Orange City Council members continue avoiding hard choices to tame a looming and quickly approaching $19 million budget deficit – one that threatens public services including the hiring of police officers and firefighters.
Earlier this month, council members confronted the deficit by making statements about programs they wouldn’t cut, which was most top budget items like police and fire budgets.
Last night, council members avoided the debate for about six hours at their public meeting, waiting until midnight to consider tough choices between hiking taxes and fees or instituting cuts.
At the end of the night, after two hours of discussion, council members ended without voting to institute any cuts and barely any consensus on even when to meet next to finalize decisions.
“We can’t afford the level of service that we’re providing as a city,” said Councilman John Gyllenhammer at Tuesday’s city council meeting. “If we are interested, or if we’re serious about reducing this budget deficit, we need some level of freeze across the city and we need some allowed vacancy rate in public service.”
“This decision is going to be one of the bigger decisions on whether or not we can actually get to where we need to go.”
On the potential chopping block based on discussions and staff reports? Selling off a public library, a host of special events hosted by the city including the 3rd of July celebration, tree trimming, park maintenance and nightly security patrols, police overtime and a potential hiring freeze that could impact public safety.
[Read: City of Orange Faces $19 Million Budget Shortfall, Major Service Cuts Loom]
But leaders are having a hard time agreeing on what exactly they want to make residents live without with Mayor Dan Slater, Councilmembers Jon Dumitru and Kathy Tavoularis reluctant to place a hiring freeze on police officers.
Councilwoman Ana Gutierrez was not present.
Council members did however move forward with direction on how they want to bring in more money to help keep taxpayer coffers afloat.
In play to bump up revenue: potential new city charges to be determined through a fee study, an increase in parking enforcement citations on residents and a sales tax increase that could bring up to $40 million in revenue depending on the rate and if it is approved by voters.
[Read: City of Orange Eyes a Sales Tax Increase While Facing Massive Budget Deficit]
Officials are also eying charging Chapman University and local hospitals fees to help dig themselves out of the hole.
Local leaders are expected to continue Wednesday’s early morning discussion on how to address the deficit at a special meeting – possibly on Saturday June 8 – but no date has been confirmed.
They are also expected to discuss a tax measure at their June 11 meeting.
Bumping Up Revenue
Orange leaders are moving forward with a study to implement new fees including credit card fees, business license back taxes and penalties, as well as upping parking enforcement citations
Last night officials voted 6-0 on a $2.5 million 5-year contract for parking enforcement in the city that staff projects could bring in $8-10 million in revenue.
Slater said people have called for enforcement and the revenue the city could make off increased citations on residents was “icing on the cake.”
“There’s no question that the best part of all is that we’re going to come out revenue ahead and I’ll bet you it’s gonna be closer to $2 million a year, at least initially,” he said.
The decision comes as officials in Fullerton – another college town that is also struggling financially – rethink their approach to parking enforcement as working class residents complain about a lack of parking options and some question if the approach is a way to tax them through tickets.
[Read: Will Fullerton Residents Keep Getting Cited for Blocking Street Sweeping?]
Officials also have their eyes on local hospitals and Chapman University for help.
They plan on negotiating with Chapman President Daniele Struppa on ways the university can assist including implementing an over enrollment penalty on the university as well as a life safety fee charged for use of police and fire services on campus.
Police Chief Dan Adams said they get about 100 calls to the university a year. Fire officials also said they regularly respond to a similar amount of calls on campus and the surrounding area.
Councilwoman Arianna Barrios pushed for the city to start looking into the fees and the over enrollment penalty right away as opposed to waiting to sit down with university representatives.
“We started off this process with no sacred cows and all of a sudden, we’ve got the biggest cow in front of us and everyone’s going ‘Oh, no’,” she said. “I don’t understand. We have to look into this. We have to move forward with some of these things.”
City staff said the direction officials took would provide the city with $5.7 million in revenue enhancements.
No Sacred Cows
Tavoularis called on the city to sell off Taft Library for a one time revenue of $2.7 million dollars to help address the deficit.
“There’s no sacred cows,” she said as she called on her colleague to sell the library.
Slater, Gyllenhammer and Dumitru said the city should hold off on the sale.
“If we’re not willing to do this, and we’re not willing to cut public safety, what are we willing to cut – Nothing,” said Tavoularis. “If we’re not ready to make the tough decisions, I mean, I don’t know what the heck we’re doing.”
Tavoularis did not receive enough support to sell the library.
She, along with Slater and Dumitru, also pushed back on a hiring freeze on police officers.
“I’m just not comfortable with cutting any of those people, even people that are in the pipeline,” she said. “I made it clear that I feel that that’s crossing the Rubicon.”
Gyllenhammer said while no one wants to cut public safety, they don’t have options.
“We can’t put this entire deficit on all other departments except for police and fire, it’s not going to work, the city’s not going to be able to operate,” he said.
Will Residents Vote on a Sales Tax Increase?
Discussion on the deficit comes as federal COVID bailout dollars start to runout at local school districts and cities across the county.
It also comes as leaders in neighboring Santa Ana warn of a looming sales tax cliff on the horizon with their own sales tax measure – Measure X – expected to decrease in five years resulting in a projected $30 million loss of revenue.
On early Wednesday morning, officials kicked off a discussion on a sales tax increase measure to their June 11th meeting.
If sent to the November ballot and voters agree on a 1% sales tax increase, it could mean about $40 million in additional revenue for the city annually.
Hosam Elattar is a Voice of OC reporter and corps member with Report for America, a GroundTruth initiative. Contact him at helattar@voiceofoc.org or on Twitter @ElattarHosam.
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