Costa Mesa Seeks Charter

Costa Mesa, Calif., made national headlines in March with plans to lay off half of its public workers, but officials are hitting roadblocks as they try to implement the plan.

City officials planned to begin layoffs in September, but the union was able to get a preliminary injunction from Orange County Superior Court in July 2011 to stop them. The injunction was affirmed in November pending a trial slated for April.

The city on Wednesday held an informational meeting for residents on a resolution passed by the City Council in mid-December that will put a city charter before voters on the June ballot.

The union’s lawsuit alleges that because Costa Mesa is a general-law city, not a city charter city, California’s constitution limits outsourcing to special services.

The meeting was designed to explain the difference between a general-law city and one with a city charter that can enact policies that would otherwise be prohibited under state law, according to a release.

Moody’s Investors Service downgraded the city to Aa2 from Aa1 in May citing Costa Mesa’s weak finances due to a dramatic decline in tax revenue in recent years and low reserves.

Moody’s also sliced the city’s general fund lease obligations to A1 from Aa2. The rating change affected $40 million in debt.

Costa Mesa started fiscal 2011 with a $9.5 million deficit, but ended the year with a $3.8 million surplus as of June 30, according to the city’s comprehensive annual financial report completed on Dec. 15.

The reserve fund is still $14 million short of the city’s stated reserve policy, according to city officials.

The City Council’s efforts were designed to help them pay down the city’s $255 million in unfunded pension liabilities and begin a five-year, multimillion-dollar capital improvement plan to make infrastructure repairs and improvements put off because of budget shortfalls in recent years, the release said.

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