FACED with possible bankruptcy, the Westminster City Council acted Monday to look for other sources of revenue instead relying on possible renewal of a 2016 one-cent sales tax increase (Shutterstock).

By Jim Tortolano

Faced with a dire report that the City of Westminster might soon be facing financial implosion, the city council Monday night decided to bypass asking voters to renew an existing one-cent sales tax and instead try to find other ways to raise money.

On a 5-0 vote, the council acted to “receive and file” a report predicting that allowing Measure SS – passed by voters in 2016 and expiring this year – to lapse would eventually exhaust reserves and gut city services, and instead consider other ways to generate funds to operate the city.

There was little discussion about the issue, which one city staff member termed “inevitable bankruptcy.” Vice Mayor Carlos Manzo initially spoke in favor of letting voters decide the issue, but there appeared to be little appetite Tuesday night to act on the sales tax issue at that special meeting.

“It is the job of this council and staff to come up with ways to generate more revenue,” said Councilmember Kimberly Ho (District 3).  She suggested creating a task force to generate ideas. “I think I work better under pressure. I come up with really excellent ideas under pressure.”

She added that if city residents really wanted the matter to go to voters, they could gather enough signatures on a petition to force the matter onto the Nov. 8 ballot. “No one’s stopping you,” she added.

The deadline for putting a measure on the ballot is Aug. 12.

Ideas floated for plugging the financial hole revolved around the Little Saigon business district. Could the Tet Festival help bring in more tax dollars? Would improving parking and traffic conditions along Bolsa Avenue help? How about revenue from billboards?

Interim City Manager Christine Cordon, who earlier said that allowing Measure SS to lapse would result in a “devastating loss of services,” said that city staff had “a few ideas; we’re not ready to go public yet.”

All public comments voiced support for putting a renewal of the one-cent sales tax before voters. Diana Carey, a former councilmember who serves as chair of the oversight committee for Measure SS, listed the problems that would result if the tax were allowed to lapse.

Uncertainty about the future is “already having an impact,” said Carey, and that to not approve putting the issue before the public wouldn’t “be prudent.”

City staff made a presentation on the impact of the city if Measure SS expired. According to the report supplied to the council, if the tax is allowed to lapse, the city will be $10.5 million in the red for the 2022-23 fiscal year, with the gap plugged by the use of reserves. However, by 2024-25, the city would have exhausted its reserves and would have a negative balance of $7 million in that “rainy day fund.”

What could be done, budget-wise,  to stave off what one staff member called “the inevitable bankruptcy”?

To make up for the loss of nearly one-quarter of its revenue, the city would have to disband all commissions not required by law, eliminate several senior management positions such as assistant city manager, economic development manager, community services director, 16 full-time and 14 part-time public works positions and reduce the police force by one-third, equivalent to 24 sworn, 17 non-sworn and 25 part-time employees, and other cutbacks, including slashing recreation and parks.