This year's city budget decisions more difficult than ever

By Doug Spoon, Editor

In special meetings called for May 13-14, the Menifee City Council will consider two crucial financial matters that aren’t part of standard procedure during budget planning time.

First, City officials must consider a budget proposal that can project only estimated lost revenue due to the economic impact of COVID-19. Then, they must analyze the potential impact of even more lost income if a November ballot measure to recall Measure DD passes.

The City’s annual budget workshop, scheduled for May 13 at 11 a.m., is an opportunity for council members to hear from City staff’s financial department with recommendations for allocation of funds. It is expected to be held virtually, with council and staff members participating via video conference, rather than at City Hall. Either way, a video broadcast of the meeting will be available to residents.

The second meeting will take place May 14 at 5 p.m. and again is expected to be a virtual meeting with a public video broadcast. This meeting, rescheduled from the original May 6 City Council date, will focus on a staff report on the potential financial impacts of a loss of Measure DD funds, according to city manager Armando Villa. A study of that report is required within 30 days of the April 15 meeting, when council members requested it in response to the city clerk’s report that a Measure DD recall petition was eligible to be placed on the November ballot.

Determining a budget for the current fiscal year’s general fund was challenging enough, considering the City’s rapid growth and demand for increasing infrastructure and public safety. But the loss of revenue both because of COVID-19 and from the removal of Measure DD would be “devastating,” Villa said.

Measure DD was passed in 2016, with 68 percent of Menifee voters in favor of it. The measure created a 1 percent increase in sales tax to help fund increasing costs of public safety and road improvements. Measure DD helped fund the creation of a Menifee Police Department, which is preparing for a July 1 launch. It also has helped pay for the Scott Road Interchange project, and it is expected to help fund the Holland Road Overpass and other infrastructure improvements in the future.

A major obstacle to those plans would be a recall of Measure DD. In a third attempt to get a recall petition on the ballot, Menifee residents John Smelser and Anne Pica obtained 2,758 signatures – about 1,200 more than needed to place the recall initiative on the Nov. 3 ballot. A notice of intent to circulate a petition was filed Sept. 6, 2019, and was submitted on Feb. 10.

Smelser first tried to get such a recall on the ballot in 2018 when he partnered with former Menifee Mayor Scott Mann on a petition that was submitted but rejected because it failed to comply with Election Code regulations. Smelser and Pica authored a similar petition a year ago but it also failed to make the ballot.

In their recall petition, Smelser and Pica claim that Measure DD is no longer necessary because of the restoration of vehicle license fee funding, which had been denied Menifee by Governor Jerry Brown from 2011-2017. Villa has always contended that even with the restoration of VLF fees, the Measure DD funds remain necessary to boost police and fire protection for one of California’s fastest growing cities.

Now Villa is hit with the prospect of a 15 percent or more loss in revenue in the coming months because of COVID-19, according to the City’s tax consultant.

“If we lose Measure DD, that’s about $10 million, which would be about 20 percent of our budget,” Villa said. “A loss like that creates a domino effect on all departments. Then you add the additional impact of COVID-19, and you realize that without Measure DD, the result would be devastating.”

Villa said another frustration is the fact that the federal government, while issuing aid to many businesses and other organizations, has not thus far promised any such help to cities.

“We keep waiting for the Cavalry to arrive, but they’re not arriving,” Villa said. “With that much of a dip in revenue, all our expansion plans would be out the window. We would be reduced to simply sustaining our current pavement management and infrastructure. Cities are putting together their budgets will have to make serious cuts.”

In Menifee’s case, Villa said, he would work to ensure that as little as possible is cut from the budget for the new police department, which city documents show will provide more manpower at less cost than the current contract with the Sheriff’s Department. But the less he cuts from the police department budget, the more he would have to cut from departments such as Public Works and Community Service.

“At the end of the ay, public safety is more important that parks and roads,” Villa said. “The police department would be the priority and there would be a domino effect on other City services.”

Villa said that City staff must provide the most realistic budget proposal it can for the May 13 meeting, without considering the Measure DD recall initiative. If Measure DD were to pass in November, a considerable amount of additional budget adjustments would have to be made.

The estimated severity of those cuts will be among the information given to council members at the May 14 meeting. Meanwhile, there’s always the possibility that Smelser and Pica could look at the hit already taken by Menifee’s economy, due to a pandemic that didn’t exist when they obtained the recall signatures, and withdraw the petition.

Menifee 24/7 attempted to reach out to Smelser and Pica to ask that question. We received no response.