The four budget workshops and one presentation leading up to final approval of the City of Lompoc’s two-year spending plan were both instructive and clearly demonstrated that we have a diligent council/staff team in place. Council members received their draft copies of the 195-page plan just four days prior to the first workshop, but they used the review time effectively.
The staff projected that the General Fund budget would increase by 17 percent to $67,235,238 in the 2015-17 budget cycle. To balance the GF budget they were asking to use $635,342 from the reserve fund. These numbers would change as the budget was examined in detail.
This year’s budget was unique in several ways. It was reorganized, and according to a presentation made during the May 5 council meeting, the “focus (has) changed to service delivery” — a new concept in the city, a “zero-based” approach meaning you start with no money and justify every expense would be employed.
This is the first time that any city administrator I can remember has directed his staff to take this approach.
Two council members, Dirk Starbuck and Jim Mosby, led the council discussion. They asked methodical questions and allowed staff time to provide clear answers rather than wasting time making assumptions or providing their own “technical input.”
It was very clear that the staff took this new budgeting approach seriously. They analyzed their service delivery tasks and initially concluded that the General Fund services needed 40 additional full-time positions, and the utility enterprise funds would allow 33 additional full-time positions to provide the highest level of service. This totaled 73 new employees and well more than $14 million in salaries, a number that couldn’t be reached due to revenue concerns.
A new cost allocation plan was introduced that distributed administrative costs to each major functional area in a much more equitable manner. At the end of the process, fewer than a dozen full-time positions were approved — three in the fire department, three administrative positions and the remaining were needed to staff the public library after its operation was absorbed into city government.
Some new positions were easily justified. For example, the grant funding for fire department positions will expire during the new budget, and the fire chief requested that these positions become permanent. The adding of three full-time firefighter positions has improved service delivery and nearly eliminated the inability to provide service during multiple calls in the same time period.
There were many unknowns going into these discussions — only the skillful questioning by Councilmen Mosby and Starbuck brought out some serious points to consider. I was impressed with the ability of the staff to respond promptly to the questions of the council members, and those answers required staffers to burn the midnight oil researching each one.
One answer revealed that the staff had not spent an estimated $1 million from the last two-year budget and this money would now be utilized in the new budget. Thus the council and taxpayers learned that the staff didn’t just spend everything they had but instead tried to be disciplined in the operation of the city.
A collateral benefit was that the questioning and answer seeking discovered that some administrative costs were listed more than once by various departments and some revenues were underestimated. Thus the final total was less than originally thought.
There were some unknowns that only time will provide the answer to. For example, when estimating revenue, it’s hard to say what the economy will do, how many new projects will actually be built or what funds will flow into Lompoc from either the state or federal government.
Another unknown is how many new regulations that the state or federal government will create that establish new unfunded mandates that the city must pay for. Recent examples are the new sick leave standards that will increase employer costs and stormwater management and methane gas recovery systems at the landfill.
One thing is clear: The city administration was very conservative with their budgeting estimates, meaning that they probably underestimated revenue and overestimated expenses. One example was the addition of three new administrative staff positions.
The city administrator pointed out that even if the council approved the additional staff, the human resources department couldn’t possibly recruit and hire new folks for several months, thus there would be an immediate “savings” of several hundred thousand dollars in salary costs in the first year.
Another revelation was that a major effort is under way to examine the fee schedule for public services. A several hundred page report is in its final stages and should be put on the council agenda for public discussion in the next few months.
During the last meeting on this subject on June 23, the staff rolled out a well-thought-out graphic. The staff displayed an Excel spreadsheet to automatically calculate the impact of funding their “wish list” on both the bottom line and amount of reserves needed as each decision was made. All funds were approved and they still lowered the amount of reserves needed by 30 percent.
This budget had a lot of moving parts, but at the end of the day taxpayers can feel confident that we have the right membership on the council who ask the tough questions and won’t just rubber stamp anything that comes their way.
Well done, Lompoc!
— 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 news@noozhawk.com. The opinions expressed are his own.
