Chula Vista Cratering, Layoffs Probable
Published: Wednesday, October 29, 2008 11:14 AM PDT
It's one thing to face the perfect storm with a new, well-built ship and a fresh, healthy crew. It's another to try to ride it out on a boat that's been falling apart, taking on water for some time and led by officers at war with each other.
The city of Chula Vista is looking at the looming local recession -- a horrible combination of plummeting property values and negative growth in sales taxes -- and sending out an S.O.S.
Interim City Manager Scott Tulloch and his finance team sat down with reporters at City Hall on Tuesday to present this PowerPoint and to outline the shortfall the city faces. Bottom line: real layoffs are on the way and so are real service cuts.
 | | Scott Tulloch said despite the financial troubles, he still wants to be the permanent city manager. |
These notices are becoming sadly routine. Every few months since last year, the city has announced that its projections were too optimistic and it will need to cut positions to continue. Remember when former City Manager David Garcia told a City Council hearing that the city was on the path to insolvency if it didn't derail itself?
Things have apparently gotten worse.
The officials gathered Tuesday said the Chula Vista was facing a $6.3 million deficit for this year. This means the budget they approved this summer foresees spending $6.3 million more than they look like they will receive. Next year, it looks even worse. The city will have to find an estimated $19 million or cut out that much to craft a budget.
To put it in perspective, the budget is $143 million right now -- cutting $19 million from that would mean a slashing of 13 percent of the whole budget.
Tulloch said he has a hard time imagining how that will be possible without actual layoffs. And no, not the classic government "position" cuts where the employees actually aren't laid off but vacancies eliminated instead. There are about 50 vacancies at the city. Cutting them all wouldn't even make up half of the shortfall.
The U-T's editorial writer for South Bay asked if this was just a "worst-case scenario" Tulloch and his staff were outlining. They shook their heads.
"I wish I could say that," said Maria Kachadoorian, Chula Vista's director of finance.
They said the city had given the same presentation to employees. The employees were understanding, the managers said. But the cutting their jobs will surely add more kindling to the ugly fire burning in that city.
Think back for a second on what's happened over the last few weeks: The city is watching a political war play out between Mayor Cheryl Cox and City Councilman Steve Castaneda. The councilman is up for re-election and both his battle and another council seat are being fiercely contended. As I've said, it's become a brutal playing field with money pouring into the campaigns from across the county.
At the same time, the city recently fired its manager in the midst of a bizarre scandal. All of this in a beautiful City Hall bought and paid for with money the city didn't have. It literally bet that the booming housing market would continue to fill its coffers for many years to come.
I asked Tulloch and his staff if the city was in any danger of defaulting on their bonds -- the many loans they took out to build the City Hall and other fancy facilities.
They said no, that the debt payments were budgeted and could be made under the scenarios outlined above.
But think about what that means for a second. City officials are about to begin what will not be the only round of layoffs. They will be cutting jobs because there is no alternative. They can't stop making the payments to the banks and investors to whom the city owes millions. That, after all, is known as bankruptcy. Can you imagine having to lay off employees with families and worries of their own just so you can keep making the payments on the office building you borrowed way too much money to buy?
If you can't, sit in on the next City Council hearing on the matter. On Nov. 17 at 6:30 they're having a special workshop and they'll explain exactly what it's like.
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