Malibu’s new budget reflects Woolsey Fire settlement, belt-tightening
Michele Willer-Allred, Staff Reporter
3:23 pm PDT June 24, 2020
The Malibu City Council has adopted a budget for the 2020-21 fiscal year propped up by a one-time Woolsey Fire lawsuit settlement from Southern California Edison.
Addressing the council during a virtual meeting on Monday, Assistant City Manager Lisa Soghor said the SCE settlement, along with an overall reduction of citywide expenditures, actually helped balance the budget.
“This will not be a solution in future budget years,” she cautioned.
Soghor said that significant expenditures in future years that may create budgetary problems for the city include a full debt service on the city’s 2018 Civic Center Way land acquisition, increased sheriff contract costs and increased employee retirement costs.
In the 2020-21 fiscal year, the city anticipates receiving $30.2 million of general fund revenue, a decrease of about $2.1 million from prior years. General fund expenditures are projected to be $34.1 million, with $3.9 million funded by the SCE settlement.
The settlement, Soghor said, also helped the city this year maintain a healthy reserve, which is necessary to maintain Malibu’s high credit rating.
“This reserve has helped the city overcome the Woolsey Fire and now positions it to weather the COVID-19 pandemic,” Soghor said. “Maintaining (a) healthy reserve is critical with weathering future disasters.”
To help cover unavoidable cost increases in future years, the city will probably have to tap into its reserves, she added.
Soghor said the city is anticipating that the COVID-19 pandemic and subsequent stay-at-home orders issued by the county and state will eat into revenue, including sales, transient occupancy and gas taxes, as well as planning fees and building permits, for multiple fiscal years.
Soghor said the final budget continues to assume a phased reopening under the county’s pandemic road map to recovery plan, and businesses operating in a limited capacity throughout the summer.
“This budget doesn’t factor in a second wave of COVID-19 cases or further stay-at-home orders which would have further impacts,” she said.
The spending plan was approved unanimously by the five-member council.
Soghor said the budget reflects cuts in every department, as well as a reduction in hiring outside consultants, to bring the whole budget into balance.
She said staff plans to bring some of those proposed cuts back for council approval in August.
Staff plans to continue to look at ways to reduce city employee salaries and benefits by $500,000. About $265,000 was reduced from the budget by eliminating a 3.4 percent cost of living adjustment for city employees this year.
In addition to implementing a possible retirement incentive program, Soghor said staff is exploring consolidation of city positions, potential employee contributions into the cost of healthcare and cutting the city’s match for employee retirement plans.
Soghor said staff will also evaluate potential reduction or elimination of some community service programs and activities, and reductions of noncompliance related environmental sustainability programs.
Programs that will remain unfunded include on-call CHP services, enhanced services and staffing to address homelessness, the Malibu Lagoon State Beach management plan, a Malibu Canyon traffic study and immediate implementation of the city’s Dark Sky Ordinance for businesses.
Soghor added that staff has also requested an analysis from the Los Angeles County Sheriff’s Department Malibu-Lost Hills Station of the types and frequencies of calls for service, which may yield areas for savings while maintaining the same level of public safety.
For example, the city might be able to save money by using social workers instead of sheriff’s deputies to assist the homeless.
Soghor said staff is also looking at the possibility of replacing some sheriff deputy hours with CHP services to assist on Pacific Coast Highway. The city is also looking to recoup some funds by placing a hotel bed tax increase on the November ballot, which would raise the tax from 12 percent to 15 percent.
Other changes to the budget include a $50,000 transfer to reserves to fund the enforcement of the city’s dumpster lid ordinance, which takes effect this week.
The Woolsey Fire rebuild fee waiver for residents, which the council also unanimously agreed to extend until June 30, 2021, is estimated to cost the city more than $5.8 million.
Council members lamented that some projects will have to be put off, including an ombudsman program proposed by Jefferson Wagner and a solar panel project at City Hall proposed by Skylar Peak.
Mayor Pro Tem Mikke Pierson said that those who were disappointed about their project not coming forward should be thankful Malibu is not Santa Monica, where they laid off more than 500 employees, including many long-timers, and departments have been completely cut.
“And (Santa Monica) is worried it can get worse. They can be upside down (by) $200 million in two years,” said Pierson, adding that he’s heard other cities having major financial problems too.
Pierson said Malibu needs to have a conservative budget because, right now, the future is unpredictable.
“We don’t know if there is another fire or earthquake, or if this pandemic will come back in a worse way,” Pierson said. “Because, as what has been already pointed out by many people, more and more people have COVID right now.”