City staff explains changes in the budget process
News of the apparently dismal state of the city budget has cast an ominous shadow, shaking up city hall with layoff notices, giving “I-told-you-so” ammunition to fiscal conservatives, putting some elected officials on the defensive, and thoroughly confusing nearly everyone else.
It was recently announced that the city’s general fund has a $4.8 million deficit that must be erased in the next fiscal year, which begins July 1. Other funds are also running in the red, but are not required by law to be balanced in the next year.
City Manager Brian Nakamura announced in May that the city’s goal was to cut spending by $7 million to balance the general fund and draw down the other deficits. But Assistant City Manager Mark Orme and Administrative Services Director Chris Constantin recommended the city shoot for the less ambitious $4.8 million reduction, which will be reflected in the proposed budget given to the City Council Tuesday, June 18, for its consideration during an all-day budget session.
On Friday, June 8, the city co-hosted with local business organizations a public forum called Budget 101 to try to explain the city’s financial process. During the hour-long event in the City Council chambers, about 75 citizens watched a PowerPoint presentation and heard from city officials whose general message was: “Yeah, things are bad. But don’t point fingers, because we’re gonna be OK.”
Nakamura said the goal is to promote business and cut expenses. He also asked for patience from the public and reverence for city staff and the council. “It’s very different sitting out there than it is sitting up here,” he said, gesturing to the council dais.
Orme echoed Nakamura and said it is important “to keep Chico, Chico, but responsibly. The public distrusts the government right now. There is insecurity inside city hall as well.”
Indeed, a few days after the Budget 101 event, a longtime city employee, who asked not to be named, said there is a general air of tension among workers. “We don’t know what’s going to happen,” the employee said. “The waiting is the hardest part.”
Included in the possible layoffs are police and firefighter jobs. Of the 19 positions slated for elimination at the police station, 13 are unfilled positions, two are pending retirements and four are actual layoffs of non-sworn police personnel—two community-services officers, one crime analyst and one animal-control supervisor. The five firefighter positions slated for elimination are currently vacant.
In a press release, Chico Police Chief Kirk Trostle voiced his concerns over the proposed budget.
“I can appreciate the City Manager’s daunting task in balancing a $4.8 million budget deficit, but I must boldly oppose the preliminary budget recommendation that decimates the law-enforcement component of public safety in the city of Chico,” he wrote.
Nakamura, Orme and Constantin were all hired within the last year from out of town. City Accounting Manager Frank Fields has been with the city for a number of years, having moved here in 1991. He told the Budget 101 crowd that he looked forward to the changes ahead.
“Over the next few years, the budget process will be changing a lot,” Fields said. “The mission of the budget process is to ensure that the council can make informed decisions.”
Constantin, the administrative-services director, said in a recent interview that past spending habits have brought the city to its current financial mess.
“In the past, we were spending far in excess of what we took in,” he said. “We would direct charge-expenses to the developer fund. This fund was not balanced, and since you’re not required to balance it, the city did nothing. We overspent and didn’t address it.”
Constantin, in a brief report called “How Did We Get Here?,” notes that besides directing charges to various funds to keep the general fund balanced, the city’s fees do not cover the costs of service. “As a result, the general and other funds ‘subsidize’ these activities when they should be paid by those who benefit,” the report states.
Constantin said that the city charges a vendor $11 for a door-to-door sales permit, for example, but producing that permit costs the city more than $100.
“The sky has been falling for the past eight years,” Constantin said. “But not in a manner the public would have seen. The important takeaway here is that the city has to balance its checkbook before it can truly grow. The city has to be more accountable with how it spends its money.”