Council, public hear budget reduction plan; Harvey speaks his mind
The Town of Mammoth Lakes, which managed to balance its budget this fiscal year, but faces a $2.8 million projected shortfall next year, rolled out its budget reduction plan on Tuesday night.
During a Special Meeting of the Town Council on Tuesday in Suite Z, Assistant Town Manager Marianna Marysheva-Martinez talked about specifics of the plan, which her presentation said balances the Fiscal Year 2012-2013 budget, creates a surplus fund to satisfy debts and obligations currently owed, including the $43 million Mammoth Lakes Land Acquisition judgment and puts the Town on a sustainable path for future budgets.
Clearing up between $2.5 million and $2.7 million of the shortfall, the plan’s 40 actions and initiatives were designed to avoid an across-the-board 14% cut to all departments and all personnel. Probably the largest single reduction would come from salaries. Employees will be asked for pay concessions that amount to more than $1 million in cuts … 10% from civilians, and another 24% from police, the latter of which could, if necessary, be asked for position reductions.
Property leases would be negotiated down 10%, for another $50,000 in savings. Another $1 million in savings would be realized through myriad of cuts to nearly every department, including some Town contracts with outside entities, such as High Sierra Energy Foundation’s modest $14,500 stipend, all the way up to Mammoth Lakes Trail and Public Access, which will need to look more toward Measure R and Measure U awards to backfill its $170,000 eliminated subsidy.
Several positions will be eliminated, including at least one in Recreation lost through attrition that won’t be refilled, the duties of which have already been divided among remaining Rec staff.
Marysheva-Martinez’s proposal does increase funding in one area: road rehabilitation. While the road budget is still deemed unsustainable to maintain roads in the long term, she said the Town should fund $750,000 of the desired $1.5 million for roads.
This past year, the Town spent just $500,000 on roads.
The plan also counts on revenue enhancement through Transient Occupancy Tax enforcement, which hopefully will add $500,000, some of which will be split between Mammoth Lakes Housing, Eastern Sierra Transit Authority and Mammoth Lakes Tourism. That’s the good news.
The bad news is that those same agencies are going to get hit with 5% net reductions, and 10% if TOT enhancement isn’t realized. This didn’t sit well with MLT Director John Urdi, whose presentation earlier in the evening stressed not cutting back on marketing during tough times.
A sense of Urdi-gency
During his pitch to Council, Urdi was diplomatic, but blunt. “Mammoth is [comrpised of] one industry: Tourism,” he stated. With no agriculture or other industries to fall back on, and surrounded by public land in all directions, Urdi also charged it’s also unrealistic to expect anything to replace it.
“No one in this town is untouched by tourism,” he added, pointing out that 60% of the workforce is directly related to tourism. According to Urdi’s figures, visitor spending pays for almost 70% of town services; “It’s not from me buying a pair of ski boots.”
Every household in Mammoth would pay an additional $3,052 to make up for visitor spending, if tourism went away or never existed. That’s the highest per capita figure for any municipality in the state.
Brands that increase advertising during economic downturns typically fare better than those that cut back, and ultimately spend less overall,” he said. Urdi pointed to Colorado, which in 1992 was the #1 summer destination. Tourism was then seen as an “unnecessary tax.” The state basically gutted the entire $12 million tourism budget, using the argument, “The Rocky Mountains were here long before tourism, and they’ll be here long after the marketers have left.”
As Urdi illustrated, while the Mountains remained, fewer visitors came to admire them. Visitation plummeted and cost the state hundreds of millions of dollars in lost revenues and visitor spending. To this day, Colorado still hasn’t recovered fully.
Urdi reinforced that message by also highlighting Wisconsin’s lack of promoting itself, which has only racked up losses to the tune of $700 million, and Washington state, which cut its tourism budget completely this past year, and could be headed down the same road as Wisconsin and Colorado.
Michigan, however, doubled its tourism budget to fund the “Pure Michigan” ad campaign, generating 1.5 million additional visitors, almost half of which are considered new. The state has enjoyed massive increased visitor spending and revenue, paying for more police and teachers, and creating 10,000 new jobs. Montana took a page from that same book, and has seen a boost in tourism.
During a brisk public comment period, Leigh Gaasch advocated no further cuts in police positions, citing what she indicated were increasing public safety needs in the Sierra Valley Sites area. Warren Harrell thought there should be more spending on roads. Ruth Harrell talked about contracting out law enforcement and considering disincorporation.
