Lompoc’s Chamber of Commerce may lose hundreds of thousands of dollars in city funding for the next two years, if the dramatic cuts proposed in Lompoc’s draft 2017 to 2019 budget make their way into the final version.
The draft budget, which city staff presented at the May 2 Lompoc City Council meeting, eliminates all general fund support of outside agencies. This would pull more than $600,000 in funding for the Lompoc Valley Chamber of Commerce and Visitor’s Bureau, as well as Domestic Violence Solutions, the Lompoc Museum, the Central Coast Collaborative on Homelessness, and several agencies selected by the city’s Human Services Commission.
City Manager Patrick Wiemiller told the Sun he “lost sleep” over drafting the proposed budget, knowing those agencies would take a big hit from the cuts.
“I don’t feel good about it,” Wiemiller said. “My hope is we would be able to restore some level of that support with the next budget cycle, but for right now, we are facing a dramatic situation that calls for aggressive and dramatic response on our part. It was a very difficult choice to make, but a necessary choice for right now.”
The “dramatic situation” in question traces back to a lowered expected rate of return on pension investments for retired city employees, from 7.5 percent to 7 percent—the same rate change that’s putting the county budget in a hole. According to Wiemiller, the new projected investments are sticking the city with a $70 million obligation to the California Public Employees’ Retirement System (CalPERS).
Now, the City Council is tasked with balancing the upcoming budget while compensating for unexpected pension costs. Wiemiller’s draft budget does that—but at the expense of city-funded outside agencies.
Mayor Bob Lingl said at the May 2 meeting that he and his fellow councilmembers were “a little shocked” by the draft.
“But I have to commend you on the brave moves you’re making,” Lingl said to Wiemiller at the meeting. “It’s drastic times, and it looks like drastic measures are necessary.”
For the 2015 to 2017 fiscal year, the city’s general fund shelled out $216,000 to the Chamber of Commerce alone—distributed over time at about $9,000 a month—plus about $75,000 in advertising reimbursements, according to Assistant City Manager Teresa Gallavan.
Wiemiller’s proposed budget would pull all that funding from the chamber, but Gallavan said potential methods of implementation—whether the funding would stop all of a sudden or if it would taper off—are “up for discussion.”
Amber Wilson, CEO of Lompoc’s Chamber of Commerce, responded to the Sun’s questions regarding potential budget cuts with an emailed statement.
“If chamber funding is eliminated, all of our programs will be affected,” Wilson wrote in her statement. “Budget discussions have just begun, and nothing has been decided. It is our best hope that the city of Lompoc finds value in a sustained partnership, allowing us to continue to provide the quality of service our community deserves.”
Lompoc Museum Director Lisa Renken told the Sun that because she hadn’t been contacted by anyone from city administration about the proposed cuts, she and museum staff were “scrambling” to find out what they could about potential general fund withdrawals. She said the museum receives an annual grant of $58,000 from the city, which accounts for about 60 percent of the museum’s yearly budget.
“That would be a big hit,” Renken said. “The board would have to decide how to deal with that. We’re in a city-owned building. The collection that we display is owned by the city, too. There would be some tough decisions all around of what would happen.”
At the May 2 meeting, Gallavan echoed a hope Wiemiller also expressed, that the City Council would be able to reincorporate its outside agency partnerships in future fiscal years.
“We’re all looking at taking cuts in this process—not just the outside agencies, all the city departments as well,” Gallavan told the Sun. “We need to work together creatively to come up with ways to continue our priority areas, but maybe look at additional partners in that process, or ways to change up our business models to handle this new reality.”
In addition to pulling funding from outside agencies, Wiemiller’s draft budget eliminates nearly all capital expenditures from the general fund. At the May 2 meeting he also recommended three tax measures for the November 2018 ballot: one raising sales tax by a half cent, another increasing hotel taxes by 2 percent, and yet another implementing a 6 percent tax on utility users.
“If the voters approve, doing so not only balances this budget, but also balances future budgets to address the CalPERS obligation of about $70 million in its entirety,” Wiemiller said at the meeting.
Councilmember Dirk Starbuck expressed reservations about a city vote on raising taxes, citing a recently failed school bond as evidence that Lompoc residents are stingy with their tax dollars.
“History shows that people in this community are not going to support tax increases,” Starbuck said at the meeting. “There’s very little confidence in the community on us managing our money.”
Wiemiller maintained that the city doesn’t have much choice. If it wasn’t for the CalPERS debt, the budget slashes wouldn’t be so severe, he said—but as it is, the city has inherited a financial obligation it must deal with, “like it or not.”
“We could shut down our operations and lay off everyone and discontinue services altogether, but we still have that dollar obligation,” he said at the meeting. “We also have to resolve this historic issue we inherited, and the only way to resolve that, that I can see at this moment, is to have a tax measure like this run before the voters.”
Nothing’s set in stone as far as the budget goes, but Wiemiller told the Sun he hopes the City Council can adopt a final draft by early June, though the councilmembers might want to make some line-item changes.
“It certainly is valid if the council wishes to direct money in other directions,” he said. “It’s just that for every dollar they change, we’re also going to have to identify where that money’s coming from—either increased revenue, or in lieu of spending the money somewhere else. We’re going to have to reduce a service somewhere.”
Staff Writer Brenna Swanston can be reached at [email protected].
