Costa Mesa to Lay Off 43% of City Workforce, Outsource Services; Nearly Half-Way There; The Ideal Number of Public Employees is Zero

The City of Costa Mesa, with a population over 100,000, is about to become 43% closer to the idealized goal of no city workers.

In a massive step in the right direction, Costa Mesa to lay off nearly half of city workforce, outsource services.

The city of Costa Mesa plans to lay off more than 200 employees and outsource 18 city services by the fall.

The layoffs would cut the city's municipal workforce by 43%. The City Council approved the layoffs in a 4-1 vote late Tuesday night, despite nearly unanimous opposition from the audience.

City officials said pink slips will go out in the next six months. The mayor blamed years of missteps by city staff and rising pension costs.

Almost half of city work force gets pink slips

The Daily Pilot has more details in Almost half of city work force gets pink slips

About 203 city employees will be receiving the six-month notice in the City Council effort to correct the budget.

City officials have crunched the numbers and determined that more than 200 Costa Mesa employees — or 43% of Costa Mesa's municipal workforce — could be laid off through outsourcing.

Of the 472 full-time positions, 203 city employees, give or take one or two, will get pink slips notifying them that they could be laid off in six months, said Administrative Services Director Steve Mandoki.

Tuesday's move is part of a dramatic restructuring of a city that faces potentially skyrocketing pension costs in the coming years.

Costa Mesa's own projections show that in the next few years, it will be expected to pay more into the state's public pension fund, CalPERS. It's a situation being replayed up and down the state: When the CalPERS pension fund was flush in the early 2000s, Costa Mesa did not have to pay much to the state to cover its employees' retirement costs. Now that CalPERS investments are hurting, cities have to cover the difference.

That pattern looks to continue for at least the next five years, city officials project.

Laying off hundreds of employees and their accumulating pensions by the fall would help to balance the city's budget in years to come, council members reason.

"We're going to run out of money sometime this year if nothing changes," said Councilman Eric Bever.

Costa Mesa Half-Way There

The best way to deal with public employees and their overly generous pension contracts is to not have public employees at all.

I commend Costa Mesa for a huge but incomplete step in the right direction.

Other than a small number of elected officials and a few administrative assistants, the correct number of public employees is zero.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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