And Tom Cage suggested taking the estimated savings (five year, and year-to-year thereafter) and applying those to marketing. He also talked about PR campaign to clean up the MLLA mess. “The sky is falling mentality … is hurting us as a community,” he said. “Get it wrapped up and done with. The rumors are killing us, as are the time and the interest accruing on the judgment. Push the button; get it done.”
Council remarks were brief and mostly restrained. Mostly. Councilmember John Eastman pointed out that MLT is slated to get back almost $100,000 in recovered TOT funding. Councilmember Matthew Lehman mentioned the impact on jobs. “MMSA had to lay off 75 people … our unemployment rate went up 1% in one day,” he said.
Mayor Jo Bacon said little, except conspicuously mentioning “strategies for future litigation,” which presumably involves the MLLA judgment, though no specifics were brought up.
“It’s difficult to argue anything people have said tonight,” Councilmember Rick Wood said. According to Wood, the Town had “begun a restructuring process long before what we’re going to do in next few months … we outsourced tourism and transit … we’re going down another 6 employees,” if MMM’s downsizing plan is adopted as part of the new budget in June.
“In 2009, we suffered from a structural deficit, which came to a head through dramatic decline in snow. We would still have some structural deficit if would have had a good year,” Wood opined. “I’m not suggesting we can’t make more cuts, or do business differently.”
Marysheva-Martinez, he said, eloquently stated [in her presentation that for this Council this is the third round of cutting, amounting to $7 million in three years. There will be more, Wood added.
Wood said it would be important to consider what role should government plays in the promotion of itself and its product, and what role the private sector plays, since it directly benefits from that.
Wood refrained supporting any significant changes to the budget plan vis a vis MLT’s reduced funding. He seemed to back addressing underfunded roads, wanting to avoid any perception of a bait-and-switch campaign. “We can see the mountains in the pictures … we have to provide the services when people get here,” he posited.
The Harvey speech
One person who held back very little was outgoing Councilmember Skip Harvey. “What a mess … it’s a total mess,” Harvey stated, adding Mammoth’s situation is a reflection of the times. “What’s really on peoples’ minds is the lawsuit and what’s going to happen with that. I owe everyone an apology in that it doesn’t appear it will be finished by the time I leave office. It’s something I wanted to accomplish, and I’m sorry … I’m truly sorry.”
Harvey further said he doesn’t want Mammoth to be known as the town that declared bankruptcy. “I would like to avoid that.” He agreed with the many comments supporting marketing, but also with [Wood] that Mammoth shouldn’t have “smoke-and-mirror” marketing.
“The Town has to take responsibility for its actions getting us into the lawsuit,” Harvey charged. MLLA is people, he added, not some big ugly monster. “They’re not the bad guys. They didn’t set the judgment amount, a jury in Bridgeport did. We were told by the judges that we were wrong, that we made mistakes. We have to find out what happened.”
He said that based on recent letters he’s seen, MLLA is mad … really mad, and issued an impassioned plea the company participate in mediation. “This could be our last chance to get this resolved,” he told those in attendance.
Harvey also lashed out at those running Mammoth Yosemite Airport, saying it’s been a victim of bad decisions and management, as well as several lawsuits that have yielded mixed results. “I’m tired of the airport being managed in a mediocre form,” he blasted. “We can plan for the future, but we have to change things, or we’ll be right back in it again.”
All but naming names, he aimed his remarks squarely at senior management, saying the airport litigation judgment “had barely cooled, when the airport tried to hire someone who had the feature of being related to someone.” He did, however, praise Marysheva-Martinez, who he said stepped in and made a course correction that averted another potential lawsuit.
“The experts in this town are the five of us. We know this town better than anyone. You need to lock this Council, MLLA and our town managers in a room and say don’t come out until this is wrapped up,” Harvey advised the constituency. “We need help from community … I know it irks you to pay for something you had absolutely nothing to do with.”
Though Marysheva-Martinez stated earlier that part of the balancing plan would be to address the MLLA judgment, no clear delineation was presented as to how that would be achieved. Yet to come are public hearings on the budget and public deliberations on Council’s take on the balancing plan. The 2012-2013 budget is required to be passed by July 1.