t be this quick bounce back.”
