By Chris Frost
Oxnard—The Oxnard City Council's Budget hearing drew a massive crowd, and more than its share of fireworks and passion on June 5.
More than 80 people came out to speak against the city's proposed closing of the Oxnard Performing Arts and Convention Center (PACC), the Carnegie Arts Museum, the Colonia Library and Boxing Gym and proposed cutbacks at Station 2 on Pleasant Valley Road to take Engine 62 out of service and run the station with only Emergency Medical Services.
By department, the city is proposing $2.4 million in cuts to the cultural and community services department, eliminating 8 jobs, $2.2 million in public works, which removes 12 positions, saving $1 million in the fire department, $988, 000 in the police department, deferring the hiring of five public safety trainees, $194 million to the information technology department, $190 million on the city manager's staff and other cuts totaling $469,000.
Council members heard the message loud and clear and directed City Manager Alex Nguyen to return with a budget that fully funds Station 2 with Measure O Funds.
The public also came forward with fundraising efforts that will keep the Colonia Library and Boxing Gym open, and Lazer Broadcasting offered to partner with the city to keep the PACC open. The council approved CDBG funds to use at the Colonia Boxing Gym to keep it's doors open during the next fiscal year on a part-time basis.
Nguyen made the first presentation and told the capacity crowd that Oxnard is still in financial trouble. One year ago, Interim City Manager Scott Whitney shared that information with the public and forewarned everyone that the $7.5 million deficit the city faced in the fiscal year 2018-2019 that it would continue.
"We cannot stand still and hope for things to change," Nguyen said. "We have to make decisions and take actions simultaneously, and there are no simple binaries in this effort. We have been spending more money than we can afford to spend."
He called the budget proposal painful and unpopular but said it is necessary.
"We are part of a continuum of time," he said. "While some of the faces have changed, the institution has been going through this for many years."
Nguyen reviewed the timeline that led the city to where it is, starting in 2008 when companies and non-profits downsized because of the great recession but Oxnard did not. Eventually, as the recession ended those companies and non-profits made a comeback and surpassed where they were.
"Unfortunately, in that same decade, this organization found itself in massive turmoil," he said. "You start in 2010 with an FBI raid at city hall. They were not coming here to investigate the next 10 years; they came here to investigate the prior decade and the decade before that. In 2012, the district attorney released their report, and shortly thereafter the city placed the city manager at the time on administrative leave (at full pay), and the council had to appoint an interim city manager for about two years."
The city appointed a new city manager in 2014, who started doing his management assessment about what was wrong and how to explain and fix what was in the district attorney's report. The management report was released in 2015 and had 128 recommendations.
"One of the highlights of that report was that the city manager and the city manager's office become more involved in running the city and more involved in the city's budget process," he said. "A year after that, a new audit was conducted with a new audit firm. They dug deep and wide and came back with 111 findings. That is extraordinary for any organization."
One of the things exposed was the city has a severe lack of best practices in municipal government, Nguyen said, which included outdated fee structures including some fees that dated back to 1972. The city deferred strategic investments, had inadequate capital improvement programs, no master plan for its park system, outdated cost allocation formulas, plus fund deficits at the PACC and River Ridge Golf Course totaling $6 million, combined.
The city also had to pay back $4.4 million to the assessment districts, he said, plus convert 140 employees from part-time to full-time status with benefits that cost between $5-6 million per year.
"The city also had to resort to borrowing $16 million from Measure O to the general fund to cover its budget deficit gap for one year," he said. "The city did not make any structural deficit changes that year; it used a convenient band-aid. The general fund has to pay that back, and there is a 10-year repayment schedule."
Added to the problem was a report that said City Corps was not paying proper contributions to the CalPERS pension system which cost the city $2 million.
"Meanwhile, while all that's happening, the state's pension system for public employees was skyrocketing over those same years in this decade, and doubled," he said.
The city also became subject to vast amounts of turnover and employed 46 people to fill 10 positions over 10 years. That equates to 3.6 executive leaders leaving the city every year.
"No organization can succeed with this kind of turnover in leadership," he said, "When you have this, good things are unlikely to happen, things will fall through the cracks. Bad things are likely to happen, and you have a lot of lost opportunities when this is going on."
Police and fire contracts expired in 2018, Nguyen said, and the city presented the new contracts to the city council and how much they would cost year-to-year, and everyone understands, including the city council that it is a cumulative cost.
"You get an increase in year one, say of a dollar, and you get an increase in year two of another dollar, you don't lose the increase you have in year one," he said. "It's cumulative, so the all-in cost is represented in this budget proposal and not only in the proposed 19-20 budget, but in the five-year forecast. It's all baked in there. There are no surprises, and we are not going to come back in the middle of the year and say the contract for the firefighters cost more."
He pointed out that Oxnard does not exist in a bubble and it competes with other cities for employees in the region even during tight budget times.
"Our pay scale is already about 10 percent below the median and our medical premiums for whatever reasons that came to be in the past were rock bottom," he said. "If we can't keep up, we will lose them because they will make rational choices about where to work."
Nguyen dispelled rumors, starting with the arts being the first thing that always gets cut, which is untrue.
"In prior years, a lot of other things were cut starting in the 11-12 fiscal year, and only this year we are proposing closing the PACC and the Carnegie," he said. "This city and city council has done everything to avoid this."
