Tuesday, February 23, 2010

Help Us Live Within Our Means

It's February going on March, and for better or worse that means it's beginning to be budget season here in Ventura. For the psat three years, budget season hasn't been much fun. As our revenues have declined, often far below our conservative projections, we have spent most of the spring figuring out how to cut -- how to cut services, how to cut compensation for our employees, how to cut the cost of our contracts. This year is going to be no exception. We're $15 million down from our projected revenue only two years ago, we're going to have to make some tough decisions.

In many cities, the City doesn't really begin to deal with budget problems until May or June -- shortly before the June 30th deadline for budget adoption. (You saw this last spring, when many of our neighboring cities panicked in June.) But here in Ventura, we like to talk. And talk. And talk. And generally speaking, this approach has served us well. Last year, we had a lengthy public discussion about the budget in January and February, and as a result we had made the tough decisions and resolved the tough issues by the time the City Manager submitted his proposed budget to the Council, as is required by our City Charter.

Now we on the City Council are undertaking a process -- admittedly, a quick one -- of reaching out to our constituents so that we can listen to what you have to say as the budget is crafted for the 2010-11 fiscal year. Last night, the Council authorized moving forward with a public outreach plan in March and April that, we hope, will help us reach consensus about what to do.

There will be two big events -- a town hall workshop on Saturday, March 6th, to get your thoughts, and another workshop on Saturday, April 17th, to let you know what we heard. These are not formal meetings of the City Council; they are community workshops.

But this is only part of the process. The councilmembers will also be going out into the community asking questions and listening and all kinds of events in the next few weeks. In addition, there will be all kinds of other ways to participate, including an online survey.

These details have not all been worked out yet, but I'll keep you posted when they are. I know it's quick, but we need to know what you think ... now!

This year, we're also going to ask for your opinion in a slightly different way. For the past two years, we've asked you what to cut. Over that time, we've gotten a pretty consistent set of answers. We're still interested in knowing whether that list of priorities is valid, but this year we'd also like to know how we should cut.

At our council goals-setting workshop back in January, we laid out four different possible ways we can cut. These were:

1. Eliminate low-priority services.
2. Continue reductions in employee compensation.
3. Reinvent city services so that we can deliver the same services more efficiently.
4. "Muddle through," by continuing to provide services in a way that is probably unsustainable in the long run and wait for the economy to get better.

We agreed that we would probably do all 4, but we weren't sure where the emphasis would be.

To this list later on, we added a 5th possibility, which is to increase revenue through economic development and other means (though not raising taxes).

So a major question to you will be, depending on what the priorities are, which of these techniques should we focus on? I hope you can start thinking about that now so you can let us know during this March-April outreach process.

One other thing to think about as we enter into this public outreach period. For the past couple of years, the City Council has functioned under a set of "Budget Operating Principles" -- guidance for our staff and ourselves as we put together the budget. Last night we revised them slightly for the coming here. Here they are:

In the face of continuing national economic crisis, Ventura must continue to ensure fiscal sustainability by living within our means. The City Council rejects the reckless policy of spending money we don’t have. In revising the adopted spending plan for next year, the FY 2011/12 budget will be based on shared contributions for reducing General Fund expenses:

-- Further reductions in lower priority programs and expenses
-- Continuation of employee compensation reductions
-- “Re-inventing” services to reduce costs

The Council seeks to engage the community in understanding and shaping the tough choices that must be made. Rather than compromising the success of high-priority efforts by inadequate funding, the Council recognizes the need to determine what programs could be eliminated, restructured or assigned to others without compromising the core mission and highest priorities of City government.  Although generating additional revenue is not expected to close the projected budget gap for next year, high priority will be given to longer-run efforts to restore prosperity and rebuild revenue to restore desired community services and competitive compensation.

Overall Priority Statements
1. Emphasize economic prosperity to ensure sustainable funding for necessary city programs and to meet critical needs, including maintaining the high priority City Council has placed on public safety, financial stewardship, and streets and public utilities

Revenue Operating Principles
1. Move toward recovering the full cost of any fee-based service except where the Council and the community see a clear public interest in full or partial subsidy
2. Without lowering standards of quality, streamline regulations and processes that impede business investment and economic prosperity
3. Assure sufficient resources to actively pursue Federal and State funding opportunities
4. Programs, and initiatives that produce income rapidly, or save future expenses rapidly should generally be given higher priority than those that simply consume revenue

Expense Operating Principles
1. Reorganize to cut costs and improve effectiveness in order to submit a structurally balanced budget
2. Use the green strategies whenever we can demonstrate a short-term net reduction in operating costs
3. Emphasize pro-active prevention over reactive responses to reduce costs
4. Make strategic use of volunteers, partnerships and collaborations, including with other public agencies, to meet community needs and/or provide services.
5. Do not use “one-time money” for ongoing operations.

Stay tuned, and I hope to hear from you in March and April.