Budget Concerns split GT Council

While on the surface the City of Grand Terrace is perceived to be unaffected by the dire financial conditions of the neighboring cities that surround them, but truth be known that is not the case. With the elimination of redevelopment funding from the state, the city, which relied upon those funds to balance their budget each year, finds themselves in the precarious position of looking for ways to currently balance the budget. The projected city deficit for Fiscal Year 2013-14 is now projected at ($760,513). An Ad Hoc Budget Advisory Committee was appointed by the City council to review the Five-Year Plan, and the committee brought forth a recommendation to the council which stated: “That the Mayor and city council of the City of Grand Terrace, (i) unanimously declare a fiscal emergency, (ii) place a utility users’ tax initiative on the November 2013 ballot for the purpose of generating $1.5 million in new revenues for the City; and (iii) take any and all related actions necessary to ensure this matter is placed before the voters of the City of Grand Terrace by no later than November 2013”. Kenneth Henderson, Chairperson of the committee stated, “The idea for the dis-incorporation of the City was to be considered only as a last resort, and the committee supported that view point unanimously.” At the last council meeting on June 11, 2013, Betsy Adams, city manager, said, “Because it is not known whether a special election to consider a tax will be held on November 2013 or not, I’m introducing four ) budget expenditure reduction options for the council’s consideration.” Option #1—Considering a projected deficit of ($760,513), Option #1 would offset that loss by reducing law enforcement by two (2) deputies, close Rollins and Pico Parks, reduce contract services (Finance & City Attorney), eliminate Senior Center funding and reduce EOC/CERT committee funding by 50% which leaves a possible fund balance for the year of $259,339. Option #2---Considering a projected deficit of ($760,513), Option #2 would offset that loss by reducing law enforcement by one (1) deputy, close Rollins and Pico Parks, reduce contract services (Finance & City Attorney), eliminate Senior Center funding and EOC/CERT committee funding by 50% which leaves a possible fund balance for the year of $1,839. Option #3---Considering a projected deficit of $760,513, Option #3 would offset that loss by reducing law enforcement by one deputy which will leave a negative balance of ($202,861) for fiscal year 2013-14. Option #4---No costs are eliminated and the new fiscal year will start with a ($760,513) negative balance with the hope of a positive result at the November 2013 election to instill a Utility User Tax to offset city expenditures. This option has the greatest risk. City staff recommended that Option #3 be instituted. After hearing the recommendation, the city council proceeded to make the following comments; Councilwoman McNaboe expressed her view that she felt that the city shouldn’t declare a fiscal emergency and that Option #1 should be instituted to create a balanced budget. Councilwomen Robles & Mitchell both felt that Option #1 couldn’t work because the elimination of the parks and the reduction of law enforcement would ruin the fabric of the city. Mayor Pro Tem Sandoval felt the choice lies with the residents on which fiscal direction that the city should go forward with, and he supported Option #3. Finally, Mayor Walt Stanckiewitz was upset by Councilwoman McNaboe’s take it or leave it approach for Option #1, and he chose Option #4, where the city services would be kept at the current levels until a decision was made on the November 2013 ballot measure. On June 25, 2013, the city manager will present to the council a budget balancing plan for July 1, 2013 that mirrors Option #3. It includes a reduction of one deputy which leaves an ongoing budget deficit of ($212,861). After January 1, 2014 other expenditure reductions will be instituted if a Utility User Tax ballot measure is not passed through a special election in November. Other possible reductions that may occur are: Reduction of one more deputy, eliminate senior center funding, reduce EOC/CERT committee funding, close Rollins and Pico parks, reduce contract services for City Attorney and Finance, City Administration personnel-related expense, reduce Cultural & Historical committee funding, reduce City Council and Oversight Board meetings to once a month, and eliminate the Planning Commission. The fund balance will be at a positive $300,839, if these expenses were eliminated by January 1, 2014. The council will determine if they want a balance budget on July 1, 2013 or declare a fiscal emergency and have a special election to consider a local tax measure Tuesday June 25th at 6:00 p.m. For further supporting documentation view link: More info