Costa Mesa budget audit claims $26 million available for services, jobs

Representative from independent firm hired by employees union suggests city is not on brink of insolvency.

June 21, 2011|By Lauren Williams and Imran Vittachi,,

Costa Mesa has about $26 million that could be spent on services and jobs slated for budgetary cuts, according to an audit released Tuesday of the city's financial picture.

The Orange County Employees Assn. retained Harvey M. Rose Associates, a San Francisco-based public sector management consulting firm, to audit the city's finances.

The results were released in the morning, hours before the City Council was scheduled to vote on a controversial $114.9-million budget for the 2011-12 fiscal year that proposes deep cuts in city spending.


City CEO Tom Hatch said Tuesday afternoon that he will review Rose Associates' findings once they are completed, then schedule a council study session to discuss the matter. He said he was given an executive summary of the report's analysis.

"Once we have the audit in hand, we will provide a full response as quickly as possible," Hatch said in the release.

OCEA, which represents many of the city's employees, opposes the proposed reductions to the city workforce. Some 200 positions are slated to be outsourced.

In an afternoon conference call with reporters, Steve Foti, the Rose Associates representative who led the audit, said Costa Mesa's finances weren't as bleak when compared with similar cities. The city was not on the brink of insolvency, he suggested.

Nonetheless, he did stress that the city was facing fiscal challenges.

"I'd say that Costa Mesa is better than average where they're sitting financially at this point," Foti told reporters, later adding "they are not in a great financial position" and that it was relative to other California cities.

At another point during the call, he said that outsourcing "is not necessarily the solution in these kinds of situations."

When a reporter asked Foti directly whether Costa Mesa officials had exaggerated the numbers by painting the situation as a fiscal crisis, Foti replied that he couldn't draw such a conclusion.

City spokesman William Lobdell said the city has been transparent in its budget process.

"There's no hidden money," Lobdell said. "The budget is out there for anybody to see."

Foti told reporters that, although OCEA had hired his firm to perform the audit, he had to remain impartial in offering his assessment.

"I'm here to give it an objective review," Foti said. "I'm not here to point fingers at anybody."

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