With additional expected revenue coming in as a result of voters approving a sales tax increase earlier this year, Lompoc City Council is entering into a payment plan to aggressively pay off its pension debt.
Over the past few years, the city has suffered from significant financial difficulty, much of which city officials attribute to its growing California Public Employees’ Retirement System (CalPERS) obligation. This led to cuts to various city departments, and eventually the council voted to put a sales tax measure on the ballot to bring in additional revenue.
When voters passed the measure, city officials predicted that this rate increase would bring in an additional $4.9 million annually while it’s in place over the next 15 years. The ballot measure said the funding would be used to “maintain and improve public services,” as well as to pay off the city’s pension debt. But that was before the COVID-19 pandemic led to mass businesses closures.
During its meeting on June 3, the council voted to fill three police officer positions and a few park positions that have been held vacant in recent years due to budget issues. The council also voted to enter into a CalPERS payment plan that the city will be locked into for the next 15 years, which is estimated to save the city millions of dollars in interest.
Mayor Jenelle Osborne and Councilmember Gilda Cordova voted against this motion. Instead, they said they’d prefer the city pass an internal policy that outlines an aggressive repayment plan that the city wouldn’t be locked into in the event that the ongoing pandemic affects the city’s finances worse than anticipated.
Cordova said she doesn’t share city staff’s optimistic projection of the city ending the next fiscal year with a $2 million surplus after closing out this year with a deficit and losing revenue due to COVID-19.
“Sustainability to me would be adopting a plan where we’re paying down our debt while we’re also improving the economic structure of this community, and I’m not seeing both sides of it here,” Cordova said. “I’m just very concerned.”
Councilmembers Jim Mosby, Dirk Starbuck, and Victor Vega disagreed and voted down a motion from Cordova trying to move an internal policy process forward. Mosby said the council needed to enter into a locked payment plan so that future councils can’t redirect the funding to other areas.
“If you put this in, and you got the recommendation from the professional staff that is a way to do it and an ability to do it, and you end up saving this kind of money, it can go a long way,” Mosby said.
This article appears in Jun 11-18, 2020.