COMPTON (AP) — The city of Compton is poised to lay off nearly 100 employees to help plug a gaping budget shortfall, the latest California municipality to grapple with a severe financial crisis.
Compton’s fiscal woes, which include a $25 million general fund deficit and no reserves, are so drastic auditors recently questioned the city’s ability “to continue as a going concern.”
City Manager Willie Norfleet said he was confident the city would avoid bankruptcy if it slashes operating expenses, including about 17 percent of the 575-employee work force.
But even with the layoffs, the proposed general fund budget, which allots money for the city’s daily operations, is still $7.1 million over its projected revenue of $44 million. More reductions are needed, Norfleet said.
“We can make it,” he told the City Council on Thursday night. “It will require a lot of reorganization in virtually every department going forward. We’re trying to maintain a functional city.”
Councilwoman Yvonne Arceneaux said it was unclear how the city would manage. “They still don’t know the full impact of this budget,” she told her fellow councilmembers.
The city of 100,000 residents, which borders south Los Angeles, is far from alone.
Despite the nation’s economic recovery, rising labor and pension costs coupled with reduced revenue from taxes and other sources continue to make budget balancing a tightrope act across California.
The fiscal plight in Costa Mesa in Orange County made headlines in March when a city maintenance worker jumped to his death off the City Hall roof after learning he would receive a layoff notice. No one knows exactly why Huy Pham jumped, but the suicide captured the attention of a country where scores of cities are struggling with a decline in revenues and the rising cost of providing services.
Costa Mesa is considering laying off more than 200 employees and plans to plug a $3.3 million budget hole with reserves.
The city of Bell, reeling from the misappropriation of at least $5.5 million by its officials, is staring at a $4.9 million deficit.
In another high profile case, the city of Vallejo in Northern California, is still trying to crawl out from the Chapter 9 bankruptcy it filed three years ago.
In Compton, the city ended the fiscal year in 2008 with a general fund surplus of $11.8 million, according to auditors’ reports. But it ended the 2010 fiscal year with its general fund $14.6 million in the hole and another $19 million in liabilities, $3.2 million in shortfalls in other funds, and a $22.5 million deficit in the self-insurance fund.
City officials have offered little explanation for the fiscal disaster. The council fired the city manager last September, the second manager to be fired in three years.
The auditors’ report indicated several problem areas, including contracts awarded without competitive bidding, awarding unnecessary contracts, not ensuring the city is collecting all business licenses and business fee revenue, and too-low city charges and fees.
Much of the council’s attention over the past year has been focused on a move spearheaded by Mayor Eric J. Perrodin to reinstitute the Compton Police Department, which was disbanded in 2000 under a cloud of corruption and politics. The Los Angeles County Sheriff’s Department now provides law enforcement in the city under a contract, which will cost $17.5 million in the next fiscal year.
The council voted in April to abandon the police force idea because of the budget crisis, but the city had already spent $1.7 million in preliminary expenses, including $984,500 on a no-bid contract for a feasibility study on the proposal by former a Compton police chief.
City employees said they were shocked to learn recently the situation had become so dire.
“It’s all coming down right now. We were told we were doing great, and we’re in the black,” said Daniel Gomez, vice president of the International Association of Firefighters Local 2216, which represents the Compton Fire Department. “We’re directly the opposite.”
Riley Blackburn, a plumber who’s worked for the city for 27 years, said many workers are angered that the city held a Mardi Gras festival in March and has other summer events planned when layoffs are looming.
“They’re still having parties and some people can’t feed their families,” Blackburn said. “Who do you blame? The government.”
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