Everyone knows the financial footing of Mammoth is bleak, and that it’s been bleak for three years or more.
But on Tuesday night at a special Town Council meeting, citizens learned that the town is merely at the start of a hard road ahead.
“Our future is even bleaker,” said assistant town manager Marianna Marysheva-Martinez, who said the various cuts in a new budget reduction plan equals about 14 percent of the budget.
“There are studies that show nationwide that cities and towns face significant challenges in the future, and we’re no exception.”
On the front burner, she said, is trying to make up a $2.8 million budget shortfall, even apart from the $43 million impending payment to the Mammoth Lakes Land Acquisition.
To do it, the town immediately will:
1) Impose $1 million in pay concessions from its various employees, most of whom have union contracts through 2014.
2) Negotiate its lease payments on the town offices and the police department buildings, saving $50,000.
3) Impose a $1 million reduction to so-called “Voter Commitment” funding for tourism, housing and transit.
4) Reduce $1 million in departmental programs, including a deferral on road construction and maintenance, as well as a reduction in snow removal personnel.
5) Step up its enforcement of the transient occupancy tax, also referred to as the bed tax and/or hotel tax, infusing $500,000 into the economy, $173,000 of which to be distributed back among Mammoth Lakes Tourism, Mammoth Lakes Housing and the Eastern Sierra Transit Authority, which runs the buses.
“The budget reduction plan focuses on the $2.8 million shortfall,” Marysheva-Martinez said. “That shortfall is in the general fund. It translates to 14 percent, even after the town has gone through years of reduction, and before the payment to MLLA on the $43 million judgment that is outstanding.”
If there was a hunt of good news, however, it was that the plan also includes a surplus fund of about $500,000 over the next five years—the first time the council, or anybody else, has seen black ink instead of red.
Town Manager Dave Wilbrecht said in opening remarks that the budget reduction plan is not just for this coming fiscal year.
“We also have long-term plans for stability over time—a 10-year profile to carry this forward.”
But the main effort was directed at the short-term crisis.
“This plan will balance next year’s budget,” Marysheva-Martinez said, “and create surplus funds to satisfy debts that are currently owed, including the MLLA judgment, and put the town on a sustainable footing for future needs.”
In each of the targeted areas, Marysheva-Martinez presented a detailed breakdown of the plan to the citizens, and she reminded those who were not in the Suite Z Council Chambers on Tuesday that it (the plan) is to be presented in full on the town’s website.
It was by any measure a sobering presentation, and drew plenty of reaction from the audience, many of whom argued that the plan was whopperjawed in the area of tourism. They argued for an increase in tourism spending rather than a reduction (see related story, P. 2)
Mammoth Mountain Ski Area, which generates the lion’s share of tourism, sent no one to the podium for remarks or suggestions.
John Morris, the director of operations at Snow Creek resort but also representing the Mammoth Lakes Lodging Association, drew an analogy along the lines of hosting a party, which basically is what Mammoth’s economy is all about.
“If you’re going to have a party, you don’t start by making the food or setting the table. You start by inviting your guests.
“Tourism is everything we do. Mammoth Lakes Tourism’s presentation clearly shows that spending more money on tourism, not cutting tourism, is where we need to be and I know it’s a very difficult situation to be in because there are a lot of people who unfortunately are going to lose their jobs or see their departments cut.
“But we need to be looking at what we can do to increase our revenues that come into the town. And the revenues that come into town are people. We need to get these people here.
“The Lodging Association is behind Mammoth Lakes Tourism in this effort and hope that the town and council can find a way to continue to fund it at a minimum of the current level. It’s a scary prospect if we cut our tourism. The power of tourism in this town cannot be overstated.”
Tim Alpers, former owner of the Alpers Owens River Ranch fly fishing resort, also weighed in with heavy support for tourism.
“I encourage the council to look at the (tourism) numbers really hard. We all need to think on a higher level, and say hey, let’s get on with it, grow ourselves, polish our gem and move past these tough times.”
There were many suggestions from the crowd, some well out of the box.
Warren Harrell with his wife Ruth, prominent second-homeowners and former fulltime residents, suggested the town eliminate all town managers on a South Lake Tahoe model.
