Recent proposal by governor would eliminate license subsidies. City attorney’s expenditure exceeds budget by $100,000; various lawsuits cited.
By Jonathan Friedman/Special to The Malibu Times
The City of Malibu may lose $500,000 from its budget if Gov. Gray Davis’ recommended elimination of the Vehicle License Fee (VLF) backfilling money that goes to local governments is accepted by the state Legislature. It is a large sum for a city with a budget at just a little more than $13 million.
But the Senate approved a bill this week that would allow vehicle license fees to be raised back to 1998 levels, which, if passed, would in effect null Davis’ recommendation. Davis said he plans to veto the bill.
The possibility of such a drastic cut was one of the main issues affecting city staff’s recommendations to the city on where budget cuts should be made for the 2003-04 fiscal year at last Wednesday’s Quarterly Review meeting. But, depending on the outcome of Davis’ proposal and the recently Senate-approved VLF bill, it is yet to be determined if those cuts will be necessary.
The VLF backfilling is a sum of money the state has given to local governments since 1998, when the state first instituted its VLF rebates to residents. Since the 1940s, the VLF has been determined by taking 2 percent of the total value of the car. The state gave the revenue accumulated from these fees to the local governments. In 1998, the state approved a rebate for the fees. To prevent this from affecting the revenue of local governments, the state chose to subsidize the difference. Now Davis has proposed to eliminate this subsidy.
But there is some optimism on the horizon. City Manager Katie Lichtig said it is thought that any possible cut to the VLF backfilling money will not go into effect this fiscal year. That is part of the governor’s proposal, and would mean $250,000 for Malibu. Lichtig said from what she has heard from the League of California Cities that is unlikely to happen, although it is not 100 percent.
“It’s not a done deal,” she said. “It’s not for sure. But they’re optimistic”
But if Malibu does end up having to face the loss of money during the next fiscal year, city staff will have to come up with budget cut and revenue source ideas to make up for it. Administrative Services Director Julia James admitted that to increase revenue the staff “didn’t come up with too many options, and they weren’t very feasible options either.”
As for potential cuts to the budget, the staff provided a list of items that could be on the table. Many of them were rejected by the council, including deferring road maintenance costs, eliminating city programs that are not legally required (such as parks and recreation and code enforcement) and the elimination of the cost of living adjustment (COLA) for city employees.
Some of the other options, such as reducing the amount of money set aside for City Hall and stopping an increase to the General Fund reserve, received mixed reviews from the council. Mayor Jeff Jennings said he favored such cuts because the budget problem would only be a short-term one, and these would be the least effected. He said the city could afford to stretch this money for a couple of years. Mayor Pro Tem Ken Kearsley and Councilmember Sharon Barovsky said they would be okay with reducing the annual contribution to the City Hall reserve if it were done at a minimal amount.
The city currently contributes $375,000 annually to the fund, with a goal to achieve an $8 million total. The city has $1.7 million in its fund now. Kearsley suggested that perhaps the city could reduce its contribution to $300,000.
Kearsley also said he would like to see the elimination of some of the city’s use of consultant fees, which was another one of staff’s options. Specifically, he said he wanted to do away with the use of cable franchise experts.
“I see nothing productive out of that,” he said. “We’ve developed a strategy where we don’t need them. And if we need to pass something by them, we can do it on a piece-by-piece basis.
The city staff also presented the council with its mid-budget report. Several of the taxes and fees the city has collected so far, and is projected to collect before the end of the fiscal year, are much higher than earlier projections. This includes a projected take of $925,000 for building permits fees, nearly $300,000 more than the city had originally figured.
All the city’s expenditures will be at or below projected levels, with one exception to the city attorney’s budget.
The estimate is for the total amount spent to be at $797,300 by the end of the fiscal year, about $160,000 higher than projected. According to the city, that is because of the “amount and complexity of litigation currently underway.”
Since many of Malibu’s cases, including its various suits involving the Local Coastal Program, will be decided before the council’s next quarterly meeting in April, the staff will have a better idea of the exact total at that time.