City forced to dip into reserve funds to make ends meet
By Nancy Needham nancy@theacorn.com

Mayor Andy Fox sounded an alarm during the budget study session for the city's next two fiscal years beginning July 1.

"Revenues and expenditures have come to a collision point," Fox said.

Charts and graphs provided by city staff showed something unusual happening with the proposed $411-million budget: The city is spending more than it's taking in. This has resulted in a recommendation to use $40 million in reserve funds.

Those who want a say in how Thousand Oaks is spending money can speak during a public hearing at the Tues., June 12 City Council meeting.

During the study session financial director Candis Hong explained the key issues facing the city include a sales tax revenue decline of 1.3 percent over the last six months compared to a year earlier. This compares to a 0.5 percent increase statewide, she said. Also, new auto sales--a significant source of revenue for the city from the Auto Mall--are down 10 percent.

When The Oaks mall renovation is complete and other new retailers open, sales revenue should show a slight increase. Another positive is the city's mixed economy, with service stations, hotels and restaurant revenues up, Hong said. The city also has a strong housing market, continued office space demand, an educated workforce, low unemployment, and job growth, she said.

The city is now moving away from a growth phase and going into a maintenance mode. That means the population is remaining stable, revenues aren't increasing, and infrastructure is aging. There's no plan on how to replace money that will be taken from the city's reserve funds.

"Builder money is few and far between," Fox said.

Money from developers generated much of the reserve funds that are now being used to cover city expenses. With the city nearing build-out, that revenue is drying up.

When asked by Councilmember Claudia Bill-de la Peña if the city had a Plan B if projections for revenues didn't cover expenditures, city manager Scott Mitnick replied, "This is Plan B."

The budget didn't balance the first time, he explained. Cuts were made--travel and training among them.

The Alliance for the Arts stepped in, making it possible for the theater at the Civic Arts Plaza to operate without city general fund subsidies, Mitnick said.

User fees for parking at the Civic Arts Plaza and in the planning department are also being added. Water fees are expected to go up. City positions that are currently unfilled may remain that way, Hong said.

Fox recommended community study sessions to help the city keep pace and stay ahead of the problem. He also suggested financial experts be brought in to participate in the sessions.

Bill-de la Peña suggested that methods to run the city more efficiently might be found through greater use of audits.