A town tapped out
In affluent Moraga, residents blindsided by fiscal emergency
After six months of searching for the perfect home, Lisa Koltun moved into a four-bedroom house in Moraga in July. Now she wonders if she will regret it.
She hadn’t even unpacked her moving boxes when she learned that her new hometown had declared a fiscal emergency. She had attended dozens of open houses and no one mentioned the city’s financial problems. She felt blindsided.
“I’m shocked. I’m dismayed. I’m scared to death,” she said. “I just spent my life savings on a house here.”
With a property tax bill of $19,000 a year, she worries that the city will ask for more tax dollars.
It’s no wonder no one mentioned the fiscal crisis to Koltun. In a sleepy residential community whose council meetings rarely draw more than a dozen people, it was hardly the talk of town.
But now, residents have bombarded online message boards with their questions and concerns — and they packed a recent town hall meeting to find out why the city that has passed a balanced budget every year is suddenly in crisis.
Residents who paid attention to town hall matters understood Moraga
wasn’t drawing a ton of revenue. But things didn’t seem dire either: On June 14, the council approved a 6 percent salary increase for all town employees. Two weeks later, at an otherwise routine meeting, the council declared the fiscal emergency.
The only resident in the audience was Seth Freeman, a regular attendee who is a vocal critic of the town’s management. He waited two hours — the council first discussed a playground and then a town poet laureate — so he could get three minutes at the podium.
“If we are about to declare a fiscal emergency, then I think we should act as though we have an emergency,” he said. “I think it’s very inconsistent to be declaring a fiscal emergency and spending this nonessential money (on a park) on the same meeting date.”
Freeman posted their decision on the neighborhood social network Nextdoor, and residents responded with confusion and anger.
Since the declaration, tensions are rising between council members and Moraga residents as they demand answers about the town’s budget and spending, particularly the salary increases.
The raises helped keep Moraga’s wages competitive with other cities, said Amy Cunningham, Moraga’s administrative services director.
But some Moraga residents are beginning to question the town government’s staffing.
Moraga, with a population of about 17,000, has 36 full-time employees. Seventeen of them make a six-figure salary, and personnel costs account for nearly 64 percent of Moraga’s operating budget each year.
Other cities in Contra Costa County about the size of Moraga have more employees, but use far less of their operating budgets on salaries and benefits. Pinole, with 18,946 residents, has about 100 full-time employees and uses 24 percent of its budget on personnel.
Similarily, the city of Orinda, with a population of 17,643, has about 40 employees whose salaries and benefits account for about 14 percent of the overall budget.
The Town Council has complained it has a revenue problem. Cunningham said the town isn’t earning enough money because Proposition 13 keeps its property tax revenue stagnant and the lack of business growth keeps sales taxes low.
Adding to its problems, Moraga faced a string of catastrophes over the past year — a 15-foot sinkhole and a crumbling bridge — that total $5 million in repairs. Those costs all but drained the town’s reserve fund, which officials say is what prompted the emergency declaration.
With the emergency declaration in place, the town can hold a special election asking voters to pass a tax measure to increase revenues. Moraga needs to rebuild its dwindling reserve funds and start repairing the tangle of 40-year-old storm drains running underneath the streets, officials say.
Some residents, including Freeman, think the town should cut back salaries before pursuing a tax measure.
Other California cities that have declared fiscal emergencies have taken similar routes. La Mirada (Los Angeles County), which declared an emergency in 2012, cut the city’s workforce by 27 percent. Montebello (Los Angeles County), which declared an emergency in May, imposed a hiring freeze on all city departments except police and fire.
Freeman suggested that the town cut back on spending, and wants the council to rescind the emergency declaration.
“I think it’s bad for the town’s image and reputation,” he said. “It takes away the pride of ownership and of being a Moraga resident.”