On May 2, 2017, City Manager Patrick Wiemiller said during a budget briefing to the Lompoc City Council:
“The biggest financial hurdle facing Lompoc, according to staff, is the city’s obligation of about $70 million to the California Public Employees’ Retirement System, or CalPERS.”
The increased contribution to CALPERS that has resulted in reduced revenues isn’t unique to Lompoc. In 2015, Lawrence J. McQuillan published California Dreaming, which highlighted the unfunded liability crisis.
In the book, McQuillan writes: “Pushing the pension liability from today and onto our children and grandchildren leaves them with a depleted future and a potentially bankrupt California. State and local governments will scramble to find funds, forcing them to raise taxes, slash public services, and/or declare bankruptcy.”
The Santa Barbara County Taxpayers Association has warned for years that continuing to provide lucrative retirement plans for government employees while grossly exaggerating the funds’ performance would lead to the situation we are faced with today.
The obligation to pay for these folks, many of whom retired years ago, isn’t going away any time soon; staff estimates have determined it will take the next 20 years or more just to get contributions back to the point we are at today.
Could the Lompoc City Council or staff have done something to plan for this issue?
Well, in earlier budgets the staff warned that increases were coming but they didn’t know how much. They expected minor increases, however as Wiemiller said then, “when the chickens came home to roost” it turned into an “800-pound gorilla.”
Asked what this council or their predecessors could have done better, Wiemiller said, “All councils have done all they could do and have acted responsibly” and “even if we laid all of our employees off, we would still be obligated to pay this money.”
So, what will Lompoc need to do?
Part of the answer is severe budget cuts Wiemiller said: “The city of Lompoc could soon cut all funding to outside agencies, drastically reduce its capital improvement project expenses and ask residents to approve three new tax increases, if the city moves forward with a budget proposal.”
Wiemiller also recommended three tax measures for the November ballot: a half-cent sales tax increase, a 2-percent increase in hotel taxes to 12 percent, and a 6-percent utility users tax.
Objecting to this idea, Lompoc Councilman Dirk Starbuck reminded everyone that “History shows the people in this community are not going to support tax increases. I just keeping looking at this,” he later added, “and especially when (voters) find out that one of the main reasons that we’ve got a raise in tax is to cover retirements, and there’s people out there struggling to buy food — I’m thinking we’re going to have a long budget session.”
The Lompoc council and other cities now find themselves between a rock and a hard place; either they chose to place the proposed tax measures on the ballot and hope people support them or more services will have to be cut.
During the last budget update, 20 vacant positions, half of them in public safety were frozen, meaning the Police and Fire departments couldn’t fill much needed positions, to meet the current budget.
In the next budget cycle, another $1.2 million will have to be cut.
But, Wiemiller is gone and now that there is a new city manager the outlook hasn’t changed and may even be worse than earlier estimates. This means even more staff cuts, above the current 20 frozen positions will have to be made; where will they be?
Mayoral candidate Jim Mosby has declared that any effort to increase taxes is dead on arrival as far as he is concerned.
The council majority should be held accountable because they had an opportunity to offer voters a voice on this issue but didn’t think they were smart enough to understand what was about to happen if more revenue wasn’t available to bridge the 20-year gap.
So, it wasn’t the messenger who was at fault, it was the content and reality of the message that was lost on Councilmen Jim Mosby, Dirk Starbuck and Victor Vega when they refused to allow voters a voice on whether a temporary tax was necessary.
Correction: Concerning my commentary about Proposition 4, the Children’s Hospital Bond. A reader corrected me saying “the total bond is $1.5 billion. 72 percent of funds ($1,080,000,000) to the eight private nonprofit children’s hospitals ($135 million each); 18 percent of funds ($270 million) to the five UC children’s hospitals ($54 million each).
“So, most of the funding is for the 13 children’s hospitals that fall into those two categories. 10 percent of funds are available to roughly 150 other hospitals — public and private nonprofits — that provide services to children eligible for the California Children’s Services Program.”
— Ron Fink, a Lompoc resident since 1975, is retired from the aerospace industry and has been active with Lompoc municipal government commissions and committee since 1992, including 12 years on the Lompoc Planning Commission. He is also a voting member of the Santa Barbara County Taxpayers Association. Contact him at email@example.com. Click here to read previous columns. The opinions expressed are his own.