The Budget Hits The Fan!

Wow! Our city faces unprecedented amounts of high drama over the next seven weeks as a byproduct of the COVID-19 crisis. Our city manager “offered” his resignation. It was accepted, and our “wise” city government bought him out for $200,000. Oh, and as an extra perk, they kept him on the payroll until July 1. As a result, he finished with five years of employment in Santa Monica. That benchmark allowed his lifetime pension amount to skyrocket. Our city manager bails from the city’s COVID-19 related budget issues and walks away with a fistful of cash, from our town’s depleted treasury. Residents are incensed, and the axed city staff livid. A couple of comments from staff: “If Rick (Cole) wants his $$$, he should go to the back of the line.” Another stated, “Cut the strings on Cole’s golden parachute NOW,” and “Lay off Cole’s PR staff before you cut the Teamsters.” Marc Primiani​, General Counsel for a prominent financial services firm and a resident of Santa Monica since 1996, said he is disappointed in our city government. His 11-year old daughter said, “Wow, Just Wow.” In Primiani’s view, Cole offered to resign. The city accepted and did not have to negotiate a buyout nor choose to keep him employed until his pension points further accrued. We can all feel the extreme frustration that Marc Priminani and others share about the state of our city’s governance.

~ Your interim City Manager, Lane Dilg, and her staff have to submit restructuring proposals later today (May 1) for presentation to the City Council for discussion and approval on May 5. The program cuts will be devastating to our residents, and up to 30% of the city staff will lose their jobs. In a general video meeting with the city’s employees, Ms. Dilg said, “Santa Monica was setting trends throughout the country and has been a visionary force in doing novel, important work…”. Maybe that is the problem. The vast majority of our residents weren’t concerned about “trend-setting.” They wanted to feel safe in their homes and on the streets. They wanted the garbage picked up, the roads paved, working street lights, clean water, and support for residents in need. Everything else was fluff, and it seems as if the city’s elected officials and high-level staff were more concerned about recognition and awards, rather than serving residents. We will see staff cuts that begin at the top of the organizational chart. There will no longer be assistant city managers. Whole departments are eliminated, and the remainder consolidated into large umbrella divisions. $74 million in cuts are needed asap with $154 million more in the 2020-2021 budget, and we will see further reductions in 2021-2022 as well. Our city has typically had a diversified tax base; however, the COVID-19 pandemic has impacted every part of the city’s revenue. Today’s cries of economic conservatism must always be the universal hallmark in our town.

~ Twenty tragic deaths from COVID-19 in Santa Monica with the majority in our nursing homes. We grieve for each of them. The total number of confirmed cases in Santa Monica stands at 157 as of Wednesday.

~ Six of the seven neighborhood associations submitted a call to action this week outlining essential services for residents that must be maintained. Among these are fire, police, sanitation, after-school youth programs, street and alley maintenance, public transportation, libraries, the housing authority, parks, the homelessness reduction framework, and ongoing commitments to our public schools. The neighborhood associations submitted detailed cost reduction strategies, as well. They want the city’s internal audit report (2018) on city staffing and compensation used as the benchmark for reducing city employee positions equitably. They suggest a tiered permanent annual staff salary reduction of 30% at the highest pay grades to 5% at the lowest pay grade earning over $60,000/annual salary. Ways to reduce future pension liabilities are included in the plan as well.

~ More suggested changes from our neighborhood associations to the city: renegotiate the lease payments on the 55-year ground lease of Civic Center property to Santa Monica College from $1/year to market rate. Suspend the hiring of new outside consultants and sunset existing consultants unless the requisite skill sets are really beyond the reach of city staff. Outsource city services that will provide comparable value at a lower price and implement competitive outsourcing procurement policies. Discontinue municipal bond issuance, tax increases, and sale of our public land for the next three years. Suspend all capital improvement projects for the next three years that are not already fully funded. Abide by the upcoming Appeals Court verdict on the voting rights lawsuit and spend no more city revenue on the case. Reduce the general fund subsidies to our enterprise and special revenue funds as needed to balance the budget. Finally, the neighborhood associations ask for a three-year moratorium on all proposed new downtown hotel projects to protect our existing hotels during our road to economic recovery.

~ The City of Santa Monica has outspent similar beach cities in California for the past few decades. However, it has been apparent for years that our residents have not seen the results of the multi-year spending spree. Santa Barbara spends $1438 per capita, Newport Beach $2545, and Santa Monica a whopping $4,491 per citizen. So, before we all cry for Santa Monica, let’s think about the city we love. Our pockets are picked every day by a stratospheric sales tax (10.25%) and a giant utility use tax (10%). Many hope that this budget crisis will set a new normal for our city, one that recognizes that there is a limit to the financial funding of its leaders’ imaginations and that common sense must be the rule.

~ Unfortunately, the forces that want to use this crisis for their financial gain are rearing their ungainly heads. There is a pro-development group in Santa Monica that is composed of wonky urban planners, developers, and their cronies (attorneys, architects, and density advocates) who have consistently chosen to ignore Santa Monica’s beachside ambiance and history. This group’s mantra is simple, “build more, tax more.” This group that dares to call themselves “forward” has been pushing for us to become a mini New York City. They say our streets must be lined with mid-rise to high-rise buildings to be complete and that parking is an unnecessary luxury. They ignore the new reality that has been thrust upon us by this pandemic and seek to slip in their old, tired ideas on how to make more money for themselves.

~ The Santa Monica Coalition for a Livable City (SMCLC) digested that group’s pro-development treatise. They see it as an opportunistic ploy for developers to gut our town even more. The developers want to soften our zoning codes, silence community protections, and have our municipality bear some of their development expenses. SMCLC responds: More development will not solve our current financial problems. Residents have consistently shouldered the burden of needed infrastructure to support the new development in our city without any net gain. The benefits of each project must be clear to residents before approval. The pandemic will continue to change our lives. More open space and larger dwelling units will be needed. Office life will change. Adaptive reuse will be the key. Until the pandemic is analyzed, a moratorium on all significant development in Santa Monica must occur.

~ Residents and businesses are struggling to survive in Santa Monica. We know our lives will change as a result of this pandemic. In this time of crisis, we must focus on our town’s quality of life. Anyone blindly calling for increased development as a way of fixing the city budget is suggesting a grave disservice to all residents.

~ Lastly, we should all feel for the foot soldiers in our city. The members of the city staff who do not sit in the ivory tower of city hall deserve our praise and support.

~ “Compassion is the wish to see others free from suffering.” Dalai Lama

By Phil Brock for SMart (Santa Monica Architects for a Responsible Tomorrow)

Thane Roberts, Architect, Robert H. Taylor AIA, Ron Goldman FAIA, Architect, Dan Jansenson, Architect, Building and Fire-Life Safety Commission, Samuel Tolkin Architect, Mario Fonda-Bonardi, AIA, Planning Commissioner, Phil Brock, Santa Monica Arts Commission.

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