“We find ourselves in a deeper hole and a deeper hole and a deeper hole and it just keeps going on,” Harrell said.
“South Lake Tahoe eliminated the assistant city manager, the community development director, the housing director, a park and rec assistant director, a police captain, a division fire chief, a recreation supervisor and eight line staff, for an annual savings of $1.8 million, 57 percent came from management positions.”
Leigh Gaasch, representing the Sierra Valley Sites, argued strenuously to keep police officers on the job.
“They stole our speed limit sign last weekend!” she said of roving thieves in the area.
Businessman Tom Cage, taking all of his allotted five minutes of time, and then some, reminded the council that not only is there a problem with the budget, there is a related problem in public relations that must be addressed soon.
“We all knew what happened to the economy since the 2005-06 peak year, when the town was doing the most business we’ve ever done,” he began. “Then we all know what happened to the economy, a drop of 40 percent.
“Being off only 25 percent this year, for most of us who have been here a while, we can accept that, and appreciate only being off that much. It could have been a lot worse. We took less of a hit than we would have had we not had air subsidies, and marketing departments in town and on the mountain to the extent we have. Those organizations can do more than individual businesses.
“I would advocate that you shouldn’t cut marketing; you should increase marketing. You should increase it now. If it’s a municipal bankruptcy, you’re going to need to handle that marketing wise. It’s a PR issue.
“If you don’t go that way and you settle with MLLA, for whatever amount or whatever terms, that’s a PR-marketing need that you need to address.
“For those of you who are in business, you’re talking to people, just like I do all the time, with bankers, friends, customers, insurance people. Their first questions are what about this lawsuit? Is the town going to go broke? What about LADWP and the water district? Are you going to have water in the future?
“It’s not good. That’s why this needs to be dealt with on a PR basis, once you have everything wrapped up in a pretty little box with a bow on top of it. That’s why you need more marketing dollars.
“You will need to coordinate with John Urdi’s office, a PR campaign once you get this all wrapped up.
“We voted you in,” he said to the council. “We’ve put you in place and we all hope you make good decisions, but you’ve got to get this done. The rumors are killing us.
“The devil’s in the details, I understand all that, but it looks like you’ve got a little bit held back. Use that little bit responsibly, planned over the next period of time, to make sure that we increase the PR and marketing so that we can emerge from all the things going on and be a better and stronger community.”
From the dais, councilmembers for the most part heard the audience reaction with restraint, save for outgoing two-term councilman Skip Harvey (see related story, P. 1) who began a rant that began with “What a mess! What a total mess!” then directed much of his ire at the management of Mammoth-Yosemite Airport.
Councilman Rick Wood, meanwhile, sought to add perspective to the crisis.
“I point out that we began the restructuring process long before what we’re going to be doing over the next several weeks and months,” he said.
“We have outsourced tourism, housing, and transit and we have outsourced on individual departments a number of functions that used to be town functions. We had 130 employees; we now have 80, and we’re going to go down by another six.
“So these are not novel ideas nor are they new. This is an evolving process. We identified in 2009 that we were suffering from a structural deficit. It came to a head this year for a couple of reasons, not the least of which is the dramatic decline of revenues because of the low snow year.
“But even if we’d have had a good snow year, we could still be at a structural deficit, and that’s what we’re trying to change. I heard a couple of folks allude to perhaps management positions be cut. I guarantee we have fewer than we had last year, and last year fewer than the year before. I’m not suggesting that we can’t make more cuts; I’m suggesting, as Marianna so eloquently stated, this isn’t the first round of cutting.
“For this council, it’s the third round of cutting, and if you add all the cuts together, they’re in excess of $7 million over three years.”
Wood put out a capper on the discussion by saying,
“These are very tough times. We don’t have enough money, but this (budget reduction plan) seems to me to be the next step in making the community more sustainable than it ever has been.”
Mayor Jo Bacon started the discussion with cellphone reminder (“Turn ‘em off!”) and ended it softly.
“I beg you to stay with it (the process) and recognize the fact that we’re having to provide a balance, providing a level of essential services with an obligation that we must do something.
“I’m not going to repeat what everyone said, because I’d like to get everybody home before dark.”