Why five? Well, mostly because when I did resolutions last year, ten turned out to be a bit more than the City could chew. I’d say they only got to about a third of them, at best. So in 2025, let’s be a bit more pragmatic.

This year I am also styling these more as areas-of-inquiry than resolutions, as frankly I don’t have a good resolution or even plausible suggestions for any of these questions. They are objectively tough, and I have sympathy for the staff and members of the City Council that will have to tackle them. They are also things that I think are flying a bit under-the-radar after a year of fairly active local policymaking.

So, what rough beasts slouch towards Costa Mesa in 2025? Here’s some links up front for quick navigating, as this one is a bit long:

1. Whither Rental Assistance?
2. How will Grant’s Pass affect Costa Mesa?
3. Can we stop CMPD attrition?
4. The return of ICE to Costa Mesa’s jails?
5. Are local budget concerns on the horizon?

Whither Rental Assistance?

As you, dear reader, certainly know already, the 2020 COVID-19 pandemic brought with it a flood of federal relief money that shored up the budgets of many local governments, including Costa Mesa’s. While the city did a pretty admirable job of avoiding using American Rescue Plan Act (ARPA) funds to balance its budget year-to-year, this approach left it a bit of conundrum: within that constraint, it quickly ran out of eligible ways to spend that money. Really, only one easy avenue remained: plow the excess funds into rental assistance programs, which (theoretically) could help renters absorb the harrowing shocks to rental prices caused by the pandemic’s upheavals. Which is exactly what the city did, to the tune of $2,050,000 in cumulative awards to the City’s rental assistance contractor, Mercy House.

The ARPA funds officially ran out sometime in the middle of last year. In fact, the last tranche of rental assistance funds awarded in June 2024 managed to avoid busting the budget only through some deft accounting on behalf of the City’s finance team: they cleverly reallocated Federal Emergency Management Agency (FEMA) reimbursements related to the City’s COVID-19 expenditures in 2023 to this program, thus extending it for another six months or so.

So now what? It’s not like the cost-of-living crisis has abated; while rent increases slowed in the third quarter of 2024, it’s not like prices have gone down. And while wages are increasing, they are pacing inflation, not beating it. And now, with large parts of Los Angeles impacted by urban fires, I would expect the rental market in Orange County to edge even higher. High-net-worth refugees from LA will need to go somewhere, and I would expect some of them will make their way into the OC market. This in turn will pump up prices for high-end rentals. As those inflationary pressures tend to trickle downwards, I would expect another rough year in terms of housing cost inflation.

The city faces three unpalatable options: end the program, resulting potentially in a wave of for-cause evictions due to inability to pay rent (and the social problems that may come with them); continue the program and reallocate funds from other city priorities; or continue the program and find a new recurring revenue source to pay for it. I would expect spirited discussion of this item when it comes to a head.

How will Grant’s Pass affect Costa Mesa?

Back in 2017, the homelessness encampments along the Santa Ana River Trail had gotten so large and dangerous that multiple cities, including Costa Mesa, worked to clear the hundreds of homeless persons living there and move them into temporary shelters. This sparked an ugly conflict that culminated with guidance from U.S. District Court Judge David O. Carter, who threatened the cities involved with injunctions against enforcing their anti-camping and anti-loitering laws unless they provided more shelter beds. And thus, Costa Mesa’s Bridge Shelter was born.

Since opening in 2021, the City has been quietly expanding the Bridge Shelter’s capacity, first by expanding its available beds from its original 69 to 85 in July 2023, and then adding additional 15 behavioral health beds through a two-year grant from the County earlier this year. In addition to offsetting the City’s costs to maintain the shelter through one-time grants, the City also nets substantial revenue from the City of Newport Beach, which leases 20 of our shelter beds to the tune of $1.25 million each year.

But that whole arrangement has now been thrown into question thanks to the Supreme Court’s recent decision in City of Grant’s Pass v. Johnson. Grant’s Pass overruled the Ninth Circuit’s previous ruling in Martin v. Boise, which previously held that the enforcement of anti-camping laws in areas without sufficient shelter beds constituted cruel and unusual punishment and a violation of the Eighth Amendment. Grant’s Pass now says this is no longer the case, and that cities can enforce their anti-camping laws even if they provide no shelter beds.

This means that Newport Beach’s brass-tacks motivation to continue leasing beds in the Bridge Shelter has been tossed out along with the reasoning in Martin. Arguably the most practical reason why (comparatively conservative) Newport Beach was forking over north of a million dollars a year to Costa Mesa was to permit itself to move its homeless population along without risking an expensive lawsuit. Will Newport Beach now remove its support for the Bridge Shelter? If so, it would blow a huge hole in the Bridge Shelter’s budget. For context, the city already spends north of $2 million a year to support the Bridge Shelter’s operations.

Can we stop CMPD attrition?

Ever since I wrote this post I’ve been pulling together notes on a larger piece about the City’s approach to crime, and I’m sorry to say it just isn’t ready yet. But one somewhat frightening tidbit I was passed back in November was that the Costa Mesa Police Department (CMPD) has lost 18 sworn officers this year to resignation, retirement or transfer. Meanwhile, the CMPD has only hired or laterally recruited 11 new sworn officers, leading to a net loss of 7 sworn officers.

If those statistics held through the end of the year, it represents the biggest net loss of sworn officers since 2014, the last year of the wave of police cuts during the former Righeimer/Mensinger administrations.