Nguyen did say that the city will honor the venue's agreements at the PACC through the end of the year, but did site safety concerns in the old building which is 50 years old and pointed out there are no ADA compliant improvements that need to be updated.
During council comments, Mayor Pro Tem Carmen Ramirez said she is pleased the city is going to fulfill its commitments to the people who booked the PACC through the end of the year and is concerned about the issues surrounding the conditions at the venue.
"In addition to a potential recession, we are going to have an earthquake," she said. "It's not an if, but a when. We also have to be responsible for the safety of the people in that building."
In her time on the city council, she has been trying to grapple with what the real situation is with the city's finances.
"There is always room for improvement, but I think we have been dealing with how do we understand the restricted funds, what we can do with them, what are we doing with the general fund, our unfunded liabilities and how do we make sure we provide the basic services and all the other things that we want," she said. "We have never had an easy year here, and there are always unpleasant surprises when things come to light. Your city council members do not do the audits or micromanaging. We are counting on our staff to give us the information, and as you have seen, we have gone through unbelievable turnover. Great people who were here left because they became ill from the demands of the work."
Councilman Bryan MacDonald said he went through the general fund group and found untouched, unencumbered funds during the year.
"I came up with about $8.56 million that had been there since the beginning of the fiscal year," he said. "Inquiring through staff, the majority of that money is probably focused on some kind of use somewhere. On the Vineyard Avenue repair, we have two pots of money for that. One pot is the construction pot, that money has been encumbered, and the second pot is the street paving pot, and that money hasn't been encumbered, so it shows that it is sitting there doing nothing."
He pointed out an inherent weakness in the system and said he had to review multiple documents to figure out which money is encumbered.
He is not prepared to close station 2 and wait for another engine to respond to a fire.
"When your house is on fire, and extra three minutes is a long time to be looking at flames," he said.
Councilman Bert Perello spoke out about a member of SEIU during public comments who accused him of "hanging the union out to dry."
"I was asked by Danny Carrillo (from SEIU) to take a meeting, and I took the meeting and the lady he brought in Lisa Cody, the lady before her called me out," he said. "She gave me questions in a machine gun fashion, I asked her to give me the questions in writing, and I would have a meeting set up with the city manager. I asked if they would take the meeting with the city manager and they didn't want to take it, they wanted to take it later. I don't know when later is, but I got the best answers I could for the young lady, and she wasn't happy."
He is not afraid to meet with any city employee and said: "anytime, anywhere."
"It doesn't mean that I agree with your position," he said. "You'd be a damn fool to think that I agree with your position if I meet with you. I'm supposed to look out for all the residents of the city who, some of them are city employees."
He spoke about needing the fire department and called 911, and they showed up.
"There is nothing like having your wife have a heart attack and die right in front of you because they tried to do CPR and it doesn't work out," he said. "I don't want that to happen to anybody. I don't like anybody telling me because they have brown skin, are poor, or live on the south side of town that it's okay for me to say that. I don't like the text message that said it's not happening in your neighborhood. I'd like to meet you. Everybody's life is important."
Councilman Oscar Madrigal said the Colonia Boxing Gym is more than a boxing gym and he wanted to know what it would take to keep it fully open and hoped the community would raise the money to make that happen.
"It's also a two-hand-touch football field; it's a three-on-three basketball court in the back as well," he said. "It's something for a lot of the kids."
He said people on the south end of Oxnard get ignored and closing station 2 makes them feel like they are affected.
"Those trailer parks on Pleasant Valley and Saviors, God forbid one of those catches fire because the whole thing is gone," he said. "I have an uncle that lives there, and I am not putting my life at risk, I am putting the neighbor's life at risk because the trailer park is right there at the entrance.
He stands in favor of leaving fire station two open.
Councilwoman Gabriela Basua said with 4.1 million in Measure O Funds at the end of the fiscal year 2019-2020, she can't support putting Engine 62 out of service in south Oxnard.
"Yes, it's in my district, and this is what Measure O is designed to do, vital services for fire and police," she said. "I am not willing to put that truck out of service when we will end up with a $4.1 million surplus. I would be doing a disservice to the people who put me in this chair if I say yes, let's do that."
Council Member Vianey Lopez asked Nguyen to give more information on the $4.1 million surplus in Measure O, and he said when everything was crumbling in the city, the tax went from enhancing life in Oxnard to a life preserver that will expire in eight years.
"When I first looked at the city's budget before I applied for the job, I was shocked that an entire fire station, the building, the staffing, and the equipment was wholly reliant on a temporary half-cent sales tax," he said. "All these items that Measure O has been funding to the tune of $16 million a year is going to end."
Mayor Tim Flynn said the council members had abdicated their authority to make decisions about the budget.
"We paid a consultant several years ago $70,000 to start priority-based budgeting, and that requires a lot of time, and it occurs over a multi-year period," he said. "I am strongly recommending to the city manager and the finance committee members that we get started in the fall on next year's budget."
He applauded Nguyen and said he put together a great team, is very experienced, and Flynn supports the budget as presented.
"It's up to us to vett it and put it out to the public," Flynn said.
He said Nguyen is trying to stop the city from operating by the seat of its pants and he is catching a lot of heat about the fire station, the Colonia Gym, and library and everything else.
"The bottom line is you've got to cut something, and if it's not one group that is going to be here it's going to be another group that is going to be here," he said. "I'm open to working with my colleagues, that's what I was elected to do, but the time is now."
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