Oxnard $364 MM 2013-14 and $426 MM 2014-15 Budgets Approved

OxnaRD bUDGET 001

By George Miller

July 21, 2013

July 16 City Council meeting summary: Budgets approved 4-1; Measure “O” sales tax increase results, priorities dissected, new $5 million appropriation; Golf Fund restructuring debated; low income housing subsidies refinancing approved; fracking discussed by members of the public.

Ref:

City Council Meeting July 16, 2013 05h 58m Agenda Minutes Video

 

Budget Approval (Agenda item J-3)

After rejecting it only a week ago, the Oxnard City Council voted 4-1 to approve the two year budget- $364 million in 2013-14 and $426 million in 2014-15, late in the evening, after 11 p.m. Councilman Bert Perello dissented, reiterating his prior reservations about it. “Was very uncomfortable with the budget process… need answers,” said Perello. Although a majority opted not to vote it in last week, City Council members changed their minds, even though nothing in the budget appeared to change.  Previously, the Oxnard Finance Director stated that there were no real consequences to a delay, even though the new fiscal year started July 1. Council and legal counsel reinforced that the budget could be changed. Also voted in simultaneously were new financial policies and compensation structure.  The budget lacks allowance for major software upgrade needs and shows $6,416,642 for Measure “O.” Separately, it was stated that additional funds would be taken from unused funds for last year.  Attending citizens at the council meeting noticed that the city’s treatment of unspent money for unfilled positions contrasts with best practices for budget/expenditures control.

The budget was presented at the meeting as a $108 million general fund, a Measure “O” supplement from a sales tax increase, earmarked for certain purposes and a much larger portion, including services billed and major capital expenditures to enable these. The $562 million capital budget was approved weeks ago, amid assurances that it could always be changed. The budget calls for no new debt, although there is a $60 million increase in spending in 2014-15 over 2013-14.

Oxnard City Council 7-16-13 022

Oxnard resident and frequent meeting speaker Eileen Tracy stated that the department budget presentations were “marketing presentation and promotions.” She further opined that the budget did not specify what was actually done: grants won, families helped, etc. Ventura Fernandez  said the downtown 20 year theater contract promoted by former Mayor Holden is a (financial) sinkhole, as is the $2 million a year deficit drain of the City golf course.

 

Measure “O” Additional appropriation (Agenda item J-1)

This is a sales tax increase initiative, passed by voters and effective since 2009, to provide additional funding to support police, fire and emergency  response, street repair, youth recreation and other things. The net effect has been to increase the general fund by about 10 percent ($11 million annually and rising), with some constraints on usage. The money is fungible and it is possible to spend less from general revenues in order to spend more elsewhere, then backfill with Measure O funding.

November, 2008 Measure “O” text:

  Measure O: “To protect, maintain, and enhance vital services including police, fire, emergency response, increasing street paving/pothole repair to improve traffic flow, expanding youth recreation, after school and anti-gang prevention programs, acquiring property for parks/open space preservation, upgrading storm water drains, improving senior services, increasing code compliance, and other general services – shall the sales tax be increased by one half cent for 20 years only, with citizen oversight and independent financial audits?”

The City Council talked of starting to shift some items from Measure “O” funding to the General Fund, starting in 2015.

This particular discussion was to consider a proposal for:

–Four million for street repairs;

–One million for new Fire Station 8 and operating funds for a firemen’s academy;

–$160,000 for College Park recreational funding;

Motion carried 4-1, with Councilman Perello dissenting.

Controversy erupted about Fire Chief Williams’ $1 million request from Measure “O” to run a fire academy. Dissenters questioned this expenditure, saying that Oxnard should use the County academy facilities and trainers. Chief Williams felt that it would be better to have Oxnard’s own training, due to its unique culture and situation.  He said Ventura County doesn’t offer adequate services and that the Oxnard Fire Department and students would better be able to respond to local emergencies.

Councilman Perello made clear that future academies should take advantage of the economies of the County academy. There may be some grant money involved, too. Councilwoman Dorina Padilla said “ideally, you would want to train firefighters in our own department.”  Councilwoman Carmen Ramirez wanted to know if the city was covered while firefighters were out of the area for training. Mayor Tim Flynn stated that cost would be half if the Ventura County Fire Academy was used.

Councilwoman Ramirez said that additional one-time opportunities to use Measure “O” funding are available.  She mentioned Ormond Beach as a possible use. Councilwoman Padilla said that recreation programs are a good way to help prevent crime. Possibly $115 million in capital bonds requirements might be partially funded by Measure “O.”  Acting City Manager Karen Burnham suggested use of surveys to guide Measure “O” funding priorities.

Resident Steve Nash lamented the lack of citizen oversight of Measure “O” implementation, which is required. Nash also attacked the “$24 million (Fire Station 8) 10 year budget for lease and expenses.” Eileen Tracy was opposed to funding an Oxnard Fire academy via Measure “O.”  Dan Leckliter thought Measure “O” was supposed to be for streets and policing. Leckliter said that parks should not be a recipient and that 40 percent of the funding should go for street work. Larry Stein said money was being used inappropriately, surplus should go to worthy one time efforts he stated, such as street resurfacing.  According to Stein, the new fire station should be financed by golfers.

Not explained is how the $1.8 mm annual golf course deficit would first be dealt with.

