BIG Money!

In Newport Beach's Bible, there was a couple of little tidbits, here and here, about this year's City Council trying to keep the upcoming budget expenditures in check. One of the articles mentions that our City expenditures have been increasing by 8.4% every year, for the past 4 years, while income has been increasing by 9% since 2003. Pretty common when it comes with Companies, individuals, Governments etc., get it and then spend it as fast as you can, and when the chickens rule the roost, as they do in Government, payroll skyrockets up with it, which explain most of the budget increases. The difference here, though, is that in the private sector, increasing payroll usually doesn't mean a high pension liability, as they do with Governments. Our NB Police Department just got themselves a nice pay raise, coupled with a nice pension increase, giving police officers annual raises totaling 11% and management raises equal to 10.25% through 2009. Mayor Steve Rosansky said the raises are necessary for the city to compete with other law enforcement agencies. Ok, with the increase of crime in NB and the good job they are doing, they deserve raises. That's ok. Our Lifeguards are on tap for the same deal. Ok, NB Lifeguard Steve Moore just saved 7 lives. He's a hero. But the real question? Who is going to pay for it? The City's Unfunded Pension Liability for 2005 was around $51 MILLION! Unfunded. Unfunded...this is a trend that is happening all over the state and might bankrupt our County, with their Unfunded Pension liability at 4.4 Billion bucks. And now the NBPD and Lifeguards get raises, and City Expenditures have increased by 8.4% per year, for the past 4 years. The Finance Committee (Henn, Curry and Daigle) in examining the budget is very admirable, in their efforts to limit the increase to only 4%, but it is not enough. It actually needs to be pushed into the other direction and an expenditure decrease needs to be considered. Councilman Henn was a CFO for a few companies (many of them public), so he is smart enough to forecast an ugly storm coming down the pike. And believe me, if the Unfunded Pension Liability for 2005 was $51 million, there will be a BIG storm coming. County Supervisor John Moorlach has declared war against the County Unions, I hope it is not too late for us to consider the same. The "sexy" issues in the city are the new City Hall and the Sober Living Homes, and yes, both are very important. But none of those two will matter much when the income increases stop, while the expenditures and pension liabilities continue to rise, and a New City Hall is built using borrowed money (COPs). We will then see the City Council (the one after the current one is termed out, of course) go to desperate measures like Garden Grove did (proposed Casino) and Huntington Beach (Walmart on a closed Elementary School site). But at least we'll have a nice new City Hall (that no-one goes to). Councilmembers Henn, Daigle, and Curry need to call Supervisor Moorlach and get some armor.