Costa Mesa firefighter Mike Ruhl is welcomed home by his wife Megan and 2-year-old son Bradley at their Mission Viejo townhome. (SCOTT SMELTZER, Daily Pilot / July 5, 2012)

He partially blames the repeal of affordability provision for the climbing compensation.

"That was really unfortunate," he said. "Would it have changed where things were at today? No, I don't believe so. But I do think that the impact would have been substantially less had that policy remained in place."

Costa Mesa's compensation rose to compete with cities like Newport Beach, which had piles of property tax revenue to spend, and Santa Ana, which had a higher crime rate and offered good pay to lure police officers, Roeder said.

Infrastructure lagged

As Costa Mesa pumped more money into salaries and benefits, it relied on grants to fund most of its infrastructure projects. But as state and federal money dropped off some years, city leaders deferred the repair of streets, storm drains, parks and other community facilities.

On average, Costa Mesa spent less on streets, storm drains and landscaping on a per-capita basis than any other Orange County city between fiscal years 2000-01 and 2008-09, save for Aliso Viejo, according to state controller data compiled by Michael Coleman, the League of California Cities' financial consultant.

Costa Mesa also ranks low for parks and recreation spending.

City leaders saved more than $70 million in reserves before the recession, with the idea that money would always be there when they wanted to reinvest in infrastructure.

Roeder said he "pinched pennies too much at the expense of the bigger picture." And in a later interview, he clarified that he always strove to maintain public health and safety.

Still, Costa Mesa spent an average of nearly $13 million per year on capital projects over the 10 years ending in June 2009, much of it coming from gas and county sales taxes.

That has been enough to rehabilitate arterial streets like Harbor Boulevard, upgrade intersections, improve Fairview Park, restore wetlands and perform other projects large and small.

The city's streets, on average, are considered good by Orange County Transportation Authority standards, scoring slightly below those in Newport Beach.

While arterial roads are in great shape, Costa Mesa falls behind in its residential streets and alleys.

One reason the city doesn't spend more on those and other infrastructure maintenance is that the capital funding program is outdated, Roeder said.

During the same period as rising compensation, traditional revenue streams for capital projects were unreliable: The city was mostly built out, with fewer developers to pay fees; and the availability of state and federal grants was erratic, Roeder said.

Also, there generally aren't many grants available to pay for parks or storm drains — two areas that need reinvestment, he added.

A 2006 plan analyzing the city's flooded streets called for $17.6 million in storm drain repairs or improvements, to be spent over 20 years. Only about $700,000 has been spent since then, during a partially recessionary period.

The City Council considered raising fees on developers to help pay for those storm drain fixes in 2006, but only approved a slight increase, Roeder said.

Long-term pension outlook

As infrastructure spending fell behind, retirement costs quickly accelerated.