Taking action now to reduce costs

Ventura is not immune to what is happening to the state, national and world economy:

• The State of California is nowhere near a solution for its $16 billion budget gap


• The median sales price for Ventura County homes is down 24% from a year ago


• The average retail price of regular gas hit an all-time high of $3.46 a gallon locally, with predictions it will hit $4.00 by the summer


• Ventura’s sales tax is down more than 10% below this year’s budgeted projections


• Our building permit revenues are off more than 15%

The last week has been a tumultuous one for the world’s financial markets and institutions. On Tuesday, the stock of Bear Stearns, one of Wall Street’s biggest and oldest investment banks, was selling at $63 a share. On Sunday, rival JP Morgan acquired it for only $2 a share.

The City of Ventura holds $10 million in what last week were AAA-rated Bear Stearns investment notes. While we do not expect to suffer any financial losses, those investments are now essentially frozen – and cannot be sold until the market turmoil abates.

We have been preparing for tougher times. City staff proposed and our City Council adopted a 2% reduction in this year’s spending by every department (which would save $1.9 million), along with $1.1 million in savings from postponing or canceling lower priority projects, for a total of $3 million in lower spending.

To prepare next year's budget proposal, we assembled teams of staff volunteers, along with resource people from the Ventura Chamber of Commerce to work on spending plans for the City's "strategic visions" drawn from our General Plan. This “Budgeting for Outcomes” approach successfully produced a draft spending plan that achieves our goal of living within our revenue projections for next year.

Those revenue projections, however, were based on last fall’s numbers. Since that time, the economy has deteriorated markedly. Facing even lower revenue, it’ s obvious that we should act now to implement the potential savings we’ve already identified -- and take further steps to adjust to these emerging realities.

As City Manager, under my charter responsibilities for administering the annual budget adopted by the City Council, I have consulted with the Mayor and Executive Leadership Team to implement the following:

1. Immediately freeze hiring, with any exceptions to go to the City Council for approval


2. Meet promptly with all our bargaining units to seek their full support, involvement and ideas for addressing this challenge


3. Propose the following recommendations to a special meeting of the City Council: implement additional cancellations and postponements of operating and capital projects; move forward implementation additional cost saving measures during this fiscal year; save utility costs by closing City Hall every other Friday; furlough non-safety and maintenance operations staff and close city facilities December 25 through January 5th


4. Develop a revised budget alternative, based on a lower revenue estimate, in line with emerging economic trends


5. Create a Staff Transition committee, including union representatives, to propose the most effective and supportive way to reduce the workforce, including alternatives to lay-offs as well as humane ways to implement lay-offs for the good of the organization and each member of our workforce


6. Review all contracts and contractual relationships to look for ways to cancel, renegotiate or reduce rates and expenses


7. Initiate a pro-active and intensive dialogue with the community to level with our residents and businesses on the choices we face and involve them in understanding and participating in making those choices

These measures are prudent first steps toward developing a long-term plan to ensure that we weather the storm with a sustainable level of services, a sustainable level of revenue and a sustainable level of compensation for the people who do the work. As families are making adjustments in this difficult economy, we are all going to have to accept changes in the way the City provides services to the community. Over the past three years, we were successful in balancing our budget and doing a better job of paving our streets, protecting public safety and maintaining our parks. Although we will have less revenue, we can be successful over the next three years with the same level of commitment and focus.

During times like these, when families are counting their pennies, there is obviously a high level of anxiety and frustration when government and utilities either reduce services or raise fees and rates. We've certainly received an earful of complaints about the 911 fee to enhance emergency response. We have a responsibility to engage our citizens -- to hear your concerns, desires and expectations as well as to share the fiscal realities we face in delivering not only what our citizens expect from their local government, but what by law we are required to do by County, regional, State and Federal law and regulations.

We are a diverse community -- and it is unlikely we'll all agree on what services are most important and how we can responsibly pay for them. But a genuine community dialogue can give you and your neighbors the opportunity to help shape the decisions that must be made. Sometimes citizens feel if they don't get their way, that government isn't listening. More often, the reality is that we are listening to many, many voices -- and they are telling us different things. That's why, at times like these, it's important to listen to each other -- and look for common sense solutions that don't make everyone happy, but reflect our best efforts to move our community forward, even in tough economic times.