Overcoming significant concerns about fiscal responsibility from both audience members and fellow elected officials, the Manhattan Beach City Council approved a budget for the 2016-2017 and 2017-2018 fiscal years at its Tuesday night meeting.
The council approved by a 3-2 vote a compromise budget resolution that created several new positions and allowed for a small increase in merit pay for public employees. But in a nod to accountability concerns, the budget resolution rejected staff’s suggestions to hire two additional police officers and increase salary ranges for management positions, and capped the total number of city positions.
The compromise motion, devised by Councilmember Amy Howorth, drew the support of Councilmember Wayne Powell and Mayor pro tem David Lesser. Mayor Tony D’Errico and Councilmember Mark Burton voted to oppose it.
During public comment, a number of long-time residents questioned of why the city’s budget continued to rise, even though its borders and population had long been stable. The obvious implication, they said, was that the city had retained additional staff who do not perform needed work.
Howorth vigorously disputed this notion. Changes in law, technology and the town’s character, she said, have made Manhattan a more expensive place to govern.
“The property values of our dirt are higher, and that makes building much more complicated,” she said. “We are a more demanding society, for better or for worse.”
Whether those added challenges demanded higher salaries for public employees was another point of dispute. D’Errico and Burton noted that the city’s salary ranges were near the top for a number of positions in a recent comparative study of California municipalities.
Residents echoed this point, arguing that this council had been too quick to approve boosts in employee salary ranges.
“You don’t have a revenue problem, you have a spending problem,” said resident Jerry O’Connor, who noted that 70 percent of the city’s operating budget came from employee salaries. Although such a figure is typical for municipalities, O’Connor said that the council wasn’t doing enough belt-tightening to make a serious fiscal impact.
But even the council members who ultimately opposed the budget agreed that the current staff’s performance was excellent. (All took time during the evening to praise departing Public Works Director Tony Olmos.) The problem, they argued, was with council decisions.
“I do not want to see this community have animosity toward staff,” D’Errico said. “They didn’t cause this. This is on us.”
Long-term liabilities emerged as another area of fiscal dispute. During public comment, some audience members said that the budget submitted by finance director Bruce Moe was presented as balanced but in fact relied on fiscal trickery. Although the budget set aside money for capital-improvement needs and unfunded pension liabilities, disagreement over the rate at which this should be done produced animated conflicts.
Powell pointed out that the California Public Employee Retirement System crafts its contribution estimates for cities based on a presumed 7.5 percent return on its investment portfolio, even though it has not hit such a figure in years. But decreasing the estimated return, and requiring a proportionately higher contribution from cities, could bankrupt dozens of municipalities across the state, he said.
In response to these concerns, Burton proposed an interim six-month budget to carry the city through until it could make more long-term fiscal improvements. While this motion did not carry, the approved resolution did incorporate some of his concerns. Within the next six months, the council will conduct an efficiency study, and examine the effectiveness of the city’s 9-80 work schedule.
Note: A previous version of this story failed to clarify that it was speakers from the audience, not council members, who said that city finance staff had presented a deceptive budget.Â
