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City Mgm't Proposes Council Continue Spending Nearly As-Is Entering FY16 (Election Cycle) THEN (After Election) Hit Crash In FY17 ($9+ Mil Deficit) and FY18 ($7+ Mil Deficit) Threatening Cuts To Everything; Councilman Richardson Is First To Proffer Possible Utility Tax Increase

  • City Mgm't estimates don't include new city employee contracts (being negotiated) and add'l costs of a medpot ordinance that some Councilmembers want
  • 4th dist. candidate Supernaw has ruled out tax hike, his dissent would require 2/3 voter approval for tax increase; Chico has left door open to possible tax hike, her support (with otherwise uanimous Council) could enable 50% passage


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    (Mar. 5, 2015) -- In a March 3 study session, city management has indicated that it will propose roughly status quo spending in FY16 (starts Oct. 1, 2015), finding modest ways to handle a roughly $1 million deficit (expenses exceeding revenue.)

    Unspoken: that would take the City through the 2016 election cycle for Council districts 2, 4, 6 and 8 (April possibly June 2016...BUT THEN (after elections) the Council would face [acknowledged by City Management] large deficits (spending exceeding anticipated revenue) in FY 17 ($9.3 mil) and FY18 ($7.3 Mil) and worsening beyond. In addition, city management acknowledges that its estimates don't include additional costs that may result in new city employee contracts (being negotiated now) and don't include costs of a medical marijuana ordinance that some Councilmembers favor enacting.

    [Scroll down for further]

    City management blamed the deficits mainly on the drop in the price of oil, also cited CalPERS pension increases, actions over which the City has no control. To see how city management presented the current situation, and how Councilmembers reacted, see video at this link. Yes, they didn't have a quorum for roughly 10 minutes.

    Management didn't mention discretionary actions over which the Council DID have control, including: approving unbudgeted 15% raises over three years for management [Nov. 2013, recommended by former Mayor Foster, approved by Council majority] imposing a cost to taxpayers of roughly $1.5 million annually; $1 million (to obtain $3 million grant) to develop unspecified "innovations" (approved by Council without evidence that the $1 million spent would produce $1 million in taxpayer savings/revenue) and a new Civic Center (transaction avoided public vote, approved by Council without seeking bids for City Hall seismic retrofit, several million dollars in costs already incurred, further coming.)

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    The Council's spending actions above came without restoring three fire engines no longer provided at eastside three fire stations, eliminated LBPD's former field anti-gang unit and let LBPD sworn staffing levels (available for citywide deployment) fall to roughly the per capita equivalent of cutting over 25% of LAPD's officers. Management has now proposed dealing with FY17 and 18 deficits (spending exceeding expected revenue) by seeking greater efficiencies, promoting economic development...and applying "proportional reductions" that would effectively impact police and fire budgets most strongly.

    Some Councilmembers tip-toed around the issue, but Councilman Rex Richardson spoke bluntly. He suggested that the Council should confront the possibility of [seeking voter approval for] a utility tax increase.

    In November 2000, LB voters enacted by a roughly 70% margin a measure (put on the ballot by collecting voter signatures) that cut LB's then-utility from 10% to 5% (which remains comparatively high compared to a number of other area cities.)

    The prospect of a possible utility tax increase makes an upcoming April 2015 4th Council district "winner take all" special election pivotal citywide...because the two leading candidates have taken differing positions on the issue. 4th dist. candidate Daryl Supernaw has made public statements ruling out a tax hike, meaning his dissent on a Council vote could require 2/3 voter approval to enact a tax hike. Candidate Herlinda Chico has said a tax increase should be a "last resort," a verbal formula leaving the door open to supporting a tax hike, and her supportive vote on the Council (if all other Councilmembers were to agree) could enable passage of a tax hike with a 50% vote.

    In September 2015, the City Council (with a new 4th district Councilmember) will decide whether to deal with the approaching projected deficits by economizing and making changes now...or (as city management says it will recommend) basically continue the status quo until after the 2016 election cycle...and then face major cuts or ask voters for a tax increase to avoid them.

    Further to follow.

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