News

A New Fiscal Year, A New Budget

 

 

By Katta Hules

Arcadia has a new budget. The city council has approved the 2016-2017 city budget, with a total operating revenue of $62.4 million and operating expenses of $59.1 million.

“It’s easy to stop … and say we have a $3.5 million surplus. That couldn’t be further from the truth,” warned City Manager Dominic Lazzaretto at this week’s council meeting.

Mayor Pro-Tem Peter Amundson agreed, “[At] my first brush with this budget, I got excited, I saw we had $3.7 million that we could give back … but then we looked at the capital improvement and equipment plan.” This plan contains all the infrastructure that will need to be replaced or maintained in the near future. “A lot of the things we rely on, on a daily basis, the vehicles we rely on, the equipment we rely on, those funds are structurally imbalanced and we need to put as much money as possible into those funds in order to build them back up,” said Lazzaretto.

Planning for the future is the main concern of this year’s budget. The city is looking at having to pay for the medical bills of many of aging employees who were hired before the benefit reform in 2011. Some of these employees will be insured “until death,” said Lazzaretto, while others will be insured until MediCare kicks in. Larry Papp, the main proponent of Measure A and the meeting’s only public speaker called the pay and benefit packages of the last half century “outlandish.” City staff is working to cover those costs.

“There was a time when … I believe it was the mid-‘90s, the city didn’t have to pay anything into our retirement program, we were what they call, ‘super-funded.’ A lot of cities spent that money but the City of Arcadia chose very wisely and they set that money aside and they said ‘these bills are going come due someday, let’s not get fat and happy on it,’” according to Lazzaretto. City staff plans to take half of that fund, $1.35 million, and put it in a trust to build up a savings for covering the medical and retirement bills when they come.

City staff also budgeted to set aside $650,000 a year to invest and save to help offset those future costs. “That money will grow over time, we expect not only to have today’s organization pay for today’s employees, the future benefits we’re providing to them, but we also get the benefits of interest, bringing the overall costs down. We think this is something that will save the city a lot of money in the long run,” said Lazzaretto.

Arcadia used to get a large chunk of its money from the Santa Anita racetrack, but due to the popularity of online gambling, these profits have declined. “The racetrack is doing much better now than it was even a couple years ago, it’s getting better numbers, but it’s nowhere near where it was in 1980 and before that, which really built up our coffer for the equipment and capital funds,” according to Lazzaretto.

In 2012, to make up for this gap, the council voted to raise the utilities user tax. Now much of the city’s budget uses money from savings and taxes. “When we get accused of spending the taxpayer’s money, that’s right on target. That’s the only money we’ve got to spend,” said Council Member Roger Chandler.

The budget introduced several new programs for the city. Collectively, they are projected to cost $204,400, with $145,500 in one-time costs. These programs include updating the citywide design guidelines, which were last updated in 2009; helping the Breeder’s cup with marketing, which brings in “$100,000 in economic benefits,” according to Mayor Tom Beck; replacing banners; putting together a K-9 unit for the police department and a coyote education program.

Of the coyote program, Beck said, “It’s not a problem in just north Arcadia, either, it’s a problem in south Arcadia with packs of coyotes going down streets. We don’t want to wait until somebody gets hurt to do something. We know there’s a problem and we’re trying to solve it.”

The council, who went over the budget in previous study sessions, reading three binders of material and spending six hours discussing the numbers, declared themselves satisfied. The budget was approved unanimously. “The money is well-spent. We are not wasting the money,” said Council Member Sho Tay.

The council will meet again on July 5 at 7 p.m.

June 22, 2016

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