Over 400 city employees set to lose jobs, $203.2 million in budget cuts approved
By Sam Catanzaro
Santa Monica City Council has approved plans to layoff over 400 employees and implement sweeping service reductions as the COVID-19 crisis has left the city facing a major budget deficit.
At an over seven-hour meeting Tuesday, City Council authorized the abolition of 337 permanent positions and 144 part-time positions while approving $203.2 million in budget cuts.
The plan approved Tuesday frees up $117 million in one-time funds while slashing $86.2 million in ongoing expenses via cuts to city services, programing and staffing.
“We have a deadly pandemic and it’s hitting home in Santa Monica. I hope we can see each other through this as friends and neighbors and remember to keep some perspective that whatever decisions we make tonight–whether you like them or don’t like them–we are working really hard to come together as a community to get through this together. I believe we can. I believe we will,” said Santa Monica Mayor Kevin McKeown at the meeting’s end.
The meeting began with Finance Director Gigi Decavalles-Hughes laying out the financial situation Santa Monica finds itself in brought on by the COVID-19 outbreak.
“Hotel tax revenues are down by almost 20 percent this year and we expect overall declines of 42 percent next year,” Decavalles-Hughes said. “As the economy reopens, tourism and dining, sectors that are strongly represented in our city, are anticipated to be among the last to fully open and recover. For this reason, Santa Monica will feel the brunt of this downturn more than other cities.”
According to Decavalles-Hughes sales tax revenue is down 14 percent while parking and other fee revenues have declined 9 percent this year and are forecasted to drop over 29 percent next year. This loss of revenue will result in a $48 million general fund shortfall between March and June, a $102 million shortfall next fiscal year followed by a $74 million shortfall in the third fiscal year.
According to Interim City Manager Lane Dilg, there is no certainty that Santa Monica will be bailed out by the federal government. The $2.3 trillion federal stimulus package enacted by Congress last month includes $150 billion for direct aid to local municipalities but these funds only are available to cities with populations over 500,000. In addition, FEMA reimbursements Santa Monica is eligible for can only be applied directly to COVID-19-related expenses.
It should be noted that with $448 million in unfunded pension liability and flattening revenues, Santa Monica was already projected to be $72 million in the red by 2030.
The only council member to vote against the layoffs was Ana Maria Jara, who cited a lack of information surrounding the positions set to be eliminated.
“It’s really hard for me to be able to make any decisions on the positions without me having to know what the cuts are by staff level, what the cuts are by demographics, what the cuts are by unions and most importantly what they are by salary,” Jara said. “The transparency is not really there because what we are doing is, in essence, lying to the public, we are lying to the staff, we are lying to ourselves and I can’t do that.”
The reductions in services and programming were approved unanimously.
With the council’s approval to eliminate the over 400 positions, city staff will now enter into negotiations with the labor groups representing the laid-off employees over the impacts of the job eliminations.
In addition to the lay-offs, 126 staff members participated in a voluntary separation program, saving 90 current employees jobs according to Dilg.
During the public hearing Tuesday, residents and stakeholders expressed concern that many of the positions set to be eliminated will impact vulnerable employees.
“Most of these are not white and so the hit to the racial diversity in Santa Monica is a heavy one, to say nothing of the struggles then confronted by many black and Latinx people trying to find other work in the face of the discrimination and the fear that racism breeds,” said Joanne Berlin a member of Santa Monica’s Committee for Racial Justice, referring to many of the as-needed and at-will employees set to lose their jobs.
Lauralee Asch, a 29-year retired City employee, former labor leader and longtime Santa Monica resident shared a similar view, while also touching on the impacts of program cuts.
“The largest number of job eliminations hit the lowest-paid employees the hardest. Though not shown in the data, it can be assumed that these cuts will also impact our minority employees in the most severe way,” Asch said. “The cuts being suggested by this report are too severe, myopic and much too rushed. As a longterm resident, former City employee, labor leader, PAL board member and board member of Santa Monica Travel and Tourism, I ask that you keep the Santa Monica that we know whole and provide guidance for measured change to address the current financial crisis. The council should consider a temporary realignment of priorities to address the crisis and save jobs.”
In response to these concerns, Santa Monica’s Chief People Officer Lori Gentles said “the cuts across the board seem to be aligned with and reflect the diversity within our organization proportionally.”
The Interim City Manager and Interim City Attorney are taking 20 percent pay reductions while other high-level staff including police and fire chiefs will take 10 percent and 15 percent pay cuts, according to the City.
Among programs set to be impacted by the cuts is the Preserving Our Diversity (POD) program, which provides cash-based assistance to senior low-income and long-term Santa Monica residents in rent-controlled apartments. While Council gave direction to use a portion of the $2 million in discretionary funds to maintain some levels of this program, the goal of enrolling 250 to 400 residents will not be met under these cuts. Speaking at the public hearing, Michael Soloff, Co-Chair of Santa Monica for Renters Rights, urged Council to maintain a previously approved expansion of the program.
“[It’s] the most timely and cost-effective affordable housing program we have. It goes only to a subset of the most needy residents. Longterm Santa Monica seniors who do not have enough income after rent to meet their minimum needs like food and medicine. The $2 million necessary to fund the ramp-up is available in uncommitted residual housing trust funds as confirmed in response to public records act requests I made without changing any other aspect of staff proposal and will help a minimum of 434 seniors, 10 times the current enrollment,” Soloff said. It should be noted that Soloff is the husband of Santa Monica City Councilmember Sue Himmelrich.
Also set to be eliminated is programing and maintenance at parks throughout Santa Monica, including Miles Memorial Playhouse and the Camera Obscura Art Lab. In addition, annual city events will be suspended and cultural and arts grants reduced. Former Recreation & Parks Commission Chair Phil Brock lamented these losses during the public hearing.
“City Councilmembers should be tasked with doing no harm to the segment of residents who typically need the most assistance from municipal governments: children, teens and seniors,” Brock said. “Many of the proposed cuts unfairly affect our community recreation and parks programs, lives and the POD program. City administration has talked a lot about community wellness over the past five years and that effort began with our youth and teens. Keeping our community sports fields, pools and courts open and available for drop-in and organized play leads to reduced health expenses as our younger residents age.
“Historic Miles Playhouse provides an important indoor-outdoor theatre venue for our community. It is one community cultural use that benefits our youth, adults and seniors in a low budgetary cost and is also integral to helping to revitalize Reed Park for our residents. It deserves to stay open,” Brock added.
Mary Anne Laguardia, vice president of the Recreation and Parks Commission, spoke at the public hearing about how much of the programming set to be eliminated generates revenue.
“Roughly 9,500 to 10,000 people participate in field sports on Santa Monica fields. Based on financial documents we were able to review and conversations with staff, we are close to a net-zero cost in respect to field use. Field use permit revenue generates approximately $670,000 per year into the general fund,” Laguardia said. “If these fees don’t cover the costs of making these fields available to our children you have the ability to raise them. If we don’t have access to our school fields, we can’t run our programming: AYSO, soccer clubs, lacrosse and rugby. These sports and groups would disappear from Santa Monica.”
In addition to approving cuts, council also authorized $2 million in ongoing funds to be allocated, beginning in FY 2020-21, for restoring programs should the City’s circumstances post-COVID-19 permit such restoration. At the meeting Tuesday, Council identified the following programs and services in the following five areas as preservation priorities: POD program enrollment; youth-related programming including CREST Enrichment; playground partnerships and outdoor recreation, including the swim center; mobility; sustainability. Around $400,000 will be put towards each of these sectors in the restoration effort.
Even with the $2 million allocated towards restoration, the current level of programming for after school services will be reduced, including at the Santa Monica Police Activities League (PAL) and Virginia Avenue Park. At the public hearing, Angela Scott, a Pico Resident worried about the longterm impacts such reductions will have.
“I am a single parent. I often work overtime. Knowing that my daughter is at PAL under direct supervision, receives academic support, mentoring and other cultural enrichment programming, as well as nutritious meals, lifts an unimaginable amount of weight off my shoulders. Virginia Avenue Park and PAL provide a safe haven,” Scott said. “I behoove you to be intentional when eliminating programs that impact the very heart of our Santa Monica community. Changes that could very well affect generations to come. With these cuts implemented, we are looking at families already facing financial struggles and now having to deal with struggles of finding affordable after school services in this financial storm we are experiencing.”
In addition, the public library system would lose $4.5 million in funding while laying off 65 employees and closing the Fairview and Ocean Park branches temporarily. This, combined with reductions to the CREST after school program, worried Santa Monica resident and parent Noah Garrison.
“This plan appears hasty and ill-thought-out,” Garrison said at the public hearing. “The proposed cuts get the very heart of what makes us Santa Monica, in particular they get at the heart of what is necessary and critical to our children. Cutting CREST, cutting classes and access to the aquatic center, cutting libraries–particularly in the southern portion of our city– is absolutely not the right way to address this crisis and not the way we should be thinking. These are critical resources you need for families, critical resources for Santa Monica and these should be the last things you are trying to cut. I note in particular the two libraries that appear to be completely cut or eliminated from the Santa Monica library program are in the southern portion of the city.”
Interim City Manager Dilg spoke at the meeting about the uncertainty the City will face in restoring these programs.
“When COVID-19 hit, we could no longer run these programs. And indeed, we don’t know when we can run these programs again under social distancing so there is an issue with respect to when we are allowed to safely run these programs and how will we do it,” Dilg said. We don’t believe we will be running these programs in May or in June, we hope we will be running some programs by July or August but we don’t know.”
To read the full staff proposal on “A Plan for the Future” where a full list of cuts are provided, visit http://santamonicacityca.iqm2.com/Citizens/Detail_Meeting.aspx?ID=125