Nonprofits shoulder 7.5 percent cuts

By: DAVID GARRICK - Staff Writer
20 groups affected by Escondido's budget woes | Thursday, March 20, 2008 12:30 AM PDT ∞

ESCONDIDO -- From Escondido's History Center to its annual Fourth of July fireworks, nonprofit community groups are bracing for 7.5 percent cuts to the amount of city funding they receive each year.

City officials recently informed the 20 nonprofit agencies that receive city funding that they can expect to get 7.5 percent less money during fiscal year 2008-09, which begins July 1, than they got for the current fiscal year.

In interviews this week, officials from some of the nonprofit groups said the cuts will not require them to reduce staffing or shrink what they do. But officials from some other groups said they might be forced to make significant changes.

The cuts are patterned after 7.5 percent cuts being demanded of every city department to help reduce a projected $7.7 million budget deficit for fiscal 2008-09. The cuts are reductions to the actual amount spent during the current fiscal year, not cuts to projected increases in expenditures.

City officials said the primary cause of the deficit is sharply declining sales tax revenue at Escondido's 18 auto dealers and Westfield North County shopping mall.

Funding for nonprofit programs and community events comprises only $1.8 million of the city's roughly $85 million annual budget, and the cuts will only cover about $130,000 of the projected $7.7 million deficit.

But City Council members said Wednesday that nonprofit groups should have to make the same kinds of sacrifices being required at City Hall.

"Everybody has to share in this," said Councilman Ed Gallo, a member of the council's budget subcommittee. "There are no sacred cows this year."

Instead of evaluating the merits and thriftiness of each nonprofit program, the council plans to cut each program an equal percentage, according to Councilwoman Marie Waldron, the other member of the budget subcommittee.

"They're all worthy causes, so it would be very hard for us to have to pick and choose," said Waldron. "I don't see any real chance for any of them to escape the cuts, because we just don't have any money."

Each nonprofit received a letter last month telling it to expect a minimum 7.5 percent cut to its annual funding from the city.

Gilbert Rojas, the city's finance director, said the word "minimum" was used in case the cuts had to be deeper. But he said Wednesday it appears likely 7.5 percent will be adequate.

Rojas said the nonprofits should not expect their allocations to rebound during fiscal 2009-10 or the following year, explaining that the city is projecting even larger deficits for those years if city expenditures are not significantly reduced.

"We're looking at a long-term issue of expenditures outpacing revenues," said Rojas.

Gallo suggested the groups seek more private donations and grants, and the approach is being embraced by the Escondido Children's Museum, which projects to receive $6,290 instead of $6,800 next year.

"We've got to hustle to make up those dollars, so we're looking for a broader base of supporters," said Katie Ragazzi, executive director of the museum, which is on the campus of the city's performing arts center. "We've got to reach further afield."

Other funding sources also will help cover the loss of city revenue at the San Diego North Convention & Visitors Bureau, according to chief executive Cami Mattson.

Escondido projects to reduce its annual donation to the convention bureau from $90,000 to $83,250. But Mattson said other cities do not plan to reduce their donations and some, such as San Diego, may increase theirs.

The cuts are expected to have a more profound effect at the Escondido Arts Partnership, which runs a gallery on Grand Avenue displaying works by local artists. The group is projected to receive $70,300 instead of its usual $76,000.

Wendy Wilson, who took over as executive director March 1, said the cuts will require a staff reduction and scaled-back art displays.

Wilson said news of the city cuts came around the same time that the partnership's new landlord decided to triple the rent, from about $2,000 per month to more than $6,000 per month. The partnership recently began looking for another site on Grand Avenue, she said.

The cuts are also expected to affect how the Downtown Business Association runs the Cruisin' Grand weekly classic car shows, which kick off their new season April 4.

"We will need to re-strategize some of the special attractions, such as concerts on the green, which are enormous in cost," said association chief executive Debra Rosen, explaining that the city cuts have been compounded by a reduction in private sponsorships.

The city's contribution is projected to decrease from $37,000 to $34,225. But like other nonprofit executives interviewed, Rosen said she was not angry or frustrated with the city.

"We respect that the city must make the budget cuts and respect that the economy is driving this," said Rosen.

The cuts will also apply, but in a different way, to the $1.3 million that the city provides to its performing arts center each year. Rojas said the city is obligated to provide the arts center whatever it needs to balance its books each year, so the reductions are more of a request than a demand.

But Arts Center chief executive Vicky Basehore said this week that she plans to reduce the arts center budget so the city's contribution can be reduced to about $1.2 million, as requested.

"I can't tell you right now where the actual cuts will be, but we're always looking for ways to save money," said Basehore.

-- Contact staff writer David Garrick at (760) 740-5468 or dgarrick@nctimes.com.

PROGRAM / 07-08 / 08-09 PROJECTED

California Center for the Arts / $1.3 Million / $1.2 Million

Community chest / $5,000 / $4,625

Education compact / $50,160 / $46,398

Art Association / $5,700 / $5,273

Arts Partnership / $76,000 / $70,300

Children's Museum / $6,800 / $6,290

Mounted posse / $6,650 / $6,151

Youth Commission / $1,000 / $925

History Center / $81,700 / $75,572

Convention Bureau / $90,000 / $83,250

Therapy pool committee / $4,640 / $4,292

Fourth of July fireworks / $7,000 / $6,475

Int'l Young Artists Event / $4,500 / $4,163

Cruisin' Grand / $37,000 / $34,225

First Night / $33,500 / $30,988

Grape Day Festival / $6,650 / $6,151

Jaycees Christmas Parade / $14,000 / $12,950

Military band concerts / $2,500 / $2,313

High school grad nights / $3,000 / $2,775

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