Monterey Park City Council held a Special Meeting on January 12 to discuss the $1.4 million short fall, which was taken out of the city’s reserve funds.

Mayor Mitch Ing asked the staff members when they were going to tell the Council that the 2008-09 budget did not balance and the funds were taken out of the reserve account.  Why didn’t staff tell them about the drop in sales tax and interest funding? They just passed the 2009-10 budget in August that is now projecting a $3.9 million short fall. The budget is more than $2 million short so far this year. What can be done about it?

Councilmember Frank Venti said whenever he asked the former Management Services Director about the City’s finances he was told the budget always balanced. The Council tried to make cuts at the budget hearings but staff convinced them not to do it.  He thought Council should have been told that the City needed to dip into the reserve funds before it was done.  The City has to make serious cuts. There should be no area that is exempt from these cuts. The new City Manager should not be blamed because it took time to get to this problem. The City is not paying the new City Attorney the same fees as the previous attorney – nowhere near the same fees.

Mayor Ing blamed the City’s financial woes on the lack of business development in Monterey Park and the legal fees that were paid to our previous law firm. He said he had been told that the legal fees charged by the City were many more times higher than the surrounding communities.

City Manager Yotsuya said the cut proposals could include layoffs, combining of positions, outsourcing of services and municipal bond financing. She stated that another possibility maybe to combine departments. She said that the reductions are the policy choices of the Council.

Interim Management Services Director Susan Hartman (since end of December 2009) advised the Council that the problem was on the revenue side i.e. sales tax ($1 million less than anticipated) and investment income ($145,000 less). Our expenditures are on target or less than projected.

Councilmember David Lau stated the City has had balanced budgets in the past.

Councilmember Betty Tom Chu disagreed that the past budgets were balanced. She stated that the City needs to look into how the Public Safety Impact Fee is being used along with the Hazardous Waste Fee. She asked if retirement costs have been figured in?

Several speakers addressed the Council on the budget woes. A resident stated that the local government should be run like a corporation where office supplies are kept under control. All expenses should be accounted for and employees must join in the cost cutting efforts to support the business. Fire Battalion Jim Burrell said the Fire Department needs to keep their Management Analyst position that they got in last year’s budget. She does more than write grants. He also compared the Fire Department staffing to the Police Department, which did not increase their grants as much as they did. Ruth Willner, a long time resident, said she was not happy with Council’s decision to award $200,000 to a firm to make the community business friendly.

Mr. Venti blamed the former City Manager, City Attorney and Management Services Director for the City’s budget woes. He would like to have the fees paid to the former City Attorney back for the budget. He said the former City leadership would get people to testify at Council Meetings who stopped forward progress.

Mrs. Chu said that in the past the Council did not get full disclosure of information. The City needs to move forward.

Mayor Pro Tem Anthony Wong wants to do more to encourage business in the City – especially tourism. He believes that tourists would increase our sale tax base.

Mayor Ing stated he called this meeting so that everyone could be informed on what is going on.

Council requested that staff bring back a full report on the budget with their recommendations within 30 days. An update on the budget requested by Councilmember Chu was pull off the agenda of the February 3 meeting as Mrs. Chu was absent due to an illness.