Port Hueneme forecasts stable budget

Despite serious setbacks, the overall financial picture for Port Hueneme is stable because of a healthy reserve balance, the City Council was told Monday.

The council got updates on several issues at a special meeting with executive staff. Those issues included a Dec. 15 decision by the Navy to cancel a contract with the city to provide sewer line infrastructure maintenance services at Naval Base Ventura County, Port Hueneme, and the dissolution of the city's redevelopment agency.

Public Works Director Andy Santamaria said the contract was to maintain the sewer system, including manhole covers and sewage lines, on the base.

"Somebody in San Diego decides the contract needed to go out to bid to a minority-owned business," Mayor Doug Breeze said.

The cancellation represents a loss of about $477,000 to the city's general fund, according to City Manager Dave Norman. It follows the dissolution of the redevelopment agency, which paid approximately $1.2 million a year to the general fund.

"The redevelopment agency was providing funds for some salaries for those positions that were directly supporting the redevelopment agency," Norman said in a follow-up interview Tuesday. "It also includes cost allocations for things like general overhead, Finance Department support, city attorney time and utilities."

At Monday's meeting, he told the council the city is focused on holding the line with the budget and doing the best it can with existing resources.

He said the full effects of the redevelopment agency's dissolution won't be known for at least a year, with some money coming back to the city in property taxes once the successor agency divests agency properties.

The city's projected deficit for the 2010-11 fiscal year is expected to balloon to $747,534, up from an initial estimate of $70,701, largely because of less tax revenue, according to a report by Finance Director Robert Bravo.

Hueneme Beach, one of the city's revenue generators, has been undergoing a major project, with a brine line being installed by the Calleguas Municipal Water District. The project has limited parking and beach access, and income from beach parking and various fees has plunged by almost 65 percent.

The work is scheduled to end in spring, when the council will consider a project to renovate and expand the Surfside Seafood snack bar into a full indoor restaurant.

Bravo said the budget was helped out by concessions from the city's police officers association, which bargains for the police department. However, overtime in the department, which totals $80,000 so far this fiscal year, is a problem. Police Chief Kathleen Sheehan said her department is working to reduce overtime by swapping shifts and taking other steps.

Norman said the crime rate was down 8 percent in 2011 from 2010.

He added that the 2012-13 fiscal year will have the most challenging budget yet, citing reductions in major revenue sources, the unknown effect of the redevelopment dissolution, elimination of a $73,000 Neighborhoods for Learning grant for the Hueneme Ray D. Prueter Library and deferred capital maintenance costs.

Still, the city's finances are stable, with a general fund balance of $8 million.

"We still have large fund balances, but we're getting back into a structural deficit, which is a situation we need to cure," Norman said. "When we do things outside the strategic plan, that can wreak financial havoc."

Breeze and the rest of the council generally approved of the strategic plan, which calls for seeking cost savings in all departments and carefully weighing expenses. Councilman Norman Griffaw was absent from Monday's meeting.

"The staff did an excellent job of outlining our options and keeping us afloat," Councilman Ellis Green said. "It is an effort that should be commended."