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March, 2011

After cutting $14 million in expenses over the past two years to "live within our means," early projections for next fiscal year's budget show a half million dollar shortfall. Chief Financial Officer Jay Panzica outlines three options for closing that gap in his report to the City Council for the initial budget workshop on March 7.

Based on the Council's direction, City Manager Rick Cole will prepare the City Manager's Recommended Budget proposal at the end of April. That will allow the Council to adopt a fully balanced budget by June 6, 2011. To read about the choices and impacts, click here.

Working Toward Sustainable Prosperity
Proposed FY 2011-12 Budget Transmittal Letter

• FY 2011-12 Adopted Line Item Budget, All Funds Summary  (PDF, 1.37 MB)
• FY 2011-12 Recommended Budget Admin Report  (PDDFf, 1.5MB)  dated June 13, 2011
• FY 2011-12 Recommended Adopted Budget  (PDF, 1.25MB)  dated June 6, 2011

April 21, 2011

Honorable Mayor and Members of the City Council:

The City of Ventura remains committed to living within our means.

Through the “Budgeting for Outcomes” effort, we adjusted our priorities to deliver vital services with $80 million in General Fund revenue during the current fiscal year, down from $94 million two years ago.  The service reductions and employeeconcessions required to achieve that balance have been painful, but we believe and hope the worst is behind us.

The nation and our local region are still recovering from the devastating impact of the Great Recession.  Local government revenues have always lagged private sector recovery and the anemic pace of business and job expansion continues to hold down revenue growth.  Yet there are clear signs that the worst should be behind us.

In delivering a balanced budget plan for the upcoming FY 2011-12, I have followed City Council direction to balance additional spending reductions with prudent use of one-time revenue sources.  The goal is to ensure we live within our means without further eroding core services and our ability to deliver them. 

The $86.8 million Proposed FY 2011-12 General Fund Budget is balanced, based on projections of $81.2 million in ongoing revenue, $1.4 million of one-time revenue sources, and $4.2 million of one-time capital projects underwritten by previously identified funding from prior years.

For residents and local business, the bottom line is that we will be “holding the line” on services.  On the one hand, there are no more visible or damaging reductions in services if we meet our conservative revenue projections.  On the other hand, we cannot afford to restore even the most hurtful cuts, such as reductions in our Police staffing and closure of Fire Station 4.

The City Council has ratified three-year union contracts for 90% of our workforce (with the remaining soon to follow.)  All require employees to begin paying at least 4.5% of their pay toward rising pension costs.  While this will not entirely offset the impact of covering investment losses by the State pension plan (CalPERS) during the Great Recession, it does set us on a more sustainable course for the future.  All new hires will come under a reduced pension formula that will be less costly in the long run.

As City Manager, I remain deeply concerned about the sustainability of our current levels of services and the cost structure of local government.  Simply put, we can’t go on like this indefinitely.  We must either permanently reduce service expectations, restructure the way we deliver them or find more sustainable ways to pay for them.  In Ventura, because of City Council leadership, we are pursuing all three:

• Where government used to be viewed by many citizens as a vending machine entitling them to a high level of services from current revenue sources, we have undertaken a thorough rethinking with our community about “what matters most.”  By their vote on Measure A in 2009, Ventura citizens clearly mandated that local government adjust to the lowered revenues that citizens and businesses have weathered.  We have worked with the community to temper service reductions by increased volunteerism, stronger public/private/non-profit partnerships and greater reliance on community problem solving instead of government services and programs.  The nonprofit organization Urban Encore and the City of Ventura collaborated to keep the Santa Clara Senior Center open.  Urban Encore is leasing the building and providing space to other nonprofits while maintaining the senior center’s activities. The City-sponsored Art Walk this summer will transition to a Westside ArtWalk that is coordinated by artists and arts organizations themselves to preserve this signature event in our City.
   
•  We have significantly re-organized and downsized our organization to deliver high-priority results with decreased overhead.  Departments and people have taken on more work and shifted responsibilities to more efficiently and effectively keep Ventura a great place to live, work and visit.  The Public Works Department and the Parks, Recreation, and Community Partnerships Department have been reorganized; the Water Department has been established; and the Fire Prevention Division relocated to the Fire Headquarters.
   
