(January 10, 2004) -- $63M shortfall for L.B. surprises" (Press-Telegram front page headline, Jan. 10, 2004).
We dissent. What has happened isn't a "shortfall" and (at least to readers of LBReport.com) isn't a "surprise."
As we first reported in September 2003, Councilmembers voted to bust the bounds of a city management devised three-year financial strategy by spending far more than City Hall is taking in by a mindboggling $19.5 million...using that much in deadly, depleting, non-renewing resources to camouflage overspending beyond continuing revenue.
To get some idea of the magnitude of this profligacy, $19.5 million is nearly the entire sum City Hall hopes County voters will hand to LB by approving a 1/2 cent sales tax hike fronted by County Sheriff Baca and crafted in part by LB City Hall management.
For the record, LB Councilmembers were publicly warned last year by respected civic financial consultant Len Wood, ruefully conceded by City Auditor Gary Burroughs, that using one time resources to sustain ongoing spending beyond city resources could in a worst case scenario spiral toward court intervention and bankruptcy.
Councilmembers broke management's three year plan within months after voting to approve its approach. To claim otherwise is to make a mockery of the English language.
Management's financial plan called for capping use of deadly one time resources at $2.6 million in the current 04 budget year. Instead, the Council voted to expend $19.5...$2 million of which management insists was fairly used to cover one time Sacramento imposed expenses.
OK, even using management's generous math, Councilmembers still voted to spend nearly $15 million more ($17.5 minus $2.6) than the plan provided. We're not happy that management enabled this, but ultimately, spending is the Council's call. Period.
If the Council had not broken management's three year plan, LB taxpayers would be in much better shape now. $15 million in cuts made last year would go a long way to bridging the $20 million "gap" some say is now a "susprise."
Don't let anyone spin you otherwise.
We believe what's really going on is an effort by some incumbents to repeat what the Mayor and other incumbents got away with two years ago. In 2002, the Mayor and her supporters variously claimed City Hall was "on the right track" (while spreading the smear that critics were too "negative.") After Her Honor and other incumbents were safely reelected, the Council voted to fatten city employee pensions. Only then did the Mayor publicly concede what management had been saying for months: LB's overspending deficit had grown like a tumor.
Two years later, another set of incumbents apparently hope they can lull voters to sleep by basically maintaining the status quo until after coming elections. Rest assured that after the elections (to borrow a phrase from talk show sage Larry Elder), "the fit will hit the shan."
Why else would the Council recently approve short-term police and firefighter contracts that expire in June 2004...after the elections? Voters don't like talk of cutting police officers or firefighters or closing fire stations. (For the record, the Council has already publicly approved a "study" of current firefighter deployment...with possible suggested changes.)
Yes, spiraling health care costs and workers comp are legitimate, serious problems, but City Councils in other cities didn't dig nearly as deep a big hole for themselves. In 2000, voters warned Councilmembers to cut spending by voting -- by a landslide nearly 70% margin citywide -- to cut LB's former 10% utility tax.
Councilmembers didn't seriously reduce spending then.
When warned about City Hall's looming deficit in 2002, they worsened it by ballooning pensions, then promised to adhere to a three-year spending plan, then broke that promise within months.
What happened is not a shortfall. What happened is not a surprise.