Members of Temporary Citizens Panel on Santa Monica City Finances Resist Being Disbanded

By Niki Cervantes
Staff Writer

March 27, 2018 -- With their urgent calls for curbing rising employee-related costs at Santa Monica City Hall going unheeded, members of an ad hoc panel of citizens reviewing City finances are trying to win more time to make their case.

The ad hoc advisory committee, established in May, is mandated to be disbanded next month, as its boss -- the City Council’s Audit Subcommittee -- takes final action on an outside audit of City employee compensation and performance.

Two members of the Compensation Study Advisory Committee said additional time is needed to hammer out specific proposals to address looming red ink -- much of it stemming from the rising cost of unfunded employee pensions, which has reached $461 million.

“We need to roll up our sleeves and be more engaged,” Dominic Gomez, one of seven-member committee’s members, said at a joint meeting of the two panels in late February.

But no words of encouragement were forthcoming.

Once the audit is finalized next month, “your job is done,” Sue Himmelrich, a council/audit subcommittee member, said after being asked to extend the compensation committee’s end date.

Gomez and Laurence Eubanks, a fellow committee member, have proposed major cost-cutting measures as soon as possible to keep City government from facing deficits, predicted to start arriving next fiscal year ("Outside Audit Warns Santa Monica City Might Not Be Able to 'Absorb' Coming Recessions," February 20, 2018).

The proposals include a wage and/or hiring freeze at City Hall and tripling the paydown on the unfunded liability.

The “2030 Challenge” proposed by Eubank also retires the entire debt over a dozen years, instead of the 30 years originally planned ("Member of Santa Monica Audit Advisory Group Urges City to Pay Down $461 Million in Unfunded Pensions by 2030," February 28, 2018).

However, officials noted the City is now mandated -- like the rest of California’s public-sector employers -- to pay off unfunded liability in 20 years.

The reason is a recent vote by the California Public Employees’ Retirement System (CalPERS) requiring governments to speed up debt repayment, a change made to save money over time but that could hurt local governments over the next few years.

In any case, none of suggestions from compensation committee members gained momentum.

There appeared to be disagreement within the citizen committee, although the Brown Act prevented it from meeting as a whole -- and on its own-- for discussion.

Nor were the three council members who dominate the Audit Subcommittee particularly impressed.

The freezes would “cut people off at the knees,” said Council Member Pam O’Connor, who is also an Audit Subcommittee member.

The Compensation Advisory Committee was created in May of last year ("Special Committee on City of Santa Monica Employee Pay and Benefits Approved," May 11, 2017).

At the time, activists were rallying for a seat on the Audit Subcommittee, which had ordered an audit by Moss Adams of City government costs and performance.

But the panel has no voting power. Its scope was also limited to helping with the parameters of the audit.

The audit itself compared Santa Monica’s city government with peers throughout Southern California.

It found the City was at-risk of sinking into the red if hit by a major recession and recommends that officials develop “financial and operational strategies” to cope with financially hard-times in the future.

To contain personnel costs -- the biggest portion of the City budgets -- the audit said the City should explore hiring employees at lower step levels and possibly evaluate outsourcing.

It also said the City should look at its practice of paying overtime to police versus enlarging the force and conduct a study “to determine if additional firefighters are warranted to reduce the frequency of mandatory overtime.”

The report will be finalized and presented to the Audit Subcommittee at its April 17 meeting. It then decides whether to send the recommendations to the City Council for action.