HMB considers its (lack of) budget options in special meeting

NOTE: We’ll post video from this meeting when it’s ready. This story was updated to include the city’s budget information.

The Half Moon Bay City Council met for a special emergency meeting at 10 Thursday morning to consider its strategic options in the light of the failure of its Measure K proposed sales tax increase.

City Council member were clearly stunned by the measure’s defeat and dismayed by their unappealing options at the meeting in the Coastside County Water District offices. Council member Rick Kowalczyk was unable to attend the meeting because of an injury.

The city is currently facing budget imbalances of

• $500,000 in fiscal 2010 - 11
• $800,000 to $1,000,000 in fiscal 2011 - 12
• $1,200,000 in fiscal 2012 - 13, because of CalPERS cost increases

The city’s projected revenues for 2010 - 11 are $9,275,658.

The city enters this process with no good options. It has already made difficult cuts in order to sell the bonds it issued to pay off its Beachwood settlement.

The council members were clearly disappointed with the failure of their supporters to vote for the tax increase.  "It’s very unfortunate and painful," said council member John Muller. "People didn’t understand Measure K. We had an opportunity to move the city forward and we missed that opportunity. I don’t want to hear downtown busiensses complain about the bridge." After the meeting, Muller admitted that Measure K was a particularly difficult loss, saying "We don’t lose many elections."

The council took advantage of the presence of the city’s interim Police Chief Lee Violett to get a handle on its options for its single largest budget item. The Chief dismissed any possibility of cutting the existing department further, suggesting that the only savings to be had would come from outsourcing—and that would not be practical to outsource a portion of the department and that if the city were to outsource its police, startup costs would make it prohibitive to get back into policing.

The Chief was uncomfortable giving a ballpark estimate, but said that the savings might amount to $500,000 to $700,000. This would be for adequate service which would not be up to the standards the community has come to expect from its police department. The Council was unhappy with this prospect: losing direct access to the Chief, the Sheriff’s unfamiliarity with the community, and becoming a low-priority customer for the County Sheriff or another local authority.

The Chief further cautioned that the long-term savings would be unpredictable. However, it was noted that if more cities pull out of the communications agreement that Half Moon Bay has with other cities, those costs could rise unpredictably as well.

Other budget categories—none of which are likely to escape cuts—are parks and recreation, public works (both parks & roads), planning, and administration.

Because the city will issue its recreation report in the second week of December, it will consider its options in parks and recreation shortly.

Many more creative sources of cuts and revenue were discussed and dismissed. The city’s few buildings (the City Hall, Adcock Center, police station, and library) are dedicated and often funded with grants for specific purposes. The city cannot sell its newly-acquired Glencree property for three years and would take a substantial loss if it sold the unimproved and environmentally problematic Beachwood in the current real estate market. There is a conservation easement on the city’s property at 144 Kelly, near the beach. The city cannot use its reserve funds because it is obligated to maintain them by terms of its bonds.

This was an extraordinarily emotional meeting and several members of the council and the city manager became noticeably choked up as they discussed it. The city’s police department is an important symbol of the city’s independence from the county, dating back to its orginal incorporation in the 1950s.