Fiscal Report to Council Not a Bright Picture
November 11, 2010
The City Council and Redevelopment Agency heard a preliminary year-end report on Culver City’s fiscal circumstances in 2009-2010 at their meeting. Monday night
As Chief Financial Officer Jeff Muir put it, the report painted “a sufficiently gloomy picture” of finances. The initial numbers overall were: revenue: $81 million, including over $2.1 million in one-time revenue; expenditures: $82.6 million-with an operating deficit of $3.8 million.
Personnel-related expenditures are one of the big problems, having increased by seven percent since fiscal year 2007-2008. Sales taxes have brought in less than expected; gains from Westfield Culver City have not compensated for losses in other areas.
CalPERS and OPEB (Other Post Employment Benefits) expenses are adding to the cost pressures. Due to past losses in recent fiscal years, rates for CalPERS employee contributions will have to go up, from 12.2 percent of salary to 20.4 percent for miscellaneous employees, and from 26.5 percent to 42.7 percent for safety employees. OPEB benefits such as retiree health insurance are funded through the General Fund on a “pay as you go” basis. But said Muir, pay as you go “is not a financially viable option,” as more funds are needed to finance the annually required amount.
Muir’s report concluded that, without action, the General Fund Reserve will be exhausted by fiscal year 2014-15.
There was no necessity for the Council/Agency to vote on a motion, except to acknowledge having heard this review. Council/Agency members discussed the statistics and generally concluded that the problem is serious but that Culver City is also “in good shape” relative to other cities of the same size. As Mayor Christopher Armenta summarized it: “We’re ready to take action on closing the structure deficit. It will take a combination of a reduction in expenses and an increase in revenue.”
The Council also mulled a proposal to change service on Culver City Bus Line 7. They passed the staff proposal that service be discontinued on Saturdays for Line 7, which runs from Culver City along Culver Boulevard to Fisherman’s Village in Marina Del Rey.
Although a speaker in public comment pleaded with the Council not to cut Saturday service, the Council did not see the needs of a few riders as outweighing the problem of low ridership on Line 7. The line had been created from a former portion of Metro Line 220 and it was hoped that greater frequency as well as a lower fare than the Metro buses would stimulate ridership but according to Transportation Director Art Ida, that has not been the case.
However, the Council wanted to remain open to the possibility that Saturday service could be resumed on a temporary basis when the Expo Line opens. The fact that Line 7 runs to the beach could be emphasized to attract more riders and it could serve as a connection to the beach for Expo Line users.
The Council did not make a decision on the School Board‘s ability to use the Council Chambers for future School Board meetings. Board member Karlo Silbiger has been advocating this move and requested that Council authorize that the Board could use the chamber if a schedule could be agreed upon (two commissions have meetings scheduled on Tuesday evenings and the School Board also meets on second and fourth Tuesdays), and that Council could waive the costs of using the chamber.
The estimated cost would be about $1596 a year. Council members pointed out that this cost is relatively low and given the financial circumstances of the City, it would be preferable that the School Board pay for the cost. Silbiger agreed.
However, the issue of asking one or more of the commissions to change their meeting date bothered more than one Council member. They proposed that Silbiger go back to the School Board and draft a letter outlining the specifics of their request to use the chamber and that they should be the ones to negotiate with the commissions. Silbiger said that he would discuss these issues with the Board.