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LETTERS: Citizens’ Fiscal Sustainability Committee Members Sound Alarm, Want to Continue Work

As volunteer members of the Compensation Study Advisory Committee, we participated in the recent audit of Santa Monica compensation practices by Moss Adams, a private, independent firm contracted by the city government.

The experience convinced us that citizen participation in budgetary decisions made by Santa Monica’s city government is both vital and beneficial, a fair, reasonable and logical component of prudent fiscal management, since we – the public – pay the bills.

After canvassing members of the committee, we assure the Council that many are ready to continue working with the City to address fiscal anxieties of residents in responsible, collaborative discussions that lead to sound budgetary decisions of city management.

We therefore urge our City Council to continue an advisory committee, including new members from City Employee bodies, actuarial or pension experts, and the business community as necessary, to add public sector representation and private sector expertise to city budget deliberations.

The Moss Adams experience was worthwhile insofar as data made clear that comparable to municipalities in the Los Angeles area, Santa Monica employee compensation levels were above average, staffing levels were highest per capita, and productivity was average.

The overall assessment indicates that while Santa Monica enjoys a robust economy, we spend all the municipal revenue it generates and more, as illustrated by the city’s $461M unfunded pension liability.

Given projected budget deficits in the near term – shortfalls of $3M in 2019-20 and $19M in 2021-22 – hard choices must be made to put our fiscal house in order, including exploration of alternatives for acceleration of the retirement of our unfunded pension liability.

Pensions are integral to the compensation, benefit, and staffing matrix that accounts for 65% of expenditures in the nearly $800M overall annual municipal budget.

Though our strong economic base makes us far better prepared to address this challenge than myriad examples of municipal indebtedness across the state and country, it is of cold comfort given the economic constriction that must inevitably follow a decade of national GDP growth, the longest sustained expansion in a century.

With the next recession -- certain as tomorrow’s sunrise -- the existing pension shortfall will likely balloon over a half billion dollars, becoming an existential threat to our fiscal sustainability.

Therefore, we call upon the City Council to continue and enlarge citizen participation in city fiscal matters; appointment of a Citizens’ Fiscal Sustainability Committee is an appropriate place to start.

Laurence Eubank
Dominic Gomez

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