Councilman Perello wanted a legal definition of citizen oversight of Measure “O.”  Mayor Flynn sought more allocation for streets, without compromising police funding. The Mayor also sought a stronger oversight committee role.

Measure “O” expenditures in fiscal year 2013:

Oxnard City Council 7-16-13 008

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total expenditures ITD (Inception to Date) $30,534

source 7/16/13 meeting handout

 

Villa Solimar Apartments and Cypress Court Promissory Note Restructuring (Agenda item K-1)

Villa Solimar Family Apartments

web site: http://www.cabrilloedc.org/villa-solimar-family-apartments

In 1950, Oxnard subsidized low income housing by loaning money via the California Economic Development Council. Funding was ended by state law.  Loans leveraged into additional funding from higher levels of government.  The public was told that low rents “don’t provide much cash flow.”  Today, loans can be obtained at three percent; which was unanimously approved by the Oxnard City Council.

Projects originally built in 1950, Solimar- 32 unit project, Cypress, refurbished in 2003. Cabrillo is developer.

In 1994:

–  Oxnard provided $400,000 at seven percent for 30 years for Solimar;

– CEDC provided  $405,000 at 6.35 percent for 30 years for Solimar;

– City Housing Department provided $162,000 at seven percent for 35 years, using HOME funds (no CDC), for Cypress;

Accrued interest:

– $947,000 accrued, $119, 792 paid for Solimar;

– $125,982.74;

Proposed:

– Previous accrued interest of $947,000+ to be “forgiven”

– $440,000 promissory note, three percent for 55 years for Solimar replaces 7 percent note.

– $162,000  promissory note at three percent for 55 years for Cypress.

– Subordinated to new loans/1st mortgage (see below).

-Funding will be solicited for proposed rehabilitation of both projects, Solimar not done since 1995, Cypress in 2003. Involves state bond financing. Tax Equity and Financial Responsibility Act hearing held on 6/11/13.

You  can find some of the details of the deal in the meeting agenda attachment(s) – one part of agenda package, 1 was distributed.

 

Golf Fund Restructuring  (Agenda item J-2)

Image

http://www.riverridge-golfclub.com/

Oxnard has its own golf course, which is operating about a $1.8 million annual deficit.  The proposed solution is a refinance, which the City Council asked staff to research,

In addition, Councilman Perello noted that nearby Ventura’s golf course had  a much higher marketing budget and seemed to be more solvent. Staff couldn’t answer some basic questions, such as what a round of golf costs players, what the traffic will bear, how many rounds of golf are played annually, etc.

Oxnard has been borrowing from the water fund to meet the deficit.

Councilman Perello: “Can we raise fees?  What will the traffic bear?  Incur no more debt?”  Councilwoman  Ramirez: “We just need refinancing to break even.  Why not make it into soccer fields?”  (April discussion covered by the Citizens Journal).

Councilman MacDonald: “We all (Council) asked for a refinancing proposal. Now, we’re arguing whether it should be done.  Why did the City Council not discuss this among themselves beforehand?”

It was previously stated that there are probably no buyers for the golf course. Eileen Tracy: “How about privatizing operations.” Dan Pinedo: “Why not organize youth golf league and grow a whole new generation of customers?”  Oxnard City Council resolved to further discuss this next week.

see Grand Jury Report:

City of Oxnard Golf Course Management – County of Ventura

vcportal.ventura.org/GDJ/docs/reports/2004-05/oxnardgolf.pdf

Ventura County 2004 – 2005 Grand Jury. Final Report. City of Oxnard Golf Course Management. Summary. The Oxnard River Ridge Golf Club management by 

 

Oil/Gas Fracking (brought up by residents)

Meeting speakers frequently raise the subject of “fracking,” a controversial but decades old practice to wring more petroleates out of the ground by using specialized liquids to fracture rock/tight sand formations, to release additional product. This process has greatly increased yields and financial feasibility of oil/gas drilling and production.  However, some have raised concerns about potential contamination of groundwater, even though the activity is typically thousands of feet below the water table. Most fracking solutions are said not to be toxic, many are removed, but it is possible for something to leak from a cracked well casing and contaminate water. Some citizens are leading a movement to eliminate or severely constrain fracking, which would kill much of California’s oil and gas industry.

Lupe Andiamo said “fracking pollutes with chemicals and causes earthquakes.” Resident Dan Leckliter stated “fracking has been employed successfully for 60 years” and described the anti-fracking movement as “a giant devilization conspiracy.” He said fracking “is done thousands of feet beneath the water table.”

It is likely that any fracking regulation, if done, would be by state, maybe some by county. There has been talk of federal regulation.

 

Other

Resident Bill Terry stated that the illegal retirement benefits and loans  are “the elephant in the room,” referring to a past council’s awarding of benefits ruled illegal but never recovered from recipients. This is to be the subject of a special closed meeting.

Resident Steve Nash lamented that some Council members refuse to “revisit” issues formerly decided, which many feel should be reopened. Resident Larry Stein: “Staff supply inaccurate data to elected officials.”

Council members were critiqued in Spanish.   Some agenda items were postponed indefinitely.  Councilman Perello previously suggested dispensing with the recess, which had an unenthusiastic reception from other Council members and staff.

 

George Miller is a “retired” operations management consultant, active in civic affairs, living in Oxnard.

 

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