By Jonathan Friedman
Lookout Staff

May 28, 2010 --With the City Facing a $13.2 million structural deficit for next fiscal year, staff has proposed a $553.6 million budget that includes revenue enhancements and spending reductions that were made “using a scalpel and not a meat axe,” City Manager Rod Gould told the local media at a press conference on Wednesday afternoon.

The deficit is due to rising expenditures that are growing at a faster rate than revenues in the struggling economy. Gould said it will take at least two to three years for the City to crawl out of it. The cuts proposed by City staff will mostly be “invisible to the community,” Gould said. They do not contain any major program reductions, but rather are slices made “around the edges.” There is no call for employee layoffs or furloughs, which have been a part of other Cities’ approach to tackling budget crises.

“Santa Monica is far better off than the great majority of the Cities in this State and across the nation that have been going through a series of cutbacks, have reduced infrastructure spending, have cut staffing and have made short-term decisions with long-term deleterious effects for their communities,” Gould told the City Council last night at the first half of a budget study session that concludes tonight.

The proposed budget includes expenditures of $255.1 million from the City’s General Fund, which is slightly more than 1 percent higher than the amount for this year. The proposal has $5.6 million in spending reductions, including the elimination of 17.5 vacant jobs. General Fund money for capital improvement projects was slashed by $2 million and another $500,000 was removed from the pool for employee bonuses.

To further tackle the deficit, the City will put the $900,000 surplus expected for this fiscal year toward next year. Also, $3 million from the $8.2

million the City Council set aside during better times will be used. Additionally, $1.2 million will be raised through increases in various charges and fees for City services.

Among the changes, life support services such as ambulance rides will go up to the meet the County average, insurance companies will be asked to pay for accident scene clean-ups and those running for public office will have to pay fees.

The City is working on other revenue enhancement and cost-cutting measures. City management is meeting with the various municipal employee labor groups about cost sharing on rising pension and health care costs. Gould declined to state the status of those talks because it would violate City management’s promise to “negotiate in good faith.”

Also, Gould wants to look into possibly raising the property transfer tax, which is assessed to those selling properties. He said Santa Monica’s rate is “significantly below” the Cities of Los Angeles and Culver City. Increasing this tax would require voter approval.

Gould said the City’s approach to the structural deficit is a much better plan that simply cutting $13.2 million from the budget. “That’s too large to absorb directly through cutbacks in our view without real damage to the community and organization,” he told council members.

He gave a glimpse of what that would mean had the City taken that approach. It would mean reducing every City department, including police and fire, by four positions, closing the Main Library twice per week, reducing code compliance and plan checking services, 15 percent reduction in tree trimming and closing the Senior Center on Sundays.