After about six hours of study during three separate sessions over the past month, during which everything from the Community Bike Ride, Snow Festival and Library operating hours to street, fire and police services were considered for possible elimination to cover a projected $1.5 million deficit in the 2012-13 General Fund budget, the Arcadia City Council on Tuesday decided not to cut a single thing after all. Not even the much-discussed $27,000 budget to cover staffing a hang-out zone at the high school called The Apache Pit that is used by about 30 of the nearly 4,000 AHS students.
“We don’t cut people services when we’re making $300,000 per year in citizen money from interest on $20 million in unrestricted funds we’re sitting on,” Mayor Pro Tem Mickey Segal said emphatically after arriving a few minutes late to the meeting. His strong urging came after listening to Mayor Harbicht read off their suggested lists of cuts, with Harbicht’s totaling $125,000, many as small as $5,000 – $10,000 each, and Amundson’s totaling $350,000, including $141,000 in cuts to Library programs. Some of that discussion revolved around “The Pit,” which Recreation and Community Services Director Sara Somogyi explained only cost $15,000 this year, a little more than half the projected $27,000 for 2012-13. The $27,000 is a cautious estimate to allow for a potential increase in the number of students who utilize the program at the AHS cafeteria where students play games, and eat snacks, she said.
Segal said that while staff and Council need to take time over the next six months or so to look at major cuts in expenses or increases in revenue to respond to projected major deficits over the next three-to-five years, cutting a few thousand dollars here and there in the budget for the coming year is not productive and unnecessarily penalizes taxpayers by cutting back on services specifically designed for their benefit while the City is earning far more in interest on taxpayer-funded reserves than it would take to cover the costs of programs others were targeting for cutbacks.
“That’s ridiculous and I’m not comfortable with that,” Segal said.
Shortly thereafter, the Council voted unanimously to follow Segal’s advice in recommending approval of the initial budget proposed by new City Manager Dominic Lazzaretto a month earlier. A public hearing on the budget will be held at the next Council meeting June 19 before the Council casts its final vote.
A week earlier, on May 29, the Council, at the suggestion of Segal, spent two hours listening to potential Draconian long-term cut options by each City department head that could save as much as $3.95 mil., and then decided against making any of those cuts. That brought them back to the study session table Tuesday to consider up to $1.165 mil. in less drastic one-time “reverse priority” cutbacks or do nothing at all since they had all agreed the week before that the $1.5 mil. deficit would likely never become reality. The City typically budgets so conservatively that projected losses of $800,000 – $1 million often become actual net gains of $800,000 to $1 mil,, as happened again last fiscal year, which ends June 30. In addition, the City expects to enjoy revenue far in excess of $600,000 on the sale of property formerly used for a well, and about $1 million through the police department from the recovery of IRS money through audits.
In the event more revenue is needed in the future, Lazzaretto said $2.5 million can be generated from a 2% increase in the Utility User Tax and a 1% increase in franchise fees, neither of which would require voter approval. Arcadia’s 5% UUT, reduced some years ago when the City was flush with cash, stands at two points lower than the next lowest rate in any other city in the area, he said.
More optimistically, the City expects to generate increased sales taxes from a rebound in the economy and new businesses such as the Forever 21 store opening at Westfield Santa Anita this fall. Also, the City anticipates revenue that cannot be budgeted until received, such as the sale of City-owned property and about $1 million from the recovery of IRS money through audits.
— By Scott Hettrick