• With City Council direction, we have turned our focus in economic development from the short-term “zero sum game” of sales tax generation to the long-term strategy of growing high-value, high-wage jobs and the businesses that produce them.  While it is important to remain competitive with our neighbors for sales tax dollars, in the long run, we all gain from an expanding and prosperous economy.  Ventura has entitled hundreds of unbuilt homes for future residents – now our attention is on the quality jobs that will support the individuals and families who live here now.  Improvements to the Pacific View Mall brought additional sought after retailers such as Trader Joe’s,  BevMo, and Staples.  The realization of the Midtown Corridor Development Code has started with the completion of the Fresh and Easy Market on Thompson Boulevard.  The relocation of Solarsilicon Recycling Service, a world leader in silicon recycling, will bring 100 new green jobs to Ventura.  The Community Memorial Hospital development will result in substantial construction jobs and health care employment opportunities.

Each year, in presenting my Budget Transmittal to the City Council, I have put most of my focus on the General Fund because it is directly responsible for the vital services the public expects: police, fire and emergency medical protection; parks and public facilities; and the programs, services and regulatory functions that protect our quality of life and standard of living.

This year, however, I want to highlight the critical challenges facing our Capital and Water/Wastewater/Stormwater budgets.

The City Council recently unanimously adopted the 2011-17 Capital Improvement Plan, called “Building Ventura’s Future.”  Over the past fifteen years, Ventura has made impressive investments in rebuilding, replacing and upgrading its key infrastructure – all the myriad public facilities we too often take for granted: sewer pipes; water treatment plants; street pavement; emergency back-up generators; traffic signals; disabled access ramps; energy efficient lighting; stormwater retention basins; baseball diamonds; solar power panels; park paths and trails; water wells; and so much, much more.

We are continuing to do so, but in too many areas, our investments are falling short of the needs.  Confronted with the brutal reality of a closed library and fire station and reduced staffing for everyday needed services, it is unthinkable to carve out deeper cuts to fund investments with long-term pay-offs.  But Ventura would not be the livable community it is today if earlier generations had not made sacrifices to build and maintain facilities and assets that long outlasted them.

In the area of water, we cannot afford complacency either.  While I am proposing no immediate water or wastewater increases despite rising costs, we must embark on a serious, long-term discussion of the costs and uses of the water we all need for our homes and businesses.  At the supermarket, water sold by the gallon costs about a dollar.  The cost for that same gallon is one fifth of a penny delivered by Ventura Water.  Our community has an exemplary record of water conservation and cost-effective local self-sufficiency when it comes to water.  Yet in the years ahead, we are going to have to use less and pay more because of real and direct threats to our current way of doing business.  Whether it is protecting public health, keeping seawater from leeching into our groundwater or safeguarding our fragile local environment, we are going to face difficult and costly changes.  In the long run, however, we will be in a much better position to continue to ensure both the safe delivery of clean water and its responsible and beneficial disposal. 

All these challenges have a common thread: sustainability.  Living within our means; safeguarding our future quality of life and standard of living; creating a healthier and “greener” economy; prudently investing in long-term facilities and assets; partnering with our community and its institutions to work together toward common goals; and making wise decisions despite political pressures to defer or deny them – all these are vital to working toward “sustainable prosperity” for Ventura.

This budget recommendation is a modest step in that direction.  But as we look toward the City’s 150^th birthday in 2016, we know it is merely a transition toward more difficult and ambitious efforts to come.  We are still absorbing hard choices made by the City Council, community and staff over the past three years.  We are still working to accommodate to them and make them work.  But by living within our means, we have overcome what might have been a crippling crisis – one that continues to ripple through many local governments and the State of California. 

Back in 1866, when the citizens of Ventura voted to become the 22^nd incorporated municipality in California, our population was tiny, but our prospects were not.  This seaside town of San Buenaventura embarked on “a great venture.”  We are the heirs of that legacy and must conduct ourselves so that future generations will know we honored our past by planning and acting well for the future. 

Recognizing that no budget is perfect and that we face great challenges ahead, I submit the Proposed FY 2011-12 Budget.  I look forward to working with the City Council to refine the ultimate outcome, as we continue on our path toward sustainable prosperity.

Respectfully submitted,

Rick Cole
City Manager