Layoff Injunction Prompts Some Creative Spin From Costa Mesa PR Guy

SANTA ANA, CA — Expressing concern about a looming layoff date, a Superior Court judge Tuesday afternoon told attorneys she would issue a preliminary injunction precluding the mass layoffs of municipal employees within the City of Costa Mesa.

Nearly half the City’s workforce received six-month layoff notices on March 17 after the Costa Mesa City Council majority voted to outsource their jobs. At the time, the City Council had not studied the cost of outsourcing or the negative impacts to community services, and they still have failed to do so.

The Orange County Employees Association (OCEA), on behalf of the Costa Mesa City Employees Association, filed a lawsuit in May to stop the layoffs.

“This is a positive outcome, but it is only one step toward holding this Council accountable,” OCEA Communications Director Jennifer Muir said. “It will prevent the City from laying off employees to outsource to the private sector. At least temporarily, it removes a dark cloud from over the heads of City employees, their families, and the entire community.”

The City of Costa Mesa was quick to spin the results as a victory for the City. Interim Communications Director and $3,000 a week consultant Bill Lobdell’s release led off with the following headline:

Judge rules Costa Mesa can continue outsourcing process, but can’t lay off employees until all ‘proper procedures’ are followed

The release states:

Orange County Superior Court Judge Tam Nomoto Schumann ruled today that the City of Costa Mesa can continue its exploration of outsourcing many of its services, but can’t lay off employees until all “proper procedures” were followed.

The Court didn’t make a finding that the City wasn’t following “proper procedures.”

If that was indeed the case then there would have been no reason for Judge Schumann to issue the Preliminary Injunction. In fact, there was sufficient evidence presented to the judge at the hearing that demonstrated Costa Mesa was not following the proper procedures, hence the reason for her statement. As for the Judge ruling on whether the City could continue its exploration of outsourcing many of its services, that was not a matter of contention or even the subject of today’s hearing.

But this release isn’t the only wash job spinning out of the City of Costa Mesa communications office today. Earlier in the day Lobdell fired off the following gem of distortion:

With its budget balanced for first time in years, Costa Mesa looks to long-term fiscal sustainability at July 12 Study Session

COSTA MESA, CALIF.—In the wake of adopting Costa Mesa’s first balanced General Fund budget in years that didn’t rely on reserves, the City Council will explore ways to make the City’s finances sustainable in the long term at a July 12 Study Session.

The public meeting at 4:30 p.m. in the Council Chambers will focus on a new 5-year revenue and expenditure projection and capital reinvestment plan, a first-ever cash flow analysis, and a review of Costa Mesa fiscal policies.

“Though it was a difficult challenge, passing a balanced budget was an essential step toward fiscal health,” said City Chief Executive Officer Tom Hatch. “Now we need to look at longer term solutions to make sure Costa Mesa residents and businesses are getting the most from their tax dollars by delivering quality services within a sustainable budget.”

The City Council has directed staff to present future budgets that do not use reserves, adequately address infrastructure needs and replenish the reserve fund.

Over the past three years, the City has eliminated more than 140 positions, reduced or cut services, and spent more than $32 million of reserves to cover declining revenue and rising pension costs. Within the next several years, CalPERS projects annual pension costs for the City to increase to more than $20 million—or over 21% of the current general fund.

For the past decade, the Council had adopted budgets that initially relied on reserves—at least on paper—to bridge the gap between projected revenues and spending. Often, the budgets during prosperous times finished with surpluses by the year’s end because of better-than-expected revenues and/or less spending. In the 2001-02 and 2002-03 fiscal years, the city spent about $4.3 million of its reserves, which at the time had reached more than $60 million.

But since the 2007-2008 fiscal year, the City has spent more than $32 million more than it’s taken in in revenue, cutting Costa Mesa’s reserves in roughly half.

The City Council voted last week to approve a $115 million budget (a $94 million General Fund budget that uses no reserves and has $1 million set aside for contingencies).

Well first, there is the minor detail that the City has had a balanced budget EVERY year. That is required by law.

Second we have the nagging falsehood of the claim that pension costs are the cause of the alleged budget crisis. The recent audit of the City’s books made it clear that there is no crisis, no looming catastrophe on the horizon.

Third, there is that nagging truth which these guys will never admit, there are no accurate CalPERS projections that show contributions to pensions rising to more than $20 million in the next several years. Again, from the recent independent audit;

“It is our opinion that previous representations of the funding concerns surrounding future year impacts of CalPERS employee pension benefits have been overstated. Extraordinary CalPERS investment gains during the past two fiscal years will be used to offset prior year losses and begin to lower rates as early as FY 2012-13. Over time, contribution rates will very likely moderate toward the Normal Cost estimates made by CalPERS actuaries without any change in employee benefit levels or actuarial assumptions.”

Finally, that $1 million contingency fund is a set aside to pay for such off budget items as extra legal fees the city is likely to incur as a result of their failed effort to outsource jobs before following proper procedures, additional consultants needed to fabricate justifications for outsourcing, create and review the RFP’s required to implement the Council majority’s outsourcing scam and yes, fay the “off-budget” costs of the $3,000 a week spin doctor to support the Council majority in their personal political agenda with taxpayer funds.

 Such is life in the world of spin that is Costa Mesa City Hall.