How Stanton was able to balance the budget and reduce government with no new taxes
The City of Stanton is located in northwestern Orange County. With a population of more than 38,000 in 3.1 square miles, residents enjoy a small town community feeling. The City was incorporated in 1956 and over its 56 year history Stanton has persevered through the regular ups and downs in the economic cycle. During prosperous years, the City built its reserves and added services to improve the quality of life for residents and during the recent lean years, the City drew on these reserves and made difficult decisions that have kept the City afloat.
The City of Stanton was enjoying a period of prosperity in fiscal year 2006-07 and ended the year with over a $1 million surplus out of a total General Fund budget of $16.8 million. Then came fiscal year 2007-08. With steep declines in property and sales tax revenues, permit fees and investment earnings, the City ended the fiscal year with a $688,000 deficit. This very small community is also very fiscally conservative and had a 99% general fund reserve. With almost $16 million dollars available for an emergency, the City made a decision to spend some of those dollars, while cutting non-essential items from the budget and implementing a hiring freeze. The City Council did not want to impact the community if possible, and there was a hope that this was a "blip" in the economy and the City could weather the storm.
This strategy was successful for several years. However as time passed, it became very clear, that the "Great Recession" was not going to end any time soon. The City continued to tighten its belt on the expenditure side, with cuts of over $1.4 million between 2008-09 and 2010-11. These cuts included a hiring freeze, downgrade and elimination of positions, elimination of training, memberships, consulting services including planning, building, decreased park maintenance, facility improvements and building maintenance, Items which did not directly impact the general public. Unfortunately, for every cut the City made, increasing costs particularly to contracts for police and fire services and still declining revenues, it was obvious that the City needed to change its strategy to remain viable.
Only after reducing non-public safety budgets to minimum levels, did the City take the next step and begun eliminating staff positions. The City laid-off 14 full and part time positions saving over $1.1 million a year these cuts included reductions in every department including, elimination of the City Clerk, managers, office staff, engineers, crossing guards, planners, housing specialists and recreation staff. This included closing the front office of the Stanton Sheriff's substation to the public for walk-ins and was the first cut to community services.
The next wave of bad news hit the City of Stanton with the death of Redevelopment. Over 95% of the City was in the Redevelopment Agency project area and funds were used to provide infrastructure improvements, code enforcement services, housing loan and grant programs and graffiti removal. The City Council then had to decide which of these services would be absorbed into the General Fund. It seemed as though for every cut the City made, something else would happen to eliminate the work the
City had accomplished. This round of cuts included another $950,000 including the elimination of the very successful housing programs, code enforcement, and maintenance staff, reduced animal control services, eliminated park programs, eliminated successful city newsletter, additional consulting services for mandated state programs and the elimination of another 15 full and part-time positions, and the closure of two parks and a park water feature. Non public safety staff was reduced from a high of 44 FTE in 2006-2007 to 25 FTE in 2012-2013. Still had a 1.8 million dollar annual deficit which was expected to grow by $200,000 to $300,000 per year. At that rate, the City expected to deplete its reserves by fiscal year 2014-2015.
- Additional Taxation "Declined" by Voters
Prior to cutting more services to the community, the City Council believed that it was prudent to ask residents if they were willing to pay an additional 2.5% on their utility bills to support City programs and services, particularly public safety. In June of 2012, the City sponsored a ballot measure which would have increased the utility users tax from 5% to 7.5%. The measure failed to pass with 45% of the electorate supporting the measure. The City Council had its answer; the community wanted the City to live within its means. So the City Council set about balancing the budget.
- Safety Services and Fire and Police to the Rescue
77% of the City's General Fund budget is spent for police and fire services. The City has already cut over a million dollars from the police budget, and it was not enough to fill the gap. Due to the structure of the contract for fire services, staffing levels and costs were locked-in for several years. However, to be successful, both departments needed to reduce service to minimum acceptable levels to achieve a balanced budget. Through a collaborative effort and months of negotiations with the Orange County Sheriff's Department and Deputies Association, the Orange County Fire Authority and the Firefighters Association, the City was able to eliminate an additional five sworn positions from the police contract and nine positions from the fire contract. This resulted in a savings of $1.8 million dollars and a balanced the budget.
In these unprecedented economic times, it is imperative that everyone involved work together. Stanton has an amazing and dedicated City Council who made the most unpopular decisions to "save" Stanton. The City's employees have been though two rounds of layoffs, seen friends leave and have added workloads and responsibilities, without additional pay. Yet they continue to provide great customer service, with a smile on their faces and outstanding attitudes. The police and fire unions which are generally demonized in the press were active partners that supported a reduction in service based on the City's dire fiscal circumstances. As the Mayor I am grateful for their understanding and support.
It is possible to balance a budget; however, it takes perseverance, very hard choices, cooperation from all stakeholders and the political will to make it happen. Stanton has all of that and more.
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