Ruminating this morning with the Chief Financial Officer:
As one of the least impulsive persons on the Westside, Jeff Muir paused lengthily before answering a question about Gov. Brown’s May Revise budget issued last Monday: Does it change much in City Hall’s budget plans for the new fiscal year that begins on the last day of next month?
Mr. Muir exhaled while carefully rummaging through his whirling, compartmentalized mind.
“No,” he said slowly, converting the two letters into two syllables. “We really planned over the course of the coming year to be back talking to the City Council anyway about the budget.
‘Final’ Is a Long Way Off
“We will need additional mid-year revisions, either a) once we know what happens with our negotiations (currently underway with the city’s 6 labor unions, one having settled) and b) if there is changed information from the state.”
The future of the Redevelopment Agency — a concept the governor pronounced potentially dead almost five months ago — remains clouded by uncertainty. Mr. Brown has been unable to obtain the necessary 4 Republican votes in the two chambers.
“We may have to deal with a dramatic development from the state regarding redevelopment,” Mr. Muir said. “Our budget is a living document. We plan to adopt a budget next month, but that doesn’t mean we may not need to revisit it.
“I don’t want to overreact. We are talking about things that may happen. But they have to happen before we start taking action that is too dramatic.”
The CFO’s first reaction to the slightly reconfigured state budget was to be “glad, from a personal perspective, that revenues are coming in better than they had anticipated ($6.6 billion worth). That looks to provide a little relief for schools.
“From the city’s perspective, the proposal to kill redevelopment agencies still is on the table,” Mr. Muir said. “For us, that is the most concerning subject at the moment.”
Adjustments Lie Ahead
Before this legislative session is over, “I personally believe there will be changes and reform to redevelopment. I am not sure I believe it will be eliminated.”
Mr. Muir is hopeful that a redevelopment modification scheme by a state senator from his previous hometown, Rod Wright, a Democrat from Inglewood, will be embraced by the legislature.
“Sen. Wright’s plan would provide reform and also send cash to the state, just not as much as the governor wanted,” Mr. Muir said. “If I were going to bet, I would say SB 286 is the one that is going to happen.”
Despite a near Democrat monopoly of both chambers in Sacramento, passing even remotely controversial legislation is no cinch in these edgy, more-sensitive-than-usual times.
“Who knows what action will take place if this bill doesn’t pass?” said Mr. Muir. “The most concerning part for the city is what, if anything, is going to happen about redevelopment.”
In the complex fiscal machinery that determines Culver City’s health, the Redevelopment Agency is linked to a network of supportive financial responsibilities.
The Sound of Crashing
“We have an active and pretty large Redevelopment Agency,” Mr. Muir said. “Also, the Agency does support portions of certain positions in our General Fund. So if we were to suddenly lose the ability to do that all together, that would have a quick effect on our General Fund.”
Anticipating difficulties ahead, “in the budget we have proposed, we are assuming weaning ourselves off some of the Redevelopment support over the course of the next few years.
“But if we have to load that all up front because of action by the state, then obviously it will make us quickly reevaluate some things.”
Mr. Muir was asked if re-evaluation could be interpreted as pending layoffs?
“I don’t know that that would be so,” he said. “But we would certainly have to re-evaluate where we could make further expenditure reductions.
“I guess layoffs would be a possibility. I would not label them as a ‘certainty’ at this point. We are trying to avoid them to the greatest extent possible.
“It is becoming more and more difficult to avoid, though, if we have to further because we don’t have vacancies left.” Mr. Muir characterized the city’s condition as “precarious.”
“We want to avoid getting down to a ‘bare-bones’ situation because that would not distinguish us from L.A. and other surrounding communities. But we have to operate within the realities of financial information.”
