By Jacob Wilson/Garden Grove Journal
Money was the matter in Westminster last week.
The Westminster City Council passed the city’s budget for the 2010-2011 fiscal year by a 4-1 vote at its June 9 meeting. The budget includes a projected general fund deficit of over $1.4 million. Council member Tyler Diep voted no.
Most of the council saw the new budget as not ideal but not bad either considering the state of the economy.
“It really isn’t the budget that any of us want to bring forth but considering the economy it seems the best we can do,” Mayor Margie Rice said.
Diep was the harshest critic of the budget. His biggest concern was that an unbalanced budget sent the wrong message about the city’s priorities.
“I’m not going to vote for this budget in its current form,” Diep said. “This is the third year in a row that we have deficit spending.”
Diep’s biggest target was the $100,000 earmarked for the Rose Center Foundation. Forty percent of that is in the form of a grant from the city’s Community Promotions Fund. That fund also pays for the TET Parade as well as the Founder’s Day Festival and Parade.
“You still haven’t explained to us what we’re getting for a $40,000 grant to the Rose Theatre,” Diep said to finance director Paul Espinoza. “That’s money from the general fund that could be used for street repairs or police overtime.”
Westminster also gives the foundation $60,000 to cover its utility costs. The foundation runs the Rose Center, a fully-catered conference and banquet center that offers space for weddings and corporate events. The Rose Center Theatre features mostly musical theater.
Although the money for the Rose Center Foundation makes up a very small part of the city’s general fund, Diep insisted that his concern was not just about the money.
“It is about our priorities and the message that we send to the public,” Diep said.
The new fiscal year begins July 1. The general fund covers most city services such as police, fire, public works and community services. The projected general fund budget for the new year is over $42.7 million.
The police budget alone is over $25.1 million. The projected deficit was originally over $6.1 million but the city has found ways to considerably tighten its belt for the upcoming year. General fund cuts came to just over $4.7 million.
“Our staff is going to continue to look at ways to save money,” Espinoza said. “We’re confident that we’re going to get the deficit down even more.”
The biggest cut in actual dollars comes from the Westminster Police Department which slashed almost $2.5 million from its budget. The Public Works Department cut its budget roughly 28 percent. The city expects to spend over $2 million less than it has this year.
“This budget is probably as lean as any I’ve ever seen in 40 years,” Mayor Pro Tem Frank Fry said. “We’ve always had lean budgets, never very much fat.”
Yet Fry cautioned that many of the cuts were not permanent and would have to be addressed again in the future.
“We still have a rough time ahead,” Fry said. “Forty-five percent of the deficit was taken care of by one-time only fixes. That means we’ll have to look again next year.”
The deficit is mostly due to decreased tax revenues. Westminster took in over $1 million less in sales, property and utility taxes compared to the previous year. A big blow to the city’s coffers was the closure of Sunset Ford.
The automotive dealer had generally contributed about $200,000 in sales tax revenues per year. The city also gained $589,000 less in interest earnings and rental income in the past year.
Another point of contention for Diep was the city use of its reserve funds. At the end of the 08-09 fiscal year the city’s reserves were $24.9 million. The expected level for the end of the 10-11 fiscal year is $20 million.
“We will have used one-fifth of our reserve in two years,” Diep said.
But city manager Donald Lamm countered that now is the time to use the city’s reserves, citing positive projections for the economy.
“If we didn’t think the economy would improve we would insist on not using our reserves and we would be proposing layoffs,” Lamm said. “We don’t need to do this because we’re confident that the economy will recover.”
The council as a whole appeared proud that the city does not have to consider layoffs. Although both Fry and councilmember Andy Quach repeated that the city has at least 50 positions that will remain open.
“We have 50 open positions that we did not fill and can’t fill because we don’t have the money,” Fry said.
Quach put a positive spin on that figure by comparing Westminster to surrounding cities such as Fullerton and Costa Mesa who he says will likely have to layoff employees.
“While we are not filling 50 vacant positions, other cities are looking at which 50 positions to eliminate,” he said.