As a local store-owner, David Plenn isn’t in favor of parking meters lining the streets of South Pasadena’s downtown business district, unless they added significantly to the city’s bottom line.
Among ideas that might be considered to raise revenue in the city are parking meters and a Cannabis store as the South Pasadena City Council begins to grapple with a long-range financial sustainability plan in the face of an anticipated deficit over the next five years.
A major portion of Wednesday’s 7:30 p.m. council meeting will be spent looking at remedies for the city’s the 5-year financial forecast calling for a potential severe shortfall in the city budget.
“As a business owner and a resident, I’d like to see what financial impact it would have to install parking meters,” Plenn, longtime owner of the Dinosaur Farm, a toy store in the 1500 block of Mission Street, wrote in a Facebook post, responding to a question from the South Pasadenan asking if the City of South Pasadena should have parking meters as a way of increasing its revenue base. “I’d rather not have them unless it added significantly to the city’s coffers.”
For the most part, there was a resounding no to the idea of parking meters idea. “I avoid heading to downtown Pasadena because of the meters,” wrote Kristine Hren Moe in her post. “[I] encourage people to come to our downtown instead.”
Micah Ballenger, was quick to reply, “No, it’s not busy enough for parking meters. I mean the place is a ghost town after dark. It also has a small town feeling without the meters. I say keep it how it is now. I don’t want even more cars parked on my street.”
Concerns were raised by some residents that parking meters would push vehicles into residential areas where they were not found.
“No parking meters!” wrote Alfred De Leon on Facebook. “Instead of trying to squeeze more money out of South Pas residents, why not look for opportunities in where you can gain efficiencies. Or save money by not replacing non-essential staff when they move on. Asking (um, forcing) South Pas residents to dig deeper into their pockets should not be your go-to strategy. We all are asked to do more with less, so we look at cutting what’s not essential. The city should be held to the same standard.”
Nick Humby on his Facebook message noted he once lived in a small town “where they started charging for parking and after that all the stores started closing down as people started going somewhere else.”
Soon after Wednesday’s meeting, city staff is expected to proceed with gathering feedback from the community regarding strategies for a long-range solution to the problem.
Perhaps, thinking outside the box, a consultant hired by the city has included parking meters and the cannabis outlet as just two in a list of ideas the council may consider when looking for additional funding as part of a detailed report in the city’s 5-year financial forecast. Council members will likely meet opposition from some segments of the local population should it want to move forward with a parking meter effort or a cannabis store in town.
“Paid parking deters residents from patronizing local businesses,” said Kim Keipert Carlson in her Facebook account. “If you’re going to charge me, I might as well go to Pasadena or Alhambra where there are more options.”
“No,” declared Marah Yampolski Olsen, regarding the parking meter concept. “Free parking helps local businesses.”
South Pasadena Mayor Dr. Marina Khubesrian says the city “is not unique in projecting budget shortfalls in the next five years due to rising costs of retiree pensions, diminishing sales tax revenues due to an outdated state tax code, increasing labor, technology, and infrastructure maintenance costs, etc. In fact, the City Council is taking a very proactive approach in planning ahead for projected budget deficits. To that end, the city will be undertaking a robust and extensive outreach program to educate the public on the issue and get public input on various options available to us.”
In November, the city of South Pasadena overcame the potential loss of general fund revenues from the Utility Users Tax (UUT), proving to be a huge victory for the council and those working at City Hall, faced with severe cutback had the outcome been different.
South Pasadena now faces additional financial challenges, outlined in a city report by Frank Catania, a principal management analyst, and City Manager Stephanie DeWolfe, who will layout the need for a long-range financial sustainability plan with council members.
“As with all cities in California, South Pasadena is burdened by increasing pension costs from CalPERS (the state pension fund), as well as increasing costs across the board for materials, contractors, and personnel,” Catania wrote in the city report. “The single largest challenge to the city’s budget is the imposition of mandatory new payments to CalPERS. As a result of a number of factors, the CalPERS investment fund is significantly underfunded. In the early 1990s, it was ‘super-funded,’ meaning the balance was more than 100% of the value necessary to meet obligations. Today, although the fund balance has increased in recent years, it remains below 70%.”
Catania stressed that CalPERS has a structural sustainability issue, as has been found in pension plans throughout the United States. “The bottom line is that CalPERS investment funds have fallen to an alarming level and must be stabilized,” he said. “While this has potentially devastating impacts on local governments, cities have no control over the management of the CalPERS investment funds or the rates that are subsequently charged to member agencies to support the fund.”
Catania says the city has some options to balance the budget, noting means to control the rates charged by PERS are not available and no current method to reduce the amount of pension benefits provided to its employees.
Cuts can be made, suggested Catania in his report by coming up with innovative approaches, including the installation of parking meters for new fees, and, perhaps, opening a cannabis store in town for additional sales tax revenue.
Other means to cut costs, as defined in the report, would be by reducing services and associated personnel such as trimming back service hours or eliminating programs.
In addition to parking meters and a Cannabis store, Catania says revenue could be increased by encouraging investment in business districts that generate property and sales taxes, increasing existing city fees for service, restructuring local taxes, allowing for new land uses and associated taxes such as a hotel tax, and redeveloping city properties in a manner that generates more revenue.
According to the report, city staff recommends, “a robust community engagement program to review all potential options, identify preferred alternatives, and inform future strategies.”
As part of the discussion, a financial model will be presented to the community, “establishing the baseline gap for each year and outlining the potential budget impact of a variety of budget cuts and revenue enhancements, allowing residents to test a variety of options and scenarios,” explained Catania.
In addition, the report points out that the UUT will sunset in 2022 if not renewed by voters in 2020. “The loss of this $3.4 million would dangerously escalate the severity of the City’s financial position,” said Catania. “South Pasadena has a variety of options available to balance future budgets including, increasing revenue through economic, administrative, and other non-tax alternatives, increasing revenue by restructuring local taxes, and reducing costs through the reduction of personnel and the services they provide.”
The City of South Pasadena has an annual general fund budget of approximately $27 million annually. According to the report, the largest source of the city’s revenue comes from property taxes at 51 percent. The UUT contributes 12 percent and sales taxes make up 11 percent. User fees and charges comprise 9 percent of the general fund, with smaller miscellaneous sources making up the balance. Supplementing the general fund are transit dollars, special taxes, including a library tax, and grant funds.
“Because the city is a provider of services, as opposed to manufactured goods, human resources are the City’s largest asset and largest expense,” Catania said in the report. “A majority of the City budget, 72%, is expended on personnel line items including salaries, health benefits, and retirement plans. This number increases when factoring in additional funds spent on contract staff who are not counted as personnel expenses, but contribute to the city team. Together these staff enable the city to provide a full suite of services, including our own police, fire and water departments, and manage the infrastructure to create and sustain an unusually high quality of life for a small city.”
By department, say city officials, the majority of funds, 51%, are spent on the staffing and operations of the police and fire departments, followed by the public works department as the city faces critical infrastructure needs. The local library and Community Services Department also take up much of the budget, “but they are heavily subsidized by local return funds and special taxes, rather than general fund dollars,” explained Catania.
Years of neglect have finally caught up with the city’s infrastructure needs. “For many decades, the city did not make the necessary investments to adequately maintain and repair its aging infrastructure and buildings,” said Catania. “In addition, the city owns facilities that are historic properties, requiring complex and costly annual maintenance. A lack of timely repair ultimately adds significant higher expenses to most projects.”
In 2012, the City Council made a commitment to address deferred maintenance, starting with street and roadway repair projects. The City has also made substantial investments in its aging water infrastructure in large part by replacing and upgrading reservoirs serving the city.
In 2018, the council adopted the city’s first Capital Improvement Plan (CIP), identifying more than $100 million in critical projects over the next five years.
“This is the first time the city has had a comprehensive inventory of capital needs,” reads the report councilmembers will address Wednesday night. “These projects include larger systems such as roadways and water infrastructure, which are critical to maintaining quality of life, as well as smaller projects such as upgrading electrical systems, plumbing, and drainage mitigation. Less than half of the projects identified in the CIP are funded.”
The need for additional funding carries to unforeseen expenses. Two recent examples include a major drainage project at the War Memorial Building and mitigation of the new 1,2,3-TCP water regulations following complaints from resident that tap water was tainted with a yellowish color coming out of some facets in parts of the city.
“It is critical that the city plan for the costs of anticipated infrastructure and building maintenance, along unforeseen expenses, within long-term budget strategies,” said Catania in the report. “A long-range financial plan will serve as an important tool to ensure the city’s future sustainability and resiliency.”
Khubesrian is hoping for a robust community engagement when a financial model will be presented Wednesday by Catania, identifying potential options and future strategies as the city looks at ways to increase its budget over the next five years.
“I’m optimistic that this community will come together, study the options and make the difficult decisions to turn a potential crisis into an opportunity to further thrive,” explained Khubesrian. “Our city staff will be prepared to present the various options which may include a new tax – such as a public safety parcel tax, or a cannabis tax, or a city sales tax; proposals to enhance revenues from existing city assets, additional parking fees, reduction of services, etc. will also be discussed. The community input in addition to expert advise and studies will be key in the ultimate decision the City Council will need to make to ensure ongoing fiscal sustainability and resilience of our wonderful little city.”