By Steve Madison
Pasadena City Councilmember
I thought long and hard before I decided to use Dickens’ famous phrase (the opening line of A Tale of Two Cities and probably the most overused quote in literature) as the title for this article. I concluded that there truly is no better way to describe the city’s current budget situation. We, as a community, have accomplished great things over the last decade. To cite some examples, we’ve:
- Renovated City Hall, our iconic landmark and civic focal point, bringing it into the 21st century in terms of earthquake safety and technology, at a cost of $117 million;
- Completed a $150 million expansion and renovation of our convention center and historic civic auditorium;
- Approved — in concept — a $152 million renovation of the Rose Bowl, which will complete a Pasadena renaissance “trifecta” of sorts.
In West Pasadena, specifically, the city:
- Spent $10+ million on Avenue 64 upgrades and utility undergrounding
- Acquired over 20 acres of open space at Annandale Canyon
- Reinvested in neighborhood parks like Singer Park and San Rafael Park
- Created new neighborhood parks on Arlington Mediterranean Garden and Linda Vista Elementary School
So in many ways it truly has been the best of times both for Pasadena at large and West Pasadena in particular. Why is it also the worst of times?
Pasadena has been effected by the worst national economic recession in 80 years, and all levels of government in California are in a budgetary tailspin. Principally as a result of sharply decreased municipal revenues, beginning in fiscal year 2008-2009, Pasadena faced budget deficits that required a rapid and rigorous response. Fortunately, Pasadena has not been hit as hard as most California cities, and I believe we’ll rebound more quickly once the economic recovery is in full swing, but let’s examine the state of the city’s budget situation and what we’re doing to address it.
A major element — arguably the most important element — of the city’s budget, is projected revenues. For Pasadena, and virtually all other California cities, projected revenues from sources like sales tax and property taxes are way down.
To make matters worse, Pasadena and other local jurisdictions have had to weather repeated attacks on local resources from the state, which continues its practice of shifting local revenues away from their intended purpose, rather than living within its means.
Recent efforts to prevent the state from taking more than $2 billion from local redevelopment agencies appear to have failed as a result of a ruling by a Sacramento Superior Court. For Pasadena, this will mean the loss of $10.8 million in fiscal year 2010 and $2.2 million in fiscal year 2011. Local gas-tax revenues also remain under threat.
The city’s overall fiscal year (FY) 2011 adopted budget is $725 million, which includes an operating budget of $615 million and a capital improvement budget of $110 million, but most of those costs and revenues are in special funds (the utility fund is a good example) in which both revenues and expenditures are limited to specific purposes.
Most of City Council’s budget discussions — and most of our ability to actually shape the budget — is about the general fund, which is approximately 30% of the city’s overall budget, and represents all the city’s general financial resources and government activities (other than those specifically required to be accounted for separately). It also provides for police, fire, human services and recreation programs, as well as general city administration.
For fiscal year 2011, general fund revenues are estimated at $212 million — about $5.5 million less than projected revenues. Even after substantial cuts both last y ear and this, the general fund operating budget anticipates expenditures of $217 million — $5.5 million more than expected revenues.
The adopted FY 2011 general fund operating budget is down approximately $13 million in actual dollars from the fiscal year 2009 budget, even though in real terms costs have risen notwithstanding the recession.
How have we reduced expenditures notwithstanding increasing costs? Mainly by reducing personnel costs. Like all cities, Pasadena is a municipal services organization, so it is not surprising that more than 76% of general fund expenses are related to personnel.
This year’s budget requires additional personnel cuts; since FY 2009, we have reduced the number of city employees from 2,427 to 2,292, a total reduction of 135 full-time employees. (These figures include a reduction in the general fund of 108 full-time employees; 991 today, down from 1,099 in FY 2009).
The irony of our reduction of personnel costs is that according to many economic forecasters, creation of new jobs is the key to economic recovery. By cutting jobs we are certainly not contributing to recovery, here or in the state, but revenue projections left us no choice. We have had to reduce our operating budget by many millions of dollars.
Our challenge has been to find ways to work smarter and more efficiently with fewer resources while we deliver the same level of services consuming fewer resources. Unfortunately, we have seen some reduction of services, which were required to achieve a spending plan consistent with the city’s five-year financial plan. Thankfully, those service reductions have had little impact on West Pasadena. Community budget input workshops will begin in October 2010 to help fine-tune priorities and use of resources for future budgets.
In recognition of the impending budget crisis, beginning in fiscal year 2009, we on the City Council and the Economic Leadership Team (the city manager and department heads) have regularly participated in strategic planning sessions designed to focus on the key priorities for the city.
- We’ve identified specific goals:
- Maintain fiscal responsibility and stability
- Improve, maintain and enhance public facilities and infrastructure
- Increase conservation and sustainability
- Improve mobility and accessibility throughout the city
- Support and promote the local economy
- Ensure public safety
City Council also adopted a new mission statement: “The City of Pasadena is dedicated to delivering exemplary municipal services responsive to our entire community and consistent with our history, culture and unique character.”
The FY 2011 Operating and Capital Budgets represent a spending plan that addresses the issues facing Pasadena during these difficult economic times, while at the same time promoting what has made this city so great.
It will not be an easy year, but as always Pasadena’s organizations, community and leadership will persevere. When recovery comes, we will benefit greatly from our reinvestment in projects like the Convention Center/Civic Auditorium, the Rose Bowl, City Hall and the Gold Line, from our strong job base, from our vibrant retail and entertainment districts, and from our unparalleled quality of life.
In West Pasadena, we remain committed to keeping our neighborhoods great. And while it may indeed be the best of times and the worst of times for government budgets today, even better times lie ahead for our great city.
Note: Thanks to City Manager Michael Beck, Finance Director Andrew Green, Public Information Officer Ann Erdman, and District 6 Field Representative Takako Suzuki, for assistance in the preparation of this article.
For more information about the City’s budget, please see the city’s website cityofpasadena.net.