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Santa Ana budget crisis prompts outside help

September 19, 2011 12:00:00 AM PDT
A budget crisis looms in Santa Ana. City leaders are trying to put the brakes on a growing deficit that's been building for years.

Many cities are running a structural deficit.

Santa Ana is especially bad because the tax revenues here were already down before the recession hit and ever since the need for services has gone way up.

"You have to go back to the Depression in the '30s to find conditions as poor as this," said Andrew Belknap, Management Partners.

The city of Santa Ana is running out of money. City leaders are projecting a $30-million deficit for next year. The city has hired a consulting group to help them out of the red.

"The recession has been too deep and too long and they need to make structural changes," said Belknap.

Among the recommendations: a potential one-time tax increase and renegotiating contracts with union employees, including overtime rates.

"We've lost over 390 positions in the last few years through cuts, so for us, it becomes a very difficult decision point. What else can we not do that we are already doing?" said Santa Ana Chief of Police and Interim City Manager Paul Walters.

One possibility is privatizing the Santa Ana Zoo, or contracting out police and fire services altogether.

"That's not something the city wants to do, it's not a preference. None of the things are preferences," said Walters.

One thing not on the chopping block is Fiesta Patrias, a festival that brought hundreds of thousands to the city this weekend for fun and food. Leaders say city emergency services were paid for by the event organizers.

Asked about the possibility of the city declaring bankruptcy, they said that is of course a possibility but not something they are considering anytime soon. If you want to look at all the recommendations from that consultant, they have now been posted on the city's website.

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