But this time around, the reason for the departures isn’t rooted in politics. It’s economics. There were rumblings all last year that, despite Chief Ron Lawrence’s best efforts, Costa Mesa was losing out on lateral hires and new graduates from the police academy due to more attractive compensation packages being offered by other cities. Friends, I fear we have found ourselves in a bidding war for police talent in Orange County, and we’re at risk of losing. I don’t have a clever solution to this problem; it is rooted in the intersection of our sky-high cost of living, the generous deferred compensation packages that have become the market standard for high-risk public employees, and our limited budget.

But something’s got to give. Again, assuming my numbers from November hold, we will end the year with only 125 sworn officers on payroll, which puts this City Council majority back where most of them started in 2018. That’s barely 120 sworn officers per 100,000 residents; far fewer than the 200 sworn officers per 100,000 residents found statewide. The City Council must investigate this problem and come up with a long term solution, and quick.

The return of ICE to Costa Mesa’s jails?

Back in February of last year, Laken Riley was brutally murdered while she was out for a jog near her school, the University of Georgia, by an illegal immigrant who had a number of previous arrests. Riley’s murder prompted widespread outrage and, within weeks, the Republican-controlled U.S. House of Representatives had drafted and passed the “Laken Riley Act”. At the time, the Laken Riley Act was looked at as a bit a political stunt, as the bill had zero chance of passing the Democrat-controlled Senate.

But now, of course, we are in the Trump Golden Age (TM). And once again, the U.S. House has passed the Laken Riley Act and this time it has a much better chance of passing the Senate, as well. Trump’s signature is effectively a fait accompli.

Here’s the catch: the Laken Riley Act requires the U.S. Department of Homeland Security (DHS) to detain any individual arrested for crimes such as burglary, theft, larceny or shoplifting. Practically speaking, this means that DHS will deploy U.S. Immigration and Customs Enforcement (ICE) officers to “coordinate” with local police departments, which in turn will be tasked with screening each arrestee for immigration status as well as reporting that status to ICE authorities. Note the repeated emphasis on “arrest”: Under the Laken Riley Act, the individual does not need to be convicted of a crime to be turned over to ICE. A mere booking will do.

Obviously that is going to cause a few issues here in California, which styles itself as a “Sanctuary state”. While ICE agents are clamoring for cooperation, cities will also told that they can’t comply without violating State law.

For some cities, however, this isn’t much of a conundrum. Huntington Beach (naturally) just took the bold step to sue the State of California and allege that its Sanctuary state laws are unconstitutional because they are eager to help President-Elect Trump’s likely “border czar”, Tom Homan, carry out his promise to deport illegal immigrants wherever he can find them. Including by enforcing the Laken Riley Act to the letter, assuming it passes.

So what will Costa Mesa do? Full cooperation with the Laken Riley Act will require the CMPD to turn any arrestee for lower level crimes like shoplifting over to ICE, which is likely to cause some communities in the city to view the CMPD with considerable suspicion. On the other hand, full-throated endorsement of CA’s progressive sanctuary policies doesn’t seem palatable in the current political environment, either.

Are local budget concerns on the horizon?

Finally, the tie that binds all of these problems together: money. Again, so far, the city has done a good job navigating the post-COVID financial landscape, turning in four straight balanced budgets. The City’s leadership, especially Mayor John Stephens, has crowed about the City’s budget prowess, especially when many other cities are facing budget shortfalls.

But this year might be different. First, as the preceding link describes in a bit more detail, there has been a long term bleed of our sales tax revenue into online shopping, which doesn’t return nearly as much sales tax revenue to the city as you might think.

And second, the city has become more and more dependent on external grants to plug holes in funding for its initiatives. Now, that money is either dried up or about to be: Federal COVID funds via ARPA are spent, and the State, fresh off of two straight years of budget deficits, has now balanced its tentative budget on the back of Federal grant money that itself may not come. Additionally, Orange County just sounded the alarm that it is about to cut its budget in the face of economic headwinds, many of which I assume would apply to Costa Mesa as well. Consider the following projects in Costa Mesa that are funded, in whole or in part, by Federal, State or County grants:

• Rental assistance (via ARPA funds, noted above)
• Bridge Shelter (15 behavioral health beds now funded through county grants, noted above)
• Police DUI stops (funded through state grants)
• Parks projects in Shalimar Park, Ketchum-Libolt Park, and Fairview Park (all State funds)
• The Lions Park Cafe project (partly funded by County funds)
• The Fairview Development Center Master Plan (funded by State grants)
• The Adams Avenue multiuse path renovations (funded in part by OCTA grants)
• The Circuit free ride share program (funded by County grants)
• Police equipment and other purchases to combat retail theft (State grant funded)
• Free rides for seniors at the Senior Center (grant funding through OCTA)

Plus many more. The list goes on and on. And as you can see, it hits all areas of the city: infrastructure, planning, economic development, community services, and public safety.

Now before we panic, I’ll note that cities receiving generous funding from higher levels of government is nothing new. But what is new, and concerning, is that (1) those sources are now looking relatively questionable all at once, (2) large chunks of our public policy agenda are dependent, in whole or in part, on this grant money continuing to flow, and (3) the city’s income streams aren’t as robust as we would like for a variety of structural and macroeconomic reasons (many beyond our control).

So I’m curious what the next budget has in store. City Council should be, too. It might be a nice time to revisit the suggestions that have been raised in the past few years that members of the City Council sit on the Finance and Pension Advisory Committee as full members, rather than just in a observational capacity. I bet when the storm comes they would appreciate getting some advanced warning.