S A N TA M O N I C A
REFLECTING THE CONCERNS OF THE COMMUNITY
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May 8 – May 14, 2020 Volume XXXV, Issue 40
Santa Monica City Council Approves Sweeping Cuts, Layoffs 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-19related 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.
Photo: Sam Catanzaro
A 2018 Santa Monica City Council meeting.
“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
Budget cuts, see page 6
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