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Block Party canceled for 2019 because of budget deficit

Block Party canceled for 2019 because of budget deficit

The city’s Budget Advisory Group held its third monthly meeting on Jan. 14, hearing presentations and asking questions about Lakewood’s $50 million annual municipal budget. The 15-member group includes Lakewood residents and members of local community and business groups.

Group members got an update on ways the city is keeping costs low to keep the city’s budget balanced. Budget reduction measures previously enacted include freezing hiring for nine vacant city staff positions and reducing janitorial maintenance at City Hall and other locations.

At the Jan. 14 meeting, group members learned that the city has also decided to not hold the Civic Center Block Party this summer. The cost of the Block Party, including its professional fireworks show, is $125,000. The city will review the decision on the Block Party next year, including whether to redesign the event in a way that is less costly.

Photo: Members of the Budget Advisory Group listen to a presentation from City Manager Thaddeus McCormack.

The Budget Advisory Group also received a briefing on a recent facility engineering study of the city’s building repair needs over the coming 10 years. The study determined that many of Lakewood’s park structures and community buildings (a majority of which were built from 1954 to 1979) need significant repair to remain in usable condition for the future. The cost of those repairs over the next 10 years was estimated at $31 million, or about $3 million a year.

“This study was very valuable for us,” said City Manager Thaddeus McCormack. “It detailed the condition of our facilities and gave us a good ballpark estimate of repair costs. It gives us a good roadmap to use to prioritize and budget for building repairs over the coming decade. The study of course doesn’t provide the funding for those repairs, but it tells us what we need to plan on budget-wise to keep Lakewood’s facilities in usable condition.”

In the past, the City of Lakewood ran budget surpluses that averaged between $1-2 million a year, which were used to fund infrastructure repairs and upgrades. But in recent years, the surpluses have lessened as Lakewood has begun to feel fiscal pressure from several factors that have impacted many other California cities as well, including:

• The state government’s ongoing takeaway of local redevelopment funding (which now costs Lakewood over $2 million a year);
• The flattening of sales tax revenue to local government as more shoppers go online for purchases instead of shopping with local merchants; and
• The rising cost to California cities of contributions to the state-run employee retirement system as that system takes steps to become more fiscally sound after the 2008 recession.
 
The City of Lakewood ended the 2017-2018 fiscal year with a small surplus, but with a structural deficit forming in the future for the city budget. In order to maintain a balanced budget, the Lakewood City Council has approved over $2.5 million in budget reduction measures for fiscal years 2018-2020.

The Budget Advisory Group will meet again in February, and the City Council will continue with its budget analysis and deliberations leading up to July 2019 adjustments to the FY18-20 two-year city budget. The Budget Advisory Group was created by the City Council to inform community leaders, solicit input about the issues related to the city’s deficit and maintain community understanding, trust and consensus.