Budget slide

Budget presentation

On May 7, The Malibu Times reported Malibu city staff managed to present a balanced budget for the fiscal year beginning July 1—but during the most recent virtual city council budget hearing on June 8, staff stressed Malibu was still in precarious position: The city could face a $5 million budget shortfall this time next year if cuts are not made.

With the novel coronavirus pandemic shutting down tourism and severely limiting dining and retail going into the peak season, Malibu is one of countless cities struggling to make ends meet.

“I want everyone to hear I am very, very worried about next year,” City Manager Reva Feldman told council members as the meeting entered its fifth hour, nearing midnight Monday night, adding that she was concerned that “if there’s another disaster, we aren’t going to make it.”

Now, staff have asked council for areas of “belt-tightening,” just in time for the budget’s formal adoption by the end of this month. And the virtual budget hearing, which lasted two hours, came to no final conclusion on what cuts would be made.

According to Feldman and Assistant City Manager Lisa Soghor, the city budget remained balanced largely due to one major injection of cash: the payout from a settlement with Southern California Edison over the disastrous 2018 Woolsey Fire. That $13.7 million has helped bridge what otherwise would have been a multi-million-dollar budget shortfall in the 2020-21 city budget, but projections show the city will be in dire straits next June if more belt-tightening isn’t done.

While council members went back and forth over minor changes like tree trimming and environmental programs, Feldman—who, in her time as assistant city manager, first earned the city its AAA bond rating—stressed major budget cuts may have to be made. 

“I’m not dire with my predictions, ever, with my budgeting, but this is a dire situation,” Feldman said. “Right now, we need to be very mindful that in a year from now, we’re going to be five or six million dollars short and we’ll be facing some very, very difficult conversations.”

So, council asked city staff to draw up a final budget with various cost-saving options, including the possibility of:

•Placing a measure on the Nov. 3, 2020, ballot to increase transient occupancy tax from 12 percent to 15 percent,

•Reducing the cost of law enforcement for the city (though several council members stressed they were not interested in “defunding the police,” as has become a rallying cry amid ongoing police brutality protests),

•Enacting a retirement incentive program to decrease total city staff,

•Reducing community services programs and activities, and

•Reducing sustainability programs.

Though Council Member Rick Mullen—himself a captain with the LA County Fire Department—stated he was “not a ‘defund the police’ guy at all,” he asked what the possibilities were for recovering some of the $9,369,523 currently projected to go toward public safety in the 2020-21 budget. “Is there something we can do there?” Mullen asked. 

The sheriff’s department contract, which makes up 20 percent of the city’s $33.8 million operating budget, was set to increase by $58,000 in the coming fiscal year—the budget included a $489,000 increase in costs charged by the LA County Sheriff’s Department; however, the city would slash homeless services, professional services and a half-time fire liaison position added last year to help cover the increased expenses.

“My gut instinct is that isn’t the place to start making cuts,” Feldman replied, adding, “Public safety is so important to this community.”

However, Feldman said, a suggestion from Mayor Pro Tem Mikke Pierson that would move some of the services from the LASD to the California Highway Patrol for PCH safety may be workable.

Mullen agreed, asking city staff to look into the idea while reiterating that he “didn’t want to go the way of some other towns and defund our law enforcement at all.”

“Nothing against our sheriff, I think we just constantly need more focus on PCH,” Pierson later added.

The final budget hearing was scheduled for the next city council meeting, set to be held virtually on Monday, June 22. There was no indication of when physical meetings may begin to take place